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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;
|
•
|
variability in the amount of statutory capital that our insurance and reinsurance subsidiaries have or are required to hold;
|
•
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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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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 Apollo Global Management, Inc. (AGM) or any of its subsidiaries (collectively, AGM together with its subsidiaries, Apollo) of its investment management agreements with us and limitations on our ability to terminate such arrangements;
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•
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Apollo’s dependence on key executives and inability to attract qualified personnel;
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•
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the accuracy of our estimates regarding the future performance of our investment portfolio;
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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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the failure to obtain or maintain licenses and/or other regulatory approvals as required for the operation of our insurance subsidiaries;
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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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•
|
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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•
|
changes in our ability to pay dividends or make distributions;
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•
|
our failure to obtain approval of the share exchange transaction with Apollo by our shareholders or regulators;
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•
|
our failure to recognize the benefits expected to be derived from the share exchange transaction with Apollo;
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•
|
unexpected difficulties or expenditures related to the share exchange transaction with Apollo;
|
•
|
the failure to achieve the economic benefits expected to be derived from the ACRA capital raise or future ACRA capital raises; and
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•
|
other risks and factors listed under Item 1A. Risk Factors and those discussed elsewhere in this report.
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Term or Acronym
|
|
Definition
|
A-A Mortgage
|
|
A-A Mortgage Opportunities, L.P.
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AAA
|
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AP Alternative Assets, L.P.
|
AAA Investor
|
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AAA Guarantor – Athene, L.P.
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AADE
|
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Athene Annuity & Life Assurance Company
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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, now known as Apollo Insurance Solutions Group LLC
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AARe
|
|
Athene Annuity Re Ltd., a Bermuda reinsurance subsidiary
|
ACRA
|
|
Athene Co-Invest Reinsurance Affiliate 1A Ltd., together with its subsidiaries
|
ACRA 1A
|
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Athene Co-Invest Reinsurance Affiliate 1A Ltd., a Bermuda reinsurance subsidiary
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ADIP
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Apollo/Athene Dedicated Investment Program
|
AGM
|
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Apollo Global Management, Inc.
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AHL
|
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Athene Holding Ltd.
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ALRe
|
|
Athene Life Re Ltd., a Bermuda reinsurance subsidiary
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ALReI
|
|
Athene Life Re International 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, Inc., together with its subsidiaries
|
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, (5) any executive officer of AGM whom AGM designates, in a written notice delivered to Athene Holding Ltd., as a member of the Apollo Group for purposes of Athene Holding Ltd.’s bye-laws and (6) any affiliate of any of the foregoing (except that Athene, Athene employees, and ISG employees 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 Other
|
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AAA Investments (Other), L.P.
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CoInvest VI
|
|
AAA Investments (Co-Invest VI), L.P.
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CoInvest VII
|
|
AAA Investments (Co-Invest VII), L.P.
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DOL
|
|
United States Department of Labor
|
ISG
|
|
Apollo Insurance Solutions Group LLC, formerly known as Athene Asset Management LLC
|
LIMRA
|
|
Life Insurance and Market Research Association
|
MidCap
|
|
MidCap FinCo Designated Activity Company
|
NAIC
|
|
National Association of Insurance Commissioners
|
NYSDFS
|
|
New York State Department of Financial Services
|
RLI
|
|
ReliaStar Life Insurance Company
|
Treasury
|
|
United States Department of the Treasury
|
Voya
|
|
Voya Financial, Inc.
|
VIAC
|
|
Voya Insurance and Annuity Company
|
Venerable
|
|
Venerable Holdings, Inc., together with its subsidiaries
|
Term or Acronym
|
|
Definition
|
ABS
|
|
Asset-backed securities
|
ACL
|
|
Authorized control level RBC as defined by the model created by the National Association of Insurance Commissioners
|
ALM
|
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Asset liability management
|
ALRe RBC
|
|
The risk-based capital ratio of ALRe, when applying the NAIC risk-based capital factors.
|
Alternative investments
|
|
Alternative investments, including investment funds, CLO equity positions and certain other debt instruments considered to be equity-like
|
Base of earnings
|
|
Earnings generated from our results of operations and the underlying profitability drivers of our business
|
BEAT
|
|
Base Erosion and Anti-Abuse Tax
|
Bermuda capital
|
|
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
|
Block reinsurance
|
|
A transaction in which the ceding company cedes all or a portion of a block of previously issued annuity contracts through a reinsurance agreement
|
BSCR
|
|
Bermuda Solvency Capital Requirement
|
CAL
|
|
Company action level risk-based capital as defined by the model created by the National Association of Insurance Commissioners
|
CLO
|
|
Collateralized loan obligation
|
CMBS
|
|
Commercial mortgage-backed securities
|
CML
|
|
Commercial mortgage loans
|
Cost of crediting
|
|
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
|
Cost of funds
|
|
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.
|
DAC
|
|
Deferred acquisition costs
|
Deferred annuities
|
|
Fixed indexed annuities, annual reset annuities, multi-year guaranteed annuities and registered index-linked annuities
|
DSI
|
|
Deferred sales inducement
|
Excess capital
|
|
Capital in excess of the level management believes is needed to support our current operating strategy
|
FIA
|
|
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
|
Fixed annuities
|
|
FIAs together with fixed rate annuities
|
Fixed rate annuity
|
|
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
|
Flow reinsurance
|
|
A transaction in which the ceding company cedes a portion of newly issued policies to the reinsurer
|
GAAP
|
|
Accounting principles generally accepted in the United States of America
|
GLWB
|
|
Guaranteed lifetime withdrawal benefit
|
GMDB
|
|
Guaranteed minimum death benefit
|
Gross invested assets
|
|
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). Net 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). Gross invested assets includes the entire investment balance attributable to ACRA as ACRA is 100% consolidated
|
IMA
|
|
Investment management agreement
|
IMO
|
|
Independent marketing organization
|
Investment margin on deferred annuities
|
|
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
|
Liability outflows
|
|
The aggregate of withdrawals on our deferred annuities, maturities of our funding agreements, payments on payout annuities, and pension risk benefit payments
|
Term or Acronym
|
|
Definition
|
MCR
|
|
Minimum capital requirements
|
MMS
|
|
Minimum margin of solvency
|
Modco
|
|
Modified coinsurance
|
MVA
|
|
Market value adjustment
|
MYGA
|
|
Multi-year guaranteed annuity
|
Net invested assets
|
|
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). Net 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). Net invested assets includes our economic ownership of ACRA investments but does not include the investments associated with the noncontrolling interest
|
Net investment earned rate
|
|
Income from our invested assets divided by the average invested assets for the relevant period, presented on an annualized basis for interim periods
|
Net investment spread
|
|
Net investment spread measures our investment performance less the total cost of our liabilities, presented on an annualized basis for interim periods
|
Net reserve liabilities
|
|
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. Net 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. Net 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. Net reserve liabilities is net of the reserve liabilities attributable to the ACRA noncontrolling interest
|
Other liability costs
|
|
Other liability costs include DAC, DSI and VOBA amortization, change in rider reserves, the cost of liabilities on products other than deferred annuities and institutional products, excise taxes, as well as offsets for premiums, product charges and other revenues
|
OTTI
|
|
Other-than-temporary impairment
|
Payout annuities
|
|
Annuities with a current cash payment component, which consist primarily of single premium immediate annuities, supplemental contracts and structured settlements
|
Policy loan
|
|
A loan to a policyholder under the terms of, and which is secured by, a policyholder’s policy
|
PRT
|
|
Pension risk transfer
|
RBC
|
|
Risk-based capital
|
Rider reserves
|
|
Guaranteed lifetime withdrawal benefits and guaranteed minimum death benefits reserves
|
RMBS
|
|
Residential mortgage-backed securities
|
RML
|
|
Residential mortgage loan
|
Sales
|
|
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)
|
SPIA
|
|
Single premium immediate annuity
|
Surplus assets
|
|
Assets in excess of policyholder obligations, determined in accordance with the applicable domiciliary jurisdiction’s statutory accounting principles
|
TAC
|
|
Total adjusted capital as defined by the model created by the NAIC
|
U.S. RBC Ratio
|
|
The CAL RBC ratio for AADE, our parent U.S. insurance company
|
VIE
|
|
Variable interest entity
|
VOBA
|
|
Value of business acquired
|
•
|
Expand Our Organic Distribution Channels. We plan to grow organically by expanding our retail, flow reinsurance and institutional distribution channels. These organic channels generally allow us to adjust our product mix to originate liabilities that meet our return targets in diverse market environments.
|
•
|
Pursue Attractive Inorganic Growth Opportunities. We plan to continue leveraging our expertise in sourcing and evaluating inorganic transactions to grow our business profitably. From our founding through December 31, 2019, we have grown to total assets of $146.9 billion, primarily through acquisitions and block reinsurance transactions. We believe that our demonstrated ability to successfully consummate complex transactions, as well as our relationship with Apollo, provides us with distinct advantages relative to other acquisition and block reinsurance counterparty candidates. Furthermore, we have achieved sufficient scale to provide meaningful operational synergies for the businesses and blocks of business that we acquire and reinsure, respectively. Consequently, we believe we are often sought out by companies looking to restructure their businesses.
|
•
|
Expand Our Product Offering. We seek to build products that meet our policyholders’ retirement savings objectives, such as accumulation, income and legacy planning. Our products are customized for each of the retail channels through which we distribute, including IMOs, banks and independent broker dealers, and represent innovative solutions that meet the needs of policyholders in each of these channels. We continue to release updated or new products to meet the evolving needs of policyholders. To further provide innovative solutions to policyholders, in 2019 we launched our first registered product, Amplify, an index-linked product that offers policyholders an opportunity to participate in increases in equity market indices to a greater degree than was previously available within our product portfolio, in exchange for limited risk of loss to principal due to decreases in such equity market indices. Unlike more traditional deferred annuities, as a registered product, Amplify will only be distributed through registered financial representatives, broker dealers and banks.
|
•
|
Leverage Our Unique Relationship with Apollo. We intend to continue leveraging our unique relationship with Apollo to source high-quality assets with attractive risk-adjusted returns. Apollo’s global scale and reach provide us with broad market access across environments and geographies and allow us to actively source assets that exhibit our preferred risk and return characteristics. For example, through our relationship with Apollo, we have access to, or the ability to partner with, Apollo’s portfolio of origination platforms, which provides us assets with higher spreads than those available in the public markets. See –Investment Management for more information regarding Apollo’s origination platforms.
|
•
|
Allocate Assets during Market Dislocations. As we have done successfully in the past, we plan to fully capitalize on future market dislocations to opportunistically reposition our portfolio to capture incremental yield. For example, regulatory changes in the wake of the financial crisis have made it more expensive for banks and other traditional lenders to hold certain illiquid and complex assets, notwithstanding the fact that these assets may have prudent credit characteristics. The repressed demand for these asset classes has provided opportunities for investors to acquire high-quality assets that offer attractive returns. For example, we see emerging opportunities as banks retreat from direct mortgage lending, structured and asset-backed products, and middle-market commercial loans. We intend to maintain a flexible approach to asset allocation, which will allow us to act quickly on similar opportunities that may arise in the future across a wide variety of asset types.
|
•
|
Maintain Risk Management Discipline. Our risk management strategy is to proactively manage our exposure to risks associated with interest rate duration, credit risk and structural complexity of our invested assets. We address interest rate duration and liquidity risks by managing the duration of the liabilities we source with the assets we acquire through asset liability management (ALM) modeling. We assess credit risk by modeling our liquidity and capital under a range of stress scenarios. We manage the risks related to the structural complexity of our invested assets through Apollo’s modeling efforts. The goal of our risk management discipline is to be able to continue to grow and achieve profitable results across various market environments. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk for additional information.
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Annuities
|
|
|
|
|
|
||||||
Fixed indexed
|
$
|
7,304
|
|
|
$
|
29,973
|
|
|
$
|
5,480
|
|
Fixed rate
|
3,192
|
|
|
5,501
|
|
|
873
|
|
|||
Payout
|
624
|
|
|
1,362
|
|
|
129
|
|
|||
Group annuities – PRT
|
6,049
|
|
|
2,581
|
|
|
2,249
|
|
|||
Total annuities products
|
17,169
|
|
|
39,417
|
|
|
8,731
|
|
|||
Funding agreements
|
1,301
|
|
|
650
|
|
|
3,054
|
|
|||
Life and other (excluding German products)
|
37
|
|
|
58
|
|
|
84
|
|
|||
German products
|
—
|
|
|
—
|
|
|
203
|
|
|||
Gross premiums and deposits, net of ceded
|
18,507
|
|
|
40,125
|
|
|
12,072
|
|
|||
Premiums and deposits attributable to ACRA noncontrolling interests
|
(544
|
)
|
|
—
|
|
|
—
|
|
|||
Net premiums and deposits, net of ceded and noncontrolling interests
|
$
|
17,963
|
|
|
$
|
40,125
|
|
|
$
|
12,072
|
|
|
December 31,
|
||||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
||||||||||
Annuities
|
|
|
|
|
|
|
|
||||||
Fixed indexed
|
$
|
73,346
|
|
|
64.0
|
%
|
|
$
|
73,224
|
|
|
68.0
|
%
|
Fixed rate
|
19,481
|
|
|
17.0
|
%
|
|
17,802
|
|
|
16.5
|
%
|
||
Group annuities – PRT
|
8,230
|
|
|
7.2
|
%
|
|
4,710
|
|
|
4.4
|
%
|
||
Payout
|
6,383
|
|
|
5.6
|
%
|
|
6,009
|
|
|
5.6
|
%
|
||
Total annuities products
|
107,440
|
|
|
93.8
|
%
|
|
101,745
|
|
|
94.5
|
%
|
||
Funding agreements
|
5,107
|
|
|
4.4
|
%
|
|
3,826
|
|
|
3.5
|
%
|
||
Life and other
|
2,105
|
|
|
1.8
|
%
|
|
2,161
|
|
|
2.0
|
%
|
||
Total reserve liabilities
|
$
|
114,652
|
|
|
100.0
|
%
|
|
$
|
107,732
|
|
|
100.0
|
%
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
FABN
|
$
|
1,001
|
|
|
$
|
—
|
|
|
$
|
2,750
|
|
FHLB
|
300
|
|
|
650
|
|
|
250
|
|
|||
Total funding agreement deposits
|
$
|
1,301
|
|
|
$
|
650
|
|
|
$
|
3,000
|
|
|
MidCap is a commercial finance company that provides various financial products to middle-market businesses in multiple industries, primarily located in the U.S. MidCap primarily originates and invests in commercial and industrial loans, including senior secured corporate loans, working capital loans collateralized mainly by accounts receivable and inventory, senior secured loans collateralized by portfolios of commercial and consumer loans and related products and secured loans to highly capitalized pharmaceutical and medical device companies, and commercial real estate loans, including multifamily independent-living properties, assisted living, skilled nursing and medical office properties, warehouse, office building, hotel and other commercial use properties and multifamily properties. MidCap originates and acquires loans using borrowings under financing arrangements that it has in place with numerous financial institutions.
|
|
AmeriHome is a mortgage origination platform and an aggregator of mortgage servicing rights. AmeriHome acquires mortgage loans from retail originators and re-sells the loans to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association and other investors. AmeriHome retains the mortgage servicing rights on the loans that it sells and employs a subservicer to perform servicing operations, including payment collection.
|
|
Merx Aviation is a global aircraft leasing, management and finance company based in New York and Dublin. Merx has an open mandate to invest in aviation assets, with full flexibility across the spectrum of investment scale, duration, asset type, asset age and structure. Merx targets investment opportunities that provide attractive risk-adjusted returns with downside protection from the underlying aircraft metal value and collateral package. Merx sources proprietary deal flow from its extensive aviation relationship network, composed of other lessors, airlines, private equity firms, hedge funds, aircraft asset managers, part-out shops, and original equipment manufacturers. Merx leverages its operational expertise across marketing, technical, legal, finance, and portfolio management functions to ensure performance across its owned and managed portfolio.
|
|
Apollo Net Lease Co. is a net lease origination platform focused on the acquisition of operationally-essential, triple net lease real estate assets located throughout the U.S. and is an indirect subsidiary of AGM. The platform sources, underwrites, structures and actively manages net lease real estate assets diversified by both geography and tenancy on behalf of Athene. Apollo Net Lease Co. provides access to a diverse asset base through its experienced management team and fully integrated origination platform.
|
|
Haydock Finance is an established lender focused on providing lease finance to UK-based small and medium-sized enterprises backed by business-critical hard assets. Collateral includes, among others, commercial vehicles, industrial plant & machinery and agricultural equipment. By nature of the agreements, the portfolio is granular and has a short weighted average life. For distribution, Haydock relies on a panel of approved brokers and direct sales.
|
|
Redding Ridge Asset Management (Redding Ridge) is a registered investment advisor specializing in leveraged loans and global CLO management. Redding Ridge’s primary business consists of acting as collateral manager for CLO transactions and related warehouse facilities and as holder of CLO Retention interests in both U.S. and Europe. Redding Ridge was established and seeded by AGM in response to risk retention regulations. The firm is strategically positioned with access to significant CLO management and structuring expertise, industry contacts and investor relationships. Pursuant to various service agreements with AGM, Redding Ridge is supported by top tier credit research, credit risk management, credit trading platform and other corporate / administrative services.
|
PK Air
|
PK AirFinance is a leading provider and arranger of loans secured by commercial aircraft, aircraft engines and helicopters. PK AirFinance has comprehensive origination, underwriting, and syndication lending capabilities across products and geographies. PK AirFinance’s customer base includes airlines, aircraft traders, lessors, investors and financial institutions with product expertise spanning senior secured loans, finance leases, conditional sales, loan participations, pre-delivery payment loans, and bridge loans. PK AirFinance maintains a global footprint with extensive experience in attractive emerging markets that are not core for some traditional banks. PK AirFinance employs a differentiated, asset-focused underwriting approach underpinned by EDGE (data analytics tool) and supplemented by credit underwriting and cash flow analysis.
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hosting of financial systems;
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policy administration of existing policies;
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custody;
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information technology development and maintenance; and
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investment management.
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Company
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A.M. Best
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S&P
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Fitch
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Athene Holding Ltd.
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Issuer Credit Rating/Counterparty Credit Rating/Issuer Default Rating
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bbb
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BBB+
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BBB+
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Outlook
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Positive
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Stable
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Stable
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Athene Life Re Ltd.
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Life Re International Ltd.
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Annuity & Life Assurance Company
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Annuity & Life Assurance Company of New York
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Annuity and Life Company
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Life Insurance Company of New York
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Financial Strength Rating
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A
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Not Rated
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Not Rated
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Outlook
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Stable
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Not Rated
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Not Rated
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Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd.
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Athene Co-Invest Reinsurance Affiliate International Ltd.
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Financial Strength Rating
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A
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A
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A
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Outlook
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Stable
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Stable
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Stable
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Rating Agency
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Financial Strength
Rating Scale
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Senior Unsecured Notes
Credit Rating Scale
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A.M. Best1
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“A++” to “S”
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“aaa” to “rs”
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S&P2
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“AAA” to “R”
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“AAA” to “D”
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Fitch3
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“AAA” to “C”
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“AAA” to “D”
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1 A.M. Best’s financial strength rating is an independent opinion of an insurer’s or reinsurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company’s balance sheet strength, operating performance and business profile or, where appropriate, the specific nature and details of a security. The analysis may include comparisons to peers, industry standards and proprietary benchmarks as well as assessments of operating plans, philosophy, management, risk appetite and the implicit or explicit support of a parent or affiliate. A.M. Best’s long-term credit ratings reflect its assessment of the ability of an obligor to pay interest and principal in accordance with the terms of the obligation. Ratings from “aa” to “ccc” may be enhanced with a “+” (plus) or “-“ (minus) to indicate whether credit quality is near the top or bottom of a category. A.M. Best’s short-term credit rating is an opinion as to the ability of the rated entity to meet its senior financial commitments on obligations maturing in generally less than one year.
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2 S&P’s insurer financial strength rating is a forward-looking opinion about the financial security characteristics of an insurance organization with respect to its ability to pay under its insurance policies and contracts in accordance with their terms. Generic rating categories range from “AAA” to “D”. A “+” or “-“ indicates relative strength within a generic category. An S&P credit rating is an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Short-term issuer credit ratings reflect the obligor’s creditworthiness over a short-term time horizon.
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3 Fitch’s financial strength ratings provide an assessment of the financial strength of an insurance organization. The National Insurer Financial Strength Rating is assigned to the insurance company’s policyholder obligations, including assumed reinsurance obligations and policyholder obligations, such as guaranteed investment contracts. Within long-term and short-term ratings, a “+” or a “-” may be appended to a rating to denote relative status within major rating categories.
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CAL: The insurer is required to submit a plan for corrective action when its TAC is equal to or less than 200% of ACL;
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Regulatory Action Level: The insurer is required to submit a plan for corrective action and is subject to examination, analysis and specific corrective action when its TAC is equal to or less than 150% of ACL;
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ACL: Regulators may place the insurer under regulatory control when its TAC is equal to or less than 100% of ACL; and
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Mandatory Control Level: Regulators are required to place the insurer under regulatory control when its TAC is equal to or less than 70% of ACL.
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Actual Shareholder Controller Voting Power
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Defined Shareholder Controller Voting Power
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10% or more but less than 20%
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10%
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20% or more but less than 33%
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20%
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33% or more but less than 50%
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33%
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50% or more
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50%
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Insurance Products and Liabilities – Pricing of our annuity and other insurance products, whether issued by us or acquired through reinsurance or acquisitions, is based upon assumptions about persistency, mortality and the rates at which optional benefits are elected. A factor which may affect persistency for some of our products is the value of guaranteed minimum benefits. An increase in the value of guaranteed minimum benefits could result in our policies remaining in force longer than we have estimated, which could adversely affect our results of operations. This could be caused by extended periods of poor equity market performance and/or low interest rates, developments affecting customer perception and other factors outside our control. Alternatively, our persistency estimates could be negatively affected during periods of rising equity markets or interest rates or by other factors outside our control, which could result in fewer policies remaining in force than estimated. Therefore, our results will vary based on differences between actual and expected withdrawals from our subsidiaries’ products.
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Determination of Fair Value – We hold securities, derivative instruments and other assets and liabilities that must be, or at our election are, measured at fair value. Fair value represents the anticipated amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction. The determination of fair value involves the use of various assumptions and estimates, and considerable judgment may be required to estimate fair value. Accordingly, estimates of fair value are not necessarily indicative of the amounts that could be realized in a current or future market exchange. As such, changes in or deviations from the assumptions used in such valuations can significantly affect our financial condition and results of operations. During periods of market disruption, including periods of rapidly changing credit spreads or illiquidity, if trading becomes less frequent or market data becomes less observable, it will likely be difficult to value certain of our investments. Further, rapidly changing credit and equity market conditions could materially impact the valuation of investments as reported within our financial statements, and the period-to-period changes in value could vary significantly. Even if our assumptions and valuations are accurate at the time that they are made, the market value of these investments could subsequently decline, which could materially and adversely impact our financial condition, results of operations or cash flows.
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Hedging Strategies – We use, and may in the future use, derivatives and reinsurance contracts to hedge risks related to current or future changes in the fair value of our assets and liabilities; current or future changes in cash flows; changes in interest rates, equity markets and credit spreads; the occurrence of credit defaults; currency fluctuations; and changes in mortality and longevity. We use equity derivatives to hedge the liabilities associated with our FIAs. Our hedging strategies rely on assumptions and projections regarding our assets and liabilities, as well as general market factors and the creditworthiness of our counterparties, any or all of which may prove to be incorrect or inadequate. Accordingly, our hedging activities may not have the desired impact. We may also incur significant losses on hedging transactions.
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Financial Statements – The preparation of our consolidated financial statements requires management to make various estimates and assumptions that affect the amounts reported therein. These estimates include, but are not limited to, the fair value of investments; impairment of investments and valuation allowances; the valuation of derivatives, including embedded derivatives; DAC, DSI and VOBA; future policy benefit reserves; valuation allowances on deferred tax assets; and stock-based compensation. The assumptions and estimates required for these calculations involve judgment and by their nature are imprecise and subject to changes and revisions over time. Accordingly, our financial condition and results of operations may be adversely affected if actual results differ from assumptions or if assumptions are materially revised.
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Fixed maturity and equity securities – As of December 31, 2019, 76.7% of our net invested assets were invested in fixed maturity securities, equity securities, and short-term investments, including our investments in investment grade and high-yield corporate bonds and structured products, which include RMBS and CLOs. An economic downturn affecting the issuers or underlying collateral of these securities, a ratings downgrade affecting the issuers or guarantors of such securities, or similar trends and issues could cause the estimated fair value of our fixed income securities portfolio and our earnings to decline and the default rates of the fixed income securities in our portfolio to increase.
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Collateralized loan obligations – As of December 31, 2019, 8.7% of our net invested assets were invested in CLOs. Control over the CLOs in which we invest is exercised through collateral managers, who may take actions that could adversely affect our interests, and we may not have the right to direct collateral management. There may also be less information available to us regarding the underlying debt instruments held by CLOs than if we had invested directly in the debt of the underlying companies. Additionally, as subordinated interests, the estimated fair values of CLOs tend to be much more sensitive to adverse economic downturns and underlying borrower defaults than those of more senior securities. For example, as the secondary market pricing of the loans underlying CLOs deteriorated during the fourth quarter of 2008, it is our understanding that many investors were forced to raise cash by selling their interests in performing loans which resulted in a forced deleveraging cycle of price declines, compulsory sales and further price declines. While loan prices have recovered from the low levels experienced during the financial crisis, conditions in the large corporate leveraged loan market may deteriorate again, which may cause pricing levels to decline. Furthermore, our investments in CLOs are also subject to liquidity risk as there is a limited market for CLOs. Accordingly, we may suffer unrealized depreciation and could incur realized losses in connection with the sale of our CLO interests.
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Significant changes in interest rates expose us to the risk of not realizing anticipated spreads between overall net investment earned rates and the crediting rates to our policyholders.
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Changes in interest rates may negatively affect the value of our assets and our ability to realize gains or avoid losses from the sale of those assets. Significant volatility in interest rates may have a larger adverse impact on certain assets in our investment portfolio that are highly structured or have limited liquidity.
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Changes in interest rates may cause changes in prepayment rates on certain fixed income assets within our investment portfolio. For instance, falling interest rates may accelerate the rate of prepayment on mortgage loans, while rising interest rates may decrease such prepayments below the level of our expectations. At the same time, falling interest rates may result in the lengthening of duration for our policies and liabilities due to the guaranteed minimum benefits contained in our products, while rising interest rates could lead to increased policyholder withdrawals and a shortening of duration for our liabilities. In either case, we could experience a mismatch in our assets and liabilities and potentially incur significant economic losses.
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During periods of declining interest rates or a prolonged period of low interest rates, life insurance and annuity products may be relatively more attractive to consumers than other investment opportunities. This may cause our assumptions regarding persistency to prove inaccurate as our customers opt not to surrender or take withdrawals from their products, which may result in us experiencing greater claim costs than we had anticipated and/or cash flow mismatches between assets and liabilities.
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During periods of declining interest rates, we may have to reinvest the cash we receive as interest or return of principal on our investments into lower-yielding high-grade instruments or seek higher-yielding, but higher-risk instruments in an effort to achieve returns comparable with those attained during more stable interest rate environments.
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Certain securitized financial assets are accounted for based on expectations of future cash flows. To the extent future interest rates are lower than we have projected, we will experience slower accretion of discounts on these assets and will have a lower yield on our portfolio.
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An extended period of declining interest rates or a prolonged period of low interest rates may cause us to decrease the crediting rates of our products, thereby reducing their attractiveness.
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In periods of rapidly increasing interest rates, withdrawals from and/or surrenders of annuity contracts may increase as policyholders choose to seek higher investment returns elsewhere. Obtaining cash to satisfy these obligations may require our insurance subsidiaries to liquidate fixed income investments at a time when market prices for those assets are depressed. This may result in realized investment losses.
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An increase in market interest rates could reduce the value of certain of our alternative investments held as collateral under reinsurance agreements and require us to provide additional collateral, thereby reducing our available capital and potentially creating a need for additional capital which may not be available to us on favorable terms, or at all.
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the amount of statutory income or loss generated by our insurance subsidiaries;
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the amount of additional capital our insurance subsidiaries must hold to support their business growth;
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changes in reserve requirements applicable to our insurance subsidiaries;
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changes in market value of certain securities in our investment portfolio;
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recognition of write-downs or other losses on investments held in our investment portfolio;
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changes in the credit ratings of investments held in our investment portfolio;
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changes in the value of certain derivative instruments;
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changes in interest rates;
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credit market volatility;
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changes in policyholder behavior;
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changes in corporate tax rates;
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changes to the RBC formulas and interpretations of the NAIC instructions with respect to RBC calculation methodologies; and
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changes to the ECR, BSCR, or TCL formulas and interpretations of the BMA’s instructions with respect to ECR, BSCR, or TCL calculation methodologies.
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changes to our business practices or organizational business plan in a manner that no longer supports our ratings;
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unfavorable financial or market trends;
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a need to increase reserves to support our outstanding insurance obligations;
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our inability to retain our senior management and other key personnel;
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rapid or excessive growth, especially through large reinsurance transactions or acquisitions, beyond the bounds of capital sufficiency or management capabilities as judged by the NRSROs;
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significant losses to our investment portfolio; and
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changes in NRSROs’ capital adequacy assessment methodologies in a manner that would adversely affect the financial strength ratings of our insurance subsidiaries.
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reducing new sales of insurance products;
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harming relationships with or perceptions of distributors, IMOs, sales agents, banks and broker-dealers;
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increasing the number or amount of policy lapses or surrenders and withdrawals of funds, which may result in a mismatch of our overall asset and liability position;
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requiring us to offer higher crediting rates or greater policyholder guarantees on our insurance products in order to remain competitive;
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increase our borrowing costs;
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reducing our level of profitability and capital position generally or hindering our ability to raise new capital; or
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requiring us to collateralize obligations under or result in early or unplanned termination of hedging agreements and harming our ability to enter into new hedging agreements.
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the ability of material subsidiaries of the borrowers to incur additional indebtedness and make guarantees;
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the ability to create liens on the borrowers’ assets and on the equity interests of material subsidiaries;
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the ability of any borrower or any material subsidiary thereof to make fundamental changes;
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the ability of any borrower or any subsidiary thereof to engage in certain transactions with affiliates; and
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the ability to make changes in the nature of the borrowers’ business.
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a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of U.S. courts against us or against persons who reside in Bermuda based upon the civil liability provisions of the U.S. federal securities laws; or
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a holder of our shares would be able to bring an original action in the Bermuda courts to enforce liabilities against us or our directors and officers who reside outside the United States based solely upon U.S. federal securities laws.
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the material facts as to such interested director’s relationship or interests were disclosed or were known to the board of directors and the board of directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors;
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such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction was specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or
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the transaction was fair to the corporation as of the time it was authorized, approved or ratified.
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Period
|
|
(a) Total number of shares purchased1
|
|
(b) Average price paid per share
|
|
(c) Total number of shares purchased as part of publicly announced programs 1,2
|
|
(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
|
||||||
October 1 – October 31, 2019
|
|
7,050,056
|
|
|
$
|
40.15
|
|
|
7,050,056
|
|
|
$
|
640,157,788
|
|
November 1 – November 30, 2019
|
|
14
|
|
|
$
|
43.89
|
|
|
—
|
|
|
$
|
640,157,788
|
|
December 1 – December 31, 2019
|
|
1,237
|
|
|
$
|
46.96
|
|
|
—
|
|
|
$
|
640,157,788
|
|
|
|
|
|
|
|
|
|
|
||||||
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.
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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 common 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 common 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 common 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 common shares. On October 28, 2019, we announced that our board of directors had approved an additional $600 million authorization for the repurchase of our Class A common 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 10 – Equity to the consolidated financial statements for more information.
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Period
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|
(a) Total number of shares purchased1
|
|
(b) Average price paid per share
|
|
(c) Total number of shares purchased as part of publicly announced programs2
|
|
(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs2
|
||||||
June 10 – June 30, 2019
|
|
130,000
|
|
|
$
|
25.00
|
|
|
—
|
|
|
$
|
—
|
|
July 1 – July 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
August 1 – August 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
September 1 – September 30, 2019
|
|
50,000
|
|
|
$
|
25.00
|
|
|
—
|
|
|
$
|
—
|
|
October 1 – October 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
November 1 – November 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
December 1 – December 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||
1 Purchases relate to purchases of depositary shares made by certain executive officers and directors in connection with the public offering of such depositary shares. James Belardi purchased 80,000 depositary shares, each representing a 1/1,000th interest in a 6.35 Fixed-to-Floating Rate Perpetual Non-Cumulative Preference Share, Series A, par value $1.00 and liquidation preference $25,000 (Series A Depositary Shares) and 40,000 depositary shares, each representing a 1/1,000th interest in a 5.625% Fixed Rate Perpetual Non-Cumulative Preference Share, Series B, par value $1.00 and liquidation preference $25,000 (Series B Depositary Shares). Grant Kvalheim, an executive officer, purchased 40,000 Series A Depositary Shares. Marc Beilinson, member of our Board of Directors, purchased 10,000 Series A Depositary Shares and 10,000 Series B Depositary Shares.
|
||||||||||||||
2 As of December 31, 2019, our Board of Directors had not authorized any purchases of depositary shares in connection with a publicly announced plan or program.
|
|
Years ended December 31,
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Net income available to AHL common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
|
$
|
773
|
|
|
$
|
579
|
|
Non-operating adjustments
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment gains (losses), net of offsets
|
994
|
|
|
(274
|
)
|
|
199
|
|
|
47
|
|
|
(56
|
)
|
|||||
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets
|
(65
|
)
|
|
242
|
|
|
230
|
|
|
67
|
|
|
(30
|
)
|
|||||
Integration, restructuring and other non-operating expenses
|
(70
|
)
|
|
(22
|
)
|
|
(68
|
)
|
|
(22
|
)
|
|
(58
|
)
|
|||||
Stock compensation expense
|
(12
|
)
|
|
(11
|
)
|
|
(33
|
)
|
|
(82
|
)
|
|
(67
|
)
|
|||||
Income tax (expense) benefit – non-operating
|
—
|
|
|
(22
|
)
|
|
(25
|
)
|
|
4
|
|
|
30
|
|
|||||
Less: Total non-operating adjustments
|
847
|
|
|
(87
|
)
|
|
303
|
|
|
14
|
|
|
(181
|
)
|
|||||
Adjusted operating income available to common shareholders
|
$
|
1,289
|
|
|
$
|
1,140
|
|
|
$
|
1,055
|
|
|
$
|
759
|
|
|
$
|
760
|
|
|
Years ended December 31,
|
|||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||
Basic weighted average common shares outstanding – Class A
|
153.9
|
|
|
160.5
|
|
|
107.7
|
|
|
52.1
|
|
|
41.2
|
|
Conversion of Class B common shares to Class A common shares
|
25.4
|
|
|
29.3
|
|
|
81.6
|
|
|
134.5
|
|
|
133.9
|
|
Conversion of Class M common shares to Class A common shares
|
5.1
|
|
|
5.6
|
|
|
6.1
|
|
|
6.6
|
|
|
—
|
|
Effect of other stock compensation plans
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|
0.2
|
|
|
0.1
|
|
Weighted average common shares outstanding – adjusted operating
|
184.8
|
|
|
195.9
|
|
|
195.9
|
|
|
193.4
|
|
|
175.2
|
|
|
Years ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Basic earnings per share – Class A common shares
|
$
|
11.44
|
|
|
$
|
5.34
|
|
|
$
|
6.95
|
|
|
$
|
4.14
|
|
|
$
|
3.31
|
|
Non-operating adjustments
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment gains (losses), net of offsets
|
5.39
|
|
|
(1.40
|
)
|
|
1.02
|
|
|
0.24
|
|
|
(0.33
|
)
|
|||||
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets
|
(0.36
|
)
|
|
1.24
|
|
|
1.17
|
|
|
0.35
|
|
|
(0.17
|
)
|
|||||
Integration, restructuring and other non-operating expenses
|
(0.37
|
)
|
|
(0.12
|
)
|
|
(0.35
|
)
|
|
(0.12
|
)
|
|
(0.33
|
)
|
|||||
Stock compensation expense
|
(0.07
|
)
|
|
(0.05
|
)
|
|
(0.17
|
)
|
|
(0.42
|
)
|
|
(0.38
|
)
|
|||||
Income tax (expense) benefit – non-operating
|
—
|
|
|
(0.11
|
)
|
|
(0.13
|
)
|
|
0.02
|
|
|
0.17
|
|
|||||
Less: Total non-operating adjustments
|
4.59
|
|
|
(0.44
|
)
|
|
1.54
|
|
|
0.07
|
|
|
(1.04
|
)
|
|||||
Effect of items convertible to or settled in Class A common shares
|
(0.12
|
)
|
|
(0.04
|
)
|
|
0.02
|
|
|
0.14
|
|
|
0.01
|
|
|||||
Adjusted operating earnings per common share
|
$
|
6.97
|
|
|
$
|
5.82
|
|
|
$
|
5.39
|
|
|
$
|
3.93
|
|
|
$
|
4.34
|
|
|
December 31,
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Total AHL shareholders’ equity
|
$
|
13,391
|
|
|
$
|
8,276
|
|
|
$
|
9,176
|
|
|
$
|
6,881
|
|
|
$
|
5,367
|
|
Less: Preferred stock
|
1,172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total AHL common shareholders’ equity
|
12,219
|
|
|
8,276
|
|
|
9,176
|
|
|
6,881
|
|
|
5,367
|
|
|||||
Less: AOCI
|
2,281
|
|
|
(472
|
)
|
|
1,449
|
|
|
366
|
|
|
(241
|
)
|
|||||
Less: Accumulated change in fair value of reinsurance assets
|
493
|
|
|
(75
|
)
|
|
161
|
|
|
63
|
|
|
19
|
|
|||||
Total adjusted AHL common shareholders’ equity
|
$
|
9,445
|
|
|
$
|
8,823
|
|
|
$
|
7,566
|
|
|
$
|
6,452
|
|
|
$
|
5,589
|
|
|
December 31,
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Average AHL shareholders’ equity
|
$
|
10,834
|
|
|
$
|
8,726
|
|
|
$
|
8,029
|
|
|
$
|
6,124
|
|
|
$
|
4,959
|
|
Less: Average preferred stock
|
586
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Less: Average AOCI
|
905
|
|
|
489
|
|
|
908
|
|
|
63
|
|
|
203
|
|
|||||
Less: Average accumulated change in fair value of reinsurance assets
|
209
|
|
|
43
|
|
|
112
|
|
|
41
|
|
|
58
|
|
|||||
Average adjusted AHL common shareholders’ equity
|
$
|
9,134
|
|
|
$
|
8,194
|
|
|
$
|
7,009
|
|
|
$
|
6,020
|
|
|
$
|
4,698
|
|
|
December 31,
|
|||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||
Class A common shares outstanding
|
142.8
|
|
|
162.2
|
|
|
142.2
|
|
|
77.0
|
|
|
50.1
|
|
Conversion of Class B common shares to Class A common shares
|
25.4
|
|
|
25.4
|
|
|
47.4
|
|
|
111.8
|
|
|
136.0
|
|
Conversion of Class M common shares to Class A common shares
|
5.5
|
|
|
4.9
|
|
|
6.4
|
|
|
6.8
|
|
|
—
|
|
Effect of other stock compensation plans
|
1.2
|
|
|
1.0
|
|
|
0.9
|
|
|
0.8
|
|
|
—
|
|
Adjusted operating common shares outstanding
|
174.9
|
|
|
193.5
|
|
|
196.9
|
|
|
196.4
|
|
|
186.1
|
|
|
December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Book value per common share
|
$
|
76.21
|
|
|
$
|
42.45
|
|
|
$
|
46.60
|
|
|
$
|
35.78
|
|
|
$
|
28.84
|
|
Preferred stock
|
(6.67
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
AOCI
|
(12.98
|
)
|
|
2.42
|
|
|
(7.36
|
)
|
|
(1.90
|
)
|
|
1.29
|
|
|||||
Accumulated change in fair value of reinsurance assets
|
(2.80
|
)
|
|
0.39
|
|
|
(0.82
|
)
|
|
(0.33
|
)
|
|
(0.10
|
)
|
|||||
Effect of items convertible to or settled in Class A common shares
|
0.26
|
|
|
0.33
|
|
|
0.01
|
|
|
(0.70
|
)
|
|
—
|
|
|||||
Adjusted book value per common share
|
$
|
54.02
|
|
|
$
|
45.59
|
|
|
$
|
38.43
|
|
|
$
|
32.85
|
|
|
$
|
30.03
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Retail sales
|
$
|
6,782
|
|
|
$
|
7,542
|
|
|
$
|
5,353
|
|
Flow reinsurance
|
3,950
|
|
|
2,423
|
|
|
875
|
|
|||
Funding agreements
|
1,301
|
|
|
650
|
|
|
3,000
|
|
|||
Pension risk transfer
|
6,042
|
|
|
2,581
|
|
|
2,253
|
|
|||
Total organic deposits
|
18,075
|
|
|
13,196
|
|
|
11,481
|
|
|||
Inorganic deposits
|
—
|
|
|
26,982
|
|
|
—
|
|
|||
Gross deposits
|
18,075
|
|
|
40,178
|
|
|
11,481
|
|
|||
Deposits attributable to ACRA noncontrolling interest
|
(544
|
)
|
|
—
|
|
|
—
|
|
|||
Net deposits
|
$
|
17,531
|
|
|
$
|
40,178
|
|
|
$
|
11,481
|
|
•
|
Investment Gains (Losses), Net of Offsets—Consists 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 MVAs associated with surrenders or terminations of contracts.
|
•
|
Change in Fair Values of Derivatives and Embedded Derivatives – FIAs, Net of Offsets—Consists of 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—Consists 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—Consists of stock compensation expenses associated with our share incentive plans, excluding our long-term incentive plan, which are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans.
|
•
|
Bargain Purchase Gain—Consists of adjustments to net income available to AHL common shareholders as they are not related to our underlying profitability drivers.
|
•
|
Income Tax (Expense) Benefit – Non-operating—Consists of 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.
|
|
Years ended December 31,
|
||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
$
|
16,258
|
|
|
$
|
6,637
|
|
|
$
|
8,788
|
|
Benefits and expenses
|
13,956
|
|
|
5,462
|
|
|
7,324
|
|
|||
Income before income taxes
|
2,302
|
|
|
1,175
|
|
|
1,464
|
|
|||
Income tax expense
|
117
|
|
|
122
|
|
|
106
|
|
|||
Net income
|
2,185
|
|
|
1,053
|
|
|
1,358
|
|
|||
Less: Net income attributable to noncontrolling interests
|
13
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Athene Holding Ltd.
|
2,172
|
|
|
1,053
|
|
|
1,358
|
|
|||
Less: preferred stock dividends
|
36
|
|
|
—
|
|
|
—
|
|
|||
Net income available to AHL common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
|
|
|
|
|
|
||||||
ROE
|
19.7
|
%
|
|
12.1
|
%
|
|
16.9
|
%
|
|
Years ended December 31,
|
||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income available to AHL common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
Non-operating adjustments
|
|
|
|
|
|
||||||
Realized gains (losses) on sale of AFS securities
|
125
|
|
|
13
|
|
|
137
|
|
|||
Unrealized, impairments and other investment gains (losses)
|
(4
|
)
|
|
(18
|
)
|
|
(7
|
)
|
|||
Change in fair value of reinsurance assets
|
1,411
|
|
|
(402
|
)
|
|
152
|
|
|||
Offsets to investment gains (losses)
|
(538
|
)
|
|
133
|
|
|
(83
|
)
|
|||
Investment gains (losses), net of offsets
|
994
|
|
|
(274
|
)
|
|
199
|
|
|||
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets
|
(65
|
)
|
|
242
|
|
|
230
|
|
|||
Integration, restructuring and other non-operating expenses
|
(70
|
)
|
|
(22
|
)
|
|
(68
|
)
|
|||
Stock compensation expense
|
(12
|
)
|
|
(11
|
)
|
|
(33
|
)
|
|||
Income tax (expense) benefit – non-operating
|
—
|
|
|
(22
|
)
|
|
(25
|
)
|
|||
Less: Total non-operating adjustments
|
847
|
|
|
(87
|
)
|
|
303
|
|
|||
Adjusted operating income available to common shareholders
|
$
|
1,289
|
|
|
$
|
1,140
|
|
|
$
|
1,055
|
|
|
|
|
|
|
|
||||||
Adjusted operating income (loss) available to common shareholders by segment
|
|
|
|
|
|
||||||
Retirement Services
|
$
|
1,322
|
|
|
$
|
1,201
|
|
|
$
|
1,038
|
|
Corporate and Other
|
(33
|
)
|
|
(61
|
)
|
|
17
|
|
|||
Adjusted operating income available to common shareholders
|
$
|
1,289
|
|
|
$
|
1,140
|
|
|
$
|
1,055
|
|
|
|
|
|
|
|
||||||
Adjusted operating ROE
|
14.1
|
%
|
|
13.9
|
%
|
|
15.1
|
%
|
|||
Retirement Services adjusted operating ROE
|
17.3
|
%
|
|
18.4
|
%
|
|
21.5
|
%
|
|
Years ended December 31,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.43
|
%
|
|
4.60
|
%
|
Cost of funds
|
2.93
|
%
|
|
2.90
|
%
|
Net investment spread
|
1.50
|
%
|
|
1.70
|
%
|
|
Years ended December 31,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.43
|
%
|
|
4.60
|
%
|
Cost of crediting on deferred annuities
|
1.97
|
%
|
|
1.95
|
%
|
Investment margin on deferred annuities
|
2.46
|
%
|
|
2.65
|
%
|
|
Years ended December 31,
|
||||
|
2018
|
|
2017
|
||
Net investment earned rate
|
4.60
|
%
|
|
4.70
|
%
|
Cost of funds
|
2.90
|
%
|
|
2.76
|
%
|
Net investment spread
|
1.70
|
%
|
|
1.94
|
%
|
|
Years ended December 31,
|
||||
|
2018
|
|
2017
|
||
Net investment earned rate
|
4.60
|
%
|
|
4.70
|
%
|
Cost of crediting on deferred annuities
|
1.95
|
%
|
|
1.88
|
%
|
Investment margin on deferred annuities
|
2.65
|
%
|
|
2.82
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
AFS securities, at fair value
|
$
|
71,374
|
|
|
55.0
|
%
|
|
$
|
59,265
|
|
|
55.1
|
%
|
Trading securities, at fair value
|
2,054
|
|
|
1.6
|
%
|
|
1,949
|
|
|
1.8
|
%
|
||
Equity securities, at fair value
|
247
|
|
|
0.2
|
%
|
|
216
|
|
|
0.2
|
%
|
||
Mortgage loans, net of allowances
|
14,306
|
|
|
11.0
|
%
|
|
10,340
|
|
|
9.6
|
%
|
||
Investment funds
|
731
|
|
|
0.6
|
%
|
|
703
|
|
|
0.6
|
%
|
||
Policy loans
|
417
|
|
|
0.3
|
%
|
|
488
|
|
|
0.4
|
%
|
||
Funds withheld at interest
|
15,181
|
|
|
11.7
|
%
|
|
15,023
|
|
|
14.0
|
%
|
||
Derivative assets
|
2,888
|
|
|
2.2
|
%
|
|
1,043
|
|
|
1.0
|
%
|
||
Short-term investments
|
596
|
|
|
0.5
|
%
|
|
191
|
|
|
0.2
|
%
|
||
Other investments
|
158
|
|
|
0.1
|
%
|
|
122
|
|
|
0.1
|
%
|
||
Total investments
|
107,952
|
|
|
83.2
|
%
|
|
89,340
|
|
|
83.0
|
%
|
||
Investments in related parties
|
|
|
|
|
|
|
|
||||||
AFS securities, at fair value
|
3,804
|
|
|
2.9
|
%
|
|
1,437
|
|
|
1.3
|
%
|
||
Trading securities, at fair value
|
785
|
|
|
0.6
|
%
|
|
249
|
|
|
0.2
|
%
|
||
Equity securities, at fair value
|
58
|
|
|
0.0
|
%
|
|
120
|
|
|
0.1
|
%
|
||
Mortgage loans
|
653
|
|
|
0.5
|
%
|
|
291
|
|
|
0.3
|
%
|
||
Investment funds
|
2,886
|
|
|
2.2
|
%
|
|
2,232
|
|
|
2.1
|
%
|
||
Funds withheld at interest
|
13,220
|
|
|
10.2
|
%
|
|
13,577
|
|
|
12.6
|
%
|
||
Other investments
|
487
|
|
|
0.4
|
%
|
|
386
|
|
|
0.4
|
%
|
||
Total related party investments
|
21,893
|
|
|
16.8
|
%
|
|
18,292
|
|
|
17.0
|
%
|
||
Total investments including related party
|
$
|
129,845
|
|
|
100.0
|
%
|
|
$
|
107,632
|
|
|
100.0
|
%
|
|
December 31, 2019
|
|||||||||||||||||
(In millions, except percentages)
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Percent of Total
|
|||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
0.0
|
%
|
U.S. state, municipal and political subdivisions
|
1,322
|
|
|
220
|
|
|
(1
|
)
|
|
1,541
|
|
|
2.1
|
%
|
||||
Foreign governments
|
298
|
|
|
29
|
|
|
—
|
|
|
327
|
|
|
0.4
|
%
|
||||
Corporate
|
44,106
|
|
|
3,332
|
|
|
(210
|
)
|
|
47,228
|
|
|
62.8
|
%
|
||||
CLO
|
7,524
|
|
|
21
|
|
|
(196
|
)
|
|
7,349
|
|
|
9.8
|
%
|
||||
ABS
|
5,018
|
|
|
124
|
|
|
(24
|
)
|
|
5,118
|
|
|
6.8
|
%
|
||||
CMBS
|
2,304
|
|
|
104
|
|
|
(8
|
)
|
|
2,400
|
|
|
3.2
|
%
|
||||
RMBS
|
6,872
|
|
|
513
|
|
|
(10
|
)
|
|
7,375
|
|
|
9.8
|
%
|
||||
Total AFS securities
|
67,479
|
|
|
4,344
|
|
|
(449
|
)
|
|
71,374
|
|
|
94.9
|
%
|
||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
0.0
|
%
|
||||
CLO
|
951
|
|
|
3
|
|
|
(18
|
)
|
|
936
|
|
|
1.3
|
%
|
||||
ABS
|
2,814
|
|
|
37
|
|
|
(2
|
)
|
|
2,849
|
|
|
3.8
|
%
|
||||
Total AFS securities – related party
|
3,783
|
|
|
41
|
|
|
(20
|
)
|
|
3,804
|
|
|
5.1
|
%
|
||||
Total AFS securities including related party
|
$
|
71,262
|
|
|
$
|
4,385
|
|
|
$
|
(469
|
)
|
|
$
|
75,178
|
|
|
100.0
|
%
|
|
December 31, 2018
|
|||||||||||||||||
(In millions, except percentages)
|
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
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
Corporate
|
|
|
|
|
|
|
|
||||||
Industrial other1
|
$
|
14,956
|
|
|
19.9
|
%
|
|
$
|
11,706
|
|
|
19.3
|
%
|
Financial
|
15,286
|
|
|
20.3
|
%
|
|
11,809
|
|
|
19.5
|
%
|
||
Utilities
|
11,217
|
|
|
14.9
|
%
|
|
9,055
|
|
|
14.9
|
%
|
||
Communication
|
2,739
|
|
|
3.7
|
%
|
|
2,313
|
|
|
3.8
|
%
|
||
Transportation
|
3,049
|
|
|
4.1
|
%
|
|
2,214
|
|
|
3.6
|
%
|
||
Total corporate
|
47,247
|
|
|
62.9
|
%
|
|
37,097
|
|
|
61.1
|
%
|
||
Other government-related securities
|
|
|
|
|
|
|
|
||||||
U.S. state, municipal and political subdivisions
|
1,541
|
|
|
2.1
|
%
|
|
1,293
|
|
|
2.1
|
%
|
||
Foreign governments
|
327
|
|
|
0.4
|
%
|
|
161
|
|
|
0.3
|
%
|
||
U.S. government and agencies
|
36
|
|
|
0.0
|
%
|
|
57
|
|
|
0.1
|
%
|
||
Total non-structured securities
|
49,151
|
|
|
65.4
|
%
|
|
38,608
|
|
|
63.6
|
%
|
||
Structured securities
|
|
|
|
|
|
|
|
||||||
CLO
|
8,285
|
|
|
11.0
|
%
|
|
5,923
|
|
|
9.8
|
%
|
||
ABS
|
7,967
|
|
|
10.6
|
%
|
|
5,795
|
|
|
9.5
|
%
|
||
CMBS
|
2,400
|
|
|
3.2
|
%
|
|
2,357
|
|
|
3.9
|
%
|
||
RMBS
|
|
|
|
|
|
|
|
||||||
Agency
|
3
|
|
|
0.0
|
%
|
|
59
|
|
|
0.1
|
%
|
||
Non-agency
|
7,372
|
|
|
9.8
|
%
|
|
7,960
|
|
|
13.1
|
%
|
||
Total structured securities
|
26,027
|
|
|
34.6
|
%
|
|
22,094
|
|
|
36.4
|
%
|
||
Total AFS securities including related party
|
$
|
75,178
|
|
|
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
|
|
December 31, 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
|
$
|
36,392
|
|
|
$
|
38,667
|
|
|
51.4
|
%
|
|
$
|
31,106
|
|
|
$
|
31,311
|
|
|
51.6
|
%
|
2
|
30,752
|
|
|
32,336
|
|
|
43.0
|
%
|
|
26,682
|
|
|
25,871
|
|
|
42.6
|
%
|
||||
Total investment grade
|
67,144
|
|
|
71,003
|
|
|
94.4
|
%
|
|
57,788
|
|
|
57,182
|
|
|
94.2
|
%
|
||||
3
|
3,237
|
|
|
3,300
|
|
|
4.4
|
%
|
|
2,866
|
|
|
2,746
|
|
|
4.5
|
%
|
||||
4
|
740
|
|
|
740
|
|
|
1.0
|
%
|
|
591
|
|
|
533
|
|
|
0.9
|
%
|
||||
5
|
102
|
|
|
94
|
|
|
0.1
|
%
|
|
235
|
|
|
232
|
|
|
0.4
|
%
|
||||
6
|
39
|
|
|
41
|
|
|
0.1
|
%
|
|
7
|
|
|
9
|
|
|
0.0
|
%
|
||||
Total below investment grade
|
4,118
|
|
|
4,175
|
|
|
5.6
|
%
|
|
3,699
|
|
|
3,520
|
|
|
5.8
|
%
|
||||
Total AFS securities including related party
|
$
|
71,262
|
|
|
$
|
75,178
|
|
|
100.0
|
%
|
|
$
|
61,487
|
|
|
$
|
60,702
|
|
|
100.0
|
%
|
|
December 31, 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
|
$
|
28,299
|
|
|
37.7
|
%
|
|
$
|
19,690
|
|
|
32.4
|
%
|
BBB
|
29,032
|
|
|
38.6
|
%
|
|
23,326
|
|
|
38.4
|
%
|
||
Non-rated1
|
10,014
|
|
|
13.3
|
%
|
|
9,624
|
|
|
15.9
|
%
|
||
Total investment grade
|
67,345
|
|
|
89.6
|
%
|
|
52,640
|
|
|
86.7
|
%
|
||
BB
|
3,403
|
|
|
4.5
|
%
|
|
2,670
|
|
|
4.4
|
%
|
||
B
|
813
|
|
|
1.1
|
%
|
|
875
|
|
|
1.4
|
%
|
||
CCC
|
1,981
|
|
|
2.6
|
%
|
|
2,340
|
|
|
3.9
|
%
|
||
CC and lower
|
1,076
|
|
|
1.4
|
%
|
|
1,296
|
|
|
2.1
|
%
|
||
Non-rated1
|
560
|
|
|
0.8
|
%
|
|
881
|
|
|
1.5
|
%
|
||
Total below investment grade
|
7,833
|
|
|
10.4
|
%
|
|
8,062
|
|
|
13.3
|
%
|
||
Total AFS securities including related party
|
$
|
75,178
|
|
|
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 modeled LBaSS, and prior to January 1, 2019, non-modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
NAIC designation
|
|
|
|
|
|
|
|
||||||
1
|
$
|
4,626
|
|
|
55.9
|
%
|
|
$
|
3,005
|
|
|
50.7
|
%
|
2
|
3,499
|
|
|
42.2
|
%
|
|
2,498
|
|
|
42.2
|
%
|
||
Total investment grade
|
8,125
|
|
|
98.1
|
%
|
|
5,503
|
|
|
92.9
|
%
|
||
3
|
133
|
|
|
1.6
|
%
|
|
393
|
|
|
6.7
|
%
|
||
4
|
20
|
|
|
0.2
|
%
|
|
20
|
|
|
0.3
|
%
|
||
5
|
7
|
|
|
0.1
|
%
|
|
7
|
|
|
0.1
|
%
|
||
6
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total below investment grade
|
160
|
|
|
1.9
|
%
|
|
420
|
|
|
7.1
|
%
|
||
Total AFS CLO including related party
|
$
|
8,285
|
|
|
100.0
|
%
|
|
$
|
5,923
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
NRSRO rating agency designation
|
|
|
|
|
|
|
|
||||||
AAA/AA/A
|
$
|
4,626
|
|
|
55.9
|
%
|
|
$
|
2,921
|
|
|
49.3
|
%
|
BBB
|
3,499
|
|
|
42.2
|
%
|
|
2,829
|
|
|
47.8
|
%
|
||
Total investment grade
|
8,125
|
|
|
98.1
|
%
|
|
5,750
|
|
|
97.1
|
%
|
||
BB
|
133
|
|
|
1.6
|
%
|
|
146
|
|
|
2.4
|
%
|
||
B
|
20
|
|
|
0.2
|
%
|
|
27
|
|
|
0.5
|
%
|
||
CCC
|
7
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
||
CC and lower
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total below investment grade
|
160
|
|
|
1.9
|
%
|
|
173
|
|
|
2.9
|
%
|
||
Total AFS CLO including related party
|
$
|
8,285
|
|
|
100.0
|
%
|
|
$
|
5,923
|
|
|
100.0
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
NAIC designation
|
|
|
|
|
|
|
|
||||||
1
|
$
|
6,701
|
|
|
90.9
|
%
|
|
$
|
7,415
|
|
|
92.5
|
%
|
2
|
330
|
|
|
4.5
|
%
|
|
269
|
|
|
3.3
|
%
|
||
Total investment grade
|
7,031
|
|
|
95.4
|
%
|
|
7,684
|
|
|
95.8
|
%
|
||
3
|
289
|
|
|
3.9
|
%
|
|
207
|
|
|
2.6
|
%
|
||
4
|
52
|
|
|
0.7
|
%
|
|
106
|
|
|
1.3
|
%
|
||
5
|
3
|
|
|
0.0
|
%
|
|
22
|
|
|
0.3
|
%
|
||
6
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total below investment grade
|
344
|
|
|
4.6
|
%
|
|
335
|
|
|
4.2
|
%
|
||
Total AFS RMBS
|
$
|
7,375
|
|
|
100.0
|
%
|
|
$
|
8,019
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
NRSRO rating agency designation
|
|
|
|
|
|
|
|
||||||
AAA/AA/A
|
$
|
715
|
|
|
9.7
|
%
|
|
$
|
487
|
|
|
6.1
|
%
|
BBB
|
606
|
|
|
8.2
|
%
|
|
220
|
|
|
2.7
|
%
|
||
Non-rated1
|
2,428
|
|
|
32.9
|
%
|
|
2,932
|
|
|
36.6
|
%
|
||
Total investment grade
|
3,749
|
|
|
50.8
|
%
|
|
3,639
|
|
|
45.4
|
%
|
||
BB
|
281
|
|
|
3.8
|
%
|
|
332
|
|
|
4.1
|
%
|
||
B
|
232
|
|
|
3.2
|
%
|
|
301
|
|
|
3.8
|
%
|
||
CCC
|
1,890
|
|
|
25.6
|
%
|
|
2,259
|
|
|
28.2
|
%
|
||
CC and lower
|
1,074
|
|
|
14.6
|
%
|
|
1,292
|
|
|
16.1
|
%
|
||
Non-rated1
|
149
|
|
|
2.0
|
%
|
|
196
|
|
|
2.4
|
%
|
||
Total below investment grade
|
3,626
|
|
|
49.2
|
%
|
|
4,380
|
|
|
54.6
|
%
|
||
Total AFS RMBS
|
$
|
7,375
|
|
|
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. The NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
|
|
December 31, 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
|
$
|
5,672
|
|
|
$
|
(160
|
)
|
|
$
|
5,512
|
|
|
97.2
|
%
|
|
$
|
38,667
|
|
|
(0.4
|
)%
|
2
|
5,252
|
|
|
(223
|
)
|
|
5,029
|
|
|
95.8
|
%
|
|
32,336
|
|
|
(0.7
|
)%
|
||||
Total investment grade
|
10,924
|
|
|
(383
|
)
|
|
10,541
|
|
|
96.5
|
%
|
|
71,003
|
|
|
(0.5
|
)%
|
||||
3
|
945
|
|
|
(41
|
)
|
|
904
|
|
|
95.7
|
%
|
|
3,300
|
|
|
(1.2
|
)%
|
||||
4
|
338
|
|
|
(34
|
)
|
|
304
|
|
|
89.9
|
%
|
|
740
|
|
|
(4.6
|
)%
|
||||
5
|
79
|
|
|
(11
|
)
|
|
68
|
|
|
86.1
|
%
|
|
94
|
|
|
(11.7
|
)%
|
||||
6
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|
41
|
|
|
—
|
%
|
||||
Total below investment grade
|
1,363
|
|
|
(86
|
)
|
|
1,277
|
|
|
93.7
|
%
|
|
4,175
|
|
|
(2.1
|
)%
|
||||
Total
|
$
|
12,287
|
|
|
$
|
(469
|
)
|
|
$
|
11,818
|
|
|
96.2
|
%
|
|
$
|
75,178
|
|
|
(0.6
|
)%
|
|
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
|
)%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Net Carrying Value
|
|
Percent of Total
|
|
Net Carrying Value
|
|
Percent of Total
|
||||||
Property type
|
|
|
|
|
|
|
|
||||||
Office building
|
$
|
2,899
|
|
|
19.3
|
%
|
|
$
|
2,221
|
|
|
20.9
|
%
|
Retail
|
2,182
|
|
|
14.6
|
%
|
|
1,660
|
|
|
15.6
|
%
|
||
Apartment
|
2,142
|
|
|
14.3
|
%
|
|
791
|
|
|
7.4
|
%
|
||
Hotels
|
1,104
|
|
|
7.4
|
%
|
|
1,040
|
|
|
9.8
|
%
|
||
Industrial
|
1,448
|
|
|
9.7
|
%
|
|
1,196
|
|
|
11.2
|
%
|
||
Other commercial1
|
730
|
|
|
4.9
|
%
|
|
389
|
|
|
3.7
|
%
|
||
Total net commercial mortgage loans
|
10,505
|
|
|
70.2
|
%
|
|
7,297
|
|
|
68.6
|
%
|
||
Residential loans
|
4,454
|
|
|
29.8
|
%
|
|
3,334
|
|
|
31.4
|
%
|
||
Total mortgage loans, net of allowances
|
$
|
14,959
|
|
|
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.
|
|
December 31, 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
|
$
|
16
|
|
|
2.2
|
%
|
|
$
|
35
|
|
|
4.9
|
%
|
Equity securities
|
6
|
|
|
0.8
|
%
|
|
50
|
|
|
7.0
|
%
|
||
Investment funds
|
683
|
|
|
93.9
|
%
|
|
624
|
|
|
87.7
|
%
|
||
Cash and cash equivalents
|
3
|
|
|
0.4
|
%
|
|
2
|
|
|
0.3
|
%
|
||
Other assets
|
20
|
|
|
2.7
|
%
|
|
1
|
|
|
0.1
|
%
|
||
Total assets of consolidated VIEs
|
$
|
728
|
|
|
100.0
|
%
|
|
$
|
712
|
|
|
100.0
|
%
|
|
December 31, 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
|
$
|
15
|
|
|
0.1
|
%
|
|
$
|
77
|
|
|
0.3
|
%
|
U.S. state, municipal and political subdivisions
|
482
|
|
|
1.7
|
%
|
|
563
|
|
|
2.0
|
%
|
||
Foreign governments
|
143
|
|
|
0.5
|
%
|
|
145
|
|
|
0.5
|
%
|
||
Corporate
|
14,590
|
|
|
51.4
|
%
|
|
16,267
|
|
|
56.9
|
%
|
||
CLO
|
2,586
|
|
|
9.1
|
%
|
|
1,990
|
|
|
7.0
|
%
|
||
ABS
|
2,510
|
|
|
8.8
|
%
|
|
1,601
|
|
|
5.6
|
%
|
||
CMBS
|
756
|
|
|
2.7
|
%
|
|
575
|
|
|
2.0
|
%
|
||
RMBS
|
1,482
|
|
|
5.2
|
%
|
|
1,876
|
|
|
6.6
|
%
|
||
Equity securities
|
74
|
|
|
0.3
|
%
|
|
66
|
|
|
0.2
|
%
|
||
Mortgage loans
|
4,357
|
|
|
15.3
|
%
|
|
3,815
|
|
|
13.3
|
%
|
||
Investment funds
|
807
|
|
|
2.8
|
%
|
|
660
|
|
|
2.3
|
%
|
||
Derivative assets
|
224
|
|
|
0.8
|
%
|
|
77
|
|
|
0.3
|
%
|
||
Short-term investments
|
157
|
|
|
0.6
|
%
|
|
641
|
|
|
2.2
|
%
|
||
Cash and cash equivalents
|
239
|
|
|
0.8
|
%
|
|
455
|
|
|
1.6
|
%
|
||
Other assets and liabilities
|
(21
|
)
|
|
(0.1
|
)%
|
|
(208
|
)
|
|
(0.8
|
)%
|
||
Total funds withheld at interest including related party
|
$
|
28,401
|
|
|
100.0
|
%
|
|
$
|
28,600
|
|
|
100.0
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Net Invested Asset Value1
|
|
Percent of Total
|
|
Net Invested Asset Value1
|
|
Percent of Total
|
||||||
Corporate
|
$
|
55,077
|
|
|
46.9
|
%
|
|
$
|
55,772
|
|
|
50.2
|
%
|
CLO
|
10,223
|
|
|
8.7
|
%
|
|
8,275
|
|
|
7.5
|
%
|
||
Credit
|
65,300
|
|
|
55.6
|
%
|
|
64,047
|
|
|
57.7
|
%
|
||
RMBS
|
8,394
|
|
|
7.1
|
%
|
|
9,814
|
|
|
8.9
|
%
|
||
Mortgage loans
|
18,528
|
|
|
15.8
|
%
|
|
14,423
|
|
|
13.0
|
%
|
||
CMBS
|
2,930
|
|
|
2.5
|
%
|
|
3,018
|
|
|
2.7
|
%
|
||
Real estate
|
29,852
|
|
|
25.4
|
%
|
|
27,255
|
|
|
24.6
|
%
|
||
ABS
|
10,317
|
|
|
8.8
|
%
|
|
7,706
|
|
|
6.9
|
%
|
||
Alternative investments
|
5,586
|
|
|
4.8
|
%
|
|
4,492
|
|
|
4.1
|
%
|
||
State, municipal, political subdivisions and foreign government
|
2,260
|
|
|
1.9
|
%
|
|
2,122
|
|
|
1.9
|
%
|
||
Equity securities
|
365
|
|
|
0.3
|
%
|
|
467
|
|
|
0.4
|
%
|
||
Short-term investments
|
624
|
|
|
0.5
|
%
|
|
765
|
|
|
0.7
|
%
|
||
U.S. government and agencies
|
49
|
|
|
0.0
|
%
|
|
134
|
|
|
0.1
|
%
|
||
Other investments
|
19,201
|
|
|
16.3
|
%
|
|
15,686
|
|
|
14.1
|
%
|
||
Cash and equivalents
|
1,958
|
|
|
1.7
|
%
|
|
2,881
|
|
|
2.6
|
%
|
||
Policy loans and other
|
1,175
|
|
|
1.0
|
%
|
|
1,165
|
|
|
1.0
|
%
|
||
Net invested assets
|
$
|
117,486
|
|
|
100.0
|
%
|
|
$
|
111,034
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 See Key Operating and Non-GAAP Measures for the definition of net invested assets.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Net Invested Asset Value
|
|
Percent of Total
|
|
Net Invested Asset Value
|
|
Percent of Total
|
||||||
Retirement Services
|
|
|
|
|
|
|
|
||||||
Differentiated investments
|
|
|
|
|
|
|
|
||||||
AmeriHome
|
$
|
595
|
|
|
10.7
|
%
|
|
$
|
568
|
|
|
12.6
|
%
|
MidCap
|
547
|
|
|
9.8
|
%
|
|
553
|
|
|
12.3
|
%
|
||
Catalina
|
271
|
|
|
4.9
|
%
|
|
232
|
|
|
5.2
|
%
|
||
Venerable
|
99
|
|
|
1.8
|
%
|
|
92
|
|
|
2.1
|
%
|
||
Other
|
208
|
|
|
3.7
|
%
|
|
229
|
|
|
5.1
|
%
|
||
Total differentiated investments
|
1,720
|
|
|
30.9
|
%
|
|
1,674
|
|
|
37.3
|
%
|
||
Real estate
|
1,430
|
|
|
25.6
|
%
|
|
1,015
|
|
|
22.6
|
%
|
||
Credit
|
968
|
|
|
17.3
|
%
|
|
537
|
|
|
11.9
|
%
|
||
Private equity
|
378
|
|
|
6.8
|
%
|
|
279
|
|
|
6.2
|
%
|
||
Real assets
|
349
|
|
|
6.2
|
%
|
|
276
|
|
|
6.2
|
%
|
||
Natural resources
|
51
|
|
|
0.9
|
%
|
|
55
|
|
|
1.2
|
%
|
||
Other
|
58
|
|
|
1.0
|
%
|
|
4
|
|
|
0.1
|
%
|
||
Total Retirement Services alternative investments
|
4,954
|
|
|
88.7
|
%
|
|
3,840
|
|
|
85.5
|
%
|
||
Corporate and Other
|
|
|
|
|
|
|
|
||||||
Athora
|
140
|
|
|
2.5
|
%
|
|
130
|
|
|
2.9
|
%
|
||
Credit
|
128
|
|
|
2.3
|
%
|
|
203
|
|
|
4.5
|
%
|
||
Natural resources
|
245
|
|
|
4.4
|
%
|
|
213
|
|
|
4.8
|
%
|
||
Public equities1
|
119
|
|
|
2.1
|
%
|
|
100
|
|
|
2.2
|
%
|
||
Other
|
—
|
|
|
—
|
%
|
|
6
|
|
|
0.1
|
%
|
||
Total Corporate and Other alternative investments
|
632
|
|
|
11.3
|
%
|
|
652
|
|
|
14.5
|
%
|
||
Net alternative investments
|
$
|
5,586
|
|
|
100.0
|
%
|
|
$
|
4,492
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 As of December 31, 2019, public equities is exclusively comprised of an investment in OneMain Holdings, Inc. (ticker: OMF).
|
|
December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Total AHL shareholders’ equity
|
$
|
13,391
|
|
|
$
|
8,276
|
|
|
$
|
9,176
|
|
Less: Preferred stock
|
1,172
|
|
|
—
|
|
|
—
|
|
|||
Total AHL common shareholders’ equity
|
12,219
|
|
|
8,276
|
|
|
9,176
|
|
|||
Less: AOCI
|
2,281
|
|
|
(472
|
)
|
|
1,449
|
|
|||
Less: Accumulated change in fair value of reinsurance assets
|
493
|
|
|
(75
|
)
|
|
161
|
|
|||
Total adjusted AHL common shareholders’ equity
|
$
|
9,445
|
|
|
$
|
8,823
|
|
|
$
|
7,566
|
|
|
|
|
|
|
|
||||||
Segment adjusted common shareholders’ equity
|
|
|
|
|
|
||||||
Retirement Services
|
$
|
7,443
|
|
|
$
|
7,807
|
|
|
$
|
5,237
|
|
Corporate and Other
|
2,002
|
|
|
1,016
|
|
|
2,329
|
|
|||
Total adjusted AHL common shareholders’ equity
|
$
|
9,445
|
|
|
$
|
8,823
|
|
|
$
|
7,566
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Average AHL shareholders’ equity
|
$
|
10,834
|
|
|
$
|
8,726
|
|
|
$
|
8,029
|
|
Less: Average preferred stock
|
586
|
|
|
—
|
|
|
—
|
|
|||
Less: Average AOCI
|
905
|
|
|
489
|
|
|
908
|
|
|||
Less: Average accumulated change in fair value of reinsurance assets
|
209
|
|
|
43
|
|
|
112
|
|
|||
Average adjusted AHL common shareholders’ equity
|
$
|
9,134
|
|
|
$
|
8,194
|
|
|
$
|
7,009
|
|
|
|
|
|
|
|
||||||
Segment average adjusted common shareholders’ equity
|
|
|
|
|
|
||||||
Retirement Services
|
$
|
7,625
|
|
|
$
|
6,522
|
|
|
$
|
4,823
|
|
Corporate and Other
|
1,509
|
|
|
1,672
|
|
|
2,186
|
|
|||
Average adjusted AHL common shareholders’ equity
|
$
|
9,134
|
|
|
$
|
8,194
|
|
|
$
|
7,009
|
|
|
December 31,
|
||||||
(In millions, except percentages)
|
2019
|
|
2018
|
||||
Total debt
|
$
|
1,467
|
|
|
$
|
991
|
|
Total AHL shareholders’ equity
|
13,391
|
|
|
8,276
|
|
||
Total capitalization
|
14,858
|
|
|
9,267
|
|
||
Less: AOCI
|
2,281
|
|
|
(472
|
)
|
||
Less: Accumulated change in fair value of reinsurance assets
|
493
|
|
|
(75
|
)
|
||
Total adjusted capitalization
|
$
|
12,084
|
|
|
$
|
9,814
|
|
|
|
|
|
||||
Debt to capital ratio
|
9.9
|
%
|
|
10.7
|
%
|
||
AOCI
|
1.8
|
%
|
|
(0.5
|
)%
|
||
Accumulated change in fair value of reinsurance assets
|
0.4
|
%
|
|
(0.1
|
)%
|
||
Adjusted debt to capital ratio
|
12.1
|
%
|
|
10.1
|
%
|
|
Years ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(In millions, except percentages)
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|||||||||
GAAP net investment income
|
$
|
4,522
|
|
|
3.91
|
%
|
|
$
|
4,004
|
|
|
4.30
|
%
|
|
$
|
3,269
|
|
|
4.27
|
%
|
Change in fair value of reinsurance assets
|
680
|
|
|
0.59
|
%
|
|
301
|
|
|
0.32
|
%
|
|
191
|
|
|
0.25
|
%
|
|||
Net VIE earnings
|
80
|
|
|
0.07
|
%
|
|
37
|
|
|
0.04
|
%
|
|
77
|
|
|
0.10
|
%
|
|||
Alternative income gain (loss)
|
1
|
|
|
0.00
|
%
|
|
(34
|
)
|
|
(0.04
|
)%
|
|
(20
|
)
|
|
(0.03
|
)%
|
|||
ACRA noncontrolling interest
|
(61
|
)
|
|
(0.05
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Held for trading amortization and other
|
(43
|
)
|
|
(0.04
|
)%
|
|
(76
|
)
|
|
(0.08
|
)%
|
|
(94
|
)
|
|
(0.12
|
)%
|
|||
Total adjustments to arrive at net investment earnings/earned rate
|
657
|
|
|
0.57
|
%
|
|
228
|
|
|
0.24
|
%
|
|
154
|
|
|
0.20
|
%
|
|||
Total net investment earnings/earned rate
|
$
|
5,179
|
|
|
4.48
|
%
|
|
$
|
4,232
|
|
|
4.54
|
%
|
|
$
|
3,423
|
|
|
4.47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retirement Services
|
$
|
5,062
|
|
|
4.43
|
%
|
|
$
|
4,188
|
|
|
4.60
|
%
|
|
$
|
3,241
|
|
|
4.70
|
%
|
Corporate and Other
|
117
|
|
|
8.33
|
%
|
|
44
|
|
|
1.99
|
%
|
|
182
|
|
|
2.42
|
%
|
|||
Total net investment earnings/earned rate
|
$
|
5,179
|
|
|
4.48
|
%
|
|
$
|
4,232
|
|
|
4.54
|
%
|
|
$
|
3,423
|
|
|
4.47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retirement Services average net invested assets
|
$
|
114,310
|
|
|
|
|
$
|
90,995
|
|
|
|
|
$
|
69,014
|
|
|
|
|||
Corporate and Other average net invested assets
|
1,409
|
|
|
|
|
2,182
|
|
|
|
|
7,541
|
|
|
|
||||||
Consolidated average net invested assets
|
$
|
115,719
|
|
|
|
|
$
|
93,177
|
|
|
|
|
$
|
76,555
|
|
|
|
|
Years ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(In millions, except percentages)
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|||||||||
GAAP interest sensitive contract benefits
|
$
|
4,557
|
|
|
3.99
|
%
|
|
$
|
290
|
|
|
0.32
|
%
|
|
$
|
2,866
|
|
|
4.15
|
%
|
Interest credited other than deferred annuities and institutional products
|
232
|
|
|
0.20
|
%
|
|
65
|
|
|
0.07
|
%
|
|
(35
|
)
|
|
(0.05
|
)%
|
|||
FIA option costs
|
1,109
|
|
|
0.97
|
%
|
|
886
|
|
|
0.97
|
%
|
|
607
|
|
|
0.88
|
%
|
|||
Product charges (strategy fees)
|
(119
|
)
|
|
(0.10
|
)%
|
|
(98
|
)
|
|
(0.11
|
)%
|
|
(73
|
)
|
|
(0.10
|
)%
|
|||
Reinsurance embedded derivative impacts
|
57
|
|
|
0.05
|
%
|
|
49
|
|
|
0.05
|
%
|
|
37
|
|
|
0.05
|
%
|
|||
Change in fair value of embedded derivatives – FIAs
|
(3,644
|
)
|
|
(3.19
|
)%
|
|
436
|
|
|
0.48
|
%
|
|
(2,252
|
)
|
|
(3.26
|
)%
|
|||
Negative VOBA amortization
|
36
|
|
|
0.03
|
%
|
|
31
|
|
|
0.04
|
%
|
|
40
|
|
|
0.06
|
%
|
|||
ACRA noncontrolling interest
|
(42
|
)
|
|
(0.03
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Unit-linked change in reserves
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(29
|
)
|
|
(0.04
|
)%
|
|||
Other changes in interest sensitive contract liabilities
|
(7
|
)
|
|
(0.01
|
)%
|
|
—
|
|
|
—
|
%
|
|
(5
|
)
|
|
(0.01
|
)%
|
|||
Total adjustments to arrive at cost of crediting
|
(2,378
|
)
|
|
(2.08
|
)%
|
|
1,369
|
|
|
1.50
|
%
|
|
(1,710
|
)
|
|
(2.47
|
)%
|
|||
Retirement Services cost of crediting
|
$
|
2,179
|
|
|
1.91
|
%
|
|
$
|
1,659
|
|
|
1.82
|
%
|
|
$
|
1,156
|
|
|
1.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retirement Services cost of crediting on deferred annuities
|
$
|
1,774
|
|
|
1.97
|
%
|
|
$
|
1,431
|
|
|
1.95
|
%
|
|
$
|
1,066
|
|
|
1.88
|
%
|
Retirement Services cost of crediting on institutional products
|
405
|
|
|
3.47
|
%
|
|
228
|
|
|
3.42
|
%
|
|
90
|
|
|
2.83
|
%
|
|||
Retirement Services cost of crediting
|
$
|
2,179
|
|
|
1.91
|
%
|
|
$
|
1,659
|
|
|
1.82
|
%
|
|
$
|
1,156
|
|
|
1.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retirement Services average invested assets
|
$
|
114,310
|
|
|
|
|
$
|
90,995
|
|
|
|
|
$
|
69,014
|
|
|
|
|||
Average account value on deferred annuities
|
89,878
|
|
|
|
|
73,567
|
|
|
|
|
56,589
|
|
|
|
||||||
Average institutional reserve liabilities
|
11,632
|
|
|
|
|
6,683
|
|
|
|
|
3,194
|
|
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
GAAP benefits and expenses
|
$
|
13,956
|
|
|
$
|
5,462
|
|
|
$
|
7,324
|
|
Premiums
|
(6,382
|
)
|
|
(3,462
|
)
|
|
(2,526
|
)
|
|||
Product charges
|
(524
|
)
|
|
(449
|
)
|
|
(340
|
)
|
|||
Other revenues
|
(37
|
)
|
|
(26
|
)
|
|
(37
|
)
|
|||
Cost of crediting
|
(1,013
|
)
|
|
(724
|
)
|
|
(513
|
)
|
|||
Change in fair value of embedded derivatives – FIA, net of offsets
|
(3,577
|
)
|
|
327
|
|
|
(2,404
|
)
|
|||
DAC, DSI and VOBA amortization related to investment gains and losses
|
(477
|
)
|
|
110
|
|
|
(65
|
)
|
|||
Rider reserves related to investment gains and losses
|
(58
|
)
|
|
16
|
|
|
(16
|
)
|
|||
Policy and other operating expenses, excluding policy acquisition expenses
|
(488
|
)
|
|
(395
|
)
|
|
(435
|
)
|
|||
AmerUs closed block fair value liability
|
(152
|
)
|
|
112
|
|
|
(68
|
)
|
|||
Policyholder dividends
|
—
|
|
|
—
|
|
|
(84
|
)
|
|||
ACRA noncontrolling interest
|
(74
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(2
|
)
|
|
10
|
|
|
(30
|
)
|
|||
Total adjustments to arrive at other liability costs
|
(12,784
|
)
|
|
(4,481
|
)
|
|
(6,518
|
)
|
|||
Other liability costs
|
$
|
1,172
|
|
|
$
|
981
|
|
|
$
|
806
|
|
|
|
|
|
|
|
||||||
Retirement Services
|
$
|
1,172
|
|
|
$
|
981
|
|
|
$
|
749
|
|
Corporate and Other
|
—
|
|
|
—
|
|
|
57
|
|
|||
Consolidated other liability costs
|
$
|
1,172
|
|
|
$
|
981
|
|
|
$
|
806
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
GAAP policy and other operating expenses
|
$
|
744
|
|
|
$
|
626
|
|
|
$
|
672
|
|
Interest expense
|
(67
|
)
|
|
(57
|
)
|
|
(16
|
)
|
|||
Policy acquisition expenses, net of deferrals
|
(256
|
)
|
|
(233
|
)
|
|
(237
|
)
|
|||
Integration, restructuring and other non-operating expenses
|
(70
|
)
|
|
(22
|
)
|
|
(68
|
)
|
|||
Stock compensation expenses
|
(12
|
)
|
|
(11
|
)
|
|
(33
|
)
|
|||
ACRA noncontrolling interest
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Total adjustments to arrive at operating expenses
|
(410
|
)
|
|
(323
|
)
|
|
(354
|
)
|
|||
Operating expenses
|
$
|
334
|
|
|
$
|
303
|
|
|
$
|
318
|
|
|
|
|
|
|
|
||||||
Retirement Services
|
$
|
266
|
|
|
$
|
242
|
|
|
$
|
212
|
|
Corporate and Other
|
68
|
|
|
61
|
|
|
106
|
|
|||
Consolidated operating expenses
|
$
|
334
|
|
|
$
|
303
|
|
|
$
|
318
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Total investments, including related parties
|
$
|
129,845
|
|
|
$
|
107,632
|
|
Derivative assets
|
(2,888
|
)
|
|
(1,043
|
)
|
||
Cash and cash equivalents (including restricted cash)
|
4,639
|
|
|
3,403
|
|
||
Accrued investment income
|
807
|
|
|
682
|
|
||
Payables for collateral on derivatives
|
(2,743
|
)
|
|
(969
|
)
|
||
Reinsurance funds withheld and modified coinsurance
|
(1,440
|
)
|
|
223
|
|
||
VIE and VOE assets, liabilities and noncontrolling interest
|
730
|
|
|
718
|
|
||
Unrealized (gains) losses
|
(4,095
|
)
|
|
808
|
|
||
Ceded policy loans
|
(235
|
)
|
|
(281
|
)
|
||
Net investment receivables (payables)
|
(57
|
)
|
|
(139
|
)
|
||
ACRA noncontrolling interest
|
(7,077
|
)
|
|
—
|
|
||
Total adjustments to arrive at invested assets
|
(12,359
|
)
|
|
3,402
|
|
||
Net invested assets
|
$
|
117,486
|
|
|
$
|
111,034
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Investment funds, including related parties and VIEs
|
$
|
4,300
|
|
|
$
|
3,559
|
|
Nonredeemable preferred stock included in equity securities
|
78
|
|
|
—
|
|
||
CLO equities included in trading securities
|
405
|
|
|
125
|
|
||
Investment funds within funds withheld at interest
|
807
|
|
|
660
|
|
||
Royalties and other assets included in other investments
|
66
|
|
|
71
|
|
||
Net assets of the VIE, excluding investment funds
|
1
|
|
|
50
|
|
||
Unrealized (gains) losses and other adjustments
|
8
|
|
|
27
|
|
||
ACRA noncontrolling interest
|
(79
|
)
|
|
—
|
|
||
Total adjustments to arrive at alternative investments
|
1,286
|
|
|
933
|
|
||
Net alternative investments
|
$
|
5,586
|
|
|
$
|
4,492
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Total liabilities
|
$
|
132,734
|
|
|
$
|
117,229
|
|
Short-term debt
|
(475
|
)
|
|
—
|
|
||
Long-term debt
|
(992
|
)
|
|
(991
|
)
|
||
Derivative liabilities
|
(97
|
)
|
|
(85
|
)
|
||
Payables for collateral on derivatives and securities to repurchase
|
(3,255
|
)
|
|
(969
|
)
|
||
Funds withheld liability
|
(408
|
)
|
|
(721
|
)
|
||
Other liabilities
|
(1,181
|
)
|
|
(889
|
)
|
||
Reinsurance ceded receivables
|
(4,863
|
)
|
|
(5,534
|
)
|
||
Policy loans ceded
|
(235
|
)
|
|
(281
|
)
|
||
ACRA noncontrolling interest
|
(6,574
|
)
|
|
—
|
|
||
Other
|
(2
|
)
|
|
(27
|
)
|
||
Total adjustments to arrive at reserve liabilities
|
(18,082
|
)
|
|
(9,497
|
)
|
||
Net reserve liabilities
|
$
|
114,652
|
|
|
$
|
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
|
▪
|
AARe capital maintenance calls arising from AARe collateral calls from modco reinsurance contracts; and
|
▪
|
U.S. regulated entity capital maintenance calls from nonmodco activity.
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
2,185
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
Payment at inception of reinsurance agreements, net
|
—
|
|
|
(394
|
)
|
|
—
|
|
|||
Non-cash revenues and expenses
|
471
|
|
|
2,215
|
|
|
1,812
|
|
|||
Net cash provided by operating activities
|
2,656
|
|
|
2,874
|
|
|
3,170
|
|
|||
Sales, maturities and repayments of investments
|
17,776
|
|
|
17,069
|
|
|
17,893
|
|
|||
Purchases of investments
|
(27,687
|
)
|
|
(24,852
|
)
|
|
(24,165
|
)
|
|||
Deconsolidation of Athora Holding Ltd.
|
—
|
|
|
(296
|
)
|
|
—
|
|
|||
Other investing activities
|
(45
|
)
|
|
(94
|
)
|
|
503
|
|
|||
Net cash used in investing activities
|
(9,956
|
)
|
|
(8,173
|
)
|
|
(5,769
|
)
|
|||
Deposits on investment-type policies and contracts
|
11,569
|
|
|
10,262
|
|
|
9,056
|
|
|||
Withdrawals on investment-type policies and contracts
|
(6,548
|
)
|
|
(6,205
|
)
|
|
(4,843
|
)
|
|||
Net change in cash collateral posted for derivative transactions and securities to repurchase
|
2,286
|
|
|
(1,354
|
)
|
|
940
|
|
|||
Net proceeds and repayment of debt
|
475
|
|
|
998
|
|
|
—
|
|
|||
Issuance of preferred stock, net of expenses
|
1,172
|
|
|
—
|
|
|
—
|
|
|||
Preferred stock dividends
|
(36
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
(832
|
)
|
|
(105
|
)
|
|
(10
|
)
|
|||
Subsidiary issuance of equity interests to noncontrolling interests
|
575
|
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
(124
|
)
|
|
111
|
|
|
(95
|
)
|
|||
Net cash provided by financing activities
|
8,537
|
|
|
3,707
|
|
|
5,048
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
32
|
|
|||
Net increase (decrease) in cash and cash equivalents1
|
$
|
1,237
|
|
|
$
|
(1,592
|
)
|
|
$
|
2,481
|
|
|
|
|
|
|
|
||||||
1 Includes cash and cash equivalents, restricted cash, and cash and cash equivalents of consolidated VIEs
|
|
Payments Due by Period
|
||||||||||||||||||
(In millions)
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025 and thereafter
|
||||||||||
Interest sensitive contract liabilities
|
$
|
102,745
|
|
|
$
|
9,256
|
|
|
$
|
21,800
|
|
|
$
|
18,489
|
|
|
$
|
53,200
|
|
Future policy benefits
|
23,330
|
|
|
459
|
|
|
895
|
|
|
958
|
|
|
21,018
|
|
|||||
Other policy claims and benefits
|
138
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends payable to policyholders
|
113
|
|
|
5
|
|
|
10
|
|
|
9
|
|
|
89
|
|
|||||
Short-term debt1
|
479
|
|
|
479
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt1
|
1,351
|
|
|
41
|
|
|
83
|
|
|
83
|
|
|
1,144
|
|
|||||
Total
|
$
|
128,156
|
|
|
$
|
10,378
|
|
|
$
|
22,788
|
|
|
$
|
19,539
|
|
|
$
|
75,451
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1 The obligations for short- and long-term debt payments include contractual maturities of principal and estimated future interest payments based on the terms of the debt agreement, as described in Note 9 – Debt to the consolidated financial statements.
|
|
December 31, 2019
|
||||||||||||||
(In millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
||||||||
AFS securities
|
|
|
|
|
|
|
|
||||||||
Priced via commercial pricing services
|
$
|
29,377
|
|
|
$
|
36
|
|
|
$
|
29,329
|
|
|
$
|
12
|
|
Priced via independent broker-dealer quotations
|
45,037
|
|
|
—
|
|
|
41,183
|
|
|
3,854
|
|
||||
Priced via other methods
|
764
|
|
|
—
|
|
|
—
|
|
|
764
|
|
||||
Trading securities
|
|
|
|
|
|
|
|
||||||||
Priced via commercial pricing services
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
Priced via independent broker-dealer quotations
|
2,399
|
|
|
8
|
|
|
1,784
|
|
|
607
|
|
||||
Priced via other methods
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
Trading securities of consolidated VIEs
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||
Total fixed maturity securities including related party
|
78,033
|
|
|
44
|
|
|
72,536
|
|
|
5,453
|
|
||||
Equity securities
|
|
|
|
|
|
|
|
||||||||
Priced via commercial pricing services
|
243
|
|
|
43
|
|
|
200
|
|
|
—
|
|
||||
Priced via independent broker-dealer quotations
|
61
|
|
|
—
|
|
|
1
|
|
|
60
|
|
||||
Priced via other methods
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Equity securities of consolidated VIEs
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total equity securities including related party
|
311
|
|
|
43
|
|
|
201
|
|
|
67
|
|
||||
Total fixed maturity and equity securities including related party
|
$
|
78,344
|
|
|
$
|
87
|
|
|
$
|
72,737
|
|
|
$
|
5,520
|
|
Percent of total
|
100.0
|
%
|
|
0.1
|
%
|
|
92.9
|
%
|
|
7.0
|
%
|
(In millions)
|
December 31, 2019
|
||
+10% assessments
|
$
|
(144
|
)
|
–10% assessments
|
160
|
|
|
+100 bps discount rate
|
130
|
|
|
–100 bps discount rate
|
(175
|
)
|
|
1% higher annual equity growth
|
(49
|
)
|
|
1% lower annual equity growth
|
46
|
|
(In millions)
|
December 31, 2019
|
||
+100 bps discount rate
|
$
|
(904
|
)
|
–100 bps discount rate
|
1,038
|
|
|
December 31, 2019
|
||||||||||||||
(In millions)
|
DAC
|
|
DSI
|
|
VOBA
|
|
Total
|
||||||||
+10% estimated future gross profits
|
$
|
130
|
|
|
$
|
30
|
|
|
$
|
54
|
|
|
$
|
214
|
|
–10% estimated future gross profits
|
(150
|
)
|
|
(34
|
)
|
|
(60
|
)
|
|
(244
|
)
|
||||
+100 bps discount rate
|
(149
|
)
|
|
(53
|
)
|
|
(39
|
)
|
|
(241
|
)
|
||||
–100 bps discount rate
|
173
|
|
|
63
|
|
|
45
|
|
|
281
|
|
•
|
analyzing our liabilities to ascertain their sensitivity to behavioral variations and changes in market conditions and actuarial assumptions;
|
•
|
analyzing interest rate risk, cash flow mismatch, and liquidity risk management;
|
•
|
performing scenario and stress analyses to examine their impacts on capital and earnings;
|
•
|
performing cash flow testing and capital modeling;
|
•
|
modeling the values of the derivatives embedded in our policy liabilities so that they can be effectively hedged;
|
•
|
hedging unwanted risks, including from embedded derivatives, interest rate exposures and currency risks;
|
•
|
reviewing our corporate plan and strategic objectives, and identifying prospective risks to those objectives under normal and stressed economic, behavioral and actuarial conditions; and
|
•
|
providing appropriate risk reports that show consolidated risk exposures from assets and liabilities as well as the economic consequences of stress events and scenarios.
|
•
|
a fundamental view on existing and potential opportunities at the security level;
|
•
|
an assessment of the current risk/reward proposition for each market segment;
|
•
|
identification of downside risks and assigning a probability for those risks; and
|
•
|
establishing a plan for best execution of the investment action.
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Available-for-sale securities, at fair value (amortized cost: 2019 – $67,479 and 2018 – $60,025)
|
$
|
71,374
|
|
|
$
|
59,265
|
|
Trading securities, at fair value
|
2,054
|
|
|
1,949
|
|
||
Equity securities, at fair value
|
247
|
|
|
216
|
|
||
Mortgage loans, net of allowances (portion at fair value: 2019 – $27 and 2018 – $32)
|
14,306
|
|
|
10,340
|
|
||
Investment funds (portion at fair value: 2019 – $154 and 2018 – $182)
|
731
|
|
|
703
|
|
||
Policy loans
|
417
|
|
|
488
|
|
||
Funds withheld at interest (portion at fair value: 2019 – $801 and 2018 – $57)
|
15,181
|
|
|
15,023
|
|
||
Derivative assets
|
2,888
|
|
|
1,043
|
|
||
Short-term investments (portion at fair value: 2019 – $406 and 2018 – $191)
|
596
|
|
|
191
|
|
||
Other investments (portion at fair value: 2019 – $93 and 2018 – $52)
|
158
|
|
|
122
|
|
||
Total investments
|
107,952
|
|
|
89,340
|
|
||
Cash and cash equivalents
|
4,237
|
|
|
2,911
|
|
||
Restricted cash
|
402
|
|
|
492
|
|
||
Investments in related parties
|
|
|
|
|
|||
Available-for-sale securities, at fair value (amortized cost: 2019 – $3,783 and 2018 – $1,462)
|
3,804
|
|
|
1,437
|
|
||
Trading securities, at fair value
|
785
|
|
|
249
|
|
||
Equity securities, at fair value
|
58
|
|
|
120
|
|
||
Mortgage loans
|
653
|
|
|
291
|
|
||
Investment funds (portion at fair value: 2019 – $252 and 2018 – $201)
|
2,886
|
|
|
2,232
|
|
||
Funds withheld at interest (portion at fair value: 2019 – $594 and 2018 – $(110))
|
13,220
|
|
|
13,577
|
|
||
Other investments
|
487
|
|
|
386
|
|
||
Accrued investment income (related party: 2019 – $27 and 2018 – $25)
|
807
|
|
|
682
|
|
||
Reinsurance recoverable (related party: 2019 – $0 and 2018 – $344; portion at fair value: 2019 – $1,821 and 2018 – $1,676)
|
4,863
|
|
|
5,534
|
|
||
Deferred acquisition costs, deferred sales inducements and value of business acquired
|
5,008
|
|
|
5,907
|
|
||
Other assets (related party: 2019 – $0 and 2018 – $357)
|
985
|
|
|
1,635
|
|
||
Assets of consolidated variable interest entities
|
|
|
|
||||
Investments
|
|
|
|
||||
Trading securities, at fair value (related party: 2019 – $0 and 2018 – $35)
|
16
|
|
|
35
|
|
||
Equity securities, at fair value – related party
|
6
|
|
|
50
|
|
||
Investment funds (related party: 2019 – $664 and 2018 – $583; portion at fair value: 2019 – $567 and 2018 – $567)
|
683
|
|
|
624
|
|
||
Cash and cash equivalents
|
3
|
|
|
2
|
|
||
Other assets
|
20
|
|
|
1
|
|
||
Total assets
|
$
|
146,875
|
|
|
$
|
125,505
|
|
|
December 31,
|
||||||
(In millions, except per share data)
|
2019
|
|
2018
|
||||
Liabilities and Equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Interest sensitive contract liabilities (related party: 2019 – $15,285 and 2018 – $16,850; portion at fair value: 2019 – $11,992 and 2018 – $8,901)
|
$
|
102,745
|
|
|
$
|
96,610
|
|
Future policy benefits (related party: 2019 – $1,302 and 2018 – $1,259; portion at fair value: 2019 – $2,301 and 2018 – $2,173)
|
23,330
|
|
|
16,704
|
|
||
Other policy claims and benefits (related party: 2019 – $13 and 2018 – $10)
|
138
|
|
|
142
|
|
||
Dividends payable to policyholders
|
113
|
|
|
118
|
|
||
Short-term debt
|
475
|
|
|
—
|
|
||
Long-term debt
|
992
|
|
|
991
|
|
||
Derivative liabilities
|
97
|
|
|
85
|
|
||
Payables for collateral on derivatives and securities to repurchase
|
3,255
|
|
|
969
|
|
||
Funds withheld liability (related party: 2019 – $0 and 2018 – $337; portion at fair value: 2019 – $31 and 2018 – $(1))
|
408
|
|
|
721
|
|
||
Other liabilities (related party: 2019 – $79 and 2018 – $59)
|
1,181
|
|
|
889
|
|
||
Total liabilities
|
132,734
|
|
|
117,229
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Preferred stock
|
|
|
|
||||
Series A – par value $1 per share; $863 aggregate liquidation preference; authorized, issued and outstanding: 2019 and 2018 – 0.0 shares
|
—
|
|
|
—
|
|
||
Series B – par value $1 per share; $345 aggregate liquidation preference; authorized, issued and outstanding: 2019 and 2018 – 0.0 shares
|
—
|
|
|
—
|
|
||
Common stock
|
|
|
|
||||
Class A – par value $0.001 per share; authorized: 2019 and 2018 – 425.0 shares; issued and outstanding: 2019 – 143.2 and 2018 – 162.4 shares
|
—
|
|
|
—
|
|
||
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
|
—
|
|
|
—
|
|
||
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
|
—
|
|
|
—
|
|
||
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
|
4,171
|
|
|
3,462
|
|
||
Retained earnings
|
6,939
|
|
|
5,286
|
|
||
Accumulated other comprehensive income (loss) (related party: 2019 – $17 and 2018 – $(25))
|
2,281
|
|
|
(472
|
)
|
||
Total Athene Holding Ltd. shareholders’ equity
|
13,391
|
|
|
8,276
|
|
||
Noncontrolling interests
|
750
|
|
|
—
|
|
||
Total equity
|
14,141
|
|
|
8,276
|
|
||
Total liabilities and equity
|
$
|
146,875
|
|
|
$
|
125,505
|
|
|
Years ended December 31,
|
||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Premiums (related party: 2019 – $243, 2018 – $679 and 2017 – $0)
|
$
|
6,382
|
|
|
$
|
3,462
|
|
|
$
|
2,526
|
|
Product charges (related party: 2019 – $54, 2018 – $34 and 2017 – $0)
|
524
|
|
|
449
|
|
|
340
|
|
|||
Net investment income (related party investment income: 2019 – $707, 2018 – $539 and 2017 – $220; and related party investment expense: 2019 – $426, 2018 – $349 and 2017 – $318)
|
4,522
|
|
|
4,004
|
|
|
3,269
|
|
|||
Investment related gains (losses) (related party: 2019 – $1,008, 2018 – $(77) and 2017 – $(16))
|
4,752
|
|
|
(1,324
|
)
|
|
2,572
|
|
|||
Other-than-temporary impairment investment losses
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
(44
|
)
|
|
(24
|
)
|
|
(29
|
)
|
|||
Other-than-temporary impairment losses reclassified to (from) other comprehensive income
|
6
|
|
|
6
|
|
|
(4
|
)
|
|||
Net other-than-temporary impairment losses
|
(38
|
)
|
|
(18
|
)
|
|
(33
|
)
|
|||
Other revenues
|
37
|
|
|
26
|
|
|
37
|
|
|||
Revenues of consolidated variable interest entities
|
|
|
|
|
|
||||||
Net investment income (related party: 2019 – $72, 2018 – $55 and 2017 – $42)
|
74
|
|
|
56
|
|
|
42
|
|
|||
Investment related gains (losses) (related party: 2019 – $1, 2018 – $(21) and 2017 – $35)
|
5
|
|
|
(18
|
)
|
|
35
|
|
|||
Total revenues
|
16,258
|
|
|
6,637
|
|
|
8,788
|
|
|||
Benefits and expenses
|
|
|
|
|
|
||||||
Interest sensitive contract benefits (related party: 2019 – $511, 2018 – $63 and 2017 – $0)
|
4,557
|
|
|
290
|
|
|
2,866
|
|
|||
Amortization of deferred sales inducements
|
74
|
|
|
54
|
|
|
63
|
|
|||
Future policy and other policy benefits (related party: 2019 – $365, 2018 – $707 and 2017 – $0)
|
7,587
|
|
|
4,281
|
|
|
3,261
|
|
|||
Amortization of deferred acquisition costs and value of business acquired
|
958
|
|
|
174
|
|
|
344
|
|
|||
Dividends to policyholders
|
36
|
|
|
37
|
|
|
118
|
|
|||
Policy and other operating expenses (related party: 2019 – $45, 2018 – $42 and 2017 – $13)
|
744
|
|
|
626
|
|
|
672
|
|
|||
Total benefits and expenses
|
13,956
|
|
|
5,462
|
|
|
7,324
|
|
|||
Income before income taxes
|
2,302
|
|
|
1,175
|
|
|
1,464
|
|
|||
Income tax expense
|
117
|
|
|
122
|
|
|
106
|
|
|||
Net income
|
2,185
|
|
|
1,053
|
|
|
1,358
|
|
|||
Less: Net income attributable to noncontrolling interests
|
13
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Athene Holding Ltd. shareholders
|
2,172
|
|
|
1,053
|
|
|
1,358
|
|
|||
Less: Preferred stock dividends
|
36
|
|
|
—
|
|
|
—
|
|
|||
Net income available to Athene Holding Ltd. common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
||||||
Basic – Classes A, B, M-1, M-2, M-3 and M-4
|
$
|
11.44
|
|
|
$
|
5.34
|
|
|
$
|
6.95
|
|
Diluted – Class A
|
11.41
|
|
|
5.32
|
|
|
6.91
|
|
|||
Diluted – Class B
|
11.44
|
|
|
5.34
|
|
|
6.95
|
|
|||
Diluted – Class M-1
|
11.44
|
|
|
5.34
|
|
|
6.95
|
|
|||
Diluted – Class M-2
|
11.44
|
|
|
5.31
|
|
|
5.05
|
|
|||
Diluted – Class M-3
|
11.44
|
|
|
5.31
|
|
|
3.86
|
|
|||
Diluted – Class M-4
|
9.94
|
|
|
4.11
|
|
|
3.10
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
2,185
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
Other comprehensive income (loss), before tax
|
|
|
|
|
|
||||||
Unrealized investment gains (losses) on available-for-sale securities, net of offsets
|
3,444
|
|
|
(2,442
|
)
|
|
1,312
|
|
|||
Noncredit component of other-than-temporary impairment losses on available-for-sale securities
|
(6
|
)
|
|
(6
|
)
|
|
4
|
|
|||
Unrealized gains (losses) on hedging instruments
|
29
|
|
|
146
|
|
|
(105
|
)
|
|||
Foreign currency translation and other adjustments
|
1
|
|
|
(8
|
)
|
|
19
|
|
|||
Other comprehensive income (loss), before tax
|
3,468
|
|
|
(2,310
|
)
|
|
1,230
|
|
|||
Income tax expense (benefit) related to other comprehensive income (loss)
|
698
|
|
|
(431
|
)
|
|
334
|
|
|||
Other comprehensive income (loss)
|
2,770
|
|
|
(1,879
|
)
|
|
896
|
|
|||
Comprehensive income (loss)
|
4,955
|
|
|
(826
|
)
|
|
2,254
|
|
|||
Less: Comprehensive loss attributable to noncontrolling interests
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss) attributable to Athene Holding Ltd. shareholders
|
$
|
4,959
|
|
|
$
|
(826
|
)
|
|
$
|
2,254
|
|
(In millions)
|
Preferred stock
|
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Total Athene Holding Ltd. shareholders’ equity
|
|
Noncontrolling interests
|
|
Total shareholders’ equity
|
||||||||||||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,421
|
|
|
$
|
3,094
|
|
|
$
|
366
|
|
|
$
|
6,881
|
|
|
$
|
1
|
|
|
$
|
6,882
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,358
|
|
|
—
|
|
|
1,358
|
|
|
—
|
|
|
1,358
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
896
|
|
|
896
|
|
|
—
|
|
|
896
|
|
||||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other changes in equity of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Balance at December 31, 2017
|
—
|
|
|
—
|
|
|
3,472
|
|
|
4,255
|
|
|
1,449
|
|
|
9,176
|
|
|
—
|
|
|
9,176
|
|
||||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
(42
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,879
|
)
|
|
(1,879
|
)
|
|
—
|
|
|
(1,879
|
)
|
||||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
(61
|
)
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
||||||||
Balance at December 31, 2018
|
—
|
|
|
—
|
|
|
3,462
|
|
|
5,286
|
|
|
(472
|
)
|
|
8,276
|
|
|
—
|
|
|
8,276
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,172
|
|
|
—
|
|
|
2,172
|
|
|
13
|
|
|
2,185
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,787
|
|
|
2,787
|
|
|
(17
|
)
|
|
2,770
|
|
||||||||
Issuance of preferred shares, net of expenses
|
—
|
|
|
—
|
|
|
1,172
|
|
|
—
|
|
|
—
|
|
|
1,172
|
|
|
—
|
|
|
1,172
|
|
||||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
||||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
(349
|
)
|
|
(483
|
)
|
|
|
|
|
(832
|
)
|
|
|
|
|
(832
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
||||||||
Subsidiary issuance of equity interests
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(34
|
)
|
|
(179
|
)
|
|
754
|
|
|
575
|
|
|||||||||
Balance at December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,171
|
|
|
$
|
6,939
|
|
|
$
|
2,281
|
|
|
$
|
13,391
|
|
|
$
|
750
|
|
|
$
|
14,141
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,185
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of deferred acquisition costs and value of business acquired
|
958
|
|
|
174
|
|
|
344
|
|
|||
Amortization of deferred sales inducements
|
74
|
|
|
54
|
|
|
63
|
|
|||
Net accretion of net investment premiums, discounts and other
|
(94
|
)
|
|
(178
|
)
|
|
(192
|
)
|
|||
Payment at inception of reinsurance agreements, net (related party: 2019 – $0, 2018 – $(407) and 2017 – $0)
|
—
|
|
|
(394
|
)
|
|
—
|
|
|||
Net investment (income) loss (related party: 2019 – $(171), 2018 – $(103) and 2017 – $(63))
|
(167
|
)
|
|
(84
|
)
|
|
(53
|
)
|
|||
Net recognized (gains) losses on investments and derivatives (related party: 2019 – $(15), 2018 – $(8) and 2017 – $8)
|
(2,479
|
)
|
|
1,095
|
|
|
(2,180
|
)
|
|||
Policy acquisition costs deferred
|
(645
|
)
|
|
(919
|
)
|
|
(493
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accrued investment income (related party: 2019 – $(2), 2018 – $(15) and 2017 – $0)
|
(128
|
)
|
|
(66
|
)
|
|
(91
|
)
|
|||
Interest sensitive contract liabilities (related party: 2019 – $471, 2018 – $30 and 2017 – $0)
|
4,003
|
|
|
(365
|
)
|
|
2,564
|
|
|||
Future policy benefits, other policy claims and benefits, dividends payable to policyholders and reinsurance recoverable (related party: 2019 – $295, 2018 – $109 and 2017 – $0)
|
1,171
|
|
|
2,457
|
|
|
2,019
|
|
|||
Funds withheld assets and liabilities (related party: 2019 – $(1,317), 2018 – $113 and 2017 – $0)
|
(2,582
|
)
|
|
270
|
|
|
(419
|
)
|
|||
Other assets and liabilities
|
367
|
|
|
(240
|
)
|
|
283
|
|
|||
Consolidated variable interest entities related:
|
|
|
|
|
|
||||||
Net recognized (gains) losses on investments and derivatives (related party: 2019 – $(1), 2018 – $20 and 2017 – $(36))
|
(5
|
)
|
|
17
|
|
|
(36
|
)
|
|||
Other operating activities, net
|
(2
|
)
|
|
—
|
|
|
3
|
|
|||
Net cash provided by operating activities
|
2,656
|
|
|
2,874
|
|
|
3,170
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Sales, maturities and repayments of:
|
|
|
|
|
|
||||||
Available-for-sale securities (related party: 2019 – $252, 2018 – $181 and 2017 – $131)
|
$
|
12,762
|
|
|
$
|
12,121
|
|
|
$
|
12,634
|
|
Trading securities (related party: 2019 – $40, 2018 – $30 and 2017 – $55)
|
272
|
|
|
348
|
|
|
156
|
|
|||
Equity securities (related party: 2019 – $72, 2018 – $29 and 2017 – $22)
|
254
|
|
|
132
|
|
|
985
|
|
|||
Mortgage loans (related party: 2019 – $4, 2018 – $13 and 2017 – $0)
|
2,070
|
|
|
1,373
|
|
|
1,669
|
|
|||
Investment funds (related party: 2019 – $291, 2018 – $305 and 2017 – $349)
|
416
|
|
|
481
|
|
|
496
|
|
|||
Derivative instruments and other invested assets (related party: 2019 – $0, 2018 – $2 and 2017 – $0)
|
1,503
|
|
|
1,859
|
|
|
1,503
|
|
|||
Real estate
|
—
|
|
|
—
|
|
|
4
|
|
|||
Short-term investments (related party: 2019 – $0, 2018 – $172 and 2017 – $65)
|
398
|
|
|
538
|
|
|
351
|
|
|||
Purchases of:
|
|
|
|
|
|
||||||
Available-for-sale securities (related party: 2019 – $(2,897), 2018 – $(811) and 2017 – $(186))
|
(17,237
|
)
|
|
(15,435
|
)
|
|
(18,883
|
)
|
|||
Trading securities (related party: 2019 – $(6), 2018 – $(4) and 2017 – $0)
|
(495
|
)
|
|
(54
|
)
|
|
(89
|
)
|
|||
Equity securities (related party: 2019 – $(262), 2018 – $(149) and 2017 – $0)
|
(451
|
)
|
|
(334
|
)
|
|
(847
|
)
|
|||
Mortgage loans (related party: 2019 – $(366), 2018 – $(389) and 2017 – $0)
|
(6,391
|
)
|
|
(5,745
|
)
|
|
(2,428
|
)
|
|||
Investment funds (related party: 2019 – $(746), 2018 – $(1,140) and 2017 – $(509))
|
(902
|
)
|
|
(1,375
|
)
|
|
(660
|
)
|
|||
Derivative instruments and other invested assets (related party: 2019 – $(100), 2018 – $(150) and 2017 – $0)
|
(1,299
|
)
|
|
(1,348
|
)
|
|
(738
|
)
|
|||
Real estate
|
—
|
|
|
—
|
|
|
(76
|
)
|
|||
Short-term investments (related party: 2019 – $0, 2018 – $(121) and 2017 – $(117))
|
(802
|
)
|
|
(478
|
)
|
|
(421
|
)
|
|||
Consolidated variable interest entities related:
|
|
|
|
|
|
||||||
Sales, maturities and repayments of investments (related party: 2019 – $90, 2018 – $203 and 2017 – $85)
|
101
|
|
|
217
|
|
|
95
|
|
|||
Purchases of investments (related party: 2019 – $(92), 2018 – $(31) and 2017 – $(23))
|
(110
|
)
|
|
(83
|
)
|
|
(23
|
)
|
|||
Deconsolidation of Athora Holding Ltd.
|
—
|
|
|
(296
|
)
|
|
—
|
|
|||
Other investing activities, net
|
(45
|
)
|
|
(94
|
)
|
|
503
|
|
|||
Net cash used in investing activities
|
(9,956
|
)
|
|
(8,173
|
)
|
|
(5,769
|
)
|
|||
|
|
|
|
|
|
(Continued)
|
|
||||
See accompanying notes to consolidated financial statements
|
|
|
|
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from short-term debt
|
$
|
475
|
|
|
$
|
183
|
|
|
$
|
—
|
|
Repayment of short-term debt
|
—
|
|
|
(183
|
)
|
|
—
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
998
|
|
|
—
|
|
|||
Deposits on investment-type policies and contracts (related party: 2019 – $146, 2018 – $151 and 2017 – $0)
|
11,569
|
|
|
10,262
|
|
|
9,056
|
|
|||
Withdrawals on investment-type policies and contracts (related party: 2019 – $(455), 2018 – $(252) and 2017 – $0)
|
(6,548
|
)
|
|
(6,205
|
)
|
|
(4,843
|
)
|
|||
Payments for coinsurance agreements on investment-type contracts, net
|
(44
|
)
|
|
(2
|
)
|
|
(33
|
)
|
|||
Net change in cash collateral posted for derivative transactions and securities to repurchase
|
2,286
|
|
|
(1,354
|
)
|
|
940
|
|
|||
Issuance of preferred stock, net of expenses
|
1,172
|
|
|
—
|
|
|
—
|
|
|||
Preferred stock dividends
|
(36
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
(832
|
)
|
|
(105
|
)
|
|
(10
|
)
|
|||
Subsidiary issuance of equity interests to noncontrolling interests
|
575
|
|
|
—
|
|
|
—
|
|
|||
Other financing activities, net
|
(80
|
)
|
|
113
|
|
|
(62
|
)
|
|||
Net cash provided by financing activities
|
8,537
|
|
|
3,707
|
|
|
5,048
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
32
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
1,237
|
|
|
(1,592
|
)
|
|
2,481
|
|
|||
Cash and cash equivalents at beginning of year1
|
3,405
|
|
|
4,997
|
|
|
2,516
|
|
|||
Cash and cash equivalents at end of year1
|
$
|
4,642
|
|
|
$
|
3,405
|
|
|
$
|
4,997
|
|
|
|
|
|
|
|
||||||
Supplementary information
|
|
|
|
|
|
||||||
Cash paid (refunded) for taxes
|
$
|
36
|
|
|
$
|
52
|
|
|
$
|
(64
|
)
|
Cash paid for interest
|
49
|
|
|
26
|
|
|
—
|
|
|||
Non-cash transactions
|
|
|
|
|
|
||||||
Deposits on investment-type policies and contracts through reinsurance agreements (related party: 2019 – $217, 2018 – $17,619 and 2017 – $0)
|
782
|
|
|
26,532
|
|
|
663
|
|
|||
Withdrawals on investment-type policies and contracts through reinsurance agreements (related party: 2019 – $1,753, 2018 – $1,050 and 2017 – $0)
|
3,393
|
|
|
1,843
|
|
|
482
|
|
|||
Investments received from settlements on reinsurance agreements
|
56
|
|
|
52
|
|
|
73
|
|
|||
Investments received from settlements on related party reinsurance agreements
|
149
|
|
|
—
|
|
|
—
|
|
|||
Investments received from pension risk transfer premiums
|
5,235
|
|
|
435
|
|
|
334
|
|
|||
Investments exchanged for related party investments
|
—
|
|
|
95
|
|
|
26
|
|
|||
Related party investments exchanged for investments
|
—
|
|
|
115
|
|
|
—
|
|
|||
Investment in Athora Holding Ltd. received upon deconsolidation
|
—
|
|
|
108
|
|
|
—
|
|
|||
Ceding commission on reinsurance agreements settled in investments
|
—
|
|
|
266
|
|
|
—
|
|
|||
Decrease in investments due to novation of related party reinsurance transactions
|
320
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
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 Life Re International Ltd.; and
|
•
|
Athene USA Corporation, an Iowa corporation (together with its subsidiaries, Athene USA).
|
•
|
fair value of investments;
|
•
|
impairment of investments and valuation allowances;
|
•
|
derivatives valuation, including embedded derivatives;
|
•
|
deferred acquisition costs (DAC), deferred sales inducements (DSI) and value of business acquired (VOBA);
|
•
|
future policy benefit reserves;
|
•
|
valuation allowances on deferred tax assets; and
|
•
|
stock-based compensation.
|
•
|
the present value of expected future cash flows discounted at the loan’s original effective interest rate;
|
•
|
the value of the loan’s collateral if it is in the process of foreclosure or otherwise collateral dependent; or
|
•
|
the loan’s fair value if the loan is being sold.
|
•
|
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.
|
|
December 31, 2019
|
||||||||||||||||||
(In millions)
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
OTTI
in AOCI
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,322
|
|
|
220
|
|
|
(1
|
)
|
|
1,541
|
|
|
—
|
|
|||||
Foreign governments
|
298
|
|
|
29
|
|
|
—
|
|
|
327
|
|
|
—
|
|
|||||
Corporate
|
44,106
|
|
|
3,332
|
|
|
(210
|
)
|
|
47,228
|
|
|
1
|
|
|||||
CLO
|
7,524
|
|
|
21
|
|
|
(196
|
)
|
|
7,349
|
|
|
—
|
|
|||||
ABS
|
5,018
|
|
|
124
|
|
|
(24
|
)
|
|
5,118
|
|
|
4
|
|
|||||
CMBS
|
2,304
|
|
|
104
|
|
|
(8
|
)
|
|
2,400
|
|
|
1
|
|
|||||
RMBS
|
6,872
|
|
|
513
|
|
|
(10
|
)
|
|
7,375
|
|
|
19
|
|
|||||
Total AFS securities
|
67,479
|
|
|
4,344
|
|
|
(449
|
)
|
|
71,374
|
|
|
25
|
|
|||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||
CLO
|
951
|
|
|
3
|
|
|
(18
|
)
|
|
936
|
|
|
—
|
|
|||||
ABS
|
2,814
|
|
|
37
|
|
|
(2
|
)
|
|
2,849
|
|
|
—
|
|
|||||
Total AFS securities – related party
|
3,783
|
|
|
41
|
|
|
(20
|
)
|
|
3,804
|
|
|
—
|
|
|||||
Total AFS securities including related party
|
$
|
71,262
|
|
|
$
|
4,385
|
|
|
$
|
(469
|
)
|
|
$
|
75,178
|
|
|
$
|
25
|
|
|
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
|
|
|
December 31, 2019
|
||||||
(In millions)
|
Amortized Cost
|
|
Fair Value
|
||||
AFS securities
|
|
|
|
||||
Due in one year or less
|
$
|
1,108
|
|
|
$
|
1,113
|
|
Due after one year through five years
|
9,175
|
|
|
9,479
|
|
||
Due after five years through ten years
|
11,274
|
|
|
11,931
|
|
||
Due after ten years
|
24,204
|
|
|
26,609
|
|
||
CLO, ABS, CMBS and RMBS
|
21,718
|
|
|
22,242
|
|
||
Total AFS securities
|
67,479
|
|
|
71,374
|
|
||
AFS securities – related party
|
|
|
|
||||
Due after one year through five years
|
18
|
|
|
19
|
|
||
CLO and ABS
|
3,765
|
|
|
3,785
|
|
||
Total AFS securities – related party
|
3,783
|
|
|
3,804
|
|
||
Total AFS securities including related party
|
$
|
71,262
|
|
|
$
|
75,178
|
|
|
December 31, 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
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
78
|
|
|
(1
|
)
|
|
10
|
|
|
—
|
|
|
88
|
|
|
(1
|
)
|
||||||
Corporate
|
2,898
|
|
|
(140
|
)
|
|
902
|
|
|
(70
|
)
|
|
3,800
|
|
|
(210
|
)
|
||||||
CLO
|
1,959
|
|
|
(38
|
)
|
|
3,241
|
|
|
(158
|
)
|
|
5,200
|
|
|
(196
|
)
|
||||||
ABS
|
642
|
|
|
(6
|
)
|
|
255
|
|
|
(18
|
)
|
|
897
|
|
|
(24
|
)
|
||||||
CMBS
|
220
|
|
|
(4
|
)
|
|
41
|
|
|
(4
|
)
|
|
261
|
|
|
(8
|
)
|
||||||
RMBS
|
445
|
|
|
(6
|
)
|
|
163
|
|
|
(4
|
)
|
|
608
|
|
|
(10
|
)
|
||||||
Total AFS securities
|
6,245
|
|
|
(195
|
)
|
|
4,612
|
|
|
(254
|
)
|
|
10,857
|
|
|
(449
|
)
|
||||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CLO
|
362
|
|
|
(7
|
)
|
|
242
|
|
|
(11
|
)
|
|
604
|
|
|
(18
|
)
|
||||||
ABS
|
357
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
357
|
|
|
(2
|
)
|
||||||
Total AFS securities – related party
|
719
|
|
|
(9
|
)
|
|
242
|
|
|
(11
|
)
|
|
961
|
|
|
(20
|
)
|
||||||
Total AFS securities including related party
|
$
|
6,964
|
|
|
$
|
(204
|
)
|
|
$
|
4,854
|
|
|
$
|
(265
|
)
|
|
$
|
11,818
|
|
|
$
|
(469
|
)
|
|
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
|
)
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
16
|
|
Initial impairments – credit loss OTTI recognized on securities not previously impaired
|
11
|
|
|
3
|
|
|
17
|
|
|||
Additional impairments – credit loss OTTI recognized on securities previously impaired
|
2
|
|
|
2
|
|
|
—
|
|
|||
Reduction in impairments from securities sold, matured or repaid
|
—
|
|
|
(9
|
)
|
|
(13
|
)
|
|||
Reduction for credit loss that no longer has a portion of the OTTI loss recognized in AOCI
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
Ending balance
|
$
|
23
|
|
|
$
|
10
|
|
|
$
|
14
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
AFS securities
|
$
|
3,088
|
|
|
$
|
2,855
|
|
|
$
|
2,579
|
|
Trading securities
|
189
|
|
|
200
|
|
|
200
|
|
|||
Equity securities
|
16
|
|
|
12
|
|
|
14
|
|
|||
Mortgage loans
|
670
|
|
|
457
|
|
|
371
|
|
|||
Investment funds
|
308
|
|
|
231
|
|
|
211
|
|
|||
Funds withheld at interest
|
527
|
|
|
492
|
|
|
148
|
|
|||
Other
|
159
|
|
|
112
|
|
|
78
|
|
|||
Investment revenue
|
4,957
|
|
|
4,359
|
|
|
3,601
|
|
|||
Investment expenses
|
(435
|
)
|
|
(355
|
)
|
|
(332
|
)
|
|||
Net investment income
|
$
|
4,522
|
|
|
$
|
4,004
|
|
|
$
|
3,269
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
AFS securities
|
|
|
|
|
|
||||||
Gross realized gains on investment activity
|
$
|
178
|
|
|
$
|
165
|
|
|
$
|
169
|
|
Gross realized losses on investment activity
|
(56
|
)
|
|
(151
|
)
|
|
(72
|
)
|
|||
Net realized investment gains on AFS securities
|
122
|
|
|
14
|
|
|
97
|
|
|||
Net recognized investment gains (losses) on trading securities
|
152
|
|
|
(255
|
)
|
|
29
|
|
|||
Net recognized investment gains (losses) on equity securities
|
17
|
|
|
(19
|
)
|
|
88
|
|
|||
Derivative gains (losses)
|
4,443
|
|
|
(1,099
|
)
|
|
2,377
|
|
|||
Other gains (losses)
|
18
|
|
|
35
|
|
|
(19
|
)
|
|||
Investment related gains (losses)
|
$
|
4,752
|
|
|
$
|
(1,324
|
)
|
|
$
|
2,572
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Trading securities
|
$
|
193
|
|
|
$
|
(143
|
)
|
|
$
|
107
|
|
Trading securities – related party
|
(21
|
)
|
|
(25
|
)
|
|
(3
|
)
|
|||
VIE trading securities – related party
|
3
|
|
|
—
|
|
|
4
|
|
|||
Equity securities
|
19
|
|
|
(18
|
)
|
|
32
|
|
|||
Equity securities – related party
|
(17
|
)
|
|
—
|
|
|
—
|
|
|||
VIE equity securities – related party
|
(1
|
)
|
|
24
|
|
|
25
|
|
|
Fixed maturity securities
|
|
Mortgage loans
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contractually required payments receivable
|
$
|
6,772
|
|
|
$
|
8,179
|
|
|
$
|
3,647
|
|
|
$
|
2,675
|
|
Less: Cash flows expected to be collected1
|
(6,064
|
)
|
|
(7,195
|
)
|
|
(3,606
|
)
|
|
(2,628
|
)
|
||||
Non-accretable difference
|
$
|
708
|
|
|
$
|
984
|
|
|
$
|
41
|
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flows expected to be collected1
|
$
|
6,064
|
|
|
$
|
7,195
|
|
|
$
|
3,606
|
|
|
$
|
2,628
|
|
Less: Amortized cost
|
(4,603
|
)
|
|
(5,518
|
)
|
|
(2,575
|
)
|
|
(1,931
|
)
|
||||
Accretable difference
|
$
|
1,461
|
|
|
$
|
1,677
|
|
|
$
|
1,031
|
|
|
$
|
697
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value
|
$
|
5,007
|
|
|
$
|
5,828
|
|
|
$
|
2,756
|
|
|
$
|
1,933
|
|
Outstanding balance
|
5,740
|
|
|
6,773
|
|
|
2,925
|
|
|
2,210
|
|
||||
|
|
|
|
|
|
|
|
||||||||
1 Represents the undiscounted principal and interest cash flows expected.
|
|
Fixed maturity securities
|
|
Mortgage loans
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contractually required payments receivable
|
$
|
176
|
|
|
$
|
623
|
|
|
$
|
1,198
|
|
|
$
|
1,625
|
|
Cash flows expected to be collected
|
146
|
|
|
562
|
|
|
1,179
|
|
|
1,601
|
|
||||
Fair value
|
124
|
|
|
454
|
|
|
910
|
|
|
1,178
|
|
|
Fixed maturity securities
|
|
Mortgage loans
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Beginning balance at January 1
|
$
|
1,677
|
|
|
$
|
2,020
|
|
|
$
|
697
|
|
|
$
|
273
|
|
Purchases of PCI investments, net of sales
|
1
|
|
|
65
|
|
|
191
|
|
|
407
|
|
||||
Accretion
|
(307
|
)
|
|
(405
|
)
|
|
(115
|
)
|
|
(48
|
)
|
||||
Net reclassification from (to) non-accretable difference
|
90
|
|
|
(3
|
)
|
|
258
|
|
|
65
|
|
||||
Ending balance at December 31
|
$
|
1,461
|
|
|
$
|
1,677
|
|
|
$
|
1,031
|
|
|
$
|
697
|
|
|
December 31, 2019
|
||||||
(In millions)
|
Amortized Cost
|
|
Fair Value
|
||||
AFS securities – Corporate
|
$
|
498
|
|
|
$
|
534
|
|
Total securities pledged under repurchase agreements
|
$
|
498
|
|
|
$
|
534
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Commercial mortgage loans
|
$
|
10,412
|
|
|
$
|
7,217
|
|
Commercial mortgage loans under development
|
93
|
|
|
80
|
|
||
Total commercial mortgage loans
|
10,505
|
|
|
7,297
|
|
||
Residential mortgage loans
|
4,454
|
|
|
3,334
|
|
||
Mortgage loans, net of allowances
|
$
|
14,959
|
|
|
$
|
10,631
|
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
(In millions, except for percentages)
|
Net Carrying Value
|
|
Percentage of Total
|
|
Net Carrying Value
|
|
Percentage of Total
|
||||||
Property type
|
|
|
|
|
|
|
|
||||||
Office building
|
$
|
2,899
|
|
|
27.6
|
%
|
|
$
|
2,221
|
|
|
30.5
|
%
|
Retail
|
2,182
|
|
|
20.8
|
%
|
|
1,660
|
|
|
22.7
|
%
|
||
Apartment
|
2,142
|
|
|
20.4
|
%
|
|
791
|
|
|
10.8
|
%
|
||
Hotels
|
1,104
|
|
|
10.5
|
%
|
|
1,040
|
|
|
14.3
|
%
|
||
Industrial
|
1,448
|
|
|
13.8
|
%
|
|
1,196
|
|
|
16.4
|
%
|
||
Other commercial
|
730
|
|
|
6.9
|
%
|
|
389
|
|
|
5.3
|
%
|
||
Total commercial mortgage loans
|
$
|
10,505
|
|
|
100.0
|
%
|
|
$
|
7,297
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
U.S. Region
|
|
|
|
|
|
|
|
||||||
East North Central
|
$
|
1,036
|
|
|
9.9
|
%
|
|
$
|
855
|
|
|
11.7
|
%
|
East South Central
|
428
|
|
|
4.1
|
%
|
|
295
|
|
|
4.0
|
%
|
||
Middle Atlantic
|
2,580
|
|
|
24.6
|
%
|
|
1,131
|
|
|
15.5
|
%
|
||
Mountain
|
528
|
|
|
5.0
|
%
|
|
616
|
|
|
8.4
|
%
|
||
New England
|
340
|
|
|
3.2
|
%
|
|
374
|
|
|
5.1
|
%
|
||
Pacific
|
2,502
|
|
|
23.8
|
%
|
|
1,540
|
|
|
21.1
|
%
|
||
South Atlantic
|
1,920
|
|
|
18.3
|
%
|
|
1,468
|
|
|
20.2
|
%
|
||
West North Central
|
146
|
|
|
1.4
|
%
|
|
173
|
|
|
2.4
|
%
|
||
West South Central
|
791
|
|
|
7.5
|
%
|
|
845
|
|
|
11.6
|
%
|
||
Total U.S. Region
|
10,271
|
|
|
97.8
|
%
|
|
7,297
|
|
|
100.0
|
%
|
||
International Region
|
234
|
|
|
2.2
|
%
|
|
—
|
|
|
—
|
%
|
||
Total commercial mortgage loans
|
$
|
10,505
|
|
|
100.0
|
%
|
|
$
|
7,297
|
|
|
100.0
|
%
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
U.S. States
|
|
|
|
||
California
|
27.0
|
%
|
|
30.3
|
%
|
Florida
|
12.7
|
%
|
|
16.3
|
%
|
Texas
|
6.2
|
%
|
|
3.3
|
%
|
New York
|
3.3
|
%
|
|
7.7
|
%
|
Other1
|
38.4
|
%
|
|
42.4
|
%
|
Total U.S. percentage
|
87.6
|
%
|
|
100.0
|
%
|
International percentage – Ireland
|
12.4
|
%
|
|
—
|
%
|
Total residential mortgage loan percentage
|
100.0
|
%
|
|
100.0
|
%
|
|
|||||
1 Represents all other states, with each individual state comprising less than 5% of the portfolio.
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Less than 50%
|
$
|
2,640
|
|
|
$
|
1,883
|
|
50% to 60%
|
2,486
|
|
|
1,988
|
|
||
61% to 70%
|
4,093
|
|
|
2,394
|
|
||
71% to 80%
|
1,162
|
|
|
898
|
|
||
81% to 100%
|
31
|
|
|
54
|
|
||
Commercial mortgage loans
|
$
|
10,412
|
|
|
$
|
7,217
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Greater than 1.20x
|
$
|
9,212
|
|
|
$
|
6,576
|
|
1.00x – 1.20x
|
1,166
|
|
|
474
|
|
||
Less than 1.00x
|
34
|
|
|
167
|
|
||
Commercial mortgage loans
|
$
|
10,412
|
|
|
$
|
7,217
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
817
|
|
|
$
|
1,159
|
|
|
$
|
1,587
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Ownership Percentage
|
|
|
|
||||
100%
|
$
|
11
|
|
|
$
|
17
|
|
50% – 99%
|
1,378
|
|
|
1,044
|
|
||
3% – 49%
|
1,938
|
|
|
1,617
|
|
||
Equity method investment funds
|
$
|
3,327
|
|
|
$
|
2,678
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Ownership Percentage
|
|
|
|
||||
50% – 99%
|
$
|
28
|
|
|
$
|
—
|
|
3% – 49%
|
772
|
|
|
687
|
|
||
Less than 3%
|
173
|
|
|
194
|
|
||
Fair value investment funds
|
$
|
973
|
|
|
$
|
881
|
|
|
December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(In millions)
|
Carrying Value
|
|
Maximum Loss Exposure
|
|
Carrying Value
|
|
Maximum Loss Exposure
|
||||||||
Investment funds
|
$
|
731
|
|
|
$
|
1,246
|
|
|
$
|
703
|
|
|
$
|
1,329
|
|
Investment in related parties – investment funds
|
2,886
|
|
|
5,113
|
|
|
2,232
|
|
|
4,331
|
|
||||
Assets of consolidated VIEs – investment funds
|
683
|
|
|
861
|
|
|
624
|
|
|
727
|
|
||||
Investment in fixed maturity securities
|
22,694
|
|
|
22,170
|
|
|
21,188
|
|
|
21,139
|
|
||||
Investment in related parties – fixed maturity securities
|
4,570
|
|
|
4,878
|
|
|
1,686
|
|
|
1,788
|
|
||||
Investment in related parties – equity securities
|
58
|
|
|
58
|
|
|
120
|
|
|
120
|
|
||||
Total non-consolidated investments
|
$
|
31,622
|
|
|
$
|
34,326
|
|
|
$
|
26,553
|
|
|
$
|
29,434
|
|
|
December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Notional Amount
|
|
Fair Value
|
|
Notional Amount
|
|
Fair Value
|
||||||||||||||
(In millions)
|
|
Assets
|
|
Liabilities
|
|
|
Assets
|
|
Liabilities
|
||||||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency swaps
|
3,158
|
|
|
$
|
113
|
|
|
$
|
56
|
|
|
2,041
|
|
|
$
|
83
|
|
|
$
|
55
|
|
Foreign currency forwards
|
717
|
|
|
1
|
|
|
9
|
|
|
85
|
|
|
—
|
|
|
1
|
|
||||
Foreign currency forwards on net investments
|
139
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives designated as hedges
|
|
|
114
|
|
|
67
|
|
|
|
|
83
|
|
|
56
|
|
||||||
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity options
|
49,549
|
|
|
2,746
|
|
|
5
|
|
|
49,821
|
|
|
942
|
|
|
11
|
|
||||
Futures
|
8
|
|
|
10
|
|
|
1
|
|
|
4
|
|
|
9
|
|
|
3
|
|
||||
Total return swaps
|
106
|
|
|
6
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
3
|
|
||||
Foreign currency swaps
|
35
|
|
|
2
|
|
|
1
|
|
|
38
|
|
|
3
|
|
|
2
|
|
||||
Interest rate swaps
|
776
|
|
|
3
|
|
|
4
|
|
|
326
|
|
|
—
|
|
|
1
|
|
||||
Credit default swaps
|
10
|
|
|
—
|
|
|
3
|
|
|
10
|
|
|
—
|
|
|
4
|
|
||||
Foreign currency forwards
|
1,924
|
|
|
7
|
|
|
16
|
|
|
646
|
|
|
6
|
|
|
5
|
|
||||
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds withheld including related party
|
|
|
1,395
|
|
|
31
|
|
|
|
|
(53
|
)
|
|
(1
|
)
|
||||||
Interest sensitive contract liabilities
|
|
|
—
|
|
|
10,942
|
|
|
|
|
—
|
|
|
7,969
|
|
||||||
Total derivatives not designated as hedges
|
|
|
4,169
|
|
|
11,003
|
|
|
|
|
907
|
|
|
7,997
|
|
||||||
Total derivatives
|
|
|
$
|
4,283
|
|
|
$
|
11,070
|
|
|
|
|
$
|
990
|
|
|
$
|
8,053
|
|
|
|
|
Gross amounts not offset on the 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
|
||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
2,888
|
|
|
$
|
(67
|
)
|
|
$
|
(2,743
|
)
|
|
$
|
78
|
|
|
$
|
(145
|
)
|
|
$
|
(67
|
)
|
Derivative liabilities
|
(97
|
)
|
|
67
|
|
|
31
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 consolidated balance sheets. As of December 31, 2019 and 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 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.
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Fair value of derivative liabilities with credit related provisions
|
$
|
3
|
|
|
$
|
4
|
|
Maximum exposure for credit default swaps
|
10
|
|
|
10
|
|
•
|
AAA Investments (Co-Invest VI), L.P. (CoInvest VI);
|
•
|
AAA Investments (Co-Invest VII), L.P. (CoInvest VII);
|
•
|
AAA Investments (Other), L.P. (CoInvest Other);
|
•
|
ALR Aircraft Investment Ireland Limited (ALR); and
|
•
|
Entities included under our agreement to purchase funds managed by Apollo entities (Strategic Partnership). See Note 14 – Related Parties for further discussion on the Strategic Partnership.
|
•
|
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.
|
|
December 31, 2019
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,541
|
|
|
—
|
|
|
—
|
|
|
1,501
|
|
|
40
|
|
|||||
Foreign governments
|
327
|
|
|
—
|
|
|
—
|
|
|
327
|
|
|
—
|
|
|||||
Corporate
|
47,228
|
|
|
—
|
|
|
—
|
|
|
46,503
|
|
|
725
|
|
|||||
CLO
|
7,349
|
|
|
—
|
|
|
—
|
|
|
7,228
|
|
|
121
|
|
|||||
ABS
|
5,118
|
|
|
—
|
|
|
—
|
|
|
3,744
|
|
|
1,374
|
|
|||||
CMBS
|
2,400
|
|
|
—
|
|
|
—
|
|
|
2,354
|
|
|
46
|
|
|||||
RMBS
|
7,375
|
|
|
—
|
|
|
—
|
|
|
7,375
|
|
|
—
|
|
|||||
Total AFS securities
|
71,374
|
|
|
—
|
|
|
36
|
|
|
69,032
|
|
|
2,306
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
11
|
|
|
—
|
|
|
8
|
|
|
3
|
|
|
—
|
|
|||||
U.S. state, municipal and political subdivisions
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|||||
Corporate
|
1,456
|
|
|
—
|
|
|
—
|
|
|
1,456
|
|
|
—
|
|
|||||
CLO
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
ABS
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|||||
CMBS
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|||||
RMBS
|
303
|
|
|
—
|
|
|
—
|
|
|
251
|
|
|
52
|
|
|||||
Total trading securities
|
2,054
|
|
|
—
|
|
|
8
|
|
|
1,988
|
|
|
58
|
|
|||||
Equity securities
|
247
|
|
|
—
|
|
|
43
|
|
|
201
|
|
|
3
|
|
|||||
Mortgage loans
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Investment funds
|
154
|
|
|
132
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Funds withheld at interest – embedded derivative
|
801
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
801
|
|
|||||
Derivative assets
|
2,888
|
|
|
—
|
|
|
10
|
|
|
2,878
|
|
|
—
|
|
|||||
Short-term investments
|
406
|
|
|
—
|
|
|
46
|
|
|
319
|
|
|
41
|
|
|||||
Other investments
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|||||
Cash and cash equivalents
|
4,237
|
|
|
—
|
|
|
4,237
|
|
|
—
|
|
|
—
|
|
|||||
Restricted cash
|
402
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||
CLO
|
936
|
|
|
—
|
|
|
—
|
|
|
936
|
|
|
—
|
|
|||||
ABS
|
2,849
|
|
|
—
|
|
|
—
|
|
|
525
|
|
|
2,324
|
|
|||||
Total AFS securities – related party
|
3,804
|
|
|
—
|
|
|
—
|
|
|
1,480
|
|
|
2,324
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CLO
|
74
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
38
|
|
|||||
ABS
|
711
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
711
|
|
|||||
Total trading securities – related party
|
785
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
749
|
|
|||||
Equity securities
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||
Investment funds
|
252
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|||||
Funds withheld at interest – embedded derivative
|
594
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|||||
Reinsurance recoverable
|
1,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,821
|
|
|||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Equity securities
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Investment funds
|
567
|
|
|
567
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
90,589
|
|
|
$
|
819
|
|
|
$
|
4,785
|
|
|
$
|
76,027
|
|
|
$
|
8,958
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
|
|
December 31, 2019
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Embedded derivative
|
$
|
10,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,942
|
|
Universal life benefits
|
1,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,050
|
|
|||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
||||||||||
AmerUs Closed Block
|
1,546
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,546
|
|
|||||
ILICO Closed Block and life benefits
|
755
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
755
|
|
|||||
Derivative liabilities
|
97
|
|
|
—
|
|
|
1
|
|
|
93
|
|
|
3
|
|
|||||
Funds withheld liability – embedded derivative
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|||||
Total liabilities measured at fair value
|
$
|
14,421
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
124
|
|
|
$
|
14,296
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
(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)
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Trading securities
|
$
|
152
|
|
|
$
|
(255
|
)
|
|
$
|
30
|
|
Mortgage loans
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Investment funds
|
(3
|
)
|
|
37
|
|
|
35
|
|
|||
Future policy benefits
|
(103
|
)
|
|
182
|
|
|
(19
|
)
|
|||
Total gains (losses)
|
$
|
46
|
|
|
$
|
(36
|
)
|
|
$
|
45
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Unpaid principal balance
|
$
|
25
|
|
|
$
|
30
|
|
Mark to fair value
|
2
|
|
|
2
|
|
||
Fair value
|
$
|
27
|
|
|
$
|
32
|
|
|
Year ended December 31, 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
|
|
|
14
|
|
|
12
|
|
|
(61
|
)
|
|
5
|
|
|
(143
|
)
|
|
725
|
|
|
—
|
|
||||||||
CLO
|
107
|
|
|
—
|
|
|
3
|
|
|
50
|
|
|
—
|
|
|
(39
|
)
|
|
121
|
|
|
—
|
|
||||||||
ABS
|
1,615
|
|
|
7
|
|
|
32
|
|
|
120
|
|
|
30
|
|
|
(430
|
)
|
|
1,374
|
|
|
—
|
|
||||||||
CMBS
|
187
|
|
|
2
|
|
|
7
|
|
|
(131
|
)
|
|
—
|
|
|
(19
|
)
|
|
46
|
|
|
—
|
|
||||||||
RMBS
|
56
|
|
|
2
|
|
|
2
|
|
|
(13
|
)
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||||||
RMBS
|
134
|
|
|
(21
|
)
|
|
—
|
|
|
10
|
|
|
4
|
|
|
(75
|
)
|
|
52
|
|
|
1
|
|
||||||||
Equity securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||||
Mortgage loans
|
32
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
||||||||
Investment funds
|
29
|
|
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
22
|
|
|
(3
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
57
|
|
|
744
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
801
|
|
|
—
|
|
||||||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities, ABS
|
328
|
|
|
2
|
|
|
22
|
|
|
2,076
|
|
|
—
|
|
|
(104
|
)
|
|
2,324
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
78
|
|
|
(7
|
)
|
|
—
|
|
|
(14
|
)
|
|
17
|
|
|
(36
|
)
|
|
38
|
|
|
2
|
|
||||||||
ABS
|
149
|
|
|
(14
|
)
|
|
—
|
|
|
473
|
|
|
103
|
|
|
—
|
|
|
711
|
|
|
(6
|
)
|
||||||||
Equity securities
|
120
|
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
||||||||
Investment funds
|
105
|
|
|
8
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
8
|
|
||||||||
Funds withheld at interest – embedded derivative
|
(110
|
)
|
|
704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,676
|
|
|
145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,821
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
35
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
25
|
|
|
—
|
|
|
16
|
|
|
1
|
|
||||||||
Equity securities
|
13
|
|
|
(2
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
||||||||
Investment funds
|
15
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Total Level 3 assets
|
$
|
5,528
|
|
|
$
|
1,580
|
|
|
$
|
78
|
|
|
$
|
2,490
|
|
|
$
|
189
|
|
|
$
|
(907
|
)
|
|
$
|
8,958
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(7,969
|
)
|
|
$
|
(2,526
|
)
|
|
$
|
—
|
|
|
$
|
(447
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,942
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(932
|
)
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,050
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,443
|
)
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,546
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(730
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(755
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(4
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
1
|
|
||||||||
Total Level 3 liabilities
|
$
|
(11,078
|
)
|
|
$
|
(2,771
|
)
|
|
$
|
—
|
|
|
$
|
(447
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(14,296
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Year ended December 31, 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
|
|
|
$
|
(16
|
)
|
|
$
|
(6
|
)
|
|
$
|
249
|
|
|
$
|
97
|
|
|
$
|
(4
|
)
|
|
$
|
898
|
|
|
$
|
—
|
|
CLO
|
64
|
|
|
2
|
|
|
(2
|
)
|
|
36
|
|
|
7
|
|
|
—
|
|
|
107
|
|
|
—
|
|
||||||||
ABS
|
1,457
|
|
|
8
|
|
|
(11
|
)
|
|
252
|
|
|
—
|
|
|
(91
|
)
|
|
1,615
|
|
|
—
|
|
||||||||
CMBS
|
137
|
|
|
1
|
|
|
—
|
|
|
132
|
|
|
15
|
|
|
(98
|
)
|
|
187
|
|
|
—
|
|
||||||||
RMBS
|
301
|
|
|
4
|
|
|
(11
|
)
|
|
21
|
|
|
—
|
|
|
(259
|
)
|
|
56
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. state, municipal and political subdivisions
|
17
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
1
|
|
||||||||
CLO
|
17
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
1
|
|
|
(6
|
)
|
||||||||
ABS
|
77
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||
RMBS
|
342
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
134
|
|
|
5
|
|
||||||||
Equity securities
|
8
|
|
|
2
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
2
|
|
||||||||
Mortgage loans
|
41
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||||||
Investment funds
|
41
|
|
|
(3
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
29
|
|
|
(3
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
312
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities, ABS
|
4
|
|
|
—
|
|
|
(2
|
)
|
|
326
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
105
|
|
|
(13
|
)
|
|
—
|
|
|
(18
|
)
|
|
25
|
|
|
(21
|
)
|
|
78
|
|
|
(5
|
)
|
||||||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|
—
|
|
|
149
|
|
|
—
|
|
||||||||
Equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
—
|
|
||||||||
Investment funds
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
(3
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,824
|
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,676
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
48
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||||||
Equity securities
|
28
|
|
|
(12
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||||||
Investment funds
|
21
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||||||
Total Level 3 assets
|
$
|
5,422
|
|
|
$
|
(625
|
)
|
|
$
|
(32
|
)
|
|
$
|
1,182
|
|
|
$
|
293
|
|
|
$
|
(712
|
)
|
|
$
|
5,528
|
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(7,411
|
)
|
|
$
|
923
|
|
|
$
|
—
|
|
|
$
|
(1,481
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,969
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(1,005
|
)
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(932
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,625
|
)
|
|
182
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,443
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(803
|
)
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(730
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(5
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
||||||||
Total Level 3 liabilities
|
$
|
(10,849
|
)
|
|
$
|
1,252
|
|
|
$
|
—
|
|
|
$
|
(1,481
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,078
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Year ended December 31, 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
|
116
|
|
|
—
|
|
|
(3
|
)
|
|
(174
|
)
|
|
(61
|
)
|
|||||
CLO
|
94
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
50
|
|
|||||
ABS
|
409
|
|
|
—
|
|
|
(172
|
)
|
|
(117
|
)
|
|
120
|
|
|||||
CMBS
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(127
|
)
|
|
(131
|
)
|
|||||
RMBS
|
1
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(13
|
)
|
|||||
Trading securities, RMBS
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||||
Investment funds
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Short-term investments
|
74
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
41
|
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities, ABS
|
2,207
|
|
|
—
|
|
|
—
|
|
|
(131
|
)
|
|
2,076
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
ABS
|
511
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
473
|
|
|||||
Equity securities
|
75
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
(62
|
)
|
|||||
Investment funds
|
20
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
19
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(44
|
)
|
|||||
Equity securities
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total Level 3 assets
|
$
|
3,557
|
|
|
$
|
—
|
|
|
$
|
(247
|
)
|
|
$
|
(820
|
)
|
|
$
|
2,490
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(937
|
)
|
|
$
|
—
|
|
|
$
|
490
|
|
|
$
|
(447
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(937
|
)
|
|
$
|
—
|
|
|
$
|
490
|
|
|
$
|
(447
|
)
|
|
Year ended December 31, 2018
|
||||||||||||||||||
(In millions)
|
Purchases
|
|
Issuances
|
|
Sales
|
|
Settlements
|
|
Net purchases, issuances, sales and settlements
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
$
|
351
|
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
(73
|
)
|
|
$
|
249
|
|
CLO
|
67
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
36
|
|
|||||
ABS
|
599
|
|
|
—
|
|
|
(35
|
)
|
|
(312
|
)
|
|
252
|
|
|||||
CMBS
|
151
|
|
|
—
|
|
|
(3
|
)
|
|
(16
|
)
|
|
132
|
|
|||||
RMBS
|
56
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
21
|
|
|||||
Trading securities, CLO
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity securities
|
1
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||
Investment funds
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities, ABS
|
326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326
|
|
|||||
Trading securities, CLO
|
30
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Equity securities
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||
Investment funds
|
108
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Equity securities
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Investment funds
|
14
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Total Level 3 assets
|
$
|
1,831
|
|
|
$
|
—
|
|
|
$
|
(164
|
)
|
|
$
|
(485
|
)
|
|
$
|
1,182
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(1,888
|
)
|
|
$
|
—
|
|
|
$
|
407
|
|
|
$
|
(1,481
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(1,888
|
)
|
|
$
|
—
|
|
|
$
|
407
|
|
|
$
|
(1,481
|
)
|
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.
|
|
|
December 31, 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
|
|
$
|
10,942
|
|
|
Option budget method
|
|
Nonperformance risk
|
|
0.2
|
%
|
–
|
1.1%
|
|
Decrease
|
|
|
|
|
|
|
Option budget
|
|
0.7
|
%
|
–
|
3.7%
|
|
Increase
|
||
|
|
|
|
|
|
Surrender rate
|
|
3.5
|
%
|
–
|
8.1%
|
|
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
|
|
December 31, 2019
|
||||||||||||||||||||||
(In millions)
|
Carrying Value
|
|
Fair Value
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
$
|
14,279
|
|
|
$
|
14,719
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,719
|
|
Investment funds
|
577
|
|
|
577
|
|
|
577
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Policy loans
|
417
|
|
|
417
|
|
|
—
|
|
|
—
|
|
|
417
|
|
|
—
|
|
||||||
Funds withheld at interest
|
14,380
|
|
|
14,380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,380
|
|
||||||
Short-term investments
|
190
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||||
Other investments
|
65
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
653
|
|
|
641
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
641
|
|
||||||
Investment funds
|
2,634
|
|
|
2,634
|
|
|
2,634
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Funds withheld at interest
|
12,626
|
|
|
12,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,626
|
|
||||||
Other investments
|
487
|
|
|
537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
537
|
|
||||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment funds
|
116
|
|
|
116
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total financial assets not carried at fair value
|
$
|
46,424
|
|
|
$
|
46,902
|
|
|
$
|
3,327
|
|
|
$
|
—
|
|
|
$
|
417
|
|
|
$
|
43,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest sensitive contract liabilities
|
$
|
57,272
|
|
|
$
|
58,027
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,027
|
|
Short-term debt
|
475
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
—
|
|
||||||
Long-term debt
|
992
|
|
|
1,036
|
|
|
—
|
|
|
—
|
|
|
1,036
|
|
|
—
|
|
||||||
Securities to repurchase
|
512
|
|
|
512
|
|
|
—
|
|
|
—
|
|
|
512
|
|
|
—
|
|
||||||
Funds withheld liability
|
377
|
|
|
377
|
|
|
—
|
|
|
—
|
|
|
377
|
|
|
—
|
|
||||||
Total financial liabilities not carried at fair value
|
$
|
59,628
|
|
|
$
|
60,427
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,400
|
|
|
$
|
58,027
|
|
|
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
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Premiums
|
|
|
|
|
|
||||||
Direct
|
$
|
5,449
|
|
|
$
|
2,813
|
|
|
$
|
2,700
|
|
Reinsurance assumed
|
1,092
|
|
|
1,066
|
|
|
21
|
|
|||
Reinsurance ceded
|
(159
|
)
|
|
(417
|
)
|
|
(195
|
)
|
|||
Total premiums
|
$
|
6,382
|
|
|
$
|
3,462
|
|
|
$
|
2,526
|
|
|
|
|
|
|
|
||||||
Future policy and other policy benefits
|
|
|
|
|
|
||||||
Direct
|
$
|
6,697
|
|
|
$
|
3,739
|
|
|
$
|
3,537
|
|
Reinsurance assumed
|
1,223
|
|
|
1,093
|
|
|
37
|
|
|||
Reinsurance ceded
|
(333
|
)
|
|
(551
|
)
|
|
(313
|
)
|
|||
Total future policy and other policy benefits
|
$
|
7,587
|
|
|
$
|
4,281
|
|
|
$
|
3,261
|
|
(In millions)
|
Year ended December 31, 2019
|
||
Interest sensitive contract liabilities
|
$
|
407
|
|
Future policy benefits
|
305
|
|
|
Funds withheld liability
|
347
|
|
|
Investments
|
320
|
|
|
Policy loans
|
38
|
|
|
Reinsurance recoverable
|
674
|
|
|
Other assets and liabilities
|
27
|
|
(In millions)
|
DAC
|
|
DSI
|
|
VOBA
|
|
Total
|
||||||||
Balance at December 31, 2016
|
$
|
1,145
|
|
|
$
|
462
|
|
|
$
|
1,352
|
|
|
$
|
2,959
|
|
Additions
|
493
|
|
|
161
|
|
|
—
|
|
|
654
|
|
||||
Unlocking
|
13
|
|
|
4
|
|
|
(1
|
)
|
|
16
|
|
||||
Amortization
|
(194
|
)
|
|
(67
|
)
|
|
(162
|
)
|
|
(423
|
)
|
||||
Impact of unrealized investment (gains) losses
|
(82
|
)
|
|
(40
|
)
|
|
(112
|
)
|
|
(234
|
)
|
||||
Balance at December 31, 2017
|
1,375
|
|
|
520
|
|
|
1,077
|
|
|
2,972
|
|
||||
Additions
|
2,481
|
|
|
264
|
|
|
—
|
|
|
2,745
|
|
||||
Unlocking
|
21
|
|
|
7
|
|
|
54
|
|
|
82
|
|
||||
Amortization
|
(108
|
)
|
|
(61
|
)
|
|
(141
|
)
|
|
(310
|
)
|
||||
Impact of unrealized investment (gains) losses
|
152
|
|
|
69
|
|
|
197
|
|
|
418
|
|
||||
Balance at December 31, 2018
|
3,921
|
|
|
799
|
|
|
1,187
|
|
|
5,907
|
|
||||
Additions
|
645
|
|
|
226
|
|
|
—
|
|
|
871
|
|
||||
Unlocking
|
(117
|
)
|
|
(9
|
)
|
|
(24
|
)
|
|
(150
|
)
|
||||
Amortization
|
(749
|
)
|
|
(65
|
)
|
|
(68
|
)
|
|
(882
|
)
|
||||
Impact of unrealized investment (gains) losses
|
(426
|
)
|
|
(131
|
)
|
|
(181
|
)
|
|
(738
|
)
|
||||
Balance at December 31, 2019
|
$
|
3,274
|
|
|
$
|
820
|
|
|
$
|
914
|
|
|
$
|
5,008
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Liabilities
|
|
|
|
||||
Future policy benefits
|
$
|
1,546
|
|
|
$
|
1,443
|
|
Other policy claims and benefits
|
18
|
|
|
14
|
|
||
Dividends payable to policyholders
|
87
|
|
|
89
|
|
||
Total liabilities
|
1,651
|
|
|
1,546
|
|
||
Assets
|
|
|
|
||||
Trading securities
|
1,353
|
|
|
1,228
|
|
||
Mortgage loans, net of allowances
|
27
|
|
|
32
|
|
||
Policy loans
|
139
|
|
|
154
|
|
||
Total investments
|
1,519
|
|
|
1,414
|
|
||
Cash and cash equivalents
|
30
|
|
|
31
|
|
||
Accrued investment income
|
44
|
|
|
41
|
|
||
Reinsurance recoverable
|
19
|
|
|
22
|
|
||
Other assets
|
9
|
|
|
2
|
|
||
Total assets
|
1,621
|
|
|
1,510
|
|
||
Maximum future earnings to be recognized from AmerUs Closed Block
|
$
|
30
|
|
|
$
|
36
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Premiums
|
$
|
54
|
|
|
$
|
48
|
|
|
$
|
58
|
|
Net investment income
|
74
|
|
|
77
|
|
|
79
|
|
|||
Investment related gains (losses)
|
147
|
|
|
(118
|
)
|
|
61
|
|
|||
Total revenues
|
275
|
|
|
7
|
|
|
198
|
|
|||
Benefits and Expenses
|
|
|
|
|
|
||||||
Future policy and other policy benefits
|
234
|
|
|
(49
|
)
|
|
144
|
|
|||
Dividends to policyholders
|
36
|
|
|
36
|
|
|
51
|
|
|||
Total benefits and expenses
|
270
|
|
|
(13
|
)
|
|
195
|
|
|||
Contribution from AmerUs Closed Block before income taxes
|
5
|
|
|
20
|
|
|
3
|
|
|||
Income tax benefit
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Contribution from AmerUs Closed Block, net of income taxes
|
$
|
6
|
|
|
$
|
20
|
|
|
$
|
8
|
|
1.
|
Consolidated debt to capitalization ratio of not greater than 35%;
|
2.
|
Minimum consolidated net worth of no less than $7.3 billion; and
|
3.
|
Restrictions on our ability to incur debt and liens, in each case with certain exceptions.
|
•
|
In the first quarter, a total of 21.9 million Class B shares were converted into Class A shares pursuant to a distribution of common shares from AP Alternative Assets, L.P. (AAA) to AAA unitholders.
|
•
|
In the fourth quarter, a total of 21.4 million Class B shares were converted into Class A shares pursuant to a distribution of common shares from AP Alternative Assets, L.P. (AAA) to AAA unitholders.
|
•
|
As a result of the lockup releases during the year, 1.3 million Class B shares were converted into Class A shares.
|
•
|
During the year, we completed two follow-on offerings of our Class A common shares. Shareholders sold 50.3 million existing Class A shares through the offerings. We did not sell any shares in the follow-on offerings. A total of 41.7 million Class B shares were converted into Class A shares on a one-for-one basis in order to participate in the follow-on offerings.
|
|
Years ended December 31,
|
|||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|||
Class A
|
|
|
|
|
|
|||
Beginning balance
|
162.4
|
|
|
142.4
|
|
|
77.3
|
|
Issued shares
|
0.7
|
|
|
0.6
|
|
|
0.7
|
|
Forfeited shares
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
Repurchased shares
|
(19.8
|
)
|
|
(2.6
|
)
|
|
—
|
|
Converted from Class B shares
|
—
|
|
|
22.0
|
|
|
64.4
|
|
Ending balance
|
143.2
|
|
|
162.4
|
|
|
142.4
|
|
Class B
|
|
|
|
|
|
|||
Beginning balance
|
25.4
|
|
|
47.4
|
|
|
111.8
|
|
Converted to Class A shares
|
—
|
|
|
(22.0
|
)
|
|
(64.4
|
)
|
Ending balance
|
25.4
|
|
|
25.4
|
|
|
47.4
|
|
Class M-1
|
|
|
|
|
|
|||
Beginning balance
|
3.4
|
|
|
3.4
|
|
|
3.5
|
|
Converted to Class A shares
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
Ending balance
|
3.3
|
|
|
3.4
|
|
|
3.4
|
|
Class M-2
|
|
|
|
|
|
|||
Beginning balance
|
0.8
|
|
|
0.9
|
|
|
1.1
|
|
Converted to Class A shares
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
Ending balance
|
0.8
|
|
|
0.8
|
|
|
0.9
|
|
Class M-3
|
|
|
|
|
|
|||
Beginning balance
|
1.0
|
|
|
1.1
|
|
|
1.3
|
|
Converted to Class A shares
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
Ending balance
|
1.0
|
|
|
1.0
|
|
|
1.1
|
|
Class M-4
|
|
|
|
|
|
|||
Beginning balance
|
4.1
|
|
|
4.7
|
|
|
5.4
|
|
Converted to Class A shares
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
Forfeited shares
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
Repurchased shares
|
—
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
Ending balance
|
4.0
|
|
|
4.1
|
|
|
4.7
|
|
(In millions)
|
Unrealized investment gains (losses) on AFS securities
|
|
DAC, DSI, VOBA, future policy benefits and dividends payable to policyholders adjustments on AFS securities
|
|
Noncredit component of OTTI losses on AFS securities
|
|
Unrealized gains (losses) on hedging instruments
|
|
Foreign currency translation and other adjustments
|
|
Accumulated other comprehensive income (loss)
|
||||||||||||
Balance at December 31, 2016
|
$
|
684
|
|
|
$
|
(298
|
)
|
|
$
|
(11
|
)
|
|
$
|
6
|
|
|
$
|
(15
|
)
|
|
$
|
366
|
|
Adoption of accounting standards
|
273
|
|
|
(72
|
)
|
|
(2
|
)
|
|
(12
|
)
|
|
—
|
|
|
187
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
1,680
|
|
|
(319
|
)
|
|
(5
|
)
|
|
(105
|
)
|
|
19
|
|
|
1,270
|
|
||||||
Less: Reclassification adjustments for gains (losses) realized in net income1
|
75
|
|
|
(26
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Less: Income tax expense (benefit)
|
463
|
|
|
(95
|
)
|
|
1
|
|
|
(35
|
)
|
|
—
|
|
|
334
|
|
||||||
Balance at December 31, 2017
|
2,099
|
|
|
(568
|
)
|
|
(10
|
)
|
|
(76
|
)
|
|
4
|
|
|
1,449
|
|
||||||
Adoption of accounting standards
|
(46
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||
Other comprehensive income (loss) before reclassifications
|
(3,291
|
)
|
|
852
|
|
|
(9
|
)
|
|
146
|
|
|
(8
|
)
|
|
(2,310
|
)
|
||||||
Less: Reclassification adjustments for gains (losses) realized in net income1
|
4
|
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Less: Income tax expense (benefit)
|
(629
|
)
|
|
168
|
|
|
(1
|
)
|
|
31
|
|
|
—
|
|
|
(431
|
)
|
||||||
Balance at December 31, 2018
|
(613
|
)
|
|
121
|
|
|
(15
|
)
|
|
39
|
|
|
(4
|
)
|
|
(472
|
)
|
||||||
Other comprehensive income (loss) before reclassifications
|
4,928
|
|
|
(1,322
|
)
|
|
1
|
|
|
29
|
|
|
1
|
|
|
3,637
|
|
||||||
Less: Reclassification adjustments for gains (losses) realized in net income1
|
218
|
|
|
(56
|
)
|
|
7
|
|
|
—
|
|
|
—
|
|
|
169
|
|
||||||
Less: Income tax expense (benefit)
|
959
|
|
|
(266
|
)
|
|
(1
|
)
|
|
6
|
|
|
—
|
|
|
698
|
|
||||||
Less: Other comprehensive income attributable to NCI, net of subsidiary issuance of equity interests and tax
|
16
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
17
|
|
||||||
Balance at December 31, 2019
|
$
|
3,122
|
|
|
$
|
(879
|
)
|
|
$
|
(20
|
)
|
|
$
|
61
|
|
|
$
|
(3
|
)
|
|
$
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1 Recognized in investment related gains (losses) on the consolidated statements of income.
|
|
Year ended December 31, 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 available to Athene Holding Ltd. common shareholders – basic and diluted
|
$
|
1,760
|
|
|
$
|
291
|
|
|
$
|
38
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
153.9
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.2
|
|
||||||
Dilutive effect of stock compensation plans
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Diluted weighted average shares outstanding
|
154.3
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
Diluted
|
$
|
11.41
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
11.44
|
|
|
$
|
9.94
|
|
|
Year ended December 31, 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 available to Athene Holding Ltd. common shareholders – basic and diluted
|
$
|
857
|
|
|
$
|
157
|
|
|
$
|
18
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
160.5
|
|
|
29.3
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.1
|
|
||||||
Dilutive effect of stock compensation plans
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||||
Diluted weighted average shares outstanding
|
161.1
|
|
|
29.3
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
5.34
|
|
|
$
|
5.34
|
|
|
$
|
5.34
|
|
|
$
|
5.34
|
|
|
$
|
5.34
|
|
|
$
|
5.34
|
|
Diluted
|
$
|
5.32
|
|
|
$
|
5.34
|
|
|
$
|
5.34
|
|
|
$
|
5.31
|
|
|
$
|
5.31
|
|
|
$
|
4.11
|
|
|
Year ended December 31, 2017
|
||||||||||||||||||||||
(In millions, except per share data)
|
Class A
|
|
Class B
|
|
Class M-1
|
|
Class M-2
|
|
Class M-3
|
|
Class M-4
|
||||||||||||
Net income available to Athene Holding Ltd. common shareholders – basic
|
$
|
749
|
|
|
$
|
567
|
|
|
$
|
24
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
9
|
|
Effect of stock compensation plans on allocated net income
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income available to Athene Holding Ltd. common shareholders – diluted
|
$
|
767
|
|
|
$
|
567
|
|
|
$
|
24
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
107.7
|
|
|
81.6
|
|
|
3.4
|
|
|
0.6
|
|
|
0.7
|
|
|
1.3
|
|
||||||
Dilutive effect of stock compensation plans
|
3.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
1.6
|
|
||||||
Diluted weighted average shares outstanding
|
111.0
|
|
|
81.6
|
|
|
3.4
|
|
|
0.9
|
|
|
1.2
|
|
|
2.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
6.95
|
|
|
$
|
6.95
|
|
|
$
|
6.95
|
|
|
$
|
6.95
|
|
|
$
|
6.95
|
|
|
$
|
6.95
|
|
Diluted
|
$
|
6.91
|
|
|
$
|
6.95
|
|
|
$
|
6.95
|
|
|
$
|
5.05
|
|
|
$
|
3.86
|
|
|
$
|
3.10
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
$
|
53
|
|
|
$
|
78
|
|
|
$
|
5
|
|
Deferred
|
64
|
|
|
44
|
|
|
101
|
|
|||
Income tax expense (benefit)
|
$
|
117
|
|
|
$
|
122
|
|
|
$
|
106
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Income before income taxes – Bermuda
|
$
|
1,895
|
|
|
$
|
641
|
|
|
$
|
1,165
|
|
Income before income taxes – U.S.
|
528
|
|
|
534
|
|
|
274
|
|
|||
Income before income taxes – United Kingdom
|
(121
|
)
|
|
—
|
|
|
—
|
|
|||
Income before income taxes – Germany
|
—
|
|
|
—
|
|
|
25
|
|
|||
Income before income taxes
|
$
|
2,302
|
|
|
$
|
1,175
|
|
|
$
|
1,464
|
|
|
Years ended December 31,
|
||||||||||
(In millions, except for percentages)
|
2019
|
|
2018
|
|
2017
|
||||||
Expected tax provision computed on pre-tax income at weighted average income tax rate
|
$
|
88
|
|
|
$
|
112
|
|
|
$
|
104
|
|
Increase in income taxes resulting from:
|
|
|
|
|
|
||||||
Deferred tax valuation allowance
|
16
|
|
|
—
|
|
|
(5
|
)
|
|||
Non-deductible expenses
|
17
|
|
|
—
|
|
|
—
|
|
|||
Prior year true-up
|
2
|
|
|
11
|
|
|
8
|
|
|||
Corporate owned life insurance
|
(6
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|||
Stock compensation expense
|
2
|
|
|
1
|
|
|
5
|
|
|||
Change in statutory tax rates
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||
State taxes and other
|
(2
|
)
|
|
1
|
|
|
9
|
|
|||
Income tax expense (benefit)
|
$
|
117
|
|
|
$
|
122
|
|
|
$
|
106
|
|
Effective tax rate
|
5
|
%
|
|
10
|
%
|
|
7
|
%
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Income tax expense
|
$
|
117
|
|
|
$
|
122
|
|
|
$
|
106
|
|
Income tax expense (benefit) from OCI
|
698
|
|
|
(431
|
)
|
|
334
|
|
|||
Total income taxes
|
$
|
815
|
|
|
$
|
(309
|
)
|
|
$
|
440
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Current income tax recoverable
|
$
|
—
|
|
|
$
|
36
|
|
Current income tax payable
|
14
|
|
|
33
|
|
||
Net current income tax recoverable (payable)
|
$
|
(14
|
)
|
|
$
|
3
|
|
|
|
|
|
||||
Deferred tax assets
|
$
|
—
|
|
|
$
|
340
|
|
Deferred tax liabilities
|
423
|
|
|
—
|
|
||
Net deferred tax assets (liabilities)
|
$
|
(423
|
)
|
|
$
|
340
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Deferred tax assets
|
|
|
|
||||
Insurance liabilities
|
$
|
1,753
|
|
|
$
|
1,186
|
|
Net unrealized losses on AFS
|
—
|
|
|
112
|
|
||
Net operating and capital loss carryforwards
|
133
|
|
|
78
|
|
||
Tax credits
|
2
|
|
|
—
|
|
||
Fixed assets
|
—
|
|
|
43
|
|
||
Employee benefits
|
21
|
|
|
24
|
|
||
Other
|
16
|
|
|
38
|
|
||
Total deferred tax assets
|
1,925
|
|
|
1,481
|
|
||
Valuation allowance
|
(63
|
)
|
|
(52
|
)
|
||
Deferred tax assets, after valuation allowance
|
1,862
|
|
|
1,429
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Investments, including derivatives
|
928
|
|
|
296
|
|
||
Net unrealized gains on AFS
|
585
|
|
|
—
|
|
||
DAC, DSI and VOBA
|
758
|
|
|
790
|
|
||
Other
|
14
|
|
|
3
|
|
||
Total deferred tax liabilities
|
2,285
|
|
|
1,089
|
|
||
Net deferred tax assets (liabilities)
|
$
|
(423
|
)
|
|
$
|
340
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
U.S. federal and state net operating losses and other deferred tax assets
|
$
|
47
|
|
|
$
|
52
|
|
UK net operating losses and other deferred tax assets
|
16
|
|
|
—
|
|
||
Total valuation allowance
|
$
|
63
|
|
|
$
|
52
|
|
|
EBS capital & surplus
|
|
BSCR ratio
|
||||||||||
|
December 31,
|
|
December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
ALRe
|
$
|
14,073
|
|
|
$
|
12,000
|
|
|
310
|
%
|
|
340
|
%
|
AARe
|
2,898
|
|
|
3,029
|
|
|
257
|
%
|
|
176
|
%
|
||
ACRA 1A
|
1,237
|
|
|
575
|
|
|
341
|
%
|
|
295
|
%
|
Subsidiary
|
|
Regulatory Authority
|
AADE
|
|
Delaware Department of Insurance
|
AAIA
|
|
Iowa Insurance Division
|
AANY
|
|
New York Department of Financial Services
|
Athene Re USA IV
|
|
State of Vermont Department of Financial Regulation
|
|
Statutory capital & surplus
|
|
Statutory net income (loss)
|
||||||||||||||||
|
December 31,
|
|
Years ended December 31,
|
||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2017
|
||||||||||
ALRe
|
$
|
11,000
|
|
|
$
|
9,659
|
|
|
$
|
1,247
|
|
|
$
|
418
|
|
|
$
|
828
|
|
AARe
|
2,343
|
|
|
2,095
|
|
|
248
|
|
|
997
|
|
|
—
|
|
|||||
ACRA 1A
|
808
|
|
|
393
|
|
|
265
|
|
|
(287
|
)
|
|
—
|
|
|||||
AADE
|
1,526
|
|
|
1,544
|
|
|
(86
|
)
|
|
18
|
|
|
24
|
|
|||||
AAIA
|
1,209
|
|
|
1,234
|
|
|
241
|
|
|
81
|
|
|
239
|
|
|||||
AANY
|
318
|
|
|
282
|
|
|
33
|
|
|
6
|
|
|
29
|
|
(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 of $103.4 billion (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, except percentages)
|
December 31, 2019
|
|
Percent of Total
|
|||
Core
|
$
|
32,474
|
|
|
25.5
|
%
|
Core Plus
|
30,155
|
|
|
23.6
|
%
|
|
Yield
|
48,557
|
|
|
38.0
|
%
|
|
High Alpha
|
5,062
|
|
|
4.0
|
%
|
|
Other
|
11,302
|
|
|
8.9
|
%
|
|
Total sub-allocation assets
|
$
|
127,550
|
|
|
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
|
%
|
(A)
|
To Apollo, sub-allocation fees on the senior notes based on the rates applicable to Yield assets and sub-allocation fees on the subordinated notes based on the rates applicable to High Alpha assets.
|
(B)
|
To Redding Ridge Asset Management LLC, a company in which certain funds managed by Apollo have an interest, as consideration for assistance with the structuring, monitoring, support and maintenance of the securitization transactions, a one-time structuring fee, as well as ongoing support fees equal to 1.5 bps on the total capitalization amount and certain other fees, which may become due upon the occurrence of certain events; and
|
(C)
|
To Merx Aviation Servicing Limited, a company externally managed by Apollo Investment Management, L.P., with respect to certain diligence, technical support and enforcement, remarketing and restructuring services with respect to the existing Aviation Loans and the Forward Flow Loans, a one-time servicing fee, as well as certain special situations fees, which may become due upon the occurrence of certain events.
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
AFS securities
|
$
|
9,369
|
|
|
$
|
5,439
|
|
Trading securities
|
45
|
|
|
68
|
|
||
Equity securities
|
22
|
|
|
2
|
|
||
Mortgage loans
|
2,535
|
|
|
1,830
|
|
||
Investment funds
|
84
|
|
|
53
|
|
||
Derivative assets
|
105
|
|
|
24
|
|
||
Short-term investments
|
92
|
|
|
77
|
|
||
Other investments
|
88
|
|
|
47
|
|
||
Restricted cash
|
402
|
|
|
492
|
|
||
Total restricted assets
|
$
|
12,742
|
|
|
$
|
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 interests; and
|
•
|
Other adjustments to revenues.
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Retirement Services
|
$
|
11,460
|
|
|
$
|
8,118
|
|
|
$
|
5,960
|
|
Corporate and Other
|
117
|
|
|
44
|
|
|
368
|
|
|||
Non-operating adjustments
|
|
|
|
|
|
||||||
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets
|
2,346
|
|
|
(1,020
|
)
|
|
1,990
|
|
|||
Investment gains (losses), net of offsets
|
1,685
|
|
|
(515
|
)
|
|
461
|
|
|||
VIE expenses and noncontrolling interests
|
637
|
|
|
1
|
|
|
—
|
|
|||
Other adjustments to revenues
|
13
|
|
|
9
|
|
|
9
|
|
|||
Total revenues
|
$
|
16,258
|
|
|
$
|
6,637
|
|
|
$
|
8,788
|
|
•
|
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.
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Retirement Services
|
$
|
1,322
|
|
|
$
|
1,201
|
|
|
$
|
1,038
|
|
Corporate and Other
|
(33
|
)
|
|
(61
|
)
|
|
17
|
|
|||
Non-operating adjustments
|
|
|
|
|
|
||||||
Investment gains (losses), net of offsets
|
994
|
|
|
(274
|
)
|
|
199
|
|
|||
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets
|
(65
|
)
|
|
242
|
|
|
230
|
|
|||
Integration, restructuring and other non-operating expenses
|
(70
|
)
|
|
(22
|
)
|
|
(68
|
)
|
|||
Stock-based compensation, excluding LTIP
|
(12
|
)
|
|
(11
|
)
|
|
(33
|
)
|
|||
Income tax (expense) benefit – non-operating
|
—
|
|
|
(22
|
)
|
|
(25
|
)
|
|||
Net income available to Athene Holding Ltd. common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Retirement Services
|
$
|
5,062
|
|
|
$
|
4,188
|
|
|
$
|
3,241
|
|
Corporate and Other
|
117
|
|
|
44
|
|
|
182
|
|
|||
Adjustments to net investment income
|
|
|
|
|
|
||||||
Reinsurance embedded derivative impacts
|
(680
|
)
|
|
(301
|
)
|
|
(191
|
)
|
|||
Net VIE earnings
|
(80
|
)
|
|
(37
|
)
|
|
(77
|
)
|
|||
Alternative income (gains) losses
|
(1
|
)
|
|
34
|
|
|
20
|
|
|||
Noncontrolling interests
|
61
|
|
|
—
|
|
|
—
|
|
|||
Held for trading amortization
|
43
|
|
|
76
|
|
|
94
|
|
|||
Net investment income
|
$
|
4,522
|
|
|
$
|
4,004
|
|
|
$
|
3,269
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Retirement Services
|
$
|
117
|
|
|
$
|
100
|
|
|
$
|
83
|
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Income tax (expense) benefit – non-operating
|
—
|
|
|
22
|
|
|
25
|
|
|||
Income tax expense (benefit)
|
$
|
117
|
|
|
$
|
122
|
|
|
$
|
106
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Retirement Services
|
$
|
143,881
|
|
|
$
|
123,498
|
|
Corporate and Other
|
2,994
|
|
|
2,007
|
|
||
Total assets
|
$
|
146,875
|
|
|
$
|
125,505
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Fixed indexed annuities
|
$
|
7,304
|
|
|
$
|
29,973
|
|
|
$
|
5,480
|
|
Fixed rate annuities
|
3,192
|
|
|
5,501
|
|
|
873
|
|
|||
Payouts without life contingencies
|
341
|
|
|
535
|
|
|
106
|
|
|||
Funding agreements
|
1,301
|
|
|
650
|
|
|
3,054
|
|
|||
Life and other deposits
|
(13
|
)
|
|
4
|
|
|
33
|
|
|||
Total deposits
|
12,125
|
|
|
36,663
|
|
|
9,546
|
|
|||
Payouts with life contingencies
|
6,332
|
|
|
3,408
|
|
|
2,272
|
|
|||
Life and other premiums
|
50
|
|
|
54
|
|
|
254
|
|
|||
Total premiums
|
6,382
|
|
|
3,462
|
|
|
2,526
|
|
|||
Total premiums and deposits, net of ceded
|
$
|
18,507
|
|
|
$
|
40,125
|
|
|
$
|
12,072
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
17,159
|
|
|
$
|
16,421
|
|
|
$
|
11,217
|
|
Bermuda
|
1,348
|
|
|
23,704
|
|
|
652
|
|
|||
Germany
|
—
|
|
|
—
|
|
|
203
|
|
|||
Total premiums and deposits, net of ceded
|
$
|
18,507
|
|
|
$
|
40,125
|
|
|
$
|
12,072
|
|
|
Three months ended
|
||||||||||||||
(In millions, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
4,995
|
|
|
$
|
3,423
|
|
|
$
|
4,584
|
|
|
$
|
3,256
|
|
Total benefits and expenses
|
4,255
|
|
|
2,673
|
|
|
4,305
|
|
|
2,723
|
|
||||
Net income
|
708
|
|
|
720
|
|
|
293
|
|
|
464
|
|
||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Net income attributable to Athene Holding Ltd. shareholders
|
708
|
|
|
720
|
|
|
293
|
|
|
451
|
|
||||
Less: Preferred stock dividends
|
—
|
|
|
—
|
|
|
17
|
|
|
19
|
|
||||
Net income available to Athene Holding Ltd. common shareholders
|
708
|
|
|
720
|
|
|
276
|
|
|
432
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic – All classes
|
$
|
3.65
|
|
|
$
|
3.76
|
|
|
$
|
1.50
|
|
|
$
|
2.43
|
|
Diluted – Class A
|
3.64
|
|
|
3.75
|
|
|
1.50
|
|
|
2.42
|
|
||||
Diluted – Class B
|
3.65
|
|
|
3.76
|
|
|
1.50
|
|
|
2.43
|
|
||||
Diluted – Class M-1
|
3.65
|
|
|
3.76
|
|
|
1.50
|
|
|
2.43
|
|
||||
Diluted – Class M-2
|
3.65
|
|
|
3.76
|
|
|
1.50
|
|
|
2.43
|
|
||||
Diluted – Class M-3
|
3.65
|
|
|
3.76
|
|
|
1.50
|
|
|
2.43
|
|
||||
Diluted – Class M-4
|
3.15
|
|
|
3.28
|
|
|
1.29
|
|
|
2.13
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
1,023
|
|
|
$
|
1,850
|
|
|
$
|
2,586
|
|
|
$
|
1,178
|
|
Total benefits and expenses
|
701
|
|
|
1,529
|
|
|
1,907
|
|
|
1,325
|
|
||||
Net income (loss)
|
277
|
|
|
257
|
|
|
623
|
|
|
(104
|
)
|
||||
Net income (loss) attributable to Athene Holding Ltd. shareholders
|
277
|
|
|
257
|
|
|
623
|
|
|
(104
|
)
|
||||
Net income (loss) available to Athene Holding Ltd. common shareholders
|
277
|
|
|
257
|
|
|
623
|
|
|
(104
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic – All classes
|
$
|
1.40
|
|
|
$
|
1.30
|
|
|
$
|
3.16
|
|
|
$
|
(0.53
|
)
|
Diluted – Class A
|
1.40
|
|
|
1.30
|
|
|
3.15
|
|
|
(0.53
|
)
|
||||
Diluted – Class B
|
1.40
|
|
|
1.30
|
|
|
3.16
|
|
|
(0.53
|
)
|
||||
Diluted – Class M-1
|
1.40
|
|
|
1.30
|
|
|
3.16
|
|
|
(0.53
|
)
|
||||
Diluted – Class M-2
|
1.39
|
|
|
1.29
|
|
|
3.16
|
|
|
(0.53
|
)
|
||||
Diluted – Class M-3
|
1.38
|
|
|
1.30
|
|
|
3.16
|
|
|
(0.53
|
)
|
||||
Diluted – Class M-4
|
0.97
|
|
|
1.02
|
|
|
2.42
|
|
|
(0.53
|
)
|
Plan Category
|
|
Number of Securities to
Be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights1
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights2
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Share Incentive
Plans3
|
||||
Share Incentive Plans Approved by Security Holders
|
|
1,966,566
|
|
|
$
|
46.69
|
|
|
6,969,377
|
|
Share Incentive Plans Not Approved by Security Holders4
|
|
9,522,864
|
|
|
$
|
19.31
|
|
|
—
|
|
Total
|
|
11,489,430
|
|
|
$
|
21.93
|
|
|
6,969,377
|
|
|
||||||||||
1 Consists of Class A shares underlying options, time-based RSUs, performance-based RSUs and Class M common shares. Class M common shares, once vested, are convertible into Class A shares, subject to payment of the conversion price. Performance-based RSUs are included at their target value. Class M common shares are included based on the assumption that 100% of such shares vest and are converted into Class A shares on a one-for-one basis.
|
||||||||||
2 Includes options, Class M common shares and the RSUs issued in conjunction with the Class M-4 common shares. Does not include other time-based RSUs or performance-based RSUs, as they do not have exercise prices.
|
||||||||||
3 Includes shares remaining available for issuance under the ESPP and the 2019 Share Incentive Plan. The ESPP is a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code. As of December 31, 2019, there were 3,662,780 shares remaining available for issuance under the ESPP. We estimate that 16,694 shares are subject to purchase during the current purchase period beginning on January 1, 2020 and ending on March 31, 2020, assuming a purchase price equal to 85% of the closing price of our Class A common shares on February 14, 2020.
|
||||||||||
4 Includes securities pursuant to our 2009, 2012, and 2014 share incentive plans. These plans were frozen in 2016 and no additional awards may be granted under these plans.
|
1.
|
||
|
|
|
2.
|
Financial Statement Schedules
|
|
|
|
|
|
Schedule I—Summary of Investments Other Than Investments in Related Parties as of December 31, 2019
|
|
|
Schedule II—Condensed Financial Information of Registrant (Parent Company Only)
|
|
|
Schedule II—Balance Sheets as of December 31, 2019 and 2018
|
|
|
Schedule II—Statements of Income and Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017
|
|
|
Schedule II—Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
Schedule II—Notes to Condensed Financial Information of Registrant for the years ended December 31, 2019, 2018 and 2017
|
|
|
Schedule III—Supplementary Insurance Information for the years ended December 31, 2019, 2018 and 2017
|
|
|
Schedule IV—Reinsurance for the years ended December 31, 2019, 2018 and 2017
|
|
|
Schedule V—Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017
|
|
|
Any remaining schedules are omitted because they are inapplicable.
|
|
|
|
|
3.
|
Exhibits
|
|
|
|
December 31, 2019
|
||||||||||
(In millions)
|
Cost or Amortized Cost
|
|
Fair Value
|
|
Amount Shown on Consolidated Balance Sheet
|
||||||
AFS securities
|
|
|
|
|
|
||||||
U.S government and agencies
|
$
|
35
|
|
|
$
|
36
|
|
|
$
|
36
|
|
U.S. state, municipal and political subdivisions
|
1,322
|
|
|
1,541
|
|
|
1,541
|
|
|||
Foreign governments
|
298
|
|
|
327
|
|
|
327
|
|
|||
Public utilities
|
701
|
|
|
731
|
|
|
731
|
|
|||
Redeemable preferred stock
|
106
|
|
|
114
|
|
|
114
|
|
|||
Other corporate
|
43,299
|
|
|
46,383
|
|
|
46,383
|
|
|||
CLO
|
7,524
|
|
|
7,349
|
|
|
7,349
|
|
|||
ABS
|
5,018
|
|
|
5,118
|
|
|
5,118
|
|
|||
CMBS
|
2,304
|
|
|
2,400
|
|
|
2,400
|
|
|||
RMBS
|
6,872
|
|
|
7,375
|
|
|
7,375
|
|
|||
Trading securities
|
1,890
|
|
|
2,054
|
|
|
2,054
|
|
|||
Total fixed maturity securities
|
69,369
|
|
|
73,428
|
|
|
73,428
|
|
|||
Equity securities
|
|
|
|
|
|
||||||
Public utilities
|
—
|
|
|
1
|
|
|
1
|
|
|||
Industrial, miscellaneous and all other common stock
|
50
|
|
|
48
|
|
|
48
|
|
|||
Nonredeemable preferred stocks
|
188
|
|
|
198
|
|
|
198
|
|
|||
Total equity securities
|
238
|
|
|
247
|
|
|
247
|
|
|||
Mortgage loans, net of allowances
|
14,304
|
|
|
|
|
14,306
|
|
||||
Investment funds
|
664
|
|
|
|
|
731
|
|
||||
Policy loans
|
417
|
|
|
|
|
417
|
|
||||
Funds withheld at interest
|
15,181
|
|
|
|
|
15,181
|
|
||||
Derivative assets
|
1,588
|
|
|
|
|
2,888
|
|
||||
Short-term investments
|
596
|
|
|
|
|
596
|
|
||||
Other investments
|
158
|
|
|
|
|
158
|
|
||||
Total investments
|
$
|
102,515
|
|
|
|
|
$
|
107,952
|
|
|
December 31,
|
||||||
(In millions, except per share data)
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Available-for-sale securities, at fair value (amortized cost: 2019 – $56 and 2018 – $46)
|
$
|
61
|
|
|
$
|
45
|
|
Cash and cash equivalents
|
171
|
|
|
112
|
|
||
Investments in related parties
|
|
|
|
||||
Available-for-sale securities, at fair value (amortized cost: 2019 – $2 and 2018 – $0)
|
2
|
|
|
—
|
|
||
Investment funds
|
132
|
|
|
105
|
|
||
Other assets
|
6
|
|
|
24
|
|
||
Intercompany receivable
|
13
|
|
|
21
|
|
||
Investments in subsidiaries
|
14,085
|
|
|
9,108
|
|
||
Total assets
|
$
|
14,470
|
|
|
$
|
9,415
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Long-term debt
|
$
|
992
|
|
|
$
|
991
|
|
Note payable to subsidiary
|
38
|
|
|
105
|
|
||
Other liabilities
|
40
|
|
|
35
|
|
||
Intercompany payable
|
9
|
|
|
8
|
|
||
Total liabilities
|
1,079
|
|
|
1,139
|
|
||
Equity
|
|
|
|
||||
Preferred stock
|
|
|
|
||||
Series A – par value $1 per share; $863 aggregate liquidation preference; authorized, issued and outstanding: 2019 and 2018 – 0.0 shares
|
—
|
|
|
—
|
|
||
Series B – par value $1 per share; $345 aggregate liquidation preference; authorized, issued and outstanding: 2019 and 2018 – 0.0 shares
|
—
|
|
|
—
|
|
||
Common stock
|
|
|
|
||||
Class A – par value $0.001 per share; authorized: 2019 and 2018 – 425.0 shares; issued and outstanding: 2019 – 143.2 and 2018 – 162.4 shares
|
—
|
|
|
—
|
|
||
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
|
—
|
|
|
—
|
|
||
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
|
—
|
|
|
—
|
|
||
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
|
4,171
|
|
|
3,462
|
|
||
Retained earnings
|
6,939
|
|
|
5,286
|
|
||
Accumulated other comprehensive income (loss)
|
2,281
|
|
|
(472
|
)
|
||
Total Athene Holding Ltd. shareholders’ equity
|
13,391
|
|
|
8,276
|
|
||
Total liabilities and equity
|
$
|
14,470
|
|
|
$
|
9,415
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
|
|
|
|
||||||
Net investment income (related party: 2019 – $8, 2018 – $(3) and 2017 – $3)
|
$
|
15
|
|
|
$
|
17
|
|
|
$
|
5
|
|
Investment related gains (losses) (related party: 2019 – $1, 2018 – $24 and 2017 – $0)
|
6
|
|
|
14
|
|
|
(7
|
)
|
|||
Other revenues
|
—
|
|
|
20
|
|
|
—
|
|
|||
Total revenues
|
21
|
|
|
51
|
|
|
(2
|
)
|
|||
Benefits and Expenses
|
|
|
|
|
|
||||||
Operating expenses (related party: 2019 – $11, 2018 – $7 and 2017 – $8)
|
142
|
|
|
124
|
|
|
142
|
|
|||
Total benefits and expenses
|
142
|
|
|
124
|
|
|
142
|
|
|||
Loss before income taxes and equity earnings in subsidiaries
|
(121
|
)
|
|
(73
|
)
|
|
(144
|
)
|
|||
Equity earnings in subsidiaries
|
2,293
|
|
|
1,126
|
|
|
1,502
|
|
|||
Net income available to Athene Holding Ltd. shareholders
|
2,172
|
|
|
1,053
|
|
|
1,358
|
|
|||
Less: Preferred stock dividends
|
36
|
|
|
—
|
|
|
—
|
|
|||
Net income available to Athene Holding Ltd. common shareholders
|
$
|
2,136
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
|
|
|
|
|
|
||||||
Net income available to Athene Holding Ltd. shareholders
|
$
|
2,172
|
|
|
$
|
1,053
|
|
|
$
|
1,358
|
|
Other comprehensive income (loss)
|
2,787
|
|
|
(1,879
|
)
|
|
896
|
|
|||
Comprehensive income (loss)
|
$
|
4,959
|
|
|
$
|
(826
|
)
|
|
$
|
2,254
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash used in operating activities
|
$
|
(106
|
)
|
|
$
|
(66
|
)
|
|
$
|
(54
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital contributions to subsidiary
|
(70
|
)
|
|
(95
|
)
|
|
—
|
|
|||
Receipts on loans to subsidiaries
|
—
|
|
|
64
|
|
|
—
|
|
|||
Issuances of loans to subsidiaries
|
—
|
|
|
(20
|
)
|
|
(44
|
)
|
|||
Sales, maturities, and repayments of:
|
|
|
|
|
|
||||||
Available-for-sale securities
|
4
|
|
|
178
|
|
|
9
|
|
|||
Investment funds – related party
|
1
|
|
|
—
|
|
|
—
|
|
|||
Short-term investments
|
—
|
|
|
64
|
|
|
—
|
|
|||
Purchases of:
|
|
|
|
|
|
||||||
Fixed maturity securities, available-for-sale (related party: 2019 – $(2), 2018 – $0, and 2017 – $0)
|
(16
|
)
|
|
(994
|
)
|
|
(17
|
)
|
|||
Investment funds – related party
|
(20
|
)
|
|
—
|
|
|
—
|
|
|||
Short-term investments
|
—
|
|
|
(64
|
)
|
|
—
|
|
|||
Other investing activities, net
|
27
|
|
|
(90
|
)
|
|
74
|
|
|||
Net cash (used in) provided by investing activities
|
(74
|
)
|
|
(957
|
)
|
|
22
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
—
|
|
|
998
|
|
|
—
|
|
|||
Proceeds from note payable with subsidiary
|
108
|
|
|
105
|
|
|
—
|
|
|||
Repayment of note payable with subsidiary
|
(174
|
)
|
|
—
|
|
|
—
|
|
|||
Issuance of preferred stock, net of expenses
|
1,172
|
|
|
—
|
|
|
—
|
|
|||
Preferred stock dividends
|
(36
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
(832
|
)
|
|
(105
|
)
|
|
(10
|
)
|
|||
Other financing activities, net
|
1
|
|
|
(5
|
)
|
|
(5
|
)
|
|||
Net cash provided by (used in) financing activities
|
239
|
|
|
993
|
|
|
(15
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
59
|
|
|
(30
|
)
|
|
(47
|
)
|
|||
Cash and cash equivalents at beginning of year
|
112
|
|
|
142
|
|
|
189
|
|
|||
Cash and cash equivalents at end of year
|
$
|
171
|
|
|
$
|
112
|
|
|
$
|
142
|
|
|
|
|
|
|
|
||||||
Supplementary information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
46
|
|
|
$
|
23
|
|
|
$
|
—
|
|
Non-cash transactions
|
|
|
|
|
|
||||||
Non-cash capital contributions to subsidiaries
|
—
|
|
|
803
|
|
|
—
|
|
|||
Investment in Athora Holding Ltd. received upon deconsolidation
|
—
|
|
|
108
|
|
|
—
|
|
(In millions)
|
|
DAC, DSI, and VOBA
|
|
Future policy benefits, losses, claims and loss expenses1
|
|
Other policy claims and benefits
|
|
Premiums
|
|
Net investment income
|
|
Benefits, claims, losses, and settlement expenses2
|
|
Amortization of DAC and VOBA
|
|
Policy and other operating expenses
|
||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retirement Services
|
|
$
|
5,008
|
|
|
$
|
126,075
|
|
|
$
|
138
|
|
|
$
|
6,382
|
|
|
$
|
4,405
|
|
|
$
|
12,254
|
|
|
$
|
958
|
|
|
$
|
599
|
|
Corporate and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
145
|
|
||||||||
Total
|
|
$
|
5,008
|
|
|
$
|
126,075
|
|
|
$
|
138
|
|
|
$
|
6,382
|
|
|
$
|
4,522
|
|
|
$
|
12,254
|
|
|
$
|
958
|
|
|
$
|
744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retirement Services
|
|
$
|
5,907
|
|
|
$
|
113,314
|
|
|
$
|
142
|
|
|
$
|
3,462
|
|
|
$
|
3,960
|
|
|
$
|
4,662
|
|
|
$
|
174
|
|
|
$
|
496
|
|
Corporate and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
130
|
|
||||||||
Total
|
|
$
|
5,907
|
|
|
$
|
113,314
|
|
|
$
|
142
|
|
|
$
|
3,462
|
|
|
$
|
4,004
|
|
|
$
|
4,662
|
|
|
$
|
174
|
|
|
$
|
626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retirement Services
|
|
$
|
2,972
|
|
|
$
|
80,818
|
|
|
$
|
137
|
|
|
$
|
2,347
|
|
|
$
|
3,087
|
|
|
$
|
5,969
|
|
|
$
|
344
|
|
|
$
|
444
|
|
Corporate and other
|
|
—
|
|
|
4,838
|
|
|
74
|
|
|
179
|
|
|
182
|
|
|
339
|
|
|
—
|
|
|
228
|
|
||||||||
Total
|
|
$
|
2,972
|
|
|
$
|
85,656
|
|
|
$
|
211
|
|
|
$
|
2,526
|
|
|
$
|
3,269
|
|
|
$
|
6,308
|
|
|
$
|
344
|
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Represents interest sensitive contract liabilities and future policy benefits on the consolidated balance sheets.
|
||||||||||||||||||||||||||||||||
2 Represents interest sensitive contract benefits, amortization of deferred sales inducements, future policy and other policy benefits, and dividends to policyholders on the consolidated statements of income.
|
(In millions, except for percentages)
|
Gross amount
|
|
Ceded to other companies
|
|
Assumed from other companies
|
|
Net amount
|
|
Percentage of amount assumed to net
|
|||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force at end of year
|
$
|
33,221
|
|
|
$
|
39,145
|
|
|
$
|
7,317
|
|
|
$
|
1,393
|
|
|
525.3
|
%
|
Premiums
|
5,449
|
|
|
159
|
|
|
1,092
|
|
|
6,382
|
|
|
17.1
|
%
|
||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force at end of year
|
39,941
|
|
|
45,957
|
|
|
7,857
|
|
|
1,841
|
|
|
426.8
|
%
|
||||
Premiums
|
2,813
|
|
|
417
|
|
|
1,066
|
|
|
3,462
|
|
|
30.8
|
%
|
||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force at end of year
|
43,267
|
|
|
49,860
|
|
|
8,551
|
|
|
1,958
|
|
|
436.7
|
%
|
||||
Premiums
|
2,700
|
|
|
195
|
|
|
21
|
|
|
2,526
|
|
|
0.8
|
%
|
(In millions)
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
Balance at beginning of year
|
|
Charged to costs and expenses
|
|
Assumed through acquisitions
|
|
Deductions
|
|
Balance at end of year
|
||||||||||
Reserves deducted from assets to which they apply
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance on deferred tax assets
|
$
|
52
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
63
|
|
Valuation allowance on mortgage loans
|
2
|
|
|
10
|
|
|
—
|
|
|
(1
|
)
|
|
11
|
|
|||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance on deferred tax assets
|
96
|
|
|
9
|
|
|
—
|
|
|
(53
|
)
|
|
52
|
|
|||||
Valuation allowance on mortgage loans
|
2
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
|||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance on deferred tax assets
|
94
|
|
|
19
|
|
|
—
|
|
|
(17
|
)
|
|
96
|
|
|||||
Valuation allowance on mortgage loans
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
3.1
|
|
3.2.1
|
|
3.2.2
|
|
3.3
|
|
4.1
|
|
4.2.1
|
|
4.2.2
|
|
4.2.3
|
|
4.3.1
|
|
4.3.2
|
|
4.4.1
|
|
4.4.2
|
|
4.4.3
|
|
4.4.4
|
|
4.5.1
|
|
4.5.2
|
|
4.5.3
|
|
4.5.4
|
|
4.6
|
|
10.1
|
|
10.2
|
|
10.3.1
|
|
10.3.2
|
|
10.4
|
|
10.5
|
Exhibit No.
|
Description
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10.1
|
|
10.10.2
|
|
10.10.3
|
|
10.11.1
|
|
10.11.2
|
|
10.11.3
|
|
10.11.4
|
|
10.11.5
|
|
10.11.6
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19.1
|
|
10.19.2
|
|
10.20.1
|
|
10.20.2
|
|
10.21.1
|
|
10.21.2
|
|
10.22.1
|
Exhibit No.
|
Description
|
10.22.2
|
|
10.22.3
|
|
10.23.1
|
|
10.23.2
|
|
10.23.3
|
|
10.24.1
|
|
10.24.2
|
|
10.24.3
|
|
10.25.1
|
|
10.25.2
|
|
10.25.3
|
|
10.26.1
|
|
10.26.2
|
|
10.27.1
|
|
10.27.2
|
|
10.28
|
|
10.29
|
|
10.30.1
|
|
10.30.2
|
|
10.30.3
|
|
10.31.1
|
|
10.31.2
|
|
10.32.1
|
|
10.32.2
|
|
10.33.1
|
|
10.33.2
|
|
10.34
|
|
10.35
|
Exhibit No.
|
Description
|
10.36.1
|
|
10.36.2
|
|
10.36.3
|
|
10.37
|
|
10.38
|
|
10.39
|
|
10.40
|
|
10.41
|
|
21.1
|
|
23.1
|
|
24.1
|
|
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.
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
ATHENE HOLDING LTD.
|
|
|
Date: February 20, 2020
|
/s/ Martin P. Klein
|
|
Martin P. Klein
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
Signatures
|
Title
|
Date
|
|
|
|
/s/ James R. Belardi
|
Chairman and Chief Executive Officer
|
February 20, 2020
|
James R. Belardi
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Martin P. Klein
|
Executive Vice President and Chief Financial Officer
|
February 20, 2020
|
Martin P. Klein
|
(Principal Financial Officer)
|
|
|
|
|
/s/ John A. Sondej
|
Senior Vice President and Controller
|
February 20, 2020
|
John A. Sondej
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ Marc Beilinson
|
Director
|
February 20, 2020
|
Marc Beilinson
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/s/ Robert Borden
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Director
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February 20, 2020
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Robert Borden
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/s/ Mitra Hormozi
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Director
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February 20, 2020
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Mitra Hormozi
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/s/ Scott Kleinman
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Director
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February 20, 2020
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Scott Kleinman
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/s/ Brian Leach
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Director
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February 20, 2020
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Brian Leach
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Director
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February 20, 2020
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Gernot Lohr
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/s/ H. Carl McCall
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Director
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February 20, 2020
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H. Carl McCall
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Signatures
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Title
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Date
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/s/ Matthew R. Michelini
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Director
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February 20, 2020
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Matthew R. Michelini
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/s/ Dr. Manfred Puffer
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Director
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February 20, 2020
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Dr. Manfred Puffer
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/s/ Marc Rowan
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Director
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February 20, 2020
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Marc Rowan
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/s/ Lawrence J. Ruisi
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Director
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February 20, 2020
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Lawrence J. Ruisi
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/s/ Hope Schefler Taitz
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Director
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February 20, 2020
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Hope Schefler Taitz
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/s/ Arthur Wrubel
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Director
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February 20, 2020
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Arthur Wrubel
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/s/ Fehmi Zeko
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Director
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February 20, 2020
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Fehmi Zeko
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·
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Class A Common Shares shall be deemed non-voting if the holder of such shares (or any person related to the holder within the meaning of Section 953(c) of the Code or to whom the ownership of such holder’s shares is attributed under Section 958 of the Code, each, a “Tax-Attributed Affiliate”) (1) owns, directly, indirectly or constructively, Class B Common Shares, (2) owns, directly, indirectly or constructively, an equity interest in AGM or AP Alternative Assets, L.P. or (3) is a member of the Apollo Group at which time any member of the Apollo Group holds Class B Common Shares.
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·
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The voting power of those Class A Common Shares that are entitled to vote shall be adjusted so that no shareholder or Tax-Attributed Affiliate (other than a member of the Apollo Group and its affiliates) holds more than 9.9% of the total voting power of Common Shares. This limitation is intended to reduce the likelihood that we or any of our subsidiaries domiciled outside of the United States will be treated as a controlled foreign corporation in any taxable year (other than for purposes of taking into account related person insurance income).
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·
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The aggregate votes conferred by the Class A Common Shares held by employees of the Apollo Group may constitute collectively no more than 3% of our total voting power.
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(1)
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First, the voting power of the Class B Common Shares directly held by the shareholder(s) (i) with the highest Relative Class B Ownership Percentage (as defined in the Bye-laws) as of such time and (ii) whose Class B Common Shares have voting power as of such time (the “Adjustment Shareholder(s)”) that are attributable to the Smallest Class B 9.9% U.S. Person (as defined in the Bye-laws) shall be reduced (but not below zero) until the Class B Adjustment Condition is no longer met or such Smallest Class B 9.9% U.S. Person is no longer a Class B 9.9% U.S. Person (taking into account any reallocation of voting power pursuant to clause (2) below), whichever requires the smallest reduction in voting power;
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(2)
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Second, the aggregate voting power reduced in clause (1) above shall be reallocated pro rata among the Class B Common Shares directly held by all other shareholders;
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(3)
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Third, the adjustments described in clause (1) above and the reallocation described in clause (2) above shall be reapplied serially to the next Smallest Class B 9.9% U.S. Person until the Class B Adjustment Condition is no longer met; and
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(4)
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Any excess voting power that cannot be reallocated pursuant to clauses (1), (2) and (3) above shall be transferred pursuant to the Bye-laws, and thereafter clause (3) above shall not apply.
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·
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the name and address of the shareholder who intends to make the nomination and either the name and address of the person or persons to be nominated or the nature of the business to be proposed;
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·
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the class and number of equity securities directly or indirectly owned by such shareholder or its affiliates and a description of any agreement, arrangement or understanding to which such shareholder is a party as of the date of such notice with respect to any equity securities or that has the effect or intent of mitigating loss to, managing the potential risk or benefit of share price changes for, or increasing or decreasing the voting power of such shareholder or its affiliates with respect to such equity securities;
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·
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a representation that the shareholder is a shareholder of record of our share capital entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons or to introduce the business specified in the notice;
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·
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if applicable, a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons, naming such person or persons, pursuant to which the nomination is to be made or business is to be proposed by the shareholder;
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·
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a representation whether the shareholder intends, or is part of a “group” (as defined in Rule 13d-5 of the Exchange Act) that intends, to deliver a proxy statement and/or form of proxy statement to holders of at least the percentage of Common Shares required to approve or adopt the proposal and/or to otherwise solicit proxies from other shareholders in support of such proposal;
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·
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such other information regarding each nominee or each matter of business to be proposed by such shareholder as would be required to be included in a proxy statement filed under the U.S. Security and Exchange Commission’s proxy rules if the nominee had been nominated or intended to be nominated, or the matter that had been proposed, or intended to be proposed by the board of directors;
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·
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if applicable, the consent of each nominee to serve as a director if elected; and
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·
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such other information that the board of directors may request in its discretion.
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·
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DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or
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·
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we determine not to require all of the Depositary Shares to be represented by global securities.
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·
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will rank senior to our junior shares (as defined below);
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·
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will rank junior to our senior shares (as defined below) and any existing and future indebtedness of the Company and any of our subsidiaries;
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·
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will rank equally with our parity shares (as defined below), including the other series of Preference Shares;
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·
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will not represent an interest in any of our subsidiaries; and
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·
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will be structurally subordinated in right of payment to all obligations of our subsidiaries. Under Bermuda law, in a winding-up of any of our subsidiaries, the Preference Shares will be subordinated to all existing and future policyholders’ obligations of our subsidiaries.
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·
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no dividend shall be paid or declared on our Common Shares or any other junior securities or any parity shares (except, in the case of the parity shares, on a pro rata basis with each other series of outstanding Preference Shares as described below), other than a dividend payable solely in our Common Shares, other junior securities or (solely in the case of parity shares) other parity shares, as applicable; and
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·
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no Common Shares, other junior securities or parity shares shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (i) as a result of a reclassification of junior shares for or into other junior securities, or a reclassification of parity shares for or into other parity shares, or the exchange or conversion of one junior share for or into another junior security or the exchange or conversion of one parity share for or into another parity share, (ii) through the use of the proceeds of a substantially contemporaneous sale of junior shares or (solely in the case of parity shares) other parity shares, as applicable, or (iii) as required by or necessary to fulfill the terms of any employment contract, benefit plan or similar arrangement with or for the benefit of one or more employees, directors or consultants).
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(a)
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the rate for three-month deposits in U.S. dollars as that rate appears on the Reuters Page LIBOR01 (as described below) as of 11:00 a.m. (London time) on the LIBOR determination date for that floating rate period, unless fewer than two such offered rates so appear;
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(b)
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if fewer than two offered rates appear, or no rate appears, as the case may be, on the LIBOR determination date for that floating rate period on the Reuters Page LIBOR01, the rate calculated by the calculation agent based on two offered quotations after requesting the principal London offices of each of four major reference banks (which will not include our affiliates) in the London interbank market, as selected and identified by us, to provide the calculation agent with offered quotations for deposits in U.S. dollars for the period of three months, commencing on the first day of that floating rate period, to prime banks in the London interbank markets at approximately 11:00 a.m. (London time) on that date and in a principal amount that is representative for a single transaction in U.S. dollars in that market at that time;
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(c)
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if fewer than two offered quotations referred to in clause (b) are provided as requested, the rate calculated by the calculation agent as the arithmetic mean of the rates quoted at approximately 11:00 a.m. (New York City time) on the LIBOR determination date for that floating rate period by three major banks (which will not include our affiliates) in New York City selected and identified by us for loans in U.S. dollars to leading European banks having a three-month maturity and in a principal amount that is representative for a single transaction in U.S. dollars in that market at that time; or
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(d)
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if the banks so selected by the calculation agent are not quoting as mentioned in clause (c), the calculation agent, after consulting such sources as it deems comparable to any of the foregoing quotations or to Reuters Page LIBOR01, or any such source as it deems reasonable from which to estimate three-month LIBOR or any of the foregoing lending rates, shall determine three-month LIBOR for the applicable dividend period in its sole discretion.
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(a)
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any tax, fee, duty, assessment or governmental charge of whatever nature that would not have been imposed but for the fact that such holder was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the relevant taxing jurisdiction or any political subdivision thereof or otherwise had some connection with the relevant taxing jurisdiction other than by reason of the mere ownership of, or receipt of payment under, the Preference Shares or any Preference Shares presented for payment (where presentation is required for payment) more than 30 days after the Relevant Date (except to the extent that the holder would have been entitled to such amounts if it had presented such shares for payment on any day within such 30 day period). The “Relevant Date” means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the dividend disbursing agent on or prior to such due date, it means the first date on which the full amount of such moneys having been so received and being available for payment to holders and notice to that effect shall have been duly given to the holders of the Preference Shares;
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(b)
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any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge or any tax, assessment or other governmental charge that is payable otherwise than by withholding or deduction from payment of the liquidation preference or of any dividends on the Preference Shares;
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(c)
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any tax, fee, duty, assessment or other governmental charge that is imposed or withheld by reason of the failure by the holder of such Preference Shares to comply with any reasonable request by us addressed to the holder within 90 days of such request (i) to provide information concerning the nationality, residence or identity of the holder or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement that is required or imposed by statute, treaty, regulation or administrative practice of the relevant taxing jurisdiction as a precondition to exemption from all or part of such tax, fee, duty, assessment or other governmental charge;
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(d)
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any tax, fee, duty, assessment or governmental charge required to be withheld or deducted under Sections 1471 through 1474 of the Code (or any Treasury Regulations or other administrative guidance thereunder); or
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(e)
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any combination of items (a), (b), (c), and (d).
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·
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the shortening of the length of time the Preference Shares are assigned a particular level of equity credit by that rating agency as compared to the length of time they would have been assigned that level of equity credit by that rating agency or its predecessor on the initial issuance of the Preference Shares; or
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·
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the lowering of the equity credit (including up to a lesser amount) assigned to the Preference Shares by that rating agency as compared to the equity credit assigned by that rating agency or its predecessor on the initial issuance of the Preference Shares.
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·
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the redemption date;
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·
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the number of Preference Shares to be redeemed and, if less than all of the applicable series of Preference Shares are to be redeemed, the number of such Preference Shares to be redeemed from such holder;
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·
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the redemption price; and
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·
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that the shares should be delivered via book-entry transfer or the place or places where holders may surrender certificates evidencing the Preference Shares for payment of the redemption price.
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·
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to cure any ambiguity, or to cure, correct or supplement any provision contained in the Certificate of Designations for the applicable series of Preference Shares that may be defective or inconsistent; or
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·
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to make any provision with respect to matters or questions arising with respect to the applicable series of Preference Shares that is not inconsistent with the provisions of the Certificate of Designations;
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Option:
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You have been awarded an Option to purchase from the Company [Number of Awards Granted] Class A common shares, par value $0.001 per share (the “Common Shares”), subject to adjustment as provided in Section 4.2 of the Agreement.
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Option Date:
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[Grant Date]
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Vesting Inception Date:
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January 1 of the year of grant
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Exercise Price:
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$[Grant Date FMV] per share, subject to adjustment as provided in Section 4.2 of the Agreement.
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Vesting Schedule:
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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.
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Expiration Date:
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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.
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RSU Award:
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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.
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If the Company achieves the following level of performance:
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Then, you will become vested in the following percentage of the Target Common Shares:
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Minimum
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50%
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Target
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100%
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Maximum
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150%
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Grant Date:
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[Grant Date]
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Performance Period:
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The three (3) consecutive fiscal years of the Company beginning on January 1 of the year of grant.
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Performance Measures:
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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”).
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Vesting Conditions:
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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
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Applicable Performance Measures
|
If the Company attains the following level of performance,
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Then, you will become vested in the following percentage of Target Common Shares subject to the applicable Performance Measure
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With respect to the 33.33% of the Target Common Shares subject to the ROE Performance Measure
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Minimum of [__]%
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50%
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Target of [__]%
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100%
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Maximum of [__]%
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150%
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||
With respect to the 33.33% of the Target Common Shares subject to the Operating Income Performance Measure
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Minimum of $[__]
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50%
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Target of $[__]
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100%
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Maximum of $[__]
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150%
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|
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||
With respect to the 33.34% of the Target Common Shares subject to the Adjusted Book Value Performance Measure
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Minimum of $[__]
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50%
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Target of $[__]
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100%
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Maximum of $[__]
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150%
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1)
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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;
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2)
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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
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3)
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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.
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Definitions:
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For purposes of this Agreement, the following definitions shall apply:
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1)
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“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.
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2)
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“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.
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3)
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“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.
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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
|
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.
|
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 [_________________], 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; (F) your violation of a fiduciary
|
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.
|
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 of the year of grant.
|
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 of such Termination of Relationship with respect to the Restricted 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, 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 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.
|
(a)
|
If to any Sub-Advisor:
|
(b)
|
If to the Investment Manager:
|
Company
|
Investment Management Agreement
|
Sub-Advisor
|
ATHENE ANNUITY AND LIFE COMPANY (f/k/a AVIVA LIFE AND ANNUITY COMPANY), a life insurance company
domiciled in the State of Iowa (“AAIA”)
|
Investment Management Agreement dated as of October 2, 2013, by and between AAIA and the Investment Manager
|
All Sub-Advisors
|
Structured Annuity Reinsurance Company, a life insurance company domiciled in the State of Iowa (“STAR”)
|
Investment Management Agreement dated as of October 2, 2013, by and between STAR and the Investment Manager
|
All Sub-Advisors
|
AVIVA RE USA IV, INC., a life insurance company domiciled in the State of Vermont (“AUSAIV”)
|
Investment Management Agreement dated as of October 2, 2013, by and between AUSAIV and the Investment Manager
|
All Sub-Advisors
|
Voya insurance and annuity company, a life insurance company domiciled in the State of Iowa (“VIAC”)
|
Investment Management Agreement dated as of June 1, 2018, by and between VIAC and the Investment Manager
|
All Sub-Advisors
|
(a)
|
if such asset constitutes a Core Asset as of such date of determination, 0.065% of the market value of such asset as of such date of determination;
|
(b)
|
if such asset constitutes a Core Plus Asset as of such date of determination, 0.13% of the market value of such asset as of such date of determination;
|
(c)
|
if such asset constitutes a Yield Asset as of such date of determination, 0.375% of the market value of such asset as of such date of determination; and
|
(d)
|
if such asset constitutes a High Alpha Asset as of such date of determination, 0.70% of the market value of such asset as of such date of determination; and
|
(e)
|
if such asset constitutes a Special Asset as of such date of determination, the applicable asset management fees as may be mutually agreed to in writing from time to time between the Investment Manager and the applicable Sub-Advisor with respect to such Special Asset;
|
(f)
|
if such asset constitutes a Non-Fee Asset, zero.
|
II.
|
The Investment Manager (or its designee) shall provide valuations of assets managed hereunder for purposes of determining fees hereunder. The parties agree to negotiate in good faith as to any disputes regarding classification or valuation of the assets in the Accounts for purposes of determining fees accruing hereunder or in connection with any Account or, if applicable, including with respect to any determination of whether or not an asset constitutes a Non-Fee Asset, a Special Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset (which negotiation shall take into account the yield, duration and risk profile of such asset). Additionally, in the event that an asset in an Account is classified as of an applicable date of determination within a category that was not contemplated by this Agreement as of the Effective Date, the parties shall negotiate in good faith to determine whether such asset should constitute a Non-Fee Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset.
|
(a)
|
“Core Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (public), (ii) as a municipal security, (iii) as an agency residential or commercial mortgage-backed security, (iv) as an obligation of any governmental agency or government sponsored entity that is not expressly backed by the U.S. government or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core asset category or a core asset.
|
(b)
|
“Core Plus Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (private), (ii) as a fixed rate first lien commercial mortgage loan (CML), (iii) as an obligation issued or assumed by a financial institution (such an institution, a “Financial Issuer”) and determined by Investment Manager to be “Tier 2 Capital” under the Basel III recommendations developed by the Basel Committee on Banking Supervision (or any successor to such recommendations) or (iv) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core plus asset category or a core plus asset.
|
(c)
|
“High Alpha Asset” means any asset classified as of the applicable date of determination (i) as a subordinated commercial mortgage loan, (ii) as a sub-investment grade collateralized loan obligation, (iii) as unrated preferred equity, (iv) as a debt obligation originated by MidCap, (v) as a commercial mortgage loan for redevelopment or construction or secured by non-traditional real estate, (vi) as sub-investment grade infrastructure debt, (vii) as a loan originated directly by Apollo (other than MidCap) and made to a borrower by an Apollo client that was made either directly, sourced privately from a financial sponsor, by debtors seeking a direct loan or financed bilaterally, (viii) as an agency mortgage derivative or (ix) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a high alpha asset category or a high alpha asset.
|
(d)
|
“Non-Fee Asset” means any asset classified as of the applicable date of determination as (a) cash or a cash equivalent, (ii) a U.S. treasury security, (iii) an alternative asset; (iv) non-preferred equity; or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute a non-fee asset category or non-fee asset.
|
(e)
|
A “Special Asset” means an asset that Investment Manager and Sub-Advisor mutually agree in writing from time to time constitutes a Special Asset.
|
(f)
|
A “Yield Asset” means any asset classified as of the applicable date of determination (i) as a non-agency residential mortgage-backed security, (ii) as an investment grade collateralized loan obligation, (iii) as an asset-backed security (both insurance-linked securities and non-insurance-linked securities) that is not a residential mortgage-backed security or a commercial mortgage-backed security or a collateralized loan obligation, (iv) as an commercial mortgage-backed security, (v) as an emerging market investment, (vi) as a sub-investment grade corporate (private and public), (vii) as a subordinated debt obligation, hybrid security or surplus note issued or assumed by a Financial Issuer, (viii) as rated preferred equity, (ix) as a residential mortgage loan, (x) as a bank loan, (xi) as investment grade infrastructure debt, (xii) as a floating rate commercial mortgage loan on slightly transitional or stabilized traditional real estate or (xiii) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a yield asset category or a yield asset.
|
(i)
|
Relative to Benchmark:
|
(a)
|
Total Return - 1M, 3M, YTD, LTM, 3YR, 5YR and Since Inception performance
|
(b)
|
Yield to Worst
|
(c)
|
Yield to Maturity
|
(d)
|
Duration
|
(e)
|
OAS
|
(f)
|
Weighted average rating
|
(g)
|
Industry Analysis with Exposure by Industries
|
(h)
|
Credit Quality Analysis
|
(i)
|
Asset Class Analysis
|
(j)
|
Top Ten Issuer Overweight - (measured on a market value basis)
|
(k)
|
Top Ten Issuer Underweight - (measured on a market value basis)
|
(ii)
|
Unique to Sub-Advisor Strategy:
|
(a)
|
Total Market Value - current, last quarter end, most recent year end
|
(b)
|
Performance Attribution - main drivers of performance (ex: security selection, duration, etc.)
|
(c)
|
Turnover - current and historical
|
(d)
|
Total Holdings
|
(e)
|
Out of Index Holdings
|
(f)
|
Purchases - include yield, rating, total dollar amount
|
(g)
|
Sales - include yield, rating, total dollar amount
|
ATHENE CO-INVEST REINSURANCE AFFILIATE 1B LTD., a reinsurance company organized as a Bermuda exempted company (“ACRA 1B”)
|
Investment Management Agreement dated as of September 11, 2019, by and between ACRA 1B and the Investment Manager
|
All Sub-Advisors
|
ATHENE USA CORPORATION, a life insurance company domiciled in the State of Delaware (“AUSA”)
|
Investment Management Agreement dated as of December 15, 2014, by and between Athene Annuity and the Investment Manager
|
All Sub-Advisors
|
I.
|
The “Asset Management Fee” means, with respect to any asset in an Account as of any date of determination:
|
(a)
|
if such asset constitutes a Core Asset as of such date of determination, 0.065% of the market value of such asset as of such date of determination;
|
(b)
|
if such asset constitutes a Core Plus Asset as of such date of determination, 0.13% of the market value of such asset as of such date of determination;
|
(c)
|
if such asset constitutes a Yield Asset as of such date of determination, 0.375% of the market value of such asset as of such date of determination; and
|
(d)
|
if such asset constitutes a High Alpha Asset as of such date of determination, 0.70% of the market value of such asset as of such date of determination; and
|
(e)
|
if such asset constitutes a Special Asset as of such date of determination, the applicable asset management fees as may be mutually agreed to in writing from time to time between the Investment Manager and the applicable Sub-Advisor with respect to such Special Asset;
|
(f)
|
if such asset constitutes a Non-Fee Asset, zero.
|
II.
|
The Investment Manager (or its designee) shall provide valuations of assets managed hereunder for purposes of determining fees hereunder. The parties agree to negotiate in good faith as to any disputes regarding classification or valuation of the assets in the Accounts for purposes of determining fees accruing hereunder or in connection with any Account or, if applicable, including with respect to any determination of whether or not an asset constitutes a Non-Fee Asset, a Special Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset (which negotiation shall take into account the yield, duration and risk profile of such asset). Additionally, in the event that an asset in an Account is classified as of an applicable date of determination within a category that was not contemplated by this Agreement as of the Effective Date, the parties shall negotiate in good faith to determine whether such asset should constitute a Non-Fee Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset.
|
II.
|
For purposes of this Schedule 2:
|
(a)
|
“Core Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (public), (ii) as a municipal security, (iii) as an agency residential or commercial mortgage-backed security, (iv) as an obligation of any governmental agency or government sponsored entity that is not expressly backed by the U.S. government or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core asset category or a core asset.
|
(b)
|
“Core Plus Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (private), (ii) as a fixed rate first lien commercial mortgage loan (CML), (iii) as an obligation issued or assumed by a financial institution (such an institution, a “Financial Issuer”) and determined by Investment Manager to be “Tier 2 Capital” under the Basel III recommendations developed by the Basel Committee on Banking Supervision (or any successor to such recommendations) or (iv) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core plus asset category or a core plus asset.
|
(c)
|
“High Alpha Asset” means any asset classified as of the applicable date of determination (i) as a subordinated commercial mortgage loan, (ii) as a sub-investment grade collateralized loan obligation, (iii) as unrated preferred equity, (iv) as a debt obligation originated by MidCap, (v) as a commercial mortgage loan for redevelopment or construction or secured by non-traditional real estate, (vi) as sub-investment grade infrastructure debt, (vii) as a loan originated directly by Apollo (other than MidCap) and made to a borrower by an Apollo client that was made either directly, sourced privately from a financial sponsor, by debtors seeking a direct loan or financed bilaterally, (viii) as an agency mortgage derivative or (ix) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a high alpha asset category or a high alpha asset.
|
(d)
|
“Non-Fee Asset” means any asset classified as of the applicable date of determination as (a) cash or a cash equivalent, (ii) a U.S. treasury security, (iii) an alternative asset; (iv) non-preferred equity; or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute a non-fee asset category or non-fee asset.
|
(e)
|
A “Special Asset” means an asset that Investment Manager and Sub-Advisor mutually agree in writing from time to time constitutes a Special Asset.
|
(f)
|
A “Yield Asset” means any asset classified as of the applicable date of determination (i) as a non-agency residential mortgage-backed security, (ii) as an investment grade collateralized loan obligation, (iii) as an asset-backed security (both insurance-linked securities and non-insurance-linked securities) that is not a residential mortgage-backed security or a commercial mortgage-backed security or a collateralized loan obligation, (iv) as an commercial mortgage-backed security, (v) as an emerging market investment, (vi) as a sub-investment grade corporate (private and public), (vii) as a subordinated debt obligation, hybrid security or surplus note issued or assumed by a Financial Issuer, (viii) as rated preferred equity, (ix) as a residential mortgage loan, (x) as a bank loan, (xi) as investment grade infrastructure debt, (xii) as a floating rate commercial mortgage loan on slightly transitional or stabilized traditional real estate or (xiii) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a yield asset category or a yield asset.
|
(i)
|
Relative to Benchmark:
|
(a)
|
Total Return - 1M, 3M, YTD, LTM, 3YR, 5YR and Since Inception performance
|
(b)
|
Yield to Worst
|
(c)
|
Yield to Maturity
|
(d)
|
Duration
|
(e)
|
OAS
|
(f)
|
Weighted average rating
|
(g)
|
Industry Analysis with Exposure by Industries
|
(h)
|
Credit Quality Analysis
|
(i)
|
Asset Class Analysis
|
(j)
|
Top Ten Issuer Overweight - (measured on a market value basis)
|
(k)
|
Top Ten Issuer Underweight - (measured on a market value basis)
|
(ii)
|
Unique to Sub-Advisor Strategy:
|
(a)
|
Total Market Value - current, last quarter end, most recent year end
|
(b)
|
Performance Attribution - main drivers of performance (ex: security selection, duration, etc.)
|
(c)
|
Turnover - current and historical
|
(d)
|
Total Holdings
|
(e)
|
Out of Index Holdings
|
(f)
|
Purchases - include yield, rating, total dollar amount
|
(g)
|
Sales - include yield, rating, total dollar amount
|
Company
|
Investment Management Agreement
|
Sub-Advisor
|
ATHENE ANNUITY & LIFE ASSURANCE COMPANY OF NEW YORK (F/K/A PRESIDENTIAL LIFE INSURANCE COMPANY), a life insurance company domiciled in the State of New York (“AANY”)
|
Investment Management Agreement dated as of December 28, 2012, by and between AANY and the Investment Manager
|
All Sub-Advisors
|
ATHENE LIFE INSURANCE COMPANY OF NEW YORK (F/K/A AVIVA LIFE AND ANNUITY COMPANY OF NEW YORK), a life insurance company domiciled in the State of New York (“ALICNY”)
|
Investment Management Agreement dated as of October 2, 2013, by and between ALICNY and the Investment Manager
|
All Sub-Advisors
|
I.
|
The “Asset Management Fee” means, with respect to any asset in an Account as of any date of determination:
|
(a)
|
if such asset constitutes a Core Asset as of such date of determination, 0.065% of the market value of such asset as of such date of determination;
|
(b)
|
if such asset constitutes a Core Plus Asset as of such date of determination, 0.13% of the market value of such asset as of such date of determination;
|
(c)
|
if such asset constitutes a Yield Asset as of such date of determination, 0.375% of the market value of such asset as of such date of determination; and
|
(d)
|
if such asset constitutes a High Alpha Asset as of such date of determination, 0.70% of the market value of such asset as of such date of determination; and
|
(e)
|
if such asset constitutes a Special Asset as of such date of determination, the applicable asset management fees as may be mutually agreed to in writing from time to time between the Investment Manager and the applicable Sub-Advisor with respect to such Special Asset;
|
(f)
|
if such asset constitutes a Non-Fee Asset, zero.
|
II.
|
The Investment Manager (or its designee) shall provide valuations of assets managed hereunder for purposes of determining fees hereunder. The parties agree to negotiate in good faith as to any disputes regarding classification or valuation of the assets in the Accounts for purposes of determining fees accruing hereunder or in connection with any Account or, if applicable, including with respect to any determination of whether or not an asset constitutes a Non-Fee Asset, a Special Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset (which negotiation shall take into account the yield, duration and risk profile of such asset). Additionally, in the event that an asset in an Account is classified as of an applicable date of determination within a category that was not contemplated by this Agreement as of the Effective Date, the parties shall negotiate in good faith to determine whether such asset should constitute a Non-Fee Asset, a Core Asset, a Core Plus Asset, a High Alpha Asset or a Yield Asset.
|
III.
|
For purposes of this Schedule 2:
|
(a)
|
“Core Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (public), (ii) as a municipal security, (iii) as an agency residential or commercial mortgage-backed security, (iv) as an obligation of any governmental agency or government sponsored entity that is not expressly backed by the U.S. government or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core asset category or a core asset.
|
(b)
|
“Core Plus Asset” means any asset classified as of the applicable date of determination (i) as an investment grade corporate (private), (ii) as a fixed rate first lien commercial mortgage loan (CML), (iii) as an obligation issued or assumed by a financial institution (such an institution, a “Financial Issuer”) and determined by Investment Manager to be “Tier 2 Capital” under the Basel III recommendations developed by the Basel Committee on Banking Supervision (or any successor to such recommendations) or (iv) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a core plus asset category or a core plus asset.
|
(c)
|
“High Alpha Asset” means any asset classified as of the applicable date of determination (i) as a subordinated commercial mortgage loan, (ii) as a sub-investment grade collateralized loan obligation, (iii) as unrated preferred equity, (iv) as a debt obligation originated by MidCap, (v) as a commercial mortgage loan for redevelopment or construction or secured by non-traditional real estate, (vi) as sub-investment grade infrastructure debt, (vii) as a loan originated directly by Apollo (other than MidCap) and made to a borrower by an Apollo client that was made either directly, sourced privately from a financial sponsor, by debtors seeking a direct loan or financed bilaterally, (viii) as an agency mortgage derivative or (ix) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a high alpha asset category or a high alpha asset.
|
(d)
|
“Non-Fee Asset” means any asset classified as of the applicable date of determination as (a) cash or a cash equivalent, (ii) a U.S. treasury security, (iii) an alternative asset; (iv) non-preferred equity; or (v) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute a non-fee asset category or non-fee asset.
|
(e)
|
A “Special Asset” means an asset that Investment Manager and Sub-Advisor mutually agree in writing from time to time constitutes a Special Asset.
|
(f)
|
A “Yield Asset” means any asset classified as of the applicable date of determination (i) as a non-agency residential mortgage-backed security, (ii) as an investment grade collateralized loan obligation, (iii) as an asset-backed security (both insurance-linked securities and non-insurance-linked securities) that is not a residential mortgage-backed security or a commercial mortgage-backed security or a collateralized loan obligation, (iv) as an commercial mortgage-backed security, (v) as an emerging market investment, (vi) as a sub-investment grade corporate (private and public), (vii) as a subordinated debt obligation, hybrid security or surplus note issued or assumed by a Financial Issuer, (viii) as rated preferred equity, (ix) as a residential mortgage loan, (x) as a bank loan, (xi) as investment grade infrastructure debt, (xii) as a floating rate commercial mortgage loan on slightly transitional or stabilized traditional real estate or (xiii) with respect to which Investment Manager and Sub-Advisor have mutually agreed following the Effective Date to constitute as a yield asset category or a yield asset.
|
(i)
|
Relative to Benchmark:
|
(a)
|
Total Return - 1M, 3M, YTD, LTM, 3YR, 5YR and Since Inception performance
|
(b)
|
Yield to Worst
|
(c)
|
Yield to Maturity
|
(d)
|
Duration
|
(e)
|
OAS
|
(f)
|
Weighted average rating
|
(g)
|
Industry Analysis with Exposure by Industries
|
(h)
|
Credit Quality Analysis
|
(i)
|
Asset Class Analysis
|
(j)
|
Top Ten Issuer Overweight - (measured on a market value basis)
|
(k)
|
Top Ten Issuer Underweight - (measured on a market value basis)
|
(ii)
|
Unique to Sub-Advisor Strategy:
|
(a)
|
Total Market Value - current, last quarter end, most recent year end
|
(b)
|
Performance Attribution - main drivers of performance (ex: security selection, duration, etc.)
|
(c)
|
Turnover - current and historical
|
(d)
|
Total Holdings
|
(e)
|
Out of Index Holdings
|
(f)
|
Purchases - include yield, rating, total dollar amount
|
(g)
|
Sales - include yield, rating, total dollar amount
|
TABLE OF CONTENTS
|
Page
|
|
ARTICLE I GENERAL PROVISIONS
|
|
|
1.01 Defined Terms
|
1
|
|
1.02 Other Definitional Provisions
|
4
|
|
ARTICLE II COVERAGE
|
|
|
2.01 Scope and Basis of Reinsurance
|
5
|
|
2.02 Policy Changes
|
5
|
|
2.03 Reinstatement of Surrendered Policies
|
5
|
|
2.04 Misstatement of Fact
|
5
|
|
2.05 Credited Rates and Non-Guaranteed Elements
|
5
|
|
2.06 Programs of Internal Replacement
|
5
|
|
2.07 Conservation Program
|
5
|
|
2.08 Retrocession
|
5
|
|
2.09 Interest Maintenance Reserve
|
5
|
|
2.10 Valuation of Liabilities
|
5
|
|
ARTICLE III REINSURANCE PREMIUMS
|
|
|
3.01 Reinsurance Premiums
|
6
|
|
ARTICLE IV CEDING COMMISSION
|
|
|
4.01 Ceding Commission
|
6
|
|
ARTICLE V ADMINISTRATION FEE
|
|
|
5.01 Policy Expenses
|
6
|
|
ARTICLE VI REINSURED LIABILITIES
|
|
|
6.01 Reinsured Liabilities
|
6
|
|
6.02 Claims Settlement
|
6
|
|
6.03 Recoveries
|
6
|
|
ARTICLE VII REPORTING AND SETTLEMENTS
|
|
|
7.01 Ceding Company Reporting
|
6
|
|
7.02 Reinsurer Reporting
|
7
|
|
7.03 Settlements
|
8
|
|
7.04 Settlement of Obligations Under ALRe Modco Agreement
|
9
|
|
ARTICLE VIII MODCO ACCOUNT
|
|
|
8.01 Modco Account
|
9
|
|
8.02 Credit for Reinsurance
|
10
|
|
8.03 Investment Management
|
10
|
|
ARTICLE IX HEDGING
|
|
|
9.01 Hedging
|
10
|
|
ARTICLE X ADMINISTRATION
|
|
|
10.01 Policy Administration
|
11
|
|
10.02 Record-Keeping
|
11
|
|
ARTICLE XI TERM AND TERMINATION
|
|
|
11.01 Duration of Agreement
|
11
|
|
11.02 Recapture
|
11
|
|
11.03 Recapture Payment
|
11
|
|
11.04 Survival
|
12
|
|
ARTICLE XII ERRORS AND OMISSIONS
|
|
|
12.01 Errors and Omissions
|
12
|
|
ARTICLE XIII DISPUTE RESOLUTION
|
|
|
13.01 Negotiation
|
12
|
|
13.02 Arbitration; Waiver of Trial by Jury
|
12
|
|
ARTICLE XIV INSOLVENCY
|
|
|
14.01 Insolvency
|
13
|
|
ARTICLE XV TAXES
|
|
|
15.01 Taxes
|
14
|
|
15.02 DAC Tax Election
|
14
|
|
15.03 FATCA
|
14
|
|
15.04 DAC Reimbursement
|
14
|
|
ARTICLE XVI REPRESENTATIONS, WARRANTIES AND COVENANTS
|
|
|
16.01 Representations and Warranties of the Ceding Company
|
15
|
|
16.02 Covenants of the Ceding Company
|
16
|
|
16.03 Representations and Warranties of the Reinsurer
|
16
|
|
16.04 Covenants of the Reinsurer
|
17
|
|
ARTICLE XVII MISCELLANEOUS
|
|
|
17.01 Currency
|
17
|
|
17.02 Interest
|
17
|
|
17.03 Right of Setoff and Recoupment
|
18
|
|
17.04 No Third-Party Beneficiaries
|
18
|
|
17.05 Amendment
|
18
|
|
17.06 Notices
|
18
|
|
17.07 Consent to Jurisdiction
|
18
|
|
17.08 Service of Process
|
19
|
|
17.09 Inspection of Records
|
19
|
|
17.10 Confidentiality
|
19
|
|
17.11 Successors
|
20
|
|
17.12 Entire Agreement
|
20
|
|
17.13 Severability
|
20
|
|
17.14 Construction
|
20
|
|
17.15 Non-Waiver
|
20
|
|
17.16 Further Assurances
|
20
|
|
17.17 Governing Law
|
20
|
|
17.18 Counterparts
|
20
|
|
Product Name
|
Policy Form
|
Advantage
|
UCLIC-AN1009
|
Advantage
|
UCLIC-PI-1249
|
Advantage Index
|
1837-11/97
|
Advantage Platinum
|
1827-11/95
|
Advantage Silver
|
1801-7/94
|
AmeriGain
|
17003
|
AmeriGrand
|
17026
|
Amerilink
|
17002
|
Ameriset
|
17000
|
Asset Builder
|
UCLIC-AN-1022
|
Bonus 10
|
FB10-11/92
|
Capital Builder
|
UCLIC-PI-1224
|
Choice Index
|
1819-9/96
|
Choice Index
|
1819-9/96 or 1819-C-1/97
|
Choice Index
|
1819-C-1/97
|
Classic 5
|
1868
|
Classic 7
|
1869
|
Classic Choice MVA
|
1825-2/95
|
Cornerstone
|
1350-1/93
|
Envoy Nine
|
IU-IA-3064
|
Envoy Nine v2
|
IU-IA-3064
|
Envoy Six
|
IU-IA-3067
|
Envoy Six v2
|
IU-IA-3067
|
Envoy Three
|
IU-IA-3065
|
Flex 100
|
1000-B-4/92
|
Flex 15
|
1500-1/93
|
Flex 15
|
1500-4/92
|
Flex 2
|
FLEXII-1/93
|
Flex 200
|
1100-B-6/92
|
Flex 3
|
FLEXIII-1/93
|
Flex 4
|
FLXIV-8/92
|
Flex 7
|
FLEXVII 1/93
|
Flex 7
|
FLEXVII 7/91
|
Flex Builder
|
1853
|
Flex Guarantee
|
1853
|
FPA 9
|
FLEXIX-1/93
|
FPA 9 (conversion)
|
FLEXIX-5/91
|
FPDA
|
89A4
|
FPDA
|
8FPDA
|
FPDA
|
94FPDA
|
FPDA
|
ALSFLX-3
|
FPDA
|
ALSFLX-4.5
|
SD Fixed Guar
|
GA-IA-1094 - individual; GA-CA-1094 - group
|
Secure
|
1890
|
Secure Extra
|
FA-2014
|
Secure Five
|
IU-IA-3022
|
Secure Five v2
|
IU-IA-3033
|
Secure Five v3
|
IU-IA-3033
|
Secure II
|
FA-2013
|
Secure Opp Plus
|
IU-IA-3021
|
Secure Opp Plus v2
|
IU-IA-3032
|
Secure Opp Plus v3
|
IU-IA-3050
|
Secure Opp Plus v4
|
IU-IA-3050
|
Secure Outlook
|
IU-IA-3038
|
Secure Outlook v2
|
IU-IA-3038
|
Secure Seven
|
IU-IA-3025
|
Secure Seven v2
|
IU-IA-3034
|
Secure Seven v3
|
IU-IA-3034
|
Security
|
PI-1233
|
Select Guarantee
|
1829-3/97
|
Select Guarantee
|
1829C-3/97
|
Selectra
|
1865
|
Selectra
|
1865 or 1870
|
Selectra
|
1870
|
Selectra v2
|
IU-IA-3026
|
Senior Provider
|
UCLIC-AN-1014
|
SimpleChoice
|
IU-IA-3054
|
SimpleFlex
|
IU-IA-3019
|
Single Premium Immediate Annuity
|
1823
|
SmartDesign MRI
|
GA-IA-1100 - individual; GA-CA-1100 - group
|
SPA 15
|
1351-1/93
|
SPA 3
|
SPIII-1/93
|
SPA 5
|
SPV-6/88
|
SPA 6
|
SPVI-1/93
|
SPA 7
|
SPVII-1/93
|
SPA 7
|
SPVII-10/90
|
SPA 9
|
FLEXIX-1/93 or SPIX-1/93
|
SPA 9
|
SPIX-1/93
|
SPA 9
|
SPIX-10/90
|
SPDA
|
88SPDA
|
SPDA
|
89A1-A
|
SPDA
|
89A3
|
SPDA
|
89SPDA
|
SPDA
|
94SPDA
|
SPDA
|
ALS-3
|
SPDA
|
ALS-4.5
|
SPDA
|
ALZSP-4.5
|
SPDA
|
UCLIC-PI-1218
|
SPDA
|
UCLIC-PI-1801
|
SPIA
|
1823
|
Sterling Plus
|
1800-2/94
|
Supp Con
|
1825-2/95
|
Supp Con
|
GA-GIA-1070 or GA-IA-1070
|
Supp Con
|
GA-IA-1093 - individual; GA-CA-1093 - group
|
Supp Con
|
GA-IA-1094 - individual; GA-CA-1094 - group
|
Supp Con
|
GA-IA-1100 - individual; GA-CA-1100 - group
|
Supp Con
|
IU-IA-3019
|
Taxsaver
|
FLEXIX-1/93
|
TaxSaver
|
UCLIC-AN1255
|
TaxSaver
|
UCLIC-PI-1253
|
TaxSaver
|
UCLIC-PI-1255
|
TSA Pro
|
1600-1/93
|
TSA Pro
|
1600-4/92
|
TSA Rollover
|
1832G-6/97
|
Ultimate
|
1225-4/93
|
Ultra SPA
|
1325-4/93
|
Unidex
|
EIAN-4000
|
United
|
AN-1021
|
Wealth Builder 6
|
IU-IA-3128
|
Wealth Builder 8
|
IU-IA-3128
|
Wealth Builder PLUS
|
IU-IA-3128
|
All immediate annuities and annuitizations issued by Voya Insurance and Annuity Company and its predecessors and administered on Des Moines RPS, excluding annuitizations arising from contracts with a Guaranteed Minimum Income Benefit (GMIB).
|
|
Home Office Pension Plan Voluntary and Mandatory Contributions Administered by Aon Hewitt on behalf of VIAC.
|
|
All contracts assumed under the League Services Life Insurance Company (Magna Insurance Company) reinsurance agreement dated 2/24/1987, as amended.
|
|
All contracts assumed under the Protective Life Insurance Company reinsurance agreement dated 6/15/1996.
|
|
All contracts assumed under the Allianz Life Insurance Company of North America reinsurance agreement dated 8/1/1988.
|
|
Ceding Company Receipt of Information
|
Information to be Provided
|
8 Business Days after end of quarter
|
Draft reserve report
|
10 Business Days after end of quarter
|
Final reserve report, including statutory, GAAP and tax reserves, with an inventory of reserve topsides or adjustments
|
10 Business Days after the end of the quarter
|
Best estimate cash flows
|
17 Business Days after end of quarter
|
Reliance statements for reserves and for fixed income annuities including AG35 AA certificate and reliance for the economic assumptions used to calculate the market value of the options
|
10 Business Days prior to effective date of proposed changes
|
Recommendation for Interest Crediting
|
5 Business Days prior to effective date of proposed changes
|
Upload file for Interest Crediting
|
17 Business Days after end of year
|
Valuation Certificate/Affidavit
|
37 calendar days after end of year
|
Annual Opinion Statements
|
Annually by September 30th
|
Assumptions to support calculation of Actuarial Present Values
|
Annually
|
Support for Blue Book exhibits, including Exhibits 5 and 7; Exhibit of Policies; Analysis of Increase in Reserves (AIR), and all applicable state pages for filing of Blue Book. Additional information if needed for notes to VIAC’s financial statements, supplements, and general interrogatories
|
Annually
|
Support for Green Book exhibits, including Exhibits 3 and 6; Analysis of Increase in Reserves (AIR). Additional information if needed for notes to VIAC’s financial statements, supplements, and general interrogatories
|
Annually
|
Reliance for Asset Adequacy
|
Field
|
Definition
|
POLICY NUM
|
Associated policy number for the contract
|
PLAN CODE
|
Admin Plan code for the associated policy
|
ISSUE DATE
|
Date of Issuance
|
Month End Date
|
Date of the month end value
|
Bucket CODE
|
Identification of Fixed or Fund
|
FIA FLAG
|
Y / N to indicate if FIA.
|
Prior Month End Value
|
Value from the prior AVRF file at the bucket level.
|
Deposits
|
AV deposited into Bucket or Free look removed from bucket.
|
Annuitizations
|
Account Value annuitized.
|
AWS
|
Systematic Withdrawals. Would expect GMWB payments / Claims to be reported here.
|
DEATH CLAIMS
|
Death Claim
|
DEATH CLAIMS Excess
|
Death Claim paid in excess of AV
|
Shifts
|
Money moved between buckets.
|
SURRENDER - FULL
|
Full surrenders
|
SURRENDER - PARTIAL
|
Partial Surrenders
|
Surr Charges
|
Surrender charges applied
|
MVA
|
MVA applied
|
Apprec
|
Bucket Appreciation (Interest credited)
|
GMWB_Credit
|
Credit to offset the GMWB Claim, expected this to be populated when AV approaches zero. This will keep AV from going negative.
|
GMDB_Credit
|
Credit that represents excess death benefit paid out due to a GMDB rider.
|
GMWB_Charge
|
Charge applied for GMWB rider
|
GMDB_Charge
|
Charge applied for GMDB rider
|
Current Month End Value
|
Value after all monthly transactions have occurred. This should align with the "VOYA_FIELDS_IF" request. This should be the rolled value from the prior month.
|
I.
|
For Payout Annuities
|
Request
|
Policy Number
|
Policy Status
|
Plan Code
|
Company Name
|
Issue State
|
Contract Type (Payout, Annuitization, Structured Settlement, etc..)
|
Owner Sex
|
Owner Issue Age
|
Owner Date of Birth
|
Owner Date of Death
|
Number of Lives
|
Initial Premium
|
Rated Age
|
Substandard Category
|
Payout Type (Cert Only, C&L, Life Only)
|
Recurring Benefit Payment Amount
|
Payment Mode
|
Issue Date
|
Benefit Start Date
|
Benefit Stop Date
|
Benefit Stop Reason
|
Certain Period End Date
|
Certain Period Months
|
JointSurvivor Benefit Percent or Amount -1st Life
|
JointSurvivor Benefit Percent or Amount -2nd Life
|
Contingent Annuitant's Issue Age
|
Contingent Annuitant's Date of Birth
|
Contingent Annuitant's Date of Death
|
Contingent Annuitant's Sex
|
Cost of Living Adjustment/Benefit Growth Rate Pct
|
Cost of Living Adjustment Frequency
|
Income Change Date
|
Income Change Amount
|
Lump Sum Payment Amount
|
Lump Sum Payment Date
|
Death Benefit Amount
|
Stat Valuation Rate 1
|
Stat Valuation Rate 2
|
Stat Valuation Rate 3
|
Stat Valuation Rate 4
|
Tax Valuation Rate 1
|
Tax Valuation Rate 2
|
Tax Valuation Rate 3
|
Tax Valuation Rate 4
|
Death Status
|
Valuation Date
|
II.
|
For Non-Payout Annuities
|
a.
|
For Fixed and Fixed Indexed Annuities
|
Field
|
Definition
|
POLICY NUM
|
Associated policy number for the contract
|
PLAN CODE
|
Admin Plan code for the associated policy
|
Company
|
Issuing company
|
Treaty
|
Description of the if it is in the flow or block treaty.
|
Quota Share
|
Reinsured Quota share associated with policy. This is expected to be 1.00 for Voya.
|
Annuity Type
|
Source of Funds
|
Policy Form Name
|
Name of the policy form
|
STATUS
|
A= Active, SR = Surrendered, P = Pending , T = Terminated, CA = Canceled, DH = Death, AN: Annuitized, O = Terminated for other reason
|
REASON
|
Reason for Terminating Policy (Surrender, Etc.)
|
ISSUE STATE
|
two letter code for each issue state
|
ISSUE DATE
|
Date of Issuance
|
RATE DETERMINATION DATE
|
As of date of the rates, can be different from issue date.
|
Application Date
|
Date at which policy application was filed
|
LIFE1 ISSUE AGE
|
Age at Issue
|
LIFE1 SEX CODE
|
F = female, M = Male
|
LIFE1 Birth Date
|
Date of Birth
|
SingleJointIndicator
|
Is the policy single or Joint
|
LIFE2 ISSUE AGE
|
Joint Life Age at Issue
|
LIFE2 SEX CODE
|
Joint Life F = female, M = Male
|
LIFE2 Birth Date
|
Joint Life Date of Birth
|
QUAL CODE
|
Q = Qualified, NQ = non qualified. Any other values should be explained
|
PremBonus
|
Premium Bonus (if applicable)
|
PremBonusType
|
How is the premium bonus recaptured? Via a vesting schedule or higher surrender charges?
|
PremBonusVestTable
|
Vesting schedule for premium bonus
|
PremBonusAddSCTable
|
Additional surrender charge for premium bonus.
|
Accum Value
|
Account Value
|
Surr Value
|
Accumulation value - surrender charge - premium tax
|
MVA_Type
|
Indentifier for the Type of MVA. This would generally indicate different MVA calculations. Could be descriptive or form types. NA if no MVA.
|
MVA_Adjustment
|
Current Calculated MVA Adjustment
|
MVA_Term
|
Number of years the MVA applies
|
MVA_RateType
|
They Type of rate that the MVA calculation is based on.
|
MVA_RateInitial
|
The rate from contract issue date that the mva is calculated against
|
MVA_RateTerm
|
Term of rate to be looked in the projection to calculate future MVAs
|
MVA_RateAdd
|
Additive factor to the calculation
|
Stat Reserve
|
Calculated statutory reserve
|
Prem Rcd
|
Total premium received
|
Prem 1yr
|
Total premium received in first year
|
Remaining Premium
|
Total premium received less ITD withdrawals
|
Comm
|
Total commissions paid to Agent
|
Comm_Code
|
Commission Code. Represents heaped, level, other
|
Comm_Table
|
Table reference for the commission.
|
Comm_ChgbackITD
|
ITD amount of commission chargebacks
|
Comm_Deferrable
|
Deferrable Comm
|
Comm_NonDeferrable
|
Non deferrable Comm
|
Comm_Ceding
|
Ceding Commission Associated with Policy
|
Death Claim
|
Total death claim distributed upon death
|
Withdrawals
|
Withdrawal Value
|
Surrenders
|
Total amount paid upon surrender
|
Surr Charge
|
Total surrender charges collected upon surrender
|
SURR CHG PCT
|
Current surrender charge percent (5% Surrender Charge should be shown as 0.05)
|
SC_Table
|
Table reference for looking up policy year based surrender charges
|
Fix_GuarPeriod_Current
|
Current guarantee period in months for fixed bucket. {May move to Strat Request}
|
Fix_GuarPeriod_Prior
|
Prior Guar Period in months for fixed buckets. {May move to Strat Request}
|
Fix_GuarPeriod_Next
|
What is the length of next available guaranteed period for Fixed Buckets? In months. {May move to Strat Request}
|
Renewal Date
|
Date on which the policy has had its most recent renewal
|
Fixed Credit RT
|
Current guarantee period interest rate
|
Fix FV
|
Fixed Rate Fund Value
|
Index FV
|
Indexed Rate Fund Value
|
SNFL Value Indexed
|
Minimum guaranteed contract value for Indexed buckets
|
SNFL Rate Indexed
|
Minimum guaranteed contract value interest rate for indexed buckets
|
SNFL Value Fixed
|
Minimum guaranteed contract value for fixed buckets (Including MYGA or Traditional products)
|
SNFL Rate Fixed
|
Minimum guaranteed contract value interest rate for fixed buckets. (Including MYGA or Traditional products)
|
MGCV
|
If there is an additional guarantee other than SNFL
|
MGCV Int Rate
|
If there is an additional guaranteed Rate other than SNFL
|
MGCV2
|
If there is an additional guarantee other than SNFL and MGCV
|
MGCV2 Int Rate
|
If there is an additional guaranteed Rate other than SNFL and MCGV
|
FPW_Avail
|
Free Partial Withdrawal Currently Available to the policy
|
FPW_ITD_Free
|
Inception to date free partial withdrawals taken
|
FPW_ITD_Excess
|
Inception to date partial withdrawals in excess of the free partial withdrawal amount
|
FPW_ITD_Total
|
Inception to date total partial withdrawals taken (free + excess)
|
Spousal Cont / Beneficiary
|
Indicator if it is a spousal continuation or Beneficiary, S if Spousal, B if Bene, & N if it is not
|
Spousal/Beneficiary Continuation Date
|
Date of the spousal continuation
|
Premium Tax
|
Premium tax charged to the policy
|
Stat Val Rate Withdrawal
|
Statutory Valuation rate at issue for Withdrawal Benefit Stream
|
Stat Val Rate Annuitization
|
Statutory Valuation rate at issue for Annuitization Benefit Stream
|
Stat Val Rate Death
|
Statutory Valuation rate at issue for Death Benefit Stream
|
Original Issue Age
|
For Renewed MYGAs, the issue age for first surrender period
|
Original Issue Month
|
For Renewed MYGAs, the issue month for first surrender period
|
Original Issue Year
|
For Renewed MYGAs, the issue year for first surrender period
|
GMWB_RiderCode
|
Code or form type of GMWB rider
|
GMWB_Value
|
GMWB value to multiply the payout table by calculate the benefit.
|
GMWB_SimpleIntBase
|
If rollup is simple interest, this is the basis for the interest credited to the GMWB Value
|
GMWB_PayoutTable
|
Table reference for defining attained age or select/Ult payout factors (MAW)
|
GMWB_ChargeType
|
Definition of charges. Includes, what the basis of the charge is (AV or GMWB AV), as well as if the charge is proportional or dollar for the dollar.
|
GMWB_Charge%
|
Charge Rate
|
GMWB_ChargeTable
|
Table reference for defining charges, if more complex than a single number
|
GMWB_ChargeITD
|
Charges collected from issue
|
GMWB_RollupType
|
Definition of rollup of the GMWB Value. Generally thought of Simple / Compound interest and Dollar for Dollar or Proportional. There may be other types not listed.
|
GMWB_Rollup%
|
Rollup rate
|
GMWB_RollupTable
|
Table reference for defining rollups, if more complex than a single number
|
GMWB_RollupPar
|
Participation Rate in base contract interest credits
|
GMWB_AccumYrs
|
Years the GMWB_Value will accumulate
|
GMWB_ValueBonus
|
Bonus decimal applied to the GMWB_Value
|
GMWB_PaymentElectDate
|
Date GMWB payments are elected. Default for none elected.
|
GMWB_PaymentAttainedAge
|
Attained Age used to determine GMWB payment, if attained age driven
|
GMWB_PaymentIssueAge
|
Issue Age used to determine GMWB payment, if attained age driven
|
GMWB_PaymentElection
|
Systematic or One-time MAW;
|
GMWB_Payment
|
Current annual payment for elected GMWB. 0 if not elected.
|
GMWB_PaymentRemaining
|
Remaining annual payments for GMWB. 0 if not elected
|
GMWB_PaymentType
|
Type of GMWB payment elected. Joint/Single and Level, Inflation, Increasing, Inflation, etc. This field should have all possible payment options that have been elected. Default for none elected.
|
GMWB_PaymentMode
|
Frequency of the elected gwmb payment
|
GMWB_PaymentUtil
|
Is the maximum available being taken(max), excess, or less(partial)?
|
GMWB_PaymentIncr
|
decimal representing annual increase in GMWB_Payment. 0 if no increase or not elected
|
GMWB_TerminationDate
|
Date that the income rider was terminated by the policyholder
|
GMWB_Restart
|
Y\N flag if IR Restart has been elected. Restart
|
GMWB_RestartDate
|
Date of IR Restart (if applicable)
|
GMWB_RestartAccumDate
|
If Restarted, new end date of accumulation phase
|
GMWB_NHBType
|
Determines which type of nursing home benefit can be elected under the GMWB rider. Example are 2x payment for life, 2x payment for 5 years, 2x payment until AV is exhausted, etc…
|
GMWB_NHBMult
|
Multiplier applied to payments when "X" ADLs can not be performed
|
GMWB_NHBElectDate
|
Date the Nursing home benefit is turned on
|
GMWB_NHBEndDate
|
Date the nursing benefit is turned off.
|
GMWBDB
|
Yes/No flag to indicate if GMWB rider has a death benefit associated with it
|
GMWBDB_PayoutTermCurr
|
Number of years the GMWB face is paid out over as the death benefit
|
GMWBDB_PayoutTermGuar
|
Guaranteed number of years the GMWB face is paid out over as the death benefit
|
GMDB_RiderCode
|
Code or form type of GMDB rider
|
GMDB_Value
|
GMDB Base paid out as death benefit
|
GMDB_SimpleIntBase
|
If rollup is simple interest, this is the basis for the interest credited to the GMDB Value
|
GMDB_ChargeType
|
Definition of charges. Includes, what the basis of the charge is (AV or GMDB AV), as well as if the charge is proportional or dollar for the dollar.
|
GMDB_Charge%
|
Charge Rate
|
GMDB_ChargeTable
|
Table reference for defining charges, if more complex than a single number
|
b.
|
For Fixed Indexed Annuities Only
|
i.
|
Strategy Data
|
Field
|
Definition
|
POLICY NUM
|
Associated policy number for the contract
|
PLAN CODE
|
Admin Plan code for the associated policy
|
Bucket CODE
|
Identification of Fixed or Fund
|
ISSUE DATE
|
Date of Issuance
|
Index Date
|
Date of most recent renew
|
Index Value
|
Index Value as of Index Date
|
Index End Date
|
End Date to compare Index Values
|
Term
|
Term Length, in months or years
|
FundInBucket
|
Account value for index
|
Index Desc
|
description of index
|
Index Cap
|
Cap associated with index
|
Min Index Cap
|
minimum cap for index
|
Participation Rate
|
participation rate for index
|
Min Part Rate
|
minimum participation rate for index
|
MinGuar
|
Minimum guarantee rate
|
Trigger Rate
|
Performance Trigger rate
|
Min Trigger Rate
|
Minimum Trigger rate
|
Bucket MGCV
|
Minimum guaranteed contract value at the index bucket level (sum of buckets should total to the aggregate MGCV)
|
Bucket F133 Guaranteed Value
|
Guaranteed Value at the indexed bucket level. Total of premium + transfers - withdrawals from the strategy. Could be aggregated to the total of the indexed buckets.
|
Buffer Rate
|
Rate at which policy holders beging experiencing loss
|
SpreadRate
|
Annual spread rate
|
Max Spread Rate
|
Maximum spread rate
|
Bailout Fields
|
Any fields applicable to Bailout Strategies
|
TIER Rates
|
High and Low Tiered Rates for Tiered Rate Strategies
|
ii.
|
Transaction Data
|
Field
|
Definition
|
POLICY NUM
|
Associated policy number for the contract
|
PLAN CODE
|
Admin Plan code for the associated policy
|
ISSUE DATE
|
Date of Issuance
|
Bucket CODE
|
Identification of Fixed or Fund
|
Index Desc
|
description of index
|
transaction type
|
Detailed description of transaction
|
Account value post
|
Account Value after transaction
|
Transaction amount
|
Transaction amount
|
Effective Date
|
Effective Date of transaction (sometimes it is back dated)
|
Processdate
|
Process Date of transaction
|
Death Date
|
Date of Death
|
Death Notification Date
|
Date of Death Notification
|
reversal code
|
Code for reversing transactions
|
date of reversal
|
Used in cases of reversed transactions
|
surrender charges
|
Surrender Charges associated with transaction
|
MVA
|
MVA associated with transaction
|
Free withdrawal amount
|
$ of transaction that was free of SC and MVA
|
Interest Earned
|
Interest Credited to the policy (i.e. Fixed Interest or Indexed Interest (on Anniversary))
|
Gross Premium
|
Gross Premium
|
Remaining premium
|
Remaining Premium as of after transaction
|
|
|
|
|
Additional Transaction relevant fields
|
Include any other transaction relevant fields commonly used by VOYA
|
ACRA INVESTMENT ENTITIES
SHAREHOLDERS AGREEMENT
DATED AS OF October 1, 2019
|
TABLE OF CONTENTS
|
Page
|
|
Article I DEFINITIONS; Certain RULES OF CONSTRUCTION
|
|
|
1.1 Definitions
|
1
|
|
1.2 Certain Rules of Construction
|
7
|
|
Article II FRAMEWORK
|
|
|
2.1 Capital Stock of ACRA
|
8
|
|
2.2 New ACRA Investment Entities
|
8
|
|
2.3 Amendment of Governing Documents
|
8
|
|
Article III SHARES
|
|
|
3.1 Future Shareholders and Transfers
|
8
|
|
3.2 Limitations on Transfers
|
8
|
|
3.3 Co‑Sale Rights
|
9
|
|
3.4 Preemptive Rights
|
10
|
|
3.5 Approved Sale; Sale of an ACRA Investment Entity; Approved Reorganization
|
11
|
|
3.6 Information Rights; Covenants
|
12
|
|
3.7 Class A Common Share Preference and Class B Common Share Preference
|
13
|
|
3.8 Agreement to Provide Certain Information; AEOI
|
13
|
|
3.9 Board of Directors
|
15
|
|
3.10 Acquisitions and Capitalization
|
16
|
|
3.11 Sales between Shareholders
|
16
|
|
3.12 Treaty
|
17
|
|
Article IV MISCELLANEOUS
|
|
|
4.1 Termination
|
17
|
|
4.2 Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial
|
17
|
|
4.3 Severability
|
17
|
|
4.4 Assignments; Successors and Assigns
|
17
|
|
4.5 Amendments; Waivers
|
17
|
|
4.6 Notices
|
18
|
|
4.7 Headings
|
19
|
|
4.8 Nouns and Pronouns
|
19
|
|
4.9 Entire Agreement; Inconsistency
|
19
|
|
4.10 Counterparts
|
19
|
|
4.11 Further Assurances
|
19
|
|
4.12 Remedies
|
19
|
|
4.13 No Conflicting Agreements
|
19
|
|
4.14 Confidentiality
|
19
|
|
Schedule A-1
|
|
|
Shareholdings of ACRA - Class A Common Shares
|
21
|
|
Schedule A-2
|
|
|
Shareholdings of ACRA - Class B Common Shares
|
22
|
|
Schedule B
|
|
|
Initial ACRA Directors
|
23
|
|
Exhibit A
|
|
|
Form of Joinder Agreement
|
24
|
|
SHAREHOLDER
|
TOTAL ACRACLASS A COMMON SHARES
|
PERCENTAGE OWNERSHIP OF ACRA CLASS A COMMON SHARES
|
ADIP Holdings (A), L.P.
|
45,184
|
27.0%
|
ADIP Holdings (B), L.P.
|
62,519
|
37.3%
|
ADIP Holdings (C), L.P.
|
41,065
|
24.5%
|
ADIP Holdings (D), L.P.
|
16,462
|
9.8%
|
ADIP Holdings (E), L.P.
|
0
|
0.0%
|
ADIP Holdings (Lux), L.P.
|
2,270
|
1.4%
|
TOTAL
|
167,500
|
100%
|
SHAREHOLDER
|
TOTAL ACRA CLASS B COMMON SHARES
|
PERCENTAGE OWNERSHIP OF ACRA CLASS B COMMON SHARES
|
Athene Life Re Ltd.
|
82,500
|
100%
|
TOTAL
|
82,500
|
100%
|
|
Director
|
Class
|
End of Initial Term
|
Chairman
|
Jamshid Ehsani
|
III
|
2024
|
Apollo Representative
|
Matthew R. Michelini
|
II
|
2023
|
Athene Representative
|
William J. Wheeler
|
I
|
2022
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
Chip Gillis
|
III
|
2024
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
Gary Parr
|
II
|
2023
|
Athene Independent Director (per Section 3.9(a)(ii))
|
Josh Mandel
|
III
|
2024
|
Athene Independent Director (per Section 3.9(a)(ii))
|
Karen Berman
|
II
|
2023
|
ADIP Independent Director (per Section 3.9 (a)(iii))
|
Shaun Mathews
|
I
|
2022
|
ADIP Independent Director (per Section 3.9(a)(iii))
|
VACANT
|
|
|
ADIP Nominee (per Section 3.9(a)(iii))
|
VACANT
|
|
|
ADIP Nominee (per Section 3.9(a)(iii))
|
Vishal Sheth
|
I
|
2022
|
(a)
|
The capital stock of the New ACRA Investment Entity consists of (i) class A common shares, par value $[•] per class A common share and (ii) class B common shares, par value $[•] per class B common share.
|
(b)
|
As of the date hereof, (i) each Co-Investor holds that number of New ACRA Investment Entity Class A Common Shares as is set forth on Annex I-1 hereto and (ii) ALRe holds that number of New ACRA Investment Entity Class B Common Shares as is set forth on Annex I-2 hereto.
|
(c)
|
Immediately following the effectiveness of this Agreement, the board of directors of the New ACRA Investment Entity shall be composed of the members set forth on Annex II hereto.
|
(d)
|
Any notice required to be delivered to the New ACRA Investment Entity pursuant to Section 4.6 of the Shareholders Agreement shall be delivered to the New ACRA Investment Entity at the following address:
|
(e)
|
The New ACRA Investment Entity hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement. By executing this Joinder Agreement, the New ACRA Investment Entity is hereby deemed to be a Party to the Shareholders Agreement, and the New ACRA Investment Entity will have all of the rights, and will be bound by all of the obligations, under the Shareholders Agreement. Upon execution of this Joinder Agreement, all of the information contained herein, including the information set forth on the Annexes hereto, shall be deemed to supplement, and to form part of, the Shareholders Agreement.
|
|
[•]
By:___________________________________
Name:
Title:
|
SHAREHOLDER
|
TOTAL NEW ACRA INVESTMENT ENTITY CLASS A COMMON SHARES
|
PERCENTAGE OWNERSHIP OF NEW ACRA INVESTMENT ENTITY CLASS A COMMON SHARES
|
ADIP Holdings (A), L.P.
|
[]
|
[]%
|
ADIP Holdings (B), L.P.
|
[]
|
[]%
|
ADIP Holdings (C), L.P.
|
[]
|
[]%
|
ADIP Holdings (D), L.P.
|
[]
|
[]%
|
ADIP Holdings (E), L.P.
|
[]
|
[]%
|
ADIP Holdings (Lux), L.P.
|
[]
|
[]%
|
TOTAL
|
[]
|
100%
|
SHAREHOLDER
|
TOTAL NEW ACRA INVESTMENT ENTITY CLASS B COMMON SHARES
|
PERCENTAGE OWNERSHIP OF NEW ACRA INVESTMENT ENTITY CLASS B COMMON SHARES
|
Athene Life Re Ltd.
|
[]
|
100%
|
TOTAL
|
[]
|
100%
|
Chairman
|
[]
|
Apollo Representative
|
[]
|
Athene Representative
|
[]
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
[]
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
[]
|
Athene Independent Director (per Section 3.9(a)(ii))
|
[]
|
Athene Independent Director (per Section 3.9(a)(ii))
|
[]
|
ADIP Independent Director (per Section 3.9(a)(iii))
|
[]
|
ADIP Independent Director (per Section 3.9(a)(iii))
|
[]
|
ADIP Nominee (per Section 3.9(a)(iii))
|
[]
|
ADIP Nominee (per Section 3.9(a)(iii))
|
[]
|
|
Director
|
Class
|
End of Initial Term
|
Chairman
|
Jamshid Ehsani
|
III
|
2024
|
Apollo Representative
|
Matthew R. Michelini
|
II
|
2023
|
Athene Representative
|
William J. Wheeler
|
I
|
2022
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
Chip Gillis
|
III
|
2024
|
Apollo/Athene Representative (per Section 3.9(a)(ii))
|
Gary Parr
|
II
|
2023
|
Athene Independent Director (per Section 3.9(a)(ii))
|
Josh Mandel
|
III
|
2024
|
Athene Independent Director (per Section 3.9(a)(ii))
|
Karen Berman
|
II
|
2023
|
ADIP Independent Director (per Section 3.9 (a)(iii))
|
Shaun Mathews
|
I
|
2022
|
ADIP Independent Director (per Section 3.9(a)(iii))
|
[]
|
[]
|
[]
|
ADIP Independent Director (per Section 3.9(a)(iii))
|
VACANT
|
|
|
ADIP Nominee (per Section 3.9(a)(iii))
|
Vishal Sheth
|
I
|
2022
|
TABLE OF CONTENTS
|
Page
|
|
Article I DEFINITIONS
|
|
|
1.1 Definitions
|
1
|
|
1.2 Interpretation
|
4
|
|
Article II TRANSACTIONS
|
|
|
2.1 Closing
|
5
|
|
2.2 Closing Deliverables
|
5
|
|
2.3 Anti-Dilution
|
6
|
|
2.4 Intended Tax Treatment
|
6
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF AHL
|
|
|
3.1 Organization and Qualification
|
6
|
|
3.2 Capitalization
|
6
|
|
3.3 Authorization, Execution and Delivery
|
6
|
|
3.4 No Conflict
|
7
|
|
3.5 Consents and Approvals
|
7
|
|
3.6 Issuance; Valid Issuance
|
7
|
|
3.7 Investment Company Act
|
7
|
|
3.8 Compliance with SEC Filings
|
7
|
|
3.9 Financial Statements
|
7
|
|
3.10 Absence of Certain Changes or Events
|
7
|
|
3.11 Litigation and Regulatory Proceedings
|
8
|
|
3.12 Compliance with Law
|
8
|
|
3.13 No Broker’s Fees
|
8
|
|
3.14 No General Solicitation
|
8
|
|
3.15 No Integration; No Disqualifying Event
|
8
|
|
3.16 Compliance with Listing Requirements
|
8
|
|
3.17 Use of Form S-3
|
8
|
|
3.18 Required Vote
|
8
|
|
3.19 No Registration
|
8
|
|
3.20 Purchasing Intent
|
8
|
|
3.21 Sophistication; Investigation
|
8
|
|
Article IV Representations and Warranties of AGM
|
|
|
4.1 Organization and Qualification
|
9
|
|
4.2 Capitalization
|
9
|
|
4.3 Authorization, Execution and Delivery
|
9
|
|
4.4 No Conflict
|
9
|
|
4.5 Consents and Approvals
|
10
|
|
4.6 Issuance; Valid Issuance
|
10
|
|
4.7 Investment Company Act
|
10
|
|
4.8 Compliance with SEC Filings
|
10
|
|
4.9 Financial Statements
|
10
|
|
4.10 Absence of Certain Changes or Events
|
10
|
|
4.11 Litigation and Regulatory Proceedings
|
11
|
|
4.12 Compliance with Law
|
11
|
|
4.13 No Broker’s Fees
|
11
|
|
4.14 No General Solicitation
|
11
|
|
4.15 No Integration; No Disqualifying Event
|
11
|
|
4.16 Compliance with Listing Requirements
|
11
|
|
4.17 Use of Form S-3
|
11
|
|
4.18 No Registration
|
11
|
|
4.19 Purchasing Intent
|
11
|
|
4.20 Sophistication; Investigation
|
11
|
|
4.21 Information Supplied
|
11
|
|
4.22 Information Supplied
|
11
|
|
Article V OTHER AGREEMENTS OF THE PARTIES
|
|
|
5.1 Filings; Other Actions
|
12
|
|
5.2 Proxy Statement
|
12
|
|
5.3 Shareholder Approval
|
13
|
|
5.4 No Adverse AHL Recommendation
|
13
|
|
5.5 Securities Law Matters
|
13
|
|
5.6 AHL Capital Structure
|
14
|
|
5.7 Conditional Right
|
14
|
|
5.8 Closing Agreements
|
15
|
|
5.9 Tax Classification
|
15
|
|
5.10 Tax Audits
|
15
|
|
5.11 Tax Cooperation
|
15
|
|
5.12 Apollo Exchange Agreement
|
15
|
|
5.13 Ownership of AGM Capital Stock
|
15
|
|
5.14 Class M Matters
|
15
|
|
Article VI CONDITIONS
|
|
|
6.1 Conditions Precedent to the Obligations of each Party
|
16
|
|
6.2 Conditions Precedent to the Obligations of AGM
|
16
|
|
6.3 Conditions Precedent to the Obligations of AHL
|
16
|
|
Article VII TERMINATION
|
|
|
7.1 Termination
|
17
|
|
7.2 Effects of Termination
|
17
|
|
Article VIII MISCELLANEOUS
|
|
|
8.1 Survival
|
17
|
|
8.2 Fees and Expenses
|
17
|
|
8.3 Entire Agreement
|
17
|
|
8.4 Further Assurances
|
17
|
|
8.5 Notices
|
17
|
|
8.6 Governing Law
|
18
|
|
8.7 Consent to Jurisdiction
|
19
|
|
8.8 Equitable Remedies
|
19
|
|
8.9 Amendments; Waivers
|
19
|
|
8.10 Construction
|
19
|
|
8.11 Counterparts
|
19
|
|
8.12 Third Party Beneficiaries
|
19
|
|
8.13 Binding Effect
|
19
|
|
8.14 Severability
|
19
|
|
8.15 Non-Recourse
|
19
|
|
8.16 Apollo Operating Group Indemnification of AGM
|
20
|
|
(i)
|
if to AGM or any member of the Apollo Operating Group, to:
|
(ii)
|
If to AHL, to:
|
Title:
|
Chief Legal Officer,
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Vice President and Secretary
|
Title:
|
Manager
|
TABLE OF CONTENTS
|
Page
|
|
ARTICLE I DEFINITIONS
|
|
|
1.1 Definitions
|
1
|
|
1.2 Interpretation
|
3
|
|
ARTICLE II TRANSFER
|
|
|
2.1 Generally
|
3
|
|
2.2 Apollo Lockup
|
4
|
|
2.3 Additional Transfer Restrictions
|
4
|
|
2.4 Right of First Offer
|
4
|
|
2.5 Transfers and Joinders
|
4
|
|
2.6 Binding Effect on Transferees
|
5
|
|
2.7 Improper Transfer
|
5
|
|
2.8 Certain Transfers
|
5
|
|
ARTICLE III BOARD REPRESENTATION; INFORMATION
|
|
|
3.1 Apollo Nominees
|
5
|
|
3.2 Books and Records; Access
|
5
|
|
3.3 Confidentiality
|
6
|
|
3.4 Securities Laws
|
6
|
|
ARTICLE IV CAPITAL SUPPORT FACILITY
|
|
|
4.1 Capital Support Facility
|
6
|
|
4.2 Exercise Procedures
|
6
|
|
4.3 AHL Action
|
6
|
|
ARTICLE V APOLLO REPRESENTATIVE
|
|
|
5.1 Authority
|
7
|
|
ARTICLE VI TERMINATION
|
|
|
6.1 Term
|
7
|
|
6.2 Survival
|
7
|
|
ARTICLE VII REPRESENTATIONS AND WARRANTIES
|
|
|
7.1 Representations and Warranties of the Apollo Shareholders
|
7
|
|
7.2 Representations and Warranties of AHL
|
7
|
|
ARTICLE VIII MISCELLANEOUS
|
8
|
|
8.1 Entire Agreement
|
9
|
|
8.2 Further Assurances
|
9
|
|
8.3 Notices
|
9
|
|
8.4 Governing Law
|
9
|
|
8.5 Consent to Jurisdiction
|
9
|
|
8.6 Equitable Remedies
|
9
|
|
8.7 Construction
|
9
|
|
8.8 Counterparts
|
9
|
|
8.9 Third Party Beneficiaries
|
9
|
|
8.10 Binding Effect
|
9
|
|
8.11 Severability
|
9
|
|
8.12 Adjustments Upon Change of Capitalization
|
9
|
|
8.13 Amendments; Waivers
|
10
|
|
8.14 Non-Recourse
|
10
|
|
Term
|
Section
|
Affiliate
|
1.1
|
AGM
|
1.1
|
Agreement
|
Preamble
|
AHL
|
Preamble
|
Apollo Nominee
|
3.1(a)
|
Apollo Representative
|
1.1
|
Apollo Shareholders
|
Preamble
|
beneficial owner
|
1.1
|
beneficial ownership
|
1.1
|
beneficially own
|
1.1
|
Board of Directors
|
1.1
|
Business Day
|
1.1
|
Class A Shares
|
1.1
|
Closing
|
1.1
|
Closing Date
|
1.1
|
Closing Price
|
1.1
|
Competitor
|
1.1
|
Confidential Information
|
1.1
|
control
|
1.1
|
Controlled Affiliate
|
1.1
|
Controlled Entity
|
1.1
|
Convertible Securities
|
1.1
|
Exchange Act
|
1.1
|
Exercise Notice
|
4.2
|
Exercised ROFO Transaction
|
2.4(c)
|
Facility Closing
|
4.2
|
Facility Price
|
4.1
|
Facility Right
|
4.1
|
Facility Shares
|
4.2
|
Fall-away Date
|
1.1
|
Funds
|
1.1
|
Governing Documents
|
1.1
|
Governmental Entity
|
1.1
|
Hedging Transaction
|
1.1
|
Initial ROFO Period
|
2.4(b)(i)
|
Law
|
1.1
|
Liquidity Agreement
|
1.1
|
Lock-Up Period
|
2.2
|
Percentage Interest
|
1.1
|
Permitted Transferee
|
1.1
|
Person
|
1.1
|
Portfolio Companies
|
1.1
|
Proceeding
|
8.5
|
Related Party
|
8.14
|
ROFO Closing
|
2.4(c)
|
ROFO Closing Date
|
2.4(c)
|
ROFO Exercise Notice
|
2.4(b)(i)
|
(i)
|
If to AHL, to:
|
(ii)
|
if to any Apollo Shareholder, to:
|
Title:
|
[__________]
|
Title:
|
[__________]
|
Apollo Operating Group entity
|
Equity Interests
|
Apollo Principal Holdings I, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings II, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings III, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings IV, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings V, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings VI, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings VII, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings VIII, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings IX, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings X, L.P.
|
29,154,519 Class A Units
|
Apollo Principal Holdings XI, LLC
|
29,154,519 Ordinary Shares
|
Apollo Principal Holdings XII, L.P.
|
29,154,519 Class A Units
|
AMH Holdings (Cayman), L.P.
|
29,154,519 Class A Units
|
APOLLO GLOBAL MANAGEMENT, INC.
|
|
By: ________________________
[•]
[•]
|
|
ATHENE HOLDING, LTD.
By: ________________________
[_]
[_]
|
|
|
|
Legal Name of Holder:
|
[ ]
|
Address:
|
[ ]
|
Wire Information:
|
[ ]
|
Number of AOG Units to be sold:
|
[ ]
|
Minimum Sale Price for AOG Units to be sold:
|
[ ]
|
1.
|
Highland Capital Management, L.P.
|
2.
|
Icahn & Co. Inc / High River LP
|
3.
|
Aurelius Capital Management
|
4.
|
Elliott Management
|
5.
|
Cyrus Capital Partners, LP
|
6.
|
Appaloosa Management L.P.
|
7.
|
Oaktree Capital Management, L.P.
|
8.
|
Any actually known or reasonably identifiable affiliate (reasonably identifiable by their name) of, and, if applicable, any actually known or reasonably identifiable fund or other entity managed by (in the case of such fund or such other entity, reasonably identifiable by their name), any of the entities listed above.
|
TABLE OF CONTENTS
|
Page
|
|
ARTICLE I DEFINITIONS
|
|
|
1.1 Definitions
|
1
|
|
1.2 Interpretation
|
3
|
|
ARTICLE II REGISTRATION RIGHTS
|
|
|
2.1 Demand Registration
|
4
|
|
2.2 Piggyback Registration
|
6
|
|
2.3 Shelf Registration
|
7
|
|
2.4 Withdrawal Rights
|
8
|
|
2.5 Holdback Agreements
|
8
|
|
2.6 Registration Procedures
|
8
|
|
2.7 Registration Expenses
|
11
|
|
2.8 Registration Indemnification
|
11
|
|
2.9 Request for Information; Certain Rights
|
12
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES
|
|
|
3.1 Representations and Warranties of Prime Parent
|
13
|
|
3.2 Representations and Warranties of the Company
|
13
|
|
ARTICLE IV MISCELLANEOUS
|
|
|
4.1 Notices
|
14
|
|
4.2 Severability
|
15
|
|
4.3 Counterparts
|
15
|
|
4.4 Entire Agreement; No Third Party Beneficiaries
|
15
|
|
4.5 Further Assurances
|
15
|
|
4.6 Governing Law; Equitable Remedies
|
15
|
|
4.7 Consent To Jurisdiction
|
15
|
|
4.8 Amendments; Waivers
|
15
|
|
4.9 Assignment
|
16
|
|
4.10 Effectiveness
|
16
|
|
4.11 Term
|
16
|
|
(ii)
|
If to AHL, to:
|
1.
|
Definitions
|
2.
|
Power to Issue Shares
|
3.
|
Power of the Company to Purchase its Shares
|
4.
|
Rights Attaching to Shares
|
5.
|
Tax Restrictions
|
6.
|
Calls on Shares
|
7.
|
[Reserved]
|
8.
|
Share Certificates
|
9.
|
Fractional Shares
|
10.
|
Register of Shareholders
|
11.
|
Registered Holder Absolute Owner
|
12.
|
Transfer of Registered Shares
|
13.
|
Transfer Agent; Registrar; Rules Respecting Certificates
|
14.
|
Transmission of Registered Shares
|
15.
|
Power to Alter Capital
|
16.
|
Variation of Rights Attaching to Shares
|
17.
|
Dividends
|
18.
|
Power to Set Aside Profits
|
19.
|
Method of Payment
|
20.
|
Capitalisation
|
21.
|
Annual General Meetings
|
22.
|
Special General Meetings; Requisitioned General Meetings
|
23.
|
Purposes of Annual General Meetings; Proposals of Other Business by Shareholders
|
24.
|
Notice
|
25.
|
Giving Notice and Access
|
26.
|
Postponement of General Meeting
|
27.
|
Electronic Participation in Meetings
|
28.
|
Quorum at General Meetings
|
29.
|
Chairman to Preside at General Meetings
|
30.
|
Voting on Resolutions
|
31.
|
[Reserved]
|
32.
|
Power to Demand a Vote on a Poll
|
33.
|
Voting by Joint Holders of Shares
|
34.
|
Instrument of Proxy
|
35.
|
Representation of Corporate Shareholder
|
36.
|
Adjournment of General Meeting
|
37.
|
Written Resolutions of Shareholders
|
38.
|
Directors Attendance at General Meetings
|
39.
|
Election of Directors
|
40.
|
Nomination of Directors for Election
|
41.
|
[Reserved]
|
42.
|
Number of Directors
|
43.
|
Term of Office of Directors
|
44.
|
Removal of Directors
|
45.
|
Vacancy in the Office of Director
|
46.
|
Remuneration of Directors
|
47.
|
Defect in Appointment
|
48.
|
Directors to Manage Business
|
49.
|
Powers of the Board of Directors
|
50.
|
Register of Directors and Officers
|
51.
|
Appointment of Officers
|
52.
|
Appointment of Secretary
|
53.
|
Duties of Officers
|
54.
|
Remuneration of Officers
|
55.
|
Conflicts of Interest
|
56.
|
Indemnification and Exculpation
|
57.
|
Business Opportunities
|
58.
|
Board Meetings
|
59.
|
Notice of Board Meetings
|
60.
|
Electronic Participation in Meetings
|
61.
|
Quorum at Board Meetings
|
62.
|
Board to Continue in the Event of Vacancy
|
63.
|
Chairman to Preside
|
64.
|
Written Consent
|
65.
|
Validity of Prior Acts of the Board
|
66.
|
Resolution of Conflicts
|
67.
|
Conflicts Committee
|
68.
|
Minutes
|
69.
|
Place Where Corporate Records Kept
|
70.
|
Form and Use of Seal
|
71.
|
Books of Account
|
72.
|
Financial Year End
|
73.
|
Annual Audit
|
74.
|
Appointment of Auditor
|
75.
|
Remuneration of Auditor
|
76.
|
Duties of Auditor
|
77.
|
Access to Records
|
78.
|
Financial Statements
|
79.
|
Distribution of Auditor’s Report
|
80.
|
Vacancy in the Office of Auditor
|
81.
|
Winding-Up
|
82.
|
Changes to Bye-laws
|
83.
|
Changes to the Memorandum of Association
|
84.
|
Exclusive Jurisdiction
|
85.
|
Discontinuance
|
86.
|
Voting of Subsidiary Shares
|
87.
|
Bye-laws or Articles of Association of Certain Subsidiaries
|
88.
|
Termination of IMAs
|
1.
|
Definitions
|
1.1
|
In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively:
|
9.9% Shareholder
|
means a Person whose Controlled Shares constitute more than nine and nine-tenths percent (9.9%) of the Total Voting Power;
|
Act
|
means the Companies Act 1981 of Bermuda as amended from time to time;
|
Affiliate
|
means, as to any Person, any Person which directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by ownership of voting stock, by contract or otherwise;
|
Apollo Group
|
means, (i) Apollo Global Management, Inc., (ii) AAA Guarantor - Athene, L.P., (iii) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s Subsidiaries, (iv) BRH Holdings GP, Ltd. and its shareholders, (v) any executive officer or employee of Apollo Global Management, Inc. or its Subsidiaries, (vi) any Shareholder that has granted to Apollo Global Management, Inc. or any of its Affiliates a valid proxy with respect to all of such Shareholder’s Class A Common Shares pursuant to Bye-law 34 and (vii) any Affiliate of a Person described in clauses (i), (ii), (iii), (iv), (v) or (vi) above; provided, none of the Company or its Subsidiaries shall be deemed to be a member of the Apollo Group;
|
Applicable Law
|
means, with respect to any Person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any Governmental Authority applicable to such Person;
|
Auditor
|
means the individual or entity for the time being performing the duties of auditor of the Company (if any);
|
Bermuda
|
means the Islands of Bermuda;
|
Board
|
means the board of directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum;
|
Business Day
|
means any day that is not a Saturday, Sunday or other day on which commercial banks in Bermuda are authorised or required by law to close;
|
Bye-laws
|
means these thirteenth Amended and Restated Bye-laws adopted by the Company on [•], in their present form or as from time to time amended;
|
Code
|
means the United States Internal Revenue Code of 1986, as amended from time to time, or any U.S. Federal statute from time to time in effect that has replaced such statute, and any reference in these Bye-laws to a provision of the Code or a Treasury regulation promulgated thereunder means such provision or regulation as amended from time to time or any provision of a U.S. Federal law or any U.S. Treasury regulation, from time to time in effect that has replaced such provision or regulation;
|
Company
|
means Athene Holding Ltd.;
|
Comparable Asset Manager
|
means an asset manager with personnel of experience, education and qualification, and whose services are of a scale and scope, comparable to those of ISG (after giving effect to any assistance provided to ISG by its Affiliates;
|
Controlled Shares
|
means, in reference to any Person, all Class A Common Shares owned by such Person or any of its Affiliates beneficially within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated thereunder;
|
Director
|
means a director of the Company;
|
Equity Securities
|
means all shares of capital stock of the Company, all securities exercisable or convertible into or exchangeable for shares of capital stock of the Company, and all options, warrants, and other rights to purchase or otherwise acquire from the Company shares of such capital stock, including any share appreciation or similar rights, contractual or otherwise;
|
Exchange Act
|
means the U.S. Securities Exchange Act of 1934, as amended;
|
Expenses
|
means all fees, costs and expenses incurred in connection with any Proceeding, including, without limitation, attorneys’ fees, disbursements and retainers, fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services and other disbursements and expenses;
|
Governmental Authority
|
means any Bermudan, U.S. Federal, state, county, city, local or foreign governmental, administrative or regulatory authority, commission, committee, agency or body (including any court, tribunal or arbitral body and any self-regulating authority such as FINRA);
|
Group
|
shall have the meaning ascribed to it in Rule 13d-5 promulgated under the Exchange Act;
|
IMA
|
means the investment management agreement, dated as of July 22, 2009, as amended from time to time;
|
Independent Director
|
means any Director that meets the independence requirements under the then-prevailing rules of the New York Stock Exchange or any stock exchange or quotation system on which the Company’s common equity securities are then listed or quoted, as determined by the Board;
|
Insolvency Event
|
means: (i) the Company or any Subsidiary thereof shall commence a voluntary case or other Proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other Proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorise any of the foregoing; (ii) an involuntary case or other Proceeding shall be commenced against the Company or any Subsidiary thereof seeking liquidation, reorganization or other relief with respect to it or its debts under bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other Proceeding shall remain undismissed and unstayed for a period of sixty days; or (iii) an order for relief shall be entered against the Company or any Subsidiary thereof under the bankruptcy laws in effect at such time;
|
ISG
|
means Apollo Insurance Solutions Group, LLC, a Delaware limited liability company (or any successor entity thereto);
|
Liabilities
|
means losses, claims, damages, liabilities, joint or several, judgments, fines, penalties, interest, settlements or other amounts;
|
Liquidation
|
means: (i) any Insolvency Event; (ii) any Sale of the Company or (iii) any dissolution or winding up of the Company, other than any dissolution, liquidation or winding up in connection with any reincorporation of the Company in another jurisdiction;
|
Minimum Shareholder
|
means a Shareholder of record of the Company meeting the minimum requirements set forth for eligible shareholders to submit shareholder proposals under Rule 14a-8 of the Exchange Act or any applicable rules thereunder, as may be amended or promulgated thereunder from time to time;
|
notice
|
means written notice as further provided in these Bye-laws unless otherwise specifically stated;
|
Officer
|
means any person appointed by the Board to hold an office in the Company;
|
Permitted 9.9% Shareholder
|
means a Person that has received consent of at least 70% of the Board (or, after March 31, 2021, 75% of the Board) to be a 9.9% Shareholder;
|
Proceeding
|
means claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, at law or in equity, by or before any Governmental Authority;
|
Directors and Officers
|
means the register of directors and officers referred to in these Bye-laws;
|
Register of Shareholders
|
means the register of shareholders referred to in these Bye-laws;
|
Registered Office
|
means the registered office of the Company, which shall be at such place in Bermuda as the Board shall from time to time appoint;
|
Related Insured Entity
|
means any Person who is (directly or indirectly) insured or reinsured by any of the Company’s Subsidiaries as specified in Schedule 1 hereto or by any ceding company as specified in Schedule 1 hereto to which the Company’s Subsidiaries provide reinsurance; provided, after the date hereof, such Schedule may be amended by the Board and shall be published in each case thereafter on the Company’s website. This definition is intended to comply with the intent of Section 953(c) of the Code and will be interpreted accordingly;
|
Resident Representative
|
means any person appointed to act as resident representative and includes any deputy or assistant resident representative;
|
Resolution
|
means a resolution of the Shareholders approved by Shareholders entitled to vote for the election of directors to the Board or, where required, of a separate class or separate classes of Shareholders, adopted in a general meeting, in each case in accordance with the provisions of these Bye-laws;
|
Restricted Common Share
|
means a Class A Common Share that is treated (for purposes of Section 954(d)(3) of the Code, as applicable for purposes of Section 953(c) of the Code) as owned (in whole or in part) by any Person (other than a member of the Apollo Group (without regard to clause (v) of the definition of “Apollo Group”)) who is treated (for purposes of Section 954(d)(3) of the Code, as applicable for purposes of Section 953(c) of the Code) as owning any stock of Apollo Global Management, Inc.;
|
Date
|
means any date identified as the “Restriction Termination Date” for purposes of these Bye-laws by at least 70% of the Board (or, after March 31, 2021, 75% of the Board).
|
RPII Control Group
|
means any RPII Shareholder, or any person or persons who control (within the meaning of Section 954(d)(3) of the Code, as applicable for purposes of Section 953(c) of the Code) a RPII Shareholder, who would be treated (for purposes of Section 954(d)(3) of the Code, as applicable for purposes of Section 953(c) of the Code) as owning more than 49.9% of the total voting power of all classes of stock entitled to vote, of the Company or any Subsidiary of the Company but not more than 50% of the total value of the stock of the Company or such Subsidiary, respectively, but for the application of Bye-law 4.3(a)(iii);
|
RPII Shareholder
|
means a U.S. Person who owns (within the meaning of Section 958(a) of the Code) any stock of the Company;
|
Sale of the Company
|
means (i) the sale or transfer of all or substantially all of the Company’s assets to a Third Party; (ii) the sale or transfer of outstanding Equity Securities to a Third Party; or (iii) a business combination involving the Company and one or more additional Persons by means of merger, consolidation, scheme of arrangement, amalgamation, share exchange or similar transaction, in each case in clauses (ii) and (iii) above under circumstances in which the Third Party, immediately following such transaction, holds 51% or more of the aggregate economic value of the outstanding Equity Securities. A sale (or multiple sales) of one or more Subsidiaries of the Company (whether by way of merger, consolidation, reorganization or sale of all or substantially all of the assets or securities or otherwise) which constitutes all or substantially all of the consolidated assets or revenues of the Company shall be deemed a Sale of the Company;
|
SEC
|
means the U.S. Securities and Exchange Commission;
|
Securities Act
|
means the U.S. Securities Act of 1933, as amended;
|
Secretary
|
means the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary;
|
Shareholder
|
means the person registered in the Register of Shareholders as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Shareholders as one of such joint holders or all of such persons, as the context so requires;
|
Shareholders Agreement
|
means that certain Shareholders Agreement of the Company, by and between the Company and certain Shareholders, dated as of [•], as amended, supplemented or modified from time to time;
|
Subsidiary
|
means, with respect to any Person, any other Person the majority of whose equity securities or voting securities able to elect the board of directors or comparable governing body are directly or indirectly owned or controlled by such Person;
|
Tentative 9.9% Shareholder
|
means a Person that, but for adjustments to the voting rights of Class A Common Shares pursuant to Bye-law 4.3, would be a 9.9% Shareholder; provided, that in no event shall a Permitted 9.9% Shareholder be a Tentative 9.9% Shareholder;
|
Third Party
|
means any Person, or any Group of Persons, who, immediately prior to a proposed Sale of the Company, held less than 10% of the aggregate economic value of the outstanding Equity Securities; provided, that the Company and its Subsidiaries shall not be a Third Party or a member of a Group of Persons constituting a Third Party;
|
Total Voting Power
|
means the total votes attributable to all shares of the Company issued and outstanding;
|
Treasury Share
|
means a share of the Company that was or is treated as having been acquired and held by the Company and has been held continuously by the Company since it was so acquired and has not been cancelled; and
|
U.S. Person
|
means a “United States person”, as such term is defined in Section 957(c) of the Code.
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1.2
|
In these Bye-laws, the following terms have the meanings set forth in the sections indicated:
|
Term
|
Bye-law
|
AHL Cause
|
88.4
|
cause
|
44.1
|
Chairman
|
49(c)
|
Class A Common Shares
|
4.1
|
Company Merger Vote
|
4.3(b)
|
Company Opportunity
|
57.1
|
Conflicts Committee
|
67.1
|
Covered Arrangement
|
23.4(b)
|
Covered Person
|
56.1
|
Fee Agreement
|
88.2
|
IMA Termination Effective Date
|
88.1
|
IMA Termination Election Date
|
88.1
|
IMA Termination Notice
|
88.1
|
Indemnified Persons
|
56.12
|
Insurance Subsidiaries
|
57.1
|
New IMA
|
88.1
|
Other Holders
|
40.11
|
public announcement
|
23.6
|
Record Date Request
|
37.3
|
Record Date Requesting Shareholder(s)
|
37.3
|
Shareholder Affiliates
|
56.12
|
Specified Parties
|
57.1
|
Valid IMA Termination Notice
|
88.1
|
Vice Chairman
|
49(c)
|
Voting Commitment
|
40.7
|
1.3
|
In these Bye-laws, where not inconsistent with the context:
|
(a)
|
words denoting the plural number include the singular number and vice versa;
|
(b)
|
words denoting the masculine gender include the feminine and neuter genders;
|
(c)
|
words importing “person” or “Person” shall be construed in the broadest sense and means and includes a natural person, a partnership, a corporation, an association, a joint share company, a limited liability company, a trust, a joint venture, an unincorporated organization and any other entity and any federal, state, municipal, foreign or other government, governmental department, commission, board, bureau, agency or instrumentality, or any private or public court or tribunal;
|
(d)
|
the words:
|
(i)
|
“may” shall be construed as permissive; and
|
(ii)
|
“shall” shall be construed as imperative; and
|
(e)
|
unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Bye-laws.
|
1.4
|
In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form.
|
1.5
|
Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.
|
1.6
|
The rights and obligations set forth in these Bye-laws may be modified or restricted by any shareholders agreement entered into by two or more Shareholders or by the Company and one or more Shareholders, provided, that any such modification or restriction shall apply only to the parties to such shareholders agreement.
|
2.
|
Power to Issue Shares
|
2.1
|
Subject to these Bye-laws and to any Resolution to the contrary and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power and authority to the fullest extent permitted under the Act, but subject to all contractual restrictions to which the Company is bound, to issue any unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Board may by resolution prescribe, and to fix or alter the number of shares comprising any such class or series.
|
2.2
|
The authority of the Board with respect to each such class or series shall include, without any limitation of the foregoing, the right to determine and fix the following preferences and powers, which may vary as between different classes or series of shares:
|
(a)
|
the distinctive designation of such class or series and the number of shares to constitute such class or series;
|
(b)
|
the rate at which any dividends on the shares of such class or series shall be declared and paid, or set aside for payment, whether dividends at the rate so determined shall be cumulative or accruing, and whether the shares of such class or series shall be entitled to any participating or other dividends in addition to dividends at the rate so determined, and if so, on what terms;
|
(c)
|
the right or obligation, if any, of the Company to redeem shares of the particular class or series and, if redeemable, the price, terms and manner of such redemption;
|
(d)
|
the special and relative rights and preferences, if any, and the amount or amounts per share, which the shares of such class or series shall be entitled to receive upon any voluntary or involuntary liquidation, dissolution or winding up of the Company;
|
(e)
|
the terms and conditions, if any, upon which shares of such class or series shall be convertible into, or exchangeable for, shares of capital stock of any other class or series, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any;
|
(f)
|
the obligation, if any, of the Company to retire, redeem or purchase shares of such series pursuant to a sinking fund or fund of a similar nature or otherwise, and the terms and conditions of such obligation;
|
(g)
|
voting rights, if any, including special voting rights with respect to the election of directors and matters adversely affecting any such class or series; and
|
(h)
|
limitations, if any, on the issuance of additional shares of such class or series or any shares of any other class or series.
|
2.3
|
Subject to the Act, any preference shares may be issued or converted into shares that (at a determinable date or at the option of the Company or the holder) are liable to be redeemed on such terms and in such manner as may be determined by the Board (before the issue or conversion).
|
3.
|
Power of the Company to Purchase its Shares
|
3.1
|
The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit.
|
3.2
|
The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Act.
|
4.
|
Rights Attaching to Shares
|
4.1
|
Subject to any Resolution to the contrary (and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares), the common share capital of the Company shall consist of a single class of common
|
4.2
|
The Class A Common Shares shall collectively represent 100% of the Total Voting Power, and subject to the provisions of Bye-law 4.3, each Class A Common Share shall be entitled to one vote.
|
(a)
|
The voting rights of the Class A Common Shares shall, until the Restriction Termination Date, be subject to the provisions of this Bye-law 4.3(a); provided, that this Bye-law 4.3(a) shall not apply at any time that the number and relationships of the Company’s Shareholders would make it impossible to fully reallocate (pursuant to Bye-law 4.3(a)(iii)) all the vote that would be reduced pursuant to Bye-law 4.3(a)(ii); provided, further, that after the Restriction Termination Date, the provisions of this Bye-law 4.3(a) shall be inoperative and of no further force or effect:
|
(i)
|
The voting power to which the Controlled Shares of each Tentative 9.9% Shareholder would otherwise be entitled is hereby adjusted (and shall be automatically adjusted in the future) to the extent provided in Bye-law 4.3(a)(ii). The Board shall from time to time, including prior to any time at which a vote of Shareholders is taken, take all reasonable steps necessary to ascertain through communications with Shareholders or otherwise (including by reviewing publicly filed ownership reports of Shareholders filed pursuant to Section 16 of the Exchange Act) whether there exists, or will exist at the time any vote of Shareholders is taken, a Tentative 9.9% Shareholder.
|
(ii)
|
In the event that any Tentative 9.9% Shareholder exists, then (A) the votes of the Controlled Shares of each such Tentative 9.9% Shareholder shall be reduced pro rata to the extent necessary such that the aggregate votes of such Controlled Shares constitute no more than 9.9% of the Total Voting Power; (B) the votes of all Restricted Common Shares shall be reduced to zero, except to the extent provided in Bye-law 4.3(b); and (C) the provisions of Bye-law 86 shall apply.
|
(iii)
|
The votes of all Class A Common Shares whose votes were not reduced pursuant to Bye-law 4.3(a)(ii) shall be increased pro rata based on their then current voting power, in an aggregate amount equal to the aggregate reduction in votes of Class A Common Shares pursuant to Bye-law 4.3(a)(ii); provided, that such increase shall be limited as to any Class A Common Share to the extent necessary to avoid (A) causing any Person other than a Permitted 9.9% Shareholder to be a 9.9% Shareholder or (B) creating a RPII Control Group.
|
(b)
|
In connection with any vote of Shareholders to approve a merger or amalgamation with respect to the Company (a “Company Merger Vote”), each outstanding Restricted Common Share and each outstanding preferred share shall have the power to vote in connection with any such Company Merger Vote. Solely in connection with any such Company Merger Vote, any outstanding Restricted Common Shares (if they would otherwise have no votes pursuant to Bye-law 4.3(a)(ii)) and preferred shares shall collectively represent 0.1% of the Total Voting Power (such voting power allocated equally among such Restricted Common Shares and preferred shares) with the Total Voting Power attributable to each of the Class A Common Shares (other than such Restricted Common Shares) being reduced by such percentage on a pro-rated basis.
|
(c)
|
The Board may deviate from any of the principles described in this Bye-law 4.3 and determine that Class A Common Shares held by a Shareholder shall carry different voting rights (or no voting rights) as it determines appropriate (1) to avoid the existence of any 9.9% Shareholder other than any Permitted 9.9% Shareholder or (2) upon the request of a Shareholder, to avoid adverse tax, legal or regulatory consequences for such Shareholder or any of its Affiliates or direct or indirect owners.
|
(i)
|
The Board shall have the authority to request from any Person holding, directly or indirectly, Class A Common Shares, and such Person shall provide, as promptly as reasonably practicable, such information as the Board may require for the purpose of determining whether any Person’s voting rights are to be adjusted pursuant to these Bye-laws. If such Person fails to reasonably respond to such a request, or submits incomplete or inaccurate information in response to such a request, the Company may, in its sole and absolute discretion, determine that such Person’s Class A Common Shares shall carry no voting rights or reduced voting rights, in which case such Class A Common Shares shall not carry any voting rights or shall carry only such reduced voting rights until otherwise determined by the Company in its sole and absolute discretion.
|
(ii)
|
Any Person shall give notice to the Company within ten days following the date that such Person acquires actual knowledge that it is a Tentative 9.9% Shareholder or that its Class A Common Shares are Controlled Shares of a Tentative 9.9% Shareholder.
|
(iii)
|
Notwithstanding the foregoing, no Person shall be liable to any other Person or the Company for any losses or damages resulting from a Person’s failure to respond to, or submission of incomplete or inaccurate information in response to, a request under paragraph (i) above or from such Person’s failure to give notice under paragraph (ii) above. The Board may rely on the information provided by a Person under this Bye-law 4.3(d) in the satisfaction of its obligations under this Bye-law 4.3. The Company may, but shall have no obligation to, provide notice to any Person of any adjustment to its voting power that may result from the application of this Bye-law 4.3.
|
(iv)
|
Bye-law 4.3(a) and the definitions of “Permitted 9.9% Shareholder”, “Tentative 9.9% Shareholder” and “Restriction Termination Date” may not be rescinded, altered or amended (a) unless in accordance with the Act and (b) until the same has been approved by at least 70% of the Board (or, after March 31, 2021, 75% of the Board) and at least 50% of the Total Voting Power (which, for the avoidance of doubt will take into account the application of Bye-law 4.3).
|
(v)
|
For the avoidance of doubt, the Board may, in its discretion, grant its consent for certain Persons to be Permitted 9.9% Shareholders and need not grant its consent for other Persons. No consent obtained from the Board allowing a Person to be a Permitted 9.9% Shareholder may be revoked, rescinded or otherwise limited following the granting of such consent without the consent of such Person.
|
(a)
|
The Class A Common Shares shall be entitled to such dividends, in proportion to the number of Class A Common Shares held by such holder, as the Board may from time to time declare.
|
(b)
|
In addition to the foregoing, upon a Liquidation, after payment or provision for payment of the debts and other liabilities of the Company and payment or provision for payment for the aggregate liquidation preference for all outstanding preferred shares have each been made, distributions out of the remaining assets of the Company available for distribution to its Shareholders shall be made to the holders of the Class A Common Shares (on a pro-rata basis based upon the number of Class A Common Shares held by each such holder in proportion to the total number of Class A Common Shares then outstanding).
|
(c)
|
In the event of a Liquidation resulting from circumstances set forth in either clause (ii) or clause (iii) of the definition of Sale of the Company, the “remaining assets of the Company available for distribution” (as referred to in clause (b) above) shall be deemed to be the aggregate consideration to be paid to all holders of Class A Common Shares participating in such Liquidation. In connection with such a Liquidation, the holders of the Class A Common Shares shall allocate the aggregate consideration to be paid to all such Shareholders participating in such Liquidation among such Shareholders, such that each such Shareholder shall receive the same portion of the aggregate consideration from such Liquidation that such Shareholder would have received if such aggregate consideration had been distributed by the Company in a Liquidation caused by circumstances other than those set forth in clause (ii) or clause (iii) of the definition of Sale of the Company.
|
(d)
|
If any or all of the proceeds payable to the Shareholders in connection with a Liquidation are in a form other than cash or marketable securities, the fair market value of such consideration shall be determined in good faith by the Board.
|
4.5
|
All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company.
|
4.6
|
All determinations to be made in connection with the application of the provisions set forth in this Bye-law 4 shall be made by the Company in its sole discretion, and any such determination shall be binding on all Shareholders and holders of securities of the Company.
|
5.
|
Tax Restrictions
|
5.1
|
No Shareholder or holder of Equity Securities (or, to its actual knowledge, any direct or indirect beneficial owner thereof) who is a “United States shareholder” of the Company (within the meaning of Section 953(c) of the Code), nor any “related person” (within the meaning of Section 953(c) of the Code) to such Shareholder or holder of Equity Securities (or such
|
5.2
|
All determinations to be made in connection with the application of the provisions set forth in Bye-law 5.1 shall be made by the Board in its sole discretion, and any such determination shall be binding on all Shareholders, it being understood that a Shareholder will in no instance be liable for monetary damages with respect to a breach of this Bye-law 5. The Board may, at any time, and from time to time, request evidence and/or require representations that the restrictions set forth in this Bye-law 5 have not, or will not, be breached. Each Shareholder agrees to furnish such evidence to the Board promptly upon request therefor. The Board may waive any provision in this Bye-law 5 with respect to any Shareholder without granting similar waivers to any other Shareholder. The Board and any particular Shareholder may agree in writing to amend the application of the provisions of this Bye-law 5 with respect to such Shareholder, and the Board shall not be required to enter into similar agreements with other Shareholders.
|
5.3
|
In the event any Shareholder or holder of Equity Securities becomes aware that there is a material risk that it, any of its direct or indirect beneficial owners and/or any “related person” (within the meaning of Section 953(c) of the Code) to such Shareholder or holder of Equity Securities (or such owner) has violated any provision contained in this Bye-law 5 (without regard to any knowledge qualifier therein), such Shareholder or holder of Equity Securities will be obligated to notify the Board as promptly as possible. In the event any Shareholder or holder of Equity Securities violates Bye-law 5.1 (without regard to any knowledge qualifier therein), at the discretion of the Board, such Shareholder or holder of Equity Securities shall, and shall cause any direct or indirect beneficial owner of such Shareholder or holder of Equity Securities and any “related person” (within the meaning of Section 953(c) of the Code) to such Shareholder or holder of Equity Securities to (x) sell some or all of its Class A Common Shares or Equity Securities at fair market value (as mutually agreed by the Company and such Shareholder in good faith) as directed by the Board and/or (y) allow the Company to repurchase some or all of its Class A Common Shares or Equity Securities at fair market value (as determined by the Company and such Shareholder in good faith); provided, that if the Company and such Shareholder cannot mutually agree on the fair market value of the Class A Common Shares or Equity Securities to be sold or repurchased in accordance with this Bye-law 5.3, then fair market value shall be determined by an investment banking firm of national recognition, which firm shall be reasonably acceptable to the Company and such Shareholder or holder of Equity Securities. The determination of fair market value by such investment banking firm shall be final and binding upon the parties. If the Company and such Shareholder or holder of Equity Securities are unable to agree upon an acceptable investment banking firm within ten (10) days after the date either party proposed that one be selected, the investment banking firm will be selected by an arbitrator located in the City of New York, New York selected by the American Arbitration Association (or if such organization ceases to exist, the arbitrator shall be chosen by a court of competent jurisdiction). The arbitrator shall select the investment banking firm (within ten (10) days of his appointment) from a list, jointly prepared by the Company and such Shareholder or holder of Equity Securities, of not more than six investment banking firms of national standing in the United States, of which no more than three may be named by the Company and no more than three may be named by such Shareholder or holder of Equity Securities. The arbitrator may consider, within the ten-day period allotted, arguments from the parties regarding which investment banking firm to choose, but the selection by the arbitrator shall be made in its sole discretion from the list of six. The selection by the arbitrator of such investment banking firm shall be final and binding upon the parties. The Company and such Shareholder or holder of Equity Securities shall each pay one-half of the fees and expenses of the investment banking firms and arbitrator (if any) used to determine the fair market value. If required by any such investment banking firm or arbitrator, the Company shall execute a retainer and engagement letter containing reasonable terms and conditions, including, without limitation, customary provisions concerning the rights of indemnification and contribution by the Company in favor of such investment banking firm or arbitrator and its officers, directors, partners, employees, agents and Affiliates. The parties shall provide to the investment banking firm, on a confidential basis, such information it reasonably requests to perform its duties.
|
5.4
|
Notwithstanding anything to the contrary herein, upon a breach of this Bye-law 5 (without regard to any knowledge qualifier therein), the breaching Shareholder or holder of Equity Securities shall be required to take any reasonable action the Board deems appropriate.
|
6.
|
Calls on Shares
|
6.1
|
The Board may make such calls as it thinks fit upon the Shareholders in respect of any moneys (whether in respect of nominal value or premium) unpaid on the shares allotted to or held by such Shareholders and, if a call is not paid on or before the day appointed for payment thereof, the Shareholders may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The Board may differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.
|
6.2
|
The joint holders of a share shall be jointly and severally liable to pay all calls and any interest, costs and expenses in respect thereof.
|
6.3
|
The Company may accept from any Shareholder the whole or a part of the amount remaining unpaid on any shares held by such Shareholder, although no part of that amount has been called up.
|
7.
|
[Reserved]
|
8.
|
Share Certificates
|
8.1
|
Every Shareholder shall be entitled to a certificate under the common seal (or a facsimile thereof) of the Company or bearing the signature (or a facsimile thereof) of a Director or the Secretary or a person expressly authorised to sign specifying the number and, where appropriate, the class of shares held by such Shareholder and whether the same are fully paid up and, if not, specifying the amount paid on such shares. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means.
|
8.2
|
The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted.
|
8.3
|
The holder of any shares of the Company, promptly upon discovery, shall notify the Company of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to such holder a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or its legal representative to give the Company a bond in such sum and with such surety or sureties as it may direct to indemnify the Company against any claim that may be made against it on account of the alleged loss or destruction of any such certificate.
|
9.
|
Fractional Shares
|
10.
|
Register of Shareholders
|
10.1
|
The Board shall cause to be kept in one or more books a Register of Shareholders and shall enter therein the particulars required by the Act.
|
10.2
|
The Register of Shareholders shall be open to inspection without charge at the Registered Office of the Company on every Business Day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each Business Day be allowed for inspection. The Register of Shareholders may, after notice has been given in accordance with the Act, be closed for any time or times not exceeding in the whole thirty days in each year.
|
11.
|
Registered Holder Absolute Owner
|
12.
|
Transfer of Registered Shares
|
12.1
|
The following transfer restrictions are in addition to any transfer restrictions that may apply pursuant to the terms of any contract or other agreement between the Shareholders as among themselves or with any third parties or that the Company may enter into with any of its Shareholders.
|
12.2
|
An instrument of transfer shall be in writing in the form of the following, or as near thereto as circumstances admit, or in such other form as the Board may accept:
|
12.3
|
Such instrument of transfer shall be signed by or on behalf of the transferor and transferee, provided, that in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Shareholders.
|
12.4
|
The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer.
|
12.5
|
The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Shareholder may transfer any such share to the executors or administrators of such deceased Shareholder.
|
12.6
|
The Board may in its absolute discretion refuse to register the transfer of a share if, and only if, all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have not been obtained. If the Board refuses to register a transfer of any share, the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.
|
13.
|
Transfer Agent; Registrar; Rules Respecting Certificates
|
13.1
|
The Company may maintain one or more transfer offices or agencies where shares of the Company shall be transferable. The Company may also maintain one or more registry offices where such shares shall be registered. The Board may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of share certificates in accordance with Applicable Laws and the rules of any stock exchange or quotation system on which shares of the Company may be then listed or quoted.
|
14.
|
Transmission of Registered Shares
|
14.1
|
Subject to the terms of any contracts or other agreements by and between the Shareholders or by and between the Company and any of its Shareholders, in the case of the death of a Shareholder, the survivor or survivors where the deceased Shareholder was a joint holder, and the legal personal representatives of the deceased Shareholder where the deceased Shareholder was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Shareholder’s interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Shareholder with other persons. Subject to the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Shareholder or such other
|
14.2
|
Any person becoming entitled to a share in consequence of the death or bankruptcy of any Shareholder may be registered as a Shareholder upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form, or as near thereto as circumstances admit, of the following:
|
14.3
|
On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Shareholder. Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Shareholder before such Shareholder’s death or bankruptcy, as the case may be.
|
14.4
|
Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.
|
15.
|
Power to Alter Capital
|
15.1
|
The Company may if authorised by Resolution increase, divide, consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any manner permitted by the Act.
|
15.2
|
Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.
|
16.
|
Variation of Rights Attaching to Shares
|
17.
|
Dividends
|
17.1
|
The Board may, subject to these Bye-laws and in accordance with the Act, declare a dividend to be paid to all holders of Class A Common Shares, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company.
|
17.2
|
In the event of a distribution in specie, the value of any distributed assets shall be the fair market value of such assets at the time of distribution as reasonably determined by the Board.
|
17.3
|
The Board may declare and pay dividends on one or more class of shares of the Company to the extent one or more classes of shares of the Company ranks senior to or has priority or a preference over another class of shares of the Company.
|
17.4
|
The Board may fix, in advance, a date as the record date for the purpose of determining the Shareholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of shares, or in order to make a determination of the Shareholders for the purpose of any other lawful action, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than sixty (60) calendar days prior to such action. If no record date is fixed by the Board, the record date for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
|
17.5
|
The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
|
17.6
|
The Board may declare and make such other distributions (in cash or in specie) to the Shareholders as may be lawfully made out of the assets of the Company. No unpaid distribution shall bear interest as against the Company.
|
18.
|
Power to Set Aside Profits
|
19.
|
Method of Payment
|
19.1
|
Any dividend, interest, or other moneys payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Shareholder at such Shareholder’s address in the Register of Shareholders, or to such person and to such address as the holder may in writing direct.
|
19.2
|
In the case of joint holders of shares, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Shareholders, or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.
|
19.3
|
The Board may deduct from the dividends or distributions payable to any Shareholder all moneys due from such Shareholder to the Company on account of calls or otherwise.
|
20.
|
Capitalisation
|
20.1
|
The Board may capitalise any amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Shareholders.
|
20.2
|
The Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend or distribution by applying such amounts in paying up in full, partly or nil paid shares of those Shareholders who would have been entitled to such amounts if they were distributed by way of dividend or distribution.
|
21.
|
Annual General Meetings
|
22.
|
Special General Meetings; Requisitioned General Meetings
|
22.1
|
A special general meeting may be called by the Secretary for any purpose at any time in accordance with these Bye-laws upon the request of any of (i) the Chairman, (ii) the Vice Chairman, (iii) the Chief Executive Officer of the Company or (iv) a majority of the Board.
|
22.2
|
The Board shall, on the requisition of Shareholders holding shares at the date of the deposit of the requisition not less than ten percent (10%) of the Total Voting Power, forthwith proceed to convene a special general meeting and the provisions of the Act shall apply. Subject to Applicable Law, Shareholders requisitioning such special general meeting shall be responsible for all costs incurred to convene such meeting.
|
23.
|
Purposes of Annual General Meetings; Proposals of Other Business by Shareholders
|
23.1
|
At each annual general meeting the Shareholders shall elect the members of the Board then subject to election in accordance with the procedures set forth in these Bye-laws and subject to Applicable Law and the rules of any stock exchange or quotation system on which shares of the Company may be then listed or quoted. At any such annual general meeting any other business properly brought before the meeting may be transacted.
|
23.2
|
To be properly brought before an annual general meeting, business (other than nominations of directors, which must be made in compliance with, and shall be exclusively governed by, Bye-law 40) must be (a) specified in the notice of the meeting (or any supplement thereto) given to Shareholders by or at the direction of the Board in accordance with Bye-laws 24 and 25 below, (b) otherwise properly brought before the meeting by or at the direction of the Board or (c) otherwise properly brought before the meeting by a Shareholder who (1) is a Minimum Shareholder at the time of giving of the notice provided for in this Bye-law 23 and at the time of the annual general meeting, (2) is entitled to vote at such meeting and (3) complies with the notice procedures set forth in this Bye-law 23.
|
23.3
|
For any such business to be properly brought before any annual general meeting pursuant to clause (c) of Bye-law 23.2, the Shareholder must have given timely notice thereof in writing, either by personal delivery or express or registered mail (postage prepaid), to the Secretary at the Registered Office not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Shareholder’s notice must be received by the Secretary at the Registered Office not later than the later of (x) the close of business 90 days prior to the date of such annual general meeting and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Shareholder’s notice as described herein.
|
23.4
|
Any such notice of other business shall set forth as to each matter the Shareholder proposes to bring before the annual general meeting:
|
(a)
|
a brief description of the business desired to be brought before the annual general meeting, the reasons for conducting such business at the annual general meeting and the text of any proposal regarding such business (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend these Bye-laws, the text of the proposed amendment), which shall not exceed 1,000 words;
|
(b)
|
as to the Shareholder giving notice and any beneficial owner on whose behalf the proposal is made, (1) the name and address of such Shareholder (as it appears in the Register of Shareholders) and such beneficial owner on whose behalf the proposal is made, (2) the class and number of Equity Securities which are, directly or indirectly, owned beneficially or of record by any such Shareholder and by such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as of the date of such notice, (3) a description of any agreement, arrangement or understanding (including, without limitation, any swap or other derivative or short positions, profit interests, options, hedging transactions, and securities lending or borrowing arrangement) to which such Shareholder or any such beneficial owner or their respective Affiliates is, directly or indirectly, a party as of the date of such notice (x) with respect to any Equity Securities or (y) the effect or intent of which is to mitigate loss to, manage the
|
(c)
|
a description of any direct or indirect material interest by security holdings or otherwise of the Shareholder and of any beneficial owner on whose behalf the proposal is made, or their respective Affiliates, in such business (whether by holdings of securities, or by virtue of being a creditor or contractual counterparty of the Company or of a third party, or otherwise), and all agreements, arrangements and understandings between such Shareholder or any such beneficial owner or their respective Affiliates and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Shareholder;
|
(d)
|
a representation whether the Shareholder or the beneficial owner intends or is part of a Group which intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s Class A Common Shares (or other Equity Securities) required to approve or adopt the proposal and/or (ii) otherwise to solicit proxies from Shareholders in support of such proposal;
|
(e)
|
an undertaking by the Shareholder and any beneficial owner on whose behalf the proposal is made to (i) notify the Company in writing of the information set forth in clauses (b)(2), (b)(3) and (c) above as of the record date (set in accordance with Bye-law 24 below) for the meeting promptly (and, in any event, within five (5) Business Days) following the later of the record date or the date notice of the record date is first disclosed by public announcement and (ii) update such information thereafter within two (2) Business Days of any change in such information and, in any event, as of close of business on the day preceding the meeting date; and
|
(f)
|
any other information relating to such Shareholder, any such beneficial owner and their respective Affiliates that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, such proposal pursuant to Section 14 of the Exchange Act, to the same extent as if the shares of the Company were registered under the Exchange Act.
|
23.5
|
Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Bye-law 23, other than nominations for directors which must be made in compliance with, and shall be exclusively governed by, Bye-law 40, shall be deemed satisfied by a Shareholder if such Shareholder has submitted a proposal to the Company in compliance with Rule 14a-8 of the Exchange Act and such Shareholder’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the annual general meeting; provided, that such Shareholder shall have provided the information required by Bye-law 23.4; provided, further, that the information required by Bye-law 23.4(b) may be satisfied by providing the information to the Company required pursuant to Rule 14a-8(b) of the Exchange Act.
|
23.6
|
Notwithstanding anything in these Bye-laws to the contrary: (a) no other business brought by a Shareholder (other than the nominations of directors, which must be made in compliance with, and shall be exclusively governed by and subject to, Bye-law 40) shall be conducted at any annual general meeting except in accordance with the procedures set forth in this Bye-law 23; and (b) unless otherwise required by Applicable Law and the rules of any stock exchange or quotation system on which shares of the Company may be then listed or quoted, if a Shareholder intending to bring business before an annual general meeting in accordance with this Bye-law 23 does not (x) timely provide the notifications contemplated by clause (e) of Bye-law 23.4 above, or (y) timely appear in person or by proxy at the meeting to present the proposed business, such business shall not be transacted, notwithstanding that proxies in respect of such business may have been received by the Company or any other person or entity.
|
23.7
|
Nothing in this Bye-law 23 shall be deemed to affect any rights of (a) Shareholders to request inclusion of proposals in the Company’s proxy statement pursuant to applicable rules and regulations under the Exchange Act or (b) the holders of any
|
24.
|
Notice
|
24.1
|
Not less than 21 days’ nor more than 60 days’ notice of an annual general meeting shall be given to each Shareholder entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held, that the election of Directors up for election at that meeting will take place thereat, and as far as practicable, the other business to be conducted at the meeting.
|
24.2
|
Not less than 21 days’ nor more than 60 days’ notice of a special general meeting shall be given to each Shareholder entitled to attend and vote thereat, stating the date, time, place and the general nature of the business to be considered at the meeting.
|
24.3
|
The Board may fix any date as the record date for determining the Shareholders entitled to receive notice of and to vote at any general meeting.
|
24.4
|
A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Shareholders entitled to attend and vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Shareholders having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.
|
24.5
|
The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
|
25.
|
Giving Notice and Access
|
25.1
|
A notice of a general meeting may be given by the Company to a Shareholder:
|
(a)
|
by delivering it to such Shareholder in person; or
|
(b)
|
by sending it by letter mail or courier to such Shareholder’s address in the Register of Shareholders; or
|
(c)
|
by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given and expressly consented to by such Shareholder to the Company for such purpose; or
|
(d)
|
in accordance with Bye-law 25.4.
|
25.2
|
Any notice required to be given to a Shareholder in connection with a general meeting shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Shareholders and notice so given shall be sufficient notice to all the holders of such shares.
|
25.3
|
Any notice in connection with a general meeting (save for one delivered in accordance with Bye-law 25.4) shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission and, in proving such service, it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted, and the time when it was posted, delivered to the courier, or transmitted by electronic means.
|
25.4
|
Where a Shareholder indicates his consent (in a form and manner satisfactory to the Board) to receive information or documents by accessing them on a website rather than by other means, or receipt in this manner is otherwise permitted by the Act, the Company may deliver such information or documents by notifying the Shareholder of the availability of such and including therein the address of the website, the place on the website where the information or document may be found, and instructions as to how the information or document may be accessed on the website.
|
25.5
|
In the case of information or documents delivered in accordance with Bye-law 25.4, service shall be deemed to have occurred when (i) the Shareholder is notified in accordance with that Bye-law; and (ii) the information or document is published on the website.
|
26.
|
Postponement of General Meeting
|
27.
|
Electronic Participation in Meetings
|
28.
|
Quorum at General Meetings
|
28.1
|
Unless otherwise expressly required by Applicable Law, at any general meeting, the presence in person or by proxy of Shareholders entitled to cast a majority of the Total Voting Power shall constitute a quorum for the entire meeting, notwithstanding the withdrawal of Shareholders entitled to cast a sufficient number of votes in person or by proxy to reduce the number of votes represented at the meeting below a quorum; provided, that shares of the Company belonging to the Company or any of its Subsidiaries shall neither be counted for the purpose of determining the presence of a quorum nor entitled to vote at any general meeting.
|
28.2
|
At any general meeting at which a quorum shall be present, a majority of those present in person or by proxy may adjourn the meeting from time to time without notice other than an announcement of such at the meeting. In the absence of a quorum, the officer presiding thereat pursuant to Bye-law 29 shall have power to adjourn the meeting from time to time until a quorum shall be present. Notice of any adjourned meeting other than an announcement of such at the meeting shall not be required to be given, except as provided in Bye-law 28.4 below and except where expressly required by Applicable Law.
|
28.3
|
At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting originally called, but only those Shareholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof unless a new record date is fixed by the Board.
|
28.4
|
If an adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given in the manner specified in these Bye-laws to each Shareholder of record entitled to vote at the meeting.
|
29.
|
Chairman to Preside at General Meetings
|
30.
|
Voting on Resolutions
|
30.1
|
Other than as set forth in these Bye-laws, any question proposed for the consideration of the Shareholders at any general meeting shall be decided by the affirmative votes of a majority of the Total Voting Power cast in accordance with these Bye-laws (which, for the avoidance of doubt will take into account the application of Bye-law 4.3) and in the case of an equality of votes the Resolution shall fail.
|
30.2
|
At any general meeting a Resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to these Bye-laws, every Shareholder present in person and every person holding a valid proxy at such meeting shall be entitled to such number of votes attaching to the Class A Common Shares held by such Shareholder (which, for the avoidance of doubt will take into account the application of Bye-law 4.3) and shall cast such vote by raising his hand.
|
30.3
|
In the event that a Shareholder participates in a general meeting by telephone, electronic or other communication facilities or means, the chairman of the meeting shall direct the manner in which such Shareholder may cast his vote on a show of hands.
|
30.4
|
At any general meeting, if an amendment is proposed to any Resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.
|
30.5
|
At any general meeting, a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact.
|
31.
|
[Reserved]
|
32.
|
Power to Demand a Vote on a Poll
|
32.1
|
Notwithstanding the foregoing, a poll may be demanded by any of the following persons:
|
(a)
|
the chairman of such meeting; or
|
(b)
|
any Shareholder or Shareholders or Group present in person or represented by proxy and holding between them not less than 10% of the Total Voting Power; or
|
(c)
|
any Shareholder or Shareholders present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than 10% of the total amount paid up on all such shares conferring such right.
|
32.2
|
Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares (which, for the avoidance of doubt will take into account the application of Bye-law 4.3), every person present at such meeting shall have the number of votes corresponding to each Class A Common Share of which such person is the holder or for which such person holds a proxy, and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Shareholders are present by telephone, electronic or other communication facilities or means, in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.
|
32.3
|
A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time and in such manner during such meeting as the chairman (or acting chairman) of the meeting may direct. Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll.
|
32.4
|
Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone, electronic or other communication facilities or means shall cast his vote in such manner as the chairman of the meeting shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less than two Shareholders or proxy holders appointed by the chairman of the meeting for the purpose and the result of the poll shall be declared by the chairman of the meeting.
|
33.
|
Voting by Joint Holders of Shares
|
34.
|
Instrument of Proxy
|
34.1
|
Any Shareholder entitled to vote at any general meeting may vote either in person or by his or her attorney-in-fact or proxy.
|
34.2
|
An instrument appointing a proxy shall be in writing in substantially the following form or such other form as the Board or the chairman of the meeting shall accept:
|
34.3
|
The instrument appointing a proxy must be received by the Company at the Registered Office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting at which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid.
|
34.4
|
A Shareholder who is the holder of two or more shares may appoint more than one proxy to represent such Shareholder and vote on such Shareholder’s behalf in respect of different shares.
|
34.5
|
The decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final.
|
35.
|
Representation of Corporate Shareholder
|
36.
|
Adjournment of General Meeting
|
37.
|
Written Resolutions of Shareholders
|
37.1
|
Subject to these Bye-laws, anything which may be done by resolution of the Company in a general meeting or by resolution of a meeting of any class of the Shareholders may, without a meeting, be done by written resolution in accordance with this Bye-law.
|
37.2
|
Notice of a written resolution shall be given, and a copy of the resolution shall be circulated to all Shareholders who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of a notice by, any Shareholder does not invalidate the passing of a resolution.
|
37.3
|
Any Shareholder seeking to have the Shareholders authorize or take action by written consent shall, by written notice to the Secretary of the Company signed by Shareholders holding not less than (25%) of the Total Voting Power (which, for the avoidance of doubt will take into account the application of Bye-law 4.3), who shall not revoke such request, and complying with the procedures set forth in this Bye-law 37.3 (such Shareholder(s), together with any beneficial owner(s) on whose behalf such requisition is made and the Affiliates of each of the foregoing, the “Record Date Requesting Shareholder(s)”), request the Board to fix a record date for such consent (each such notice, a “Record Date Request”) in proper form. Without qualification, to be in proper form, such Record Date Request shall include the information and be subject to the requirements set forth in, Bye-law 23.4 as to each Record Date Requesting Shareholder, and shall describe in reasonable detail each item
|
37.4
|
The Board shall, within twenty (20) days after the date on which a Record Date Request is received, or five (5) days after the delivery of any information requested by the Company to determine the validity of any such request or whether the action to which such Record Date Request relates is an action that may be taken by written resolution of Shareholders in lieu of a meeting, determine the validity of the Record Date Request and whether the Request relates to an action that may be authorized or taken by consent pursuant to Bye-law 37. If the Board determines that such request is valid, the Board shall adopt a resolution fixing the record date for such purpose. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board.
|
37.5
|
Every written resolution shall bear the date of the signature of each Shareholder who signs the written resolution and no written resolution shall be effective to take the action referred to therein unless, within sixty (60) days after the earliest date such written resolution is received, a valid written resolution or valid written resolutions signed by a sufficient number of Shareholders to take such action are delivered to the Company in the manner prescribed by this Bye-law and Applicable Law and not revoked. Any Shareholder giving a written resolution, or the Shareholder’s proxy holder, may revoke the consent in any manner permitted by Applicable Law. Delivery must be made by hand or by mail, return receipt requested. In addition, the Company shall be entitled to engage independent inspectors of elections to perform a ministerial review of the validity of the written resolutions. No action by written resolution shall be effective until such inspectors have completed their review and certified to the Company that the consents delivered to the Company in accordance with this Bye-law 37 represent at least the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with this Bye-law 37.
|
37.6
|
No action may be authorized or taken by the Shareholders by written resolution except in accordance with this Bye-law 37. The Secretary shall not accept, and shall consider ineffective, any Record Date Request (and any consent delivered to the Company in connection therewith) that (i) does not comply with this Bye-law 37, (ii) includes an action proposed to be taken by written resolution of Shareholders in lieu of a meeting that did not appear on the Record Date Request, (iii) relates to an action proposed to be taken by written resolution of Shareholders in lieu of a meeting that is not a proper subject for Shareholder action under Applicable Law or (iv) otherwise does not comply with Applicable Law. If the Board shall determine that any Request was not properly made in accordance with, or relates to an action that may not be effected by consent pursuant to, Bye-law 37, or any Shareholders seeking to authorize or take such action do not otherwise comply with this Bye-law 37, then the Board shall not be required to fix a record date and any such purported action by consent shall be null and void to the fullest extent permitted by Applicable Law. Nothing contained in this Bye-law 37 shall be construed to imply that the Board or any Shareholder shall not be entitled to contest the validity of any consent or related revocations, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation). Notwithstanding anything to the contrary set forth in this Bye-law 37, (x) none of the foregoing provisions of this Bye-law 37 shall apply to any solicitation of action by written resolution by or at the direction of the Board and (y) the Board shall be entitled to solicit action by consent in accordance with Applicable Law.
|
37.7
|
A written resolution is passed when it is signed by, or in the case of a Shareholder that is a corporation, on behalf of, the Shareholders who at the date that the notice is given represent more than 55% of the Total Voting Power.
|
37.8
|
A resolution in writing may be signed in any number of counterparts.
|
37.9
|
A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Shareholders, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Shareholders voting in favour of a resolution shall be construed accordingly.
|
37.10
|
A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Act.
|
37.11
|
This Bye-law shall not apply to:
|
(a)
|
a resolution passed to remove an Auditor from office before the expiration of his term of office; or
|
(b)
|
a resolution passed for the purpose of removing a Director before the expiration of his term of office.
|
37.12
|
Subject to Bye-law 37.3, for the purposes of this Bye-law, the effective date of the resolution is the date when the resolution is signed by, or in the case of a Shareholder that is a corporation whether or not a company within the meaning of the Act,
|
38.
|
Directors Attendance at General Meetings
|
39.
|
Election of Directors
|
39.1
|
Each Director shall be elected or appointed in the first place at the statutory meeting of the Company and, except in the case of a casual vacancy or removal, shall hold office until the annual general meeting at which such Director’s term is due to expire.
|
39.2
|
Any vote of Shareholders taken in respect of Director elections shall be in compliance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, to the same extent as if the shares of the Company were registered under the Exchange Act.
|
39.3
|
For the avoidance of doubt, any Shareholder participating in the election of Directors shall be subject to the limitations on voting rights described in Bye-law 4.3.
|
40.
|
Nomination of Directors for Election
|
40.1
|
Nominations of persons for election as Directors may be made at an annual general meeting only by (a) the Board or (b) by any Shareholder of the Company who (1) is a Minimum Shareholder at the time of giving of the notice provided for in this Bye-law 40 and at the time of the annual general meeting, (2) is entitled to vote for the election of Directors at such annual general meeting and (3) complies with the notice procedures set forth in this Bye-law 40. Except where special representation is required by the default provisions of a class or classes of preferred shares or as contemplated by the Shareholders Agreement, clause (b) of this Bye-law 40.1 shall be the exclusive means for a Shareholder to make nominations of persons for election to the Board at an annual general meeting.
|
40.2
|
Any Shareholder entitled to vote for the election of Directors may nominate a person or persons for election as Directors only if written notice of such Shareholder’s intent to make such nomination is given in accordance with the procedures set forth in this Bye-law 40, either by personal delivery or express or registered mail (postage prepaid), to the Secretary at the Registered Office not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Shareholder’s notice must be received by the Secretary at the Registered Office not later than the later of (x) the close of business 90 days prior to the date of such annual general meeting and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Shareholder’s notice as described herein. Shareholders may nominate a person or persons (as the case may be) for election to the Board only as provided in this Bye-law and only for such class(es) or slate(s) as are specified in the Company’s notice of meeting as being up for election at such annual general meeting.
|
40.3
|
Each such notice of a Shareholder’s intent to make a nomination of a Director shall set forth:
|
(a)
|
as to the Shareholder giving notice and any beneficial owner on whose behalf the nomination is made, (1) the name and address of such Shareholder (as it appears in the Register of Shareholders) and any such beneficial owner on whose behalf the nomination is made, (2) the class and number of Equity Securities which are, directly or indirectly, owned beneficially and of record by such Shareholder and any such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as of the date of such notice, (3) a description of any Covered Arrangement to which such Shareholder or beneficial owner, or their respective Affiliates, directly or indirectly, is a party as of the date of such notice, (4) any other information relating to such Shareholder and any such beneficial owner that would be required to be disclosed in a proxy statement in connection with a solicitation of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder and (5) a representation that the Shareholder is a holder of record of shares of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in such Shareholder’s notice;
|
(b)
|
a description of all arrangements or understandings between the Shareholder or any beneficial owner, or their respective Affiliates, and each nominee or any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Shareholder;
|
(c)
|
a representation whether the Shareholder or the beneficial owner is or intends to be part of a Group which intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Class A Common Shares (or other Equity Securities) required to elect the Director or Directors nominated and/or (ii) otherwise to solicit proxies from Shareholders in support of such nomination or nominations;
|
(d)
|
as to each person whom the Shareholder proposes to nominate for election or reelection as a Director, (1) all information relating to such person as would have been required to be included in a proxy statement filed in connection with a solicitation of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (2) a description of any Covered Arrangement to which such nominee or any of his or her Affiliates is a party as of the date of such notice, (3) the written consent of each nominee to being named in the proxy statement as a nominee and to serving as a Director if so elected and (4) whether, if elected, the nominee intends to tender any advance resignation notice(s) requested by the Board in connection with subsequent elections, such advance resignation to be contingent upon the nominee’s failure to receive a majority vote and acceptance of such resignation by the Board; and
|
(e)
|
an undertaking by the Shareholder of record and each beneficial owner, if any, to (i) notify the Company in writing of the information set forth in clauses (a)(2), (a)(3), (b) and (d) above as of the record date for the meeting promptly (and, in any event, within five (5) Business Days) following the later of the record date or the date notice of the record date is first disclosed by public announcement and (ii) update such information thereafter within two (2) Business Days of any change in such information and, in any event, as of close of business on the day preceding the meeting date.
|
40.4
|
Except where as otherwise required by the default provisions of a class or classes of preferred shares or as contemplated by the Shareholders Agreement, no person shall be eligible for election as a Director unless nominated in accordance with the procedures set forth in these Bye-laws. Except as otherwise provided by Applicable Law or these Bye-laws, the presiding officer of any meeting of Shareholders to elect Directors or the Board may, if the facts warrant, determine that a nomination was not made in compliance with the foregoing procedure or if the Shareholder solicits proxies in support of such Shareholder’s nominee(s) without such Shareholder having made the representation required by clause (c) of Bye-law 40.3; and if the presiding officer or the Board should so determine, it shall be so declared to the meeting, and the defective nomination shall be disregarded. Notwithstanding anything in these Bye-laws to the contrary, unless otherwise required by Applicable Law or the rules of any stock exchange or quotation system on which shares of the Company may be then listed or quoted, if a Shareholder intending to make a nomination at a general meeting in accordance with this Bye-law 40 does not (i) timely provide the notifications contemplated by clause (e) of Bye-law 40.3, or (ii) timely appear in person or by proxy at the annual general meeting to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Company or any other person or entity.
|
40.5
|
Notwithstanding the foregoing provisions of this Bye-law 40, any Shareholder intending to make a nomination at an annual general meeting in accordance with this Bye-law 40, and each related beneficial owner, if any, shall also comply with all requirements of the Exchange Act and the rules and regulations thereunder applicable to the same extent as if the shares of the Company were registered under the Exchange Act with respect to the matters set forth in these Bye-laws; provided, however, that any references in these Bye-laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations made or intended to be made in accordance with clause (b) of Bye-law 40.1.
|
40.6
|
Nothing in this Bye-law 40 shall be deemed to affect (i) any rights of the holders of any series of preferred shares, or any other series or class of shares authorised to be issued by the Company, to elect directors pursuant to the terms thereof or (ii) any rights of the members of the Apollo Group that are party to the Shareholders Agreement to nominate Directors to the Board pursuant to the Shareholders Agreement.
|
40.7
|
To be eligible to be a nominee for election or reelection as a Director pursuant to Bye-law 40.1(b), a person must deliver (not later than the deadline prescribed for delivery of notice) to the Secretary at the Registered Office a written questionnaire prepared by the Company with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person: (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a Director, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Company or (B) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a Director, with such person’s duties under Applicable Law; (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or
|
40.8
|
At each annual general meeting of the Shareholders for the election of Directors at which a quorum is present, each Director or slate of Directors shall be elected by the vote of the majority of the votes cast with respect to the Director or slate, excluding abstentions. For purposes of this Bye-law 40.8, a majority of the votes cast shall mean that the number of shares voted “for” a Director or slate of Directors must exceed the number of votes “against” that Director or slate of Directors.
|
40.9
|
At the request of the Board, any person nominated for election as a director of the Company shall furnish to the Secretary the information that is required to be set forth in a Shareholders’ notice of nomination pursuant to Bye-law 40.
|
40.10
|
Other than with respect to nominations made in accordance with the default provisions of a class or classes of preferred shares or under the Shareholders Agreement, any Shareholder proposing to nominate a person or persons for election shall be responsible for, and bear the costs associated with, soliciting votes from any other voting Shareholder and distributing materials to such Shareholders prior to the annual general meeting in accordance with these Bye-laws and applicable SEC rules. A Shareholder shall include any person or persons such Shareholder intends to nominate for election in its own proxy statement and proxy card.
|
40.11
|
Unless prohibited by Applicable Law, the Company shall promptly (but in any event within five (5) Business Days of receipt of written request from any Shareholder proposing to nominate a person or persons for election) provide to such proposing Shareholder the names and addresses of all persons and entities who are record holders of the Company’s shares (the “Other Holders”), provided, that if any Other Holder has requested that its identity or address be kept confidential, then the Company shall (at the expense of such Shareholder) promptly (but in any event within five (5) Business Days of receipt of a written request) forward to such Other Holder any materials provided by such Shareholder in relation to the person or persons such Shareholder intends to nominate for election and a notice requesting that such Other Holder contact such Shareholder.
|
41.
|
[Reserved]
|
42.
|
Number of Directors
|
43.
|
Term of Office of Directors
|
44.
|
Removal of Directors
|
44.1
|
Subject to any provision to the contrary in these Bye-laws, a Director may only be removed for cause and not otherwise. The removal of a Director for cause shall be effected either (i) by the Board by affirmative vote of a majority of the Directors at any duly called meeting of the Board or (ii) by the Shareholders holding a majority of the Total Voting Power at any general meeting called and held in accordance with these Bye-laws. For purposes of this Bye-law 44.1, “cause” shall mean
|
44.2
|
If a Director is removed from the Board under this Bye-law 44, the Board may fill the vacancy. Persons appointed by the Board to fill a vacancy shall be approved by an affirmative vote of a majority of the Board and shall be subject to election at the immediately succeeding annual general meeting.
|
45.
|
Vacancy in the Office of Director
|
45.1
|
The office of Director shall be vacated immediately if the Director:
|
(a)
|
is prohibited from being a Director by law;
|
(b)
|
is or becomes bankrupt or insolvent;
|
(c)
|
is or becomes of unsound mind or a patient for any purpose of any statute or Applicable Law relating to mental health and the Board resolves that his office is vacated, or dies;
|
(d)
|
by virtue of holding the office of Director causes the Company to be taxed in an adverse manner; or
|
(e)
|
resigns his office by notice to the Secretary.
|
45.2
|
If there is a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Director, or on account of an increase in the number of members of the Board or a failure to elect a Director at an annual general meeting, subject to the rights of the members of the Apollo Group that are parties to the Shareholders Agreement to nominate Directors to the Board, the Board may appoint any person as a Director on an interim basis until the next annual general meeting, provided, that such person has been approved to serve as a Director by the Nominating and Governance Committee. The Board vacancy shall be submitted to a vote at the next succeeding annual general meeting irrespective of class.
|
46.
|
Remuneration of Directors
|
47.
|
Defect in Appointment
|
48.
|
Directors to Manage Business
|
49.
|
Powers of the Board of Directors
|
(a)
|
appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties;
|
(b)
|
exercise all the powers of the Company to borrow money and to mortgage or charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party;
|
(c)
|
designate a Chairman of the Board (the “Chairman”) and a Vice Chairman of the Board (the “Vice Chairman”);
|
(d)
|
appoint one or more Directors to the office of managing director or chief executive officer of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company;
|
(e)
|
appoint a person to act as manager of the Company’s day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business;
|
(f)
|
by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney;
|
(g)
|
procure that the Company pays all expenses incurred in promoting and incorporating the Company;
|
(h)
|
delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board which may consist partly or entirely of non-Directors, provided, that every such committee shall conform to such directions as the Board shall impose on them; and provided, further, that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board;
|
(i)
|
delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit;
|
(j)
|
present any petition and make any application in connection with the liquidation or reorganisation of the Company;
|
(k)
|
in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and
|
(l)
|
authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company.
|
50.
|
Register of Directors and Officers
|
51.
|
Appointment of Officers
|
52.
|
Appointment of Secretary
|
53.
|
Duties of Officers
|
54.
|
Remuneration of Officers
|
55.
|
Conflicts of Interest
|
55.1
|
Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or company shall be entitled to remuneration as if such Director were not a Director. Nothing herein contained shall authorise a Director or Director’s firm, partner or company to act as Auditor to the Company.
|
55.2
|
A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest as required by the Act.
|
55.3
|
Following a declaration being made pursuant to this Bye-law, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum for such meeting and, to the fullest extent permitted by Applicable Law, the interested Director shall not be liable to account to the Company for any profit realized thereby. To the fullest extent permitted by Applicable Law, in the event that one or more interested Directors are disqualified or elect to be recused from voting on a matter, or one or more Directors are later found to have an interest or conflict that should have been declared, the matter shall be approved or stand approved if it is or was approved by a majority of the votes cast by the Directors that do not have any interest or conflict in the matter, even if less than a quorum.
|
55.4
|
Subject to the Act and any further disclosure required thereby, a general notice to the Directors by a Director or officer declaring that he is a director or officer or has an interest in any business entity and is to be regarded as interested in any transaction or arrangement made with that business entity shall be sufficient declaration of interest in relation to any transaction or arrangement so made.
|
55.5
|
This Bye-law 55 shall be subject to any U.S. securities laws and the rules of any exchange or quotation system on which the Company’s shares are then listed.
|
56.
|
Indemnification and Exculpation
|
56.1
|
To the fullest extent permitted by Applicable Law, but subject to the limitations expressly provided in this Bye-law 56, (i) the past, present and future (x) Directors, Resident Representative, Secretary and other Officers (such term to include any person appointed to any committee by the Board), (y) any consultants participating in any Company equity incentive plan, and (z) liquidators or trustees (if any) for the time being acting in relation to any of the affairs of the Company or any Subsidiary thereof, (ii) any Person who is or was an employee or agent of the Company or a director, officer, employee or agent of any of the Company’s Subsidiaries and who, while an employee or agent of the Company or a director, officer, employee or agent of any of the Company’s Subsidiaries, is or was also an officer, director, employee, managing director, general or limited partner, manager, member, shareholder, agent or other Affiliate of any member of the Apollo Group or of any Affiliate of any member of the Apollo Group (other than the Company and its Subsidiaries) and (iii) any other Person who, while a Director or Officer, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, enterprise, nonprofit entity or other entity, including service with respect to employee benefit plans (each, a “Covered Person”) shall be indemnified and secured harmless by the Company from and against all Liabilities and Expenses arising from any and all threatened, pending or completed Proceedings, in which any Covered Person may be involved, or is threatened to be involved, as a party or otherwise, by reason of (A) in the case of any Covered Person described in the preceding clauses (i) and (iii), its status as a Covered Person or (B) in the case of any Covered Person described in the preceding clause (ii), the fact that such Covered Person is or was an employee or agent of the Company, or is or was a director, officer, employee or agent of any of the Company’s Subsidiaries, acting in relation to the affairs of the Company or any such Subsidiary, whether arising from acts or omissions to act occurring before or after the date of the adoption of these Bye-laws; provided, however, that a Covered Person shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Covered Person is seeking indemnification pursuant to this Bye-law 56, the Covered Person acted fraudulently and/or dishonestly in relation to the Company; provided further, subject in all respects to Bye-law 56.12, no Covered Person shall be entitled to indemnification from the Company (nor any amounts provided for under Bye-law 56.2) for any acts or omissions of such Covered Person in such Covered Person’s role as a director, officer, consultant, representative or agent of ISG. Notwithstanding the preceding sentence, except as otherwise described in Bye-law 56.10, the Company shall be required to indemnify a Person described in such sentence in connection with any Proceeding (or part thereof) commenced by such Person only if the commencement of such Proceeding (or part thereof) by such Person was authorised by the Board. To the fullest extent permitted by Applicable Law, each Shareholder agrees to waive any claim or right of action such Shareholder might have, whether individually or by or in right of the Company, against any Covered Person on account of any action taken by such Covered Person, or the failure of such Covered Person to take any action in the performance of such Covered Person’s duties with or for the Company or any subsidiary thereof; provided, that such waiver shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company or its Subsidiaries which may attach to such Covered Person.
|
56.2
|
To the fullest extent permitted by Applicable Law, Expenses incurred by a Covered Person in appearing at, participating in or defending any indemnifiable Proceeding pursuant to this Bye-law 56 shall, from time to time, be advanced by the Company prior to a final and non-appealable disposition of the Proceeding in which it is determined that the Covered Person is not entitled to be indemnified upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it ultimately shall be determined that the Covered Person is not entitled to be indemnified pursuant to this Bye-law 56. Notwithstanding the immediately preceding sentence, except as otherwise provided in Bye-law 56.10, the Company shall be required to indemnify a Covered Person pursuant to the immediately preceding sentence in connection with any Proceeding (or part thereof) commenced by such Person only if the commencement of such Proceeding (or part thereof) by such Person was authorised by the Board.
|
56.3
|
The indemnification and advancement of Expenses provided by this Bye-law 56 shall be in addition to any other rights to which a Covered Person may be entitled under these Bye-laws or any agreement between the Company and such Covered Person, pursuant to a vote of a majority of disinterested Directors with respect to such matter, as a matter of law, in equity or otherwise, both as to actions in the Covered Person’s capacity as a Covered Person and as to actions in any other capacity, and shall continue as to a Covered Person who has ceased to serve in such capacity.
|
56.4
|
The Company may purchase and maintain insurance on behalf of a Covered Person, and such other Persons as the Board shall determine, against any Liability that may be asserted against, or Expense that may be incurred by, such Person in connection with the Company’s activities or any such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such Liability or Expense under the provisions of these Bye-laws or Applicable Law.
|
56.5
|
For purposes of this Bye-law 56 (i) the Company shall be deemed to have requested a Covered Person to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Company also imposes duties on, or otherwise involves services by, such Covered Person to the plan or participants or beneficiaries of the plan and (ii) excise taxes assessed on a Covered Person with respect to an employee benefit plan pursuant to Applicable Law shall constitute “fines” within the meaning of “Liabilities”.
|
56.6
|
A Covered Person shall not be denied indemnification in whole or in part under this Bye-law 56 because the Covered Person had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by these Bye-laws.
|
56.7
|
Except with respect to any Shareholder Affiliate, which shall be a third party beneficiary of the rights set forth in Bye-law 56.12, the provisions of this Bye-law 56 are for the benefit of the Covered Persons and their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons.
|
56.8
|
Each Covered Person shall, in the performance of his, her or its duties, be fully protected in relying in good faith upon the records of the Company and on such information, opinions, reports or statements presented to the Company by any of the Officers, Directors or employees of the Company, or any of the officers, directors or employees of the Company’s Subsidiaries, or committees of the Board, or by any other Person (including legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by or on behalf of it) as to matters such Covered Person reasonably believes are within such other Person’s professional or expert competence.
|
56.9
|
No amendment, modification or repeal of this Bye-law 56 or any provision hereof or, to the fullest extent permitted by Applicable Law, any modification of Applicable Law, shall in any manner terminate, reduce or impair the right of any past, present or future Covered Person to be indemnified or to have such Covered Person’s Expenses advanced by the Company, nor the obligations of the Company to indemnify or advance Expenses to any such Covered Person under and in accordance with the provisions of this Bye-law 56 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or-in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
|
56.10
|
If a claim for indemnification (following the final disposition of the Proceeding for which indemnification is being sought) or advancement of Expenses under this Bye-law 56 is not paid in full within thirty (30) days after a written claim therefor by any Covered Person has been received by the Company, such Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the Expenses of prosecuting such claim, including reasonable attorneys’ fees.
|
56.11
|
This Bye-law 56 shall not limit the right of the Company, to the extent and in the manner permitted by Applicable Law, to indemnify and to advance Expenses to, and purchase and maintain insurance on behalf of Persons other than Covered Persons.
|
56.12
|
The Company hereby acknowledges that the indemnitees under this Bye-law 56 (the “Indemnified Persons”) may have certain rights to indemnification, advancement of Expenses and/or insurance provided by shareholders, members of the Apollo Group, or other Affiliates of the Company or Affiliates of members of the Apollo Group (“Shareholder Affiliates”) separate from the indemnification and advancement of Expenses provided by the Company under these Bye-laws. The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the Indemnified Persons under these Bye-laws are primary and any obligation of any Shareholder Affiliate to advance Expenses or to provide indemnification for the same Expenses or Liabilities incurred by the Indemnified Persons are secondary), (ii) that the Company shall be required to advance the full amount of Expenses incurred by the Indemnified Persons and shall be liable for the full amount of all Expenses and Liabilities paid in settlement to the extent legally permitted and as required by Bye-law 56, without regard to any rights the Indemnified Persons may have against any Shareholder Affiliate, and (iii) that the Company irrevocably waives, relinquishes and releases the Shareholder Affiliates from any and all claims against the Shareholder Affiliates for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by any Shareholder Affiliate on behalf of an Indemnified Person with respect to any claim for which such Indemnified Person has sought indemnification from the Company pursuant to Bye-law 56 shall affect the
|
56.13
|
No Covered Person shall be personally liable either to the Company or to any of its Shareholders for monetary damages for breach of fiduciary duty as a Covered Person, except to the extent such exemption from liability or limitation thereof is not permitted under Applicable Law as the same exists or may hereafter be amended. Any amendment, modification or repeal of this Bye-law inconsistent with the foregoing sentence shall not adversely affect any right or protection of a Covered Person in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
|
56.14
|
Any Person purchasing or otherwise acquiring any interest in any shares of the Company shall be deemed to have notice of and to have consented to the provisions of this Bye-law 56.
|
56.15
|
This Bye-law 56 may not be rescinded, altered or amended (a) unless in accordance with the Act and (b) until the same has been approved by the Board and at least 50% of the Total Voting Power (which, for the avoidance of doubt will take into account the application of Bye-law 4.3).
|
57.
|
Business Opportunities
|
57.1
|
To the fullest extent permitted by Applicable Law, the Company, on behalf of itself and its Subsidiaries, other than its Subsidiaries that are insurance companies which are regulated by a governmental entity (“Insurance Subsidiaries”), waives and renounces any right, interest or expectancy of the Company and/or its Subsidiaries, other than its Insurance Subsidiaries, in, or in being offered an opportunity to participate in, business opportunities of any kind, nature or description that are from time to time presented to (x) any member of the Apollo Group or an Affiliate of any member of the Apollo Group (other than the Company and its Subsidiaries), (y) any of the Directors or any of their respective Affiliates (other than the Company and its Subsidiaries), or (z) any Officer, employee or agent of the Company, or any director, officer, employee or agent of any of the Company’s Subsidiaries, who is also, and is presented such business opportunity in his or her capacity as, an officer, director, employee, managing director, general or limited partner, manager, member, shareholder, agent or other Affiliate of any member of the Apollo Group or of any Affiliate of any member of the Apollo Group (other than the Company and its Subsidiaries), in the case of each of clauses (x), (y) and (z), excluding the Chief Executive Officer of the Company and the other executive officers and employees of the Company and its Subsidiaries (the Persons described in clauses (x), (y) and (z), “Specified Parties” and each, a “Specified Party”), or of which any Specified Parties have or gain knowledge, whether or not the opportunity is competitive with the business of the Company or its Subsidiaries or in the same or similar lines of business as the Company or its Subsidiaries or one that the Company or its Subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each Specified Party shall have no duty (statutory, fiduciary, contractual or otherwise) to communicate or offer such business opportunity to the Company and, to the fullest extent permitted by Applicable Law, shall not be liable to the Company or any of its Subsidiaries, other than its Insurance Subsidiaries, for breach of any statutory, fiduciary, contractual or other duty, as a Director, Officer, employee or agent of the Company, or a director, officer, employee or agent of any of the Company’s Subsidiaries, as the case may be, or otherwise, by reason of the fact that such Specified Party pursues or acquires such business opportunity, directs such business opportunity to another Person or fails to present or communicate such business opportunity, or information regarding such business opportunity, to the Company or its Subsidiaries. Notwithstanding the foregoing, the Company and its Subsidiaries do not renounce any right, interest or expectancy in any business opportunity offered to a Specified Party who is a Director or Officer if such business opportunity is expressly offered for the Company or its Subsidiaries to such person solely in his or her capacity as a Director or Officer (a “Company Opportunity”); provided, however, that all of the protections of this Bye-law 57 shall otherwise apply to the Specified Parties with respect to such Company Opportunity, including the ability of the Specified Parties to pursue or acquire such Company Opportunity, directly or indirectly, or to direct such Company Opportunity to another person, if and to the extent that the Company or the applicable Subsidiary of the Company, as applicable, determines not to pursue such Company Opportunity or if it is subsequently determined by the Board or any committee thereof (or board of directors or other governing body of such Subsidiary or any committee thereof), or by any court of competent jurisdiction, that the business opportunity was not in the line of business of the Company or such Subsidiary, as applicable, was not of material or practical advantage to the Company or such Subsidiary, as applicable, or was one that the Company or such Subsidiary, as applicable, was not financially capable of undertaking. For the avoidance of doubt, notwithstanding anything to the contrary set forth herein or otherwise, to the fullest extent permitted by Applicable Law, the Company, on behalf of itself and its Subsidiaries, other than its Insurance Subsidiaries, hereby waives and renounces any right, interest or expectancy of the Company or its Subsidiaries to participate in or be offered an opportunity to participate in any business or business opportunity of any member of the Apollo Group or its Affiliates (other than the Company and its Subsidiaries), except to the extent such right, interest or expectancy is expressly granted to the Company or any of its Subsidiaries under a binding agreement between or among the Company and/or its Subsidiaries, on the one hand, and any member of the Apollo Group or its Affiliates (other than the Company and its Subsidiaries), on the other hand.
|
57.2
|
No amendment, modification or repeal of this Bye-law 57 or any provision hereof or, to the fullest extent permitted by Applicable Law, any modification of Applicable Law, shall in any manner terminate, reduce or impair the right of any Person under and in accordance with the provisions of this Bye-law 57 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
|
57.3
|
This Bye-law 57 shall not limit any protections or defenses available to, or indemnification or advancement rights of, any Specified Party under any agreement, these Bye-laws, vote of the Board, Applicable Law or otherwise.
|
57.4
|
Any Person purchasing or otherwise acquiring any interest in any shares of the Company shall be deemed to have notice of and to have consented to the provisions of this Bye-law 57.
|
57.5
|
Notwithstanding anything to the contrary herein, under no circumstances shall the provisions of this Bye-law 57 (other than this Bye-law 57.5) apply to (or result in or be deemed to result in a limitation or elimination of) any duty (contractual, fiduciary or otherwise, whether at law or in equity) owed by any Specified Party who is also an Officer, employee or agent of the Company, or any director, officer, employee or agent of any of its Subsidiaries (other than any such Specified Party who is also an officer, director, employee, managing director, general or limited partner, manager, member, shareholder, agent or other Affiliate of any member of the Apollo Group or of any Affiliate of any member of the Apollo Group (other than the Company and its Subsidiaries)), and any business opportunity waived or renounced by any Person pursuant to such other provisions of this Bye-law 57 shall be expressly reserved and maintained (and shall not be waived or renounced) by such Person as to any such Specified Party.
|
57.6
|
This Bye-law 57 may not be rescinded, altered or amended (a) unless in accordance with the Act and (b) until the same has been approved by the Board and at least 50% of the Total Voting Power (which, for the avoidance of doubt will take into account the application of Bye-law 4.3).
|
58.
|
Board Meetings
|
59.
|
Notice of Board Meetings
|
60.
|
Electronic Participation in Meetings
|
61.
|
Quorum at Board Meetings
|
62.
|
Board to Continue in the Event of Vacancy
|
63.
|
Chairman to Preside
|
64.
|
Written Consent
|
65.
|
Validity of Prior Acts of the Board
|
66.
|
Resolution of Conflicts
|
(a)
|
fair and reasonable to the Company and its Subsidiaries, taking into account the totality of the relationships between the parties involved (including other transactions that may be or have been particularly favorable or advantageous to the Company and its Subsidiaries); or
|
(b)
|
entered into on an arm’s-length basis; or
|
(c)
|
approved by a majority of the disinterested Directors; or
|
(d)
|
approved by the holders of a majority of the issued and outstanding Class A Common Shares that are not held by members of the Apollo Group; or
|
(e)
|
approved by the Conflicts Committee in accordance with its charter and guidelines as they may be amended from time to time.
|
67.
|
Conflicts Committee
|
67.1
|
The Board shall constitute a committee comprised solely of Directors who are not general partners, directors, managers, officers or employees of the Apollo Group (the “Conflicts Committee”).
|
67.2
|
The Conflicts Committee shall consist of up to five (5) individuals designated by the Board. The Conflicts Committee shall have a chairman, who shall be designated by the Board or, if the Board so delegates, by the Conflicts Committee. The vote necessary to approve any action at a meeting of the Conflicts Committee shall be a majority of the entire Conflicts Committee.
|
67.3
|
The Conflicts Committee may meet in person, by telephone or video conference call or in any other manner in which the Board is permitted to meet under Applicable Law and may also take action by written consent of the number and identity of Conflicts Committee members who have not less than the minimum number of votes that would be necessary to take such action at a meeting at which all Conflicts Committee members entitled to vote were present and voted.
|
67.4
|
The Conflicts Committee, upon the affirmative vote of a majority of the entire Committee, shall have the authority to engage consultants to assist in the evaluation of conflicts matters. It shall have the sole authority to retain and terminate any such consultants, including sole authority to approve the consultants’ fees and other retention terms; provided, that fees and expenses incurred in connection with the engagement of any such consultant are reasonable.
|
68.
|
Minutes
|
(a)
|
of all elections and appointments of Officers;
|
(b)
|
of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and
|
(c)
|
of all resolutions and proceedings of general meetings of the Shareholders, meetings of the Board, meetings of managers and meetings of committees appointed by the Board.
|
69.
|
Place Where Corporate Records Kept
|
70.
|
Form and Use of Seal
|
70.1
|
The Company may adopt a seal in such form as the Board may determine. The Board may adopt one or more duplicate seals for use in or outside Bermuda.
|
70.2
|
A seal may, but need not, be affixed to any deed, instrument, share certificate or document, and if the seal is to be affixed thereto, it shall be attested by the signature of (i) any Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose.
|
70.3
|
A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents.
|
71.
|
Books of Account
|
71.1
|
The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:
|
(a)
|
all amounts of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;
|
(b)
|
all sales and purchases of goods by the Company; and
|
(c)
|
all assets and liabilities of the Company.
|
71.2
|
Such records of account shall be kept at the principal place of business of the Company, or subject to the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.
|
72.
|
Financial Year End
|
73.
|
Annual Audit
|
74.
|
Appointment of Auditor
|
74.1
|
Subject to the Act, at the annual general meeting or at a subsequent special general meeting in each year, an independent representative of the Shareholders shall be appointed by them as Auditor of the accounts of the Company.
|
74.2
|
The Auditor may be a Shareholder but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.
|
75.
|
Remuneration of Auditor
|
76.
|
Duties of Auditor
|
76.1
|
The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards.
|
76.2
|
The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Act. If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used.
|
77.
|
Access to Records
|
78.
|
Financial Statements
|
79.
|
Distribution of Auditor’s Report
|
80.
|
Vacancy in the Office of Auditor
|
81.
|
Winding-Up
|
82.
|
Changes to Bye-laws
|
83.
|
Changes to the Memorandum of Association
|
84.
|
Exclusive Jurisdiction
|
85.
|
Discontinuance
|
86.
|
Voting of Subsidiary Shares
|
86.1
|
Notwithstanding any other provision of these Bye-laws to the contrary (but subject to Bye-law 86.2 and Bye-law 86.3), if the Company, in its capacity as a shareholder of any Subsidiary of the Company, has the right to vote at a general meeting or special meeting of such Subsidiary (whether in person or by its attorney-in-fact or proxy) (or by written resolution in lieu of a general meeting or special meeting), and the subject matter of the vote is (a) the appointment, removal or remuneration of directors of a non-U.S. Subsidiary of the Company or (b) any other subject matter with respect to a non-U.S. Subsidiary that legally requires the approval of the shareholders of such non-U.S. Subsidiary, the Board shall refer the subject matter of the vote to the Shareholders and seek authority from the Shareholders entitled to vote for the Board for the Company’s corporate representative or proxy to vote with respect to the resolution proposed by such Subsidiary. The Board shall cause the Company’s corporate representative or proxy to vote the Company’s shares in such Subsidiary pro rata to the votes received at the general meeting of the Company, with votes for or against the directing resolution being taken, respectively, as an instruction for the Company’s corporate representative or proxy to vote the appropriate proportion of its share for and the appropriate proportion of its shares against the resolution proposed by such Subsidiary. For the avoidance of doubt, for purposes of this Bye-law 86 and Bye-law 87, the term “non-U.S. Subsidiary” shall mean a Subsidiary that is treated as a non-U.S. person for U.S. federal income tax purposes. The Board shall have authority to resolve any ambiguity in this Bye-law 86 or Bye-law 87. All votes referred to the Company’s Shareholders pursuant to this Bye-law 86.1 shall give effect to and otherwise be subject to the voting power restrictions of Bye-law 4.3.
|
86.2
|
If the Board in its discretion, determines that the application of Bye-law 86.1(b) with respect to a particular vote is not necessary to achieve the purposes of this Bye-law 86, it may waive the application of Bye-law 86.1(b) with respect to such vote.
|
86.3
|
Notwithstanding any provision in these Bye-laws to the contrary, this Bye-law 86 shall only apply if and when applicable pursuant to Bye-law 4.3(a)(ii). Further, from and after the Restriction Termination Date, the provisions of this Bye-law 86 shall be inoperative and of no further force or effect.
|
87.
|
Bye-laws or Articles of Association of Certain Subsidiaries
|
87.1
|
The Board shall require that the Bye-laws or Articles of Association or similar organizational documents of each non-U.S. Subsidiary of the Company shall contain provisions substantially similar to Bye-law 86.1, Bye-law 86.3 and Bye-law 87. The Company shall enter into agreements, as and when determined by the Board, with each such non-U.S. Subsidiary, only if and to the extent reasonably necessary and permitted under Applicable Law, to effectuate or implement this Bye-law.
|
87.2
|
From and after the Restriction Termination Date, the provisions of this Bye-law 87 shall be inoperative and of no further force or effect.
|
88.
|
Termination of IMAs
|
88.1
|
Except as set forth in Bye-law 88.2, the Company shall not, and shall cause each Subsidiary of the Company not to, elect to terminate the IMA or any other investment advisory or investment management agreement by and between the Company
|
88.2
|
Notwithstanding anything to the contrary in Bye-law 88.1, the Company and/or the applicable Subsidiary of the Company may terminate the IMA or any New IMA upon the occurrence of an event described in clause (i) or (ii) of the definition of AHL Cause with respect to the IMA or such New IMA, as applicable; provided, that any termination of the IMA or any New IMA by the Company or Subsidiary of the Company, as applicable, for such AHL Cause shall require the approval of at least two-thirds (2/3) of the Independent Directors and the delivery of written notice to ISG or such member of the Apollo Group that is a party to such New IMA, as applicable, of such termination for such AHL Cause at least thirty (30) days prior to the effective date of such termination; provided, further, that in each case ISG or the member of the Apollo Group that is a party to the applicable IMA or New IMA, as applicable, shall have the right to dispute such determination of the Independent Directors within thirty (30) days after receiving notice from the Company of such determination, in which case the parties to such IMA or New IMA, as applicable, shall submit the question as to whether the conditions of AHL Cause have been met to binding arbitration in accordance with Section 12 of the seventh amended and restated fee agreement dated June 10, 2019 between the Company and ISG, as amended from time to time (the “Fee Agreement”), and such IMA or New IMA, as applicable, shall continue to remain in effect during the period of the arbitration.
|
88.3
|
For the avoidance of doubt, subject in all respects to the other provisions of this Bye-law 88 and the definition of AHL Cause, any termination of the IMA or any New IMA by the Company and/or any Subsidiary of the Company shall require the approval of at least two-thirds (2/3) of the Independent Directors. Notwithstanding anything to the contrary herein, for purposes of this Bye-law 88 and the definition of AHL Cause, (x) no officer or employee of the Company or any of its Subsidiaries shall constitute an Independent Director and (y) no officer or employee of (1) any member of the Apollo Group described in clauses (i) through (iv) of the definition of Apollo Group or (2) Apollo Global Management, Inc. or any of its Subsidiaries (excluding any Subsidiary that constitutes any portfolio company (or investment) of (A) an investment fund or other investment vehicle whose general partner, managing member or similar governing person is owned, directly or indirectly, by Apollo Global Management, Inc. or by one or more of its Subsidiaries or (B) a managed account agreement (or similar arrangement) whereby Apollo Global Management, Inc. or one or more of its Subsidiaries serves as general partner, managing member or in a similar governing position) shall constitute an Independent Director.
|
88.4
|
This Bye-law 88 may not be rescinded, altered or amended (a) unless in accordance with the Act and (b) until the same has been approved by at least two-thirds (2/3) of the Independent Directors and at least 50% of the Total Voting Power (which, for the avoidance of doubt will take into account the application of Bye-law 4.3).
|
1.
|
Athene Life Re Ltd.
|
2.
|
Athene Annuity & Life Assurance Company
|
3.
|
Athene Life Insurance Company of New York
|
4.
|
Athene Annuity & Life Assurance Company of New York
|
5.
|
Structured Annuity Reinsurance Company
|
6.
|
Athene Annuity and Life Company
|
7.
|
Athene Re USA IV, Inc.
|
8.
|
Athene Annuity Re Ltd.
|
9.
|
Athene Life Re International Ltd.
|
10.
|
Athene Co-Invest Reinsurance Affiliate 1A
|
11.
|
Athene Co-Invest Reinsurance Affiliate 1B
|
1.
|
Western United Life Assurance Company
|
2.
|
American Equity Investment Life Insurance Company
|
3.
|
American Pioneer Life Insurance Company
|
4.
|
American Progressive Life and Health Insurance Company of New York
|
5.
|
Nassau Life Insurance Company of Texas (formerly known as Constitution Life Insurance Company)
|
6.
|
Union Bankers Life Insurance Company
|
7.
|
Pennsylvania Life Insurance Company (merged into Nassau Life Insurance Company of Texas)
|
8.
|
The Pyramid Life Insurance Company
|
9.
|
Jefferson National Life Insurance Company
|
10.
|
Athene Annuity & Life Assurance Company
|
11.
|
Continental Assurance Company
|
12.
|
Reassure America Life Insurance Company
|
13.
|
Eagle Life Insurance Company
|
14.
|
Liberty Bankers Life Insurance Company
|
15.
|
Athene Annuity & Life Assurance Company of New York
|
16.
|
Athene Annuity and Life Company
|
17.
|
Structured Annuity Reinsurance Company
|
18.
|
Transamerica Life Insurance Company
|
19.
|
Midland National Life Insurance Company
|
20.
|
North American Company for Life and Health Insurance
|
21.
|
Athene Re USA IV, Inc.
|
22.
|
Sentinel Security Life Insurance Company
|
23.
|
Athene Life Insurance Company of New York
|
24.
|
Royal Neighbors of America
|
25.
|
Fidelity Security Life Insurance Company
|
26.
|
The Lincoln National Life Insurance Company
|
27.
|
Massachusetts Mutual Life Insurance Company
|
28.
|
Brighthouse Life Insurance Company
|
29.
|
Brighthouse Life Insurance Company of NY
|
30.
|
Life Insurance Company of the Southwest
|
31.
|
Voya Insurance and Annuity Company
|
32.
|
Reliastar Life Insurance Company
|
33.
|
Athora Lebensvericherung AG
|
1.
|
Athora Holding Ltd. and its Subsidiaries
|
2.
|
VA Capital Company LLC and its Subsidiaries.
|
Apollo Operating Group entity - Corresponding New AOG Subsidiary
|
Contributed AHL Shares Allocation
|
AMH Holdings (Cayman), L.P.
|
20,250,154
|
Apollo Principal Holdings I, L.P.
|
3,100,369
|
Apollo Principal Holdings II, L.P.
|
55,863
|
Apollo Principal Holdings III, L.P.
|
391,038
|
Apollo Principal Holdings IV, L.P.
|
307,244
|
Apollo Principal Holdings V, L.P.
|
55,863
|
Apollo Principal Holdings VI, L.P.
|
391,038
|
Apollo Principal Holdings VII, L.P.
|
446,900
|
Apollo Principal Holdings VIII, L.P.
|
949,663
|
Apollo Principal Holdings IX, L.P.
|
391,038
|
Apollo Principal Holdings X, L.P.
|
55,863
|
Apollo Principal Holdings XI, LLC
|
1,284,838
|
Apollo Principal Holdings XII, L.P.
|
279,313
|
Apollo Operating Group entity
|
Purchased AHL Shares Allocation
|
Apollo Principal Holdings VIII, L.P.
|
7,575,758
|
a.
|
Iowa Insurance Division: Approval (or non-disapproval within the applicable statutory period) of Form D Prior Notice of Transaction filings with respect to the following agreements (the “Affiliate Agreements”):
|
i.
|
Recapture Amendment (GMIB Payout Annuity Business) between Venerable Insurance and Annuity Company (“VIAC”) and Athene Life Re Ltd. (“ALRe”);
|
ii.
|
Modified Coinsurance Agreement (GMIB Payout Annuity Business) between VIAC and Athene Annuity Re Ltd. (“AARe”);
|
iii.
|
Recapture Amendment (FA Business) between VIAC and ALRe;
|
iv.
|
Modified Coinsurance Agreement (FA Business) between VIAC and AARe;
|
v.
|
Amended and Restated Assumption Consent Agreement among VIAC, Rocky Range, Inc. (“Rocky Range”), Athene Annuity & Life Assurance Company (“AADE”) and AARe (the “A&R Assumption Consent Agreement”); and
|
vi.
|
First Amendment to Investment Management Agreement between VIAC and Apollo Insurance Solutions Group, LLC (formerly Athene Asset Management LLC) (“ISG”).
|
b.
|
Arizona Department of Insurance: Filing of (i) notification letter with pre- and post-Closing structure charts regarding change of intermediate controlling entities and (ii) request for approval of captive business plan amendment for the novation to AARe of ALRe’s rights and obligations under the retrocession agreement with Rocky Range and the A&R Assumption Consent Agreement.
|
c.
|
Delaware Department of Insurance: Approval (or non-disapproval within the applicable statutory period) of a Form D Prior Notice of Transaction filing with respect to the A&R Assumption Consent Agreement may be required.
|
a.
|
California Department of Business Oversight: Filing of notice of AGM’s increased economic ownership in AHL and pre- and post-Closing structure charts within 30 days after the Closing with respect to the following entities that hold California finance lender licenses: Midcap Financial, LLC; Midcap Funding IV, LLC; Midcap Funding III, LLC; Midcap Funding Re Holdings, LLC; Midcap Funding II, LLC; HFG Healthco-4 Trust; and Healthcare Finance Group, LLC.
|
b.
|
Captive Insurance Division of the Vermont Department of Financial Regulation: Filing of notification letter regarding the change of intermediate controlling entities of Athene Re USA IV including pre- and post-Closing structure charts.
|
c.
|
Form B amendment filing within 15 days following the end of the month in which the Closing occurs by each of the AHL Insurers The “AHL Insurers” are: (i) AADE; (ii) AAIA; (iii) Structured Annuity Reinsurance Company (“STAR”); (iv) Athene Annuity & Life Assurance Company of New York (“AANY”); and (v) Athene Life Insurance Company of New York (“ALICNY”). and VIAC with the insurance regulator of its domiciliary state disclosing (i) the new AHL share/capitalization structure, (ii) an updated organizational chart and (iii) in the case of VIAC, the Affiliate Agreements, among any other matters that require disclosure at the time of filing.
|
d.
|
Delaware Department of Insurance: Form B amendment filing disclosing the A&R Assumption Consent Agreement within 15 days following the end of the month of its execution.
|
e.
|
Bermuda Monetary Authority: Post-transaction notice required to be filed within 45 days following closing by ALRe, AARe, Athene Co-Invest Reinsurance Affiliate 1A Ltd., Athene Co-Invest Reinsurance Affiliate 1B Ltd., Athene Life Re International Ltd. and Athene Co-Invest Reinsurance International Ltd.
|
1.
|
Iowa Insurance Division: Request for approval of Form A filing exemption pertaining to Athene Annuity and Life Company, Structured Annuity Reinsurance Company and Venerable Insurance and Annuity Company.
|
2.
|
Iowa Insurance Division: Request for approval of exchange of securities pursuant to Iowa Code § 507B.14.
|
3.
|
Iowa Insurance Division: Filing and approval (or non-disapproval within the applicable statutory period) of a Form D Prior Notice of Transaction with respect to the Affiliate Agreements (as defined in Section 3.5 of the Disclosure Schedules).
|
4.
|
Delaware Department of Insurance: Request for approval of Form A filing exemption pertaining to Athene Annuity & Life Assurance Company.
|
5.
|
New York State Department of Financial Services: Request for approval of Form A filing exemption pertaining to Athene Annuity & Life Assurance Company of New York and Athene Life Insurance Company of New York.
|
6.
|
Arizona Department of Insurance: Notification letter with pre- and post-transaction structure charts pertaining to Rocky Range, Inc.
|
7.
|
Bermuda Monetary Authority: Notification in respect of AGM letter if AGM’s control falls below 33% in connection with the Transaction.
|
8.
|
Dutch Central Bank (Netherlands): Notification in respect of existing filing relating to the approval of qualifying shareholders.
|
9.
|
Central Bank of Ireland: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
10.
|
Dutch Central Bank (Netherlands) and the Netherlands Authority for Financial Markets: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
11.
|
Federal Financial Supervisory Authority (Germany): All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification
|
12.
|
Deutsche Bundesbank (Germany): All applicable filings and/or approvals required in respect of AGM’s holding in Oldenburgische Landesbank AG.
|
13.
|
European Central Bank: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
14.
|
National Bank of Belgium: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
15.
|
Bermuda Monetary Authority: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing shareholder controllers that cease to be shareholder controllers or cross into new bands requiring approval or notification.
|
16.
|
Arizona Department of Insurance: Approval of captive business plan amendment for the novation to AARe of ALRe’s rights and obligations under the retrocession agreement with Rocky Range and the A&R Assumption Consent Agreement (and any other filing or approval required in connection with proposed changes to reinsurance arrangements involving Rocky Range).
|
17.
|
Delaware Department of Insurance: Filing in connection with proposed changes to the Assumption Consent Agreement among Rocky Range, VIAC, AADE and ALRe.
|
18.
|
Monetary Authority of Singapore and Lloyd’s Asia: Notification of change in equity shareholding required in respect of Apollo Singapore and in respect of Aspen Insurance UK Limited (Singapore Branch) and Aspen Singapore Pte Ltd.
|
19.
|
Securities & Futures Commission (Hong Kong): Notification regarding transaction involving significant shareholder of Apollo Management Hong Kong Limited.
|
20.
|
Commission de Surveillance du Secteur Financier (Luxembourg): Pre-Closing notification in respect of new indirect shareholder of Apollo Investment Management Europe (Luxembourg) S.à r.l.
|
1.
|
Captive Insurance Division of the Vermont Department of Financial Regulation: Filing of notification letter regarding the change of intermediate controlling entities of Athene Re USA IV including pre- and post-Closing structure charts.
|
2.
|
Office of the Superintendent of Financial Institutions (Canada) and Canadian provisional insurance regulators: Courtesy notification within one week of Closing pertaining to Aspen Insurance UK Limited (Canadian branch).
|
3.
|
Bank of Slovenia / ECB (through its Joint Supervisory Team or other competent body): To the extent required by Law, post-Closing notification pertaining to AGM’s indirect qualifying holding in Nova KBM d.d.
|
1.
|
Iowa Insurance Division: Request for approval of Form A filing exemption pertaining to Athene Annuity and Life Company, Structured Annuity Reinsurance Company and Venerable Insurance and Annuity Company.
|
2.
|
Iowa Insurance Division: Request for approval of exchange of securities pursuant to Iowa Code § 507B.14.
|
3.
|
Iowa Insurance Division: Filing and approval (or non-disapproval within the applicable statutory period) of a Form D Prior Notice of Transaction with respect to the Affiliate Agreements (as defined in Section 3.5 of the Disclosure Schedules).
|
4.
|
Delaware Department of Insurance: Request for approval of Form A filing exemption pertaining to Athene Annuity & Life Assurance Company.
|
5.
|
New York State Department of Financial Services: Request for approval of Form A filing exemption pertaining to Athene Annuity & Life Assurance Company of New York and Athene Life Insurance Company of New York.
|
6.
|
Arizona Department of Insurance: Notification letter with pre- and post-transaction structure charts pertaining to Rocky Range, Inc.
|
7.
|
Central Bank of Ireland: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
8.
|
Dutch Central Bank (Netherlands) and the Netherlands Authority for Financial Markets: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
9.
|
Federal Financial Supervisory Authority (Germany): All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
10.
|
Deutsche Bundesbank (Germany): All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
11.
|
European Central Bank: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
12.
|
National Bank of Belgium: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing qualifying shareholders that cease to be qualifying shareholders or cross into new bands requiring approval or notification.
|
13.
|
Bermuda Monetary Authority: All applicable filings and/or approvals required in respect of any new qualifying shareholders and/or existing shareholder controllers that cease to be shareholder controllers or cross into new bands requiring approval or notification.
|
14.
|
Delaware Department of Insurance: Filing in connection with proposed changes to the Assumption Consent Agreement among Rocky Range, VIAC, AADE and ALRe.
|
15.
|
Arizona Department of Insurance: Approval of captive business plan amendment for the novation to AARe of ALRe’s rights and obligations under the retrocession agreement with Rocky Range and the A&R Assumption Consent Agreement (and any other filing or approval required in connection with proposed changes to reinsurance arrangements involving Rocky Range).
|
1.
|
Pursuant to Recapture Amendments to be entered into between VIAC and ALRe, VIAC will recapture all of the liabilities ceded under the FA Business Reinsurance Agreement and the GMIB Business Reinsurance Agreement.
|
2.
|
Pursuant to a Modified Coinsurance Agreement to be entered into between VIAC and AARe, VIAC will cede to AARe all of the liabilities related to the FA Business that were previously ceded to ALRe. Pursuant to a Modified Coinsurance Agreement to be entered into between VIAC and AARe, VIAC will cede to AARe all of the liabilities relating to the GMIB Business that were previously ceded to ALRe.
|
3.
|
Certain other agreements related to the reinsurance of the FA Business and the GMIB Business will be entered into in connection with the Restructuring. The Investment Management Agreement, dated as of June 1, 2018, by and between VIAC and ISG, pursuant to which ISG provides investment management services with respect to the modified coinsurance accounts established in connection with the FA Business Reinsurance Agreement and the GMIB Business Reinsurance Agreement, will be amended to replace references to the FA Business Reinsurance Agreement and the GMIB Business Reinsurance Agreement (and the modified coinsurance accounts established thereunder) with references to the new AARe Reinsurance Agreements (and the modified coinsurance accounts established thereunder). In addition, VIAC, Rocky Range, AADE and ALRe entered into an Assumption Consent Agreement, effective as of June 1, 2018 (the “Assumption Consent Agreement”), pursuant to which, among other things, ALRe agreed to assume certain liabilities with respect to payout annuities (defined below) directly from VIAC. The Assumption Consent Agreement will be amended and restated in its entirely to replace ALRe with AARe. Finally, Rocky Range and ALRe entered into a Retrocession Agreement, effective as of June 1, 2018 (the “Retrocession Agreement”), whereby, ALRe agreed that it would reinsure the GMIB Business from Rocky Range in the event that the Assumption Consent Agreement is ever terminated. Pursuant to a Novation Agreement to be entered into among ALRe, AARe and Rocky Range, all of ALRe’s rights and obligations under the Retrocession Agreement will be novated to AARe.
|
1.
|
Iowa Insurance Division - Approval (or non-disapproval within the applicable statutory period) of Form D Prior Notice of Transaction filings with respect to the following agreements:
|
a.
|
Recapture Amendment (GMIB Payout Annuity Business) between VIAC and ALRe;
|
b.
|
Modified Coinsurance Agreement (GMIB Payout Annuity Business) between VIAC and AARe;
|
c.
|
Recapture Amendment (FA Business) between VIAC and ALRe;
|
d.
|
Modified Coinsurance Agreement (FA Business) between VIAC and AARe;
|
e.
|
Amended and Restated Assumption Consent Agreement among VIAC, Rocky Range, AADE and AARe; and
|
f.
|
First Amendment to Investment Management Agreement between VIAC and ISG.
|
2.
|
Arizona Department of Insurance - Approval of captive business plan amendment to reflect the novation to AARe of ALRe’s rights and obligations under the Retrocession Agreement and the A&R Assumption Consent Agreement.
|
3.
|
Solely to the extent required by Applicable Law, the Delaware Department of Insurance - Approval (or non-disapproval within the applicable statutory period) of a Form D Prior Notice of Transaction filing with respect to the A&R Assumption Consent Agreement.
|
TABLE OF CONTENTS
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Page
|
|
ARTICLE I DEFINITIONS AND USAGE
|
|
|
1.1 Definitions
|
1
|
|
1.2 Interpretation
|
2
|
|
ARTICLE II PROXY
|
|
|
2.1 Irrevocable Proxy and Power of Attorney
|
3
|
|
2.2 Covenants of the Other Shareholders
|
3
|
|
2.3 Term and Termination
|
3
|
|
2.4 No Liability
|
3
|
|
2.5 Assignment
|
3
|
|
2.6 No Ownership Interest
|
4
|
|
2.7 Binding Effect; Reliance
|
4
|
|
2.8 Regulatory Matters
|
4
|
|
2.9 Transfers and Joinders
|
4
|
|
ARTICLE III MISCELLANEOUS
|
|
|
3.1 Entire Agreement
|
4
|
|
3.2 Further Assurances
|
4
|
|
3.3 Notices
|
4
|
|
3.4 Governing Law
|
5
|
|
3.5 Consent to Jurisdiction
|
5
|
|
3.6 Equitable Remedies
|
5
|
|
3.7 Construction
|
5
|
|
3.8 Counterparts
|
5
|
|
3.9 Third Party Beneficiaries
|
5
|
|
3.10 Severability
|
5
|
|
3.11 Amendments; Waivers
|
6
|
|
3.12 Effectiveness
|
6
|
|
3.13 Non-Recourse
|
6
|
|
Signature Pages
|
|
|
Exhibit A
|
|
Term
|
Section
|
|
Affiliate
|
1.1
|
|
Agreement
|
Preamble
|
|
AGM
|
1.1
|
|
AHL
|
1.1
|
|
AMH
|
Preamble
|
|
beneficially own
|
1.1
|
|
Board of Directors
|
1.1
|
|
Class A Shares
|
1.1
|
|
Closing
|
1.1
|
|
control
|
1.1
|
|
Controlled Entity
|
1.1
|
|
Fall-away Date
|
1.1
|
|
Governmental Entity
|
1.1
|
|
Law
|
1.1
|
|
Other Shareholders
|
Preamble
|
|
Permitted Transferee
|
1.1
|
|
Person
|
1.1
|
|
Proceeding
|
3.5
|
|
Proxy
|
2.1(b)
|
|
Related Party
|
3.13
|
|
Selected Court
|
3.5
|
|
Subject Shares
|
1.1
|
|
Term
|
2.3
|
|
Transaction Agreement
|
Recitals
|
|
Transfer
|
1.1
|
|
Transferred
|
1.1
|
|
Transferrable
|
1.1
|
|
(i)
|
if to AMH, to:
|
(ii)
|
if to any Other Shareholder, to: the address of such Other Shareholder set forth in the records of AHL.
|
1.
|
Contemporaneous with the closing of the Transaction (the “Closing”), the Company will exchange all of the Class M Shares for the securities described on Exhibit B hereto, as set forth in more detail on Exhibit B. The Company agrees that as of the date on which the Transaction closes, the total economic value of the securities to be received by the Holder is intended to be at least equal to the value of the Class M Shares as of such date, as determined pursuant to an independent analysis performed by Duff & Phelps.
|
2.
|
The Holder hereby agrees to vote all of the Holder’s Class M Shares at the special meeting of the Company’s shareholders concerning the Transaction in favor of (i) the conversion of the series of Class M Common Shares owned by the Holder into other securities as set forth in Exhibit B and (ii) the amendment of the Bye-laws to eliminate each series of Class M Common Shares owned by the Holder and all rights relating thereto.
|
1. Acceleration
|
In connection with the closing of the transactions contemplated by the Transaction Agreement (the “Closing”) and immediately before such Closing, all vesting conditions with respect to the outstanding unvested Class M4 and M4 Prime Awards will be accelerated, and the holder shall hold the relevant Class M4 or M4 Prime Shares subject to such awards not subject to any further vesting condition.
|
2. Exchange Terms
|
Contemporaneous with the Closing, each holder of vested Class M Common Shares will exchange such vested Class M Common Shares (the “Exchanged Shares”) for:
(A) A number of Class A Common Shares of AHL with an aggregate value equal to 5% of the fair market value of the Class M Common Shares surrendered (the “Shares”);
(B) A number of warrants to purchase Class A Common Shares of AHL at a specified exercise price, with terms calculated to produce a fair market value equal to 95% of the fair market value of the Exchanged Shares (the “Warrants”) (the foregoing, the “Exchange”).
It is intended that the value of Class A Common Shares and Warrants received in connection with the Exchange as of the Closing will be equal to the value of the Exchanged Shares as of the Closing, including substantially similar “leverage” inherent in the terms and design of the Class M Common Shares.
Fair market value will be determined as follows:
(A) For Class A Common Shares, in accordance with customary valuation methodologies to be agreed between the parties;
(B) For the Class M Common Shares, in accordance with the Duff & Phelps valuation; and
(C) For the Warrants, in accordance with the Duff & Phelps valuation.
Where any calculation would otherwise produce a fractional Class A Common Share, the results of such calculation shall be rounded up to the nearest whole number.
|
3. Vesting
|
Neither the Shares nor the Warrants shall be subject to any vesting conditions.
|
4. Dividend Equivalents
|
In the event dividends are paid with respect to Class A Common Shares prior to the exercise of a Warrant, the terms of any Warrant exercised subsequent to such dividend shall be adjusted so that, upon exercise, the holder receives an additional number of Class A Common Shares to reflect such dividends.
|
5. Exercise Price of Warrants
|
In order to provide the holder with shares and securities with an aggregate value approximately equal to the Exchanged Shares, the exercise price of the Warrants will be approximately equal to (but may not be exactly equal to) the exchange price of the Exchanged Shares.
|
6. Exercise of Warrants
|
A warrant may be exercised either by:
(A) Payment of cash purchase price equal to the exercise price for such Warrant (a “Cash Exercise”); or
(B) Surrender of warrants in exchange for a number of Class A Common Shares equal to (I) the number of Warrants surrendered, multiplied by, (II) (A) the value of Class A Common Shares on the exercise date, less (B) the exercise price of such Warrant, divided by (III) the value of Class A Common Shares on the exercise date (the foregoing, a “Cashless Exercise”).
|
7. Voting Rights of Warrants
|
Consistent with the award agreements for the Shares, Holders of Warrants will not have any voting rights unless and until they exercise their Warrants and receive Class A Common Shares.
|
8. Taxation of Holder
|
For holders who did not file an 83(b) election, such holders of unvested Class M Common Shares whose vesting period is accelerated in connection with the Exchange will recognize ordinary income in an amount equal to the fair market value of such Class M Common Shares as of the vesting acceleration date. For holders who did file an 83(b) election, the acceleration of their unvested Class M Common Shares will not be a taxable event, and such holders will not recognize any income, gain, loss or deduction as a result of such acceleration.
Following acceleration, the Exchange is expected to be tax-free to holders for US federal income tax purposes. The holding period for Shares and Warrants received in the Exchange will include the holding period for the Exchanged Shares. A holder’s basis in Class A Common Shares and Warrants received in the Exchange will equal such holder’s basis in the Exchanged Shares, and will be divided between the Shares and Warrants in accordance with the relative fair market value of each.
Following a Cash Exercise, a holder will have basis in the purchased Class A Common Shares equal to (i) the holder’s basis in the Warrants plus (ii) the amount of cash paid for the Class A Common Shares in the Cash Exercise. The holding period for Class A Common Shares purchased in connection with a Cash Exercise will begin no earlier than the day of such Cash Exercise. Accordingly, any gain recognized on a disposition of such Class A Common Shares purchased in a Cash Exercise and disposed of within one year from the date of such Cash Exercise will be subject to U.S. federal income tax as short-term capital gain.
A Cashless Exercise is expected to be tax-free to holders. Assuming this treatment is correct, the holding period for Class A Common Shares received in a Cashless Exercise will include the holder’s holding period for the Warrants, and a holder’s basis in Class A Common Shares received in such Cashless Exercise will be equal to the basis in the Warrants exchanged. If such holding period is one year or longer, upon a disposition of such Class A Common Shares, any gain or loss will be long-term capital gain or long-term capital loss, as the case may be.
|
9. Adjustments for Changes in Capital Structure
|
In the event of stock splits, stock dividends or an extraordinary corporate event affecting the capital structure of AHL, the Board of Directors of AHL will adjust the Warrants to the extent necessary to preserve the economic terms of the Warrants. No adjustment will be made for ordinary cash dividends or new issuances of securities by Athene for consideration.
|
10. Protective Covenants
|
The employee will continue to be subject to the covenants in the award agreement, including but not limited to non-competition, non-solicitation and confidentiality covenants. In addition, customary covenants regarding consistent tax reporting will be included.
|
11. Arbitration
|
In general, and consistent with the terms of the award agreements for the Shares, disputes, controversies or claims relating to the Exchange (including the terms of the Warrants) are required to be settled by binding arbitration before the American Arbitration Association (the “AAA”) in accordance with the AAA’s then existing National Rules for the Resolution of Employment Disputes. The arbitration will be conducted in the State of Delaware before a neutral arbitrator.
|
12. Advisors
|
Each holder is advised to consult with his or her personal tax, financial and legal advisors concerning the treatment of the Exchange (tax, value and otherwise), and should not rely on AHL as to such treatment.
|
1.
|
Contemporaneous with the closing of the Transaction (the “Closing”), the Company will exchange all of the Class M Shares for the securities described on Exhibit B hereto, as set forth in more detail on Exhibit B. The Company agrees that as of the date on which the Transaction closes, the total economic value of the securities to be received by the Holder is intended to be at least equal to the value of the Class M Shares as of such date, as determined pursuant to an independent analysis performed by Duff & Phelps.
|
2.
|
The Holder hereby agrees to vote all of the Holder’s Class M Shares at the special meeting of the Company’s shareholders concerning the Transaction in favor of (i) the conversion of the series of Class M Common Shares owned by the Holder into other securities as set forth in Exhibit B and (ii) the amendment of the Bye-laws to eliminate each series of Class M Common Shares owned by the Holder and all rights relating thereto.
|
1. Acceleration
|
In connection with the closing of the transactions contemplated by the Transaction Agreement (the “Closing”) and immediately before such Closing, all vesting conditions with respect to the outstanding unvested Class M4 and M4 Prime Awards will be accelerated, and the holder shall hold the relevant Class M4 or M4 Prime Shares subject to such awards not subject to any further vesting condition.
|
2. Exchange Terms
|
Contemporaneous with the Closing, each holder of vested Class M Common Shares will exchange such vested Class M Common Shares (the “Exchanged Shares”) for:
(A) A number of Class A Common Shares of AHL with an aggregate value equal to 5% of the fair market value of the Class M Common Shares surrendered (the “Shares”);
(B) A number of warrants to purchase Class A Common Shares of AHL at a specified exercise price, with terms calculated to produce a fair market value equal to 95% of the fair market value of the Exchanged Shares (the “Warrants”) (the foregoing, the “Exchange”).
It is intended that the value of Class A Common Shares and Warrants received in connection with the Exchange as of the Closing will be equal to the value of the Exchanged Shares as of the Closing, including substantially similar “leverage” inherent in the terms and design of the Class M Common Shares.
Fair market value will be determined as follows:
(A) For Class A Common Shares, in accordance with customary valuation methodologies to be agreed between the parties;
(B) For the Class M Common Shares, in accordance with the Duff & Phelps valuation; and
(C) For the Warrants, in accordance with the Duff & Phelps valuation.
Where any calculation would otherwise produce a fractional Class A Common Share, the results of such calculation shall be rounded up to the nearest whole number.
|
3. Vesting
|
Neither the Shares nor the Warrants shall be subject to any vesting conditions.
|
4. Dividend Equivalents
|
In the event dividends are paid with respect to Class A Common Shares prior to the exercise of a Warrant, the terms of any Warrant exercised subsequent to such dividend shall be adjusted so that, upon exercise, the holder receives an additional number of Class A Common Shares to reflect such dividends.
|
5. Exercise Price of Warrants
|
In order to provide the holder with shares and securities with an aggregate value approximately equal to the Exchanged Shares, the exercise price of the Warrants will be approximately equal to (but may not be exactly equal to) the exchange price of the Exchanged Shares.
|
6. Exercise of Warrants
|
A warrant may be exercised either by:
(A) Payment of cash purchase price equal to the exercise price for such Warrant (a “Cash Exercise”); or
(B) Surrender of warrants in exchange for a number of Class A Common Shares equal to (I) the number of Warrants surrendered, multiplied by, (II) (A) the value of Class A Common Shares on the exercise date, less (B) the exercise price of such Warrant, divided by (III) the value of Class A Common Shares on the exercise date (the foregoing, a “Cashless Exercise”).
|
7. Voting Rights of Warrants
|
Consistent with the award agreements for the Shares, Holders of Warrants will not have any voting rights unless and until they exercise their Warrants and receive Class A Common Shares.
|
8. Taxation of Holder
|
For holders who did not file an 83(b) election, such holders of unvested Class M Common Shares whose vesting period is accelerated in connection with the Exchange will recognize ordinary income in an amount equal to the fair market value of such Class M Common Shares as of the vesting acceleration date. For holders who did file an 83(b) election, the acceleration of their unvested Class M Common Shares will not be a taxable event, and such holders will not recognize any income, gain, loss or deduction as a result of such acceleration.
Following acceleration, the Exchange is expected to be tax-free to holders for US federal income tax purposes. The holding period for Shares and Warrants received in the Exchange will include the holding period for the Exchanged Shares. A holder’s basis in Class A Common Shares and Warrants received in the Exchange will equal such holder’s basis in the Exchanged Shares, and will be divided between the Shares and Warrants in accordance with the relative fair market value of each.
Following a Cash Exercise, a holder will have basis in the purchased Class A Common Shares equal to (i) the holder’s basis in the Warrants plus (ii) the amount of cash paid for the Class A Common Shares in the Cash Exercise. The holding period for Class A Common Shares purchased in connection with a Cash Exercise will begin no earlier than the day of such Cash Exercise. Accordingly, any gain recognized on a disposition of such Class A Common Shares purchased in a Cash Exercise and disposed of within one year from the date of such Cash Exercise will be subject to U.S. federal income tax as short-term capital gain.
A Cashless Exercise is expected to be tax-free to holders. Assuming this treatment is correct, the holding period for Class A Common Shares received in a Cashless Exercise will include the holder’s holding period for the Warrants, and a holder’s basis in Class A Common Shares received in such Cashless Exercise will be equal to the basis in the Warrants exchanged. If such holding period is one year or longer, upon a disposition of such Class A Common Shares, any gain or loss will be long-term capital gain or long-term capital loss, as the case may be.
|
9. Adjustments for Changes in Capital Structure
|
In the event of stock splits, stock dividends or an extraordinary corporate event affecting the capital structure of AHL, the Board of Directors of AHL will adjust the Warrants to the extent necessary to preserve the economic terms of the Warrants. No adjustment will be made for ordinary cash dividends or new issuances of securities by Athene for consideration.
|
10. Protective Covenants
|
The employee will continue to be subject to the covenants in the award agreement, including but not limited to non-competition, non-solicitation and confidentiality covenants. In addition, customary covenants regarding consistent tax reporting will be included.
|
11. Arbitration
|
In general, and consistent with the terms of the award agreements for the Shares, disputes, controversies or claims relating to the Exchange (including the terms of the Warrants) are required to be settled by binding arbitration before the American Arbitration Association (the “AAA”) in accordance with the AAA’s then existing National Rules for the Resolution of Employment Disputes. The arbitration will be conducted in the State of Delaware before a neutral arbitrator.
|
12. Advisors
|
Each holder is advised to consult with his or her personal tax, financial and legal advisors concerning the treatment of the Exchange (tax, value and otherwise), and should not rely on AHL as to such treatment.
|
1.
|
Contemporaneous with the closing of the Transaction (the “Closing”), the Company will accelerate the vesting conditions associated with any time-based or performance-based vesting Class M restricted share awards held by the Holder, and then exchange all vested Class M Shares described on Exhibit A for the securities described on Exhibit B hereto, as set forth in more detail on Exhibit B. The Company agrees that as of the date on which the Transaction closes, the total economic value of the securities to be received by the Holder is intended to be at least equal to the value of the vested Class M Shares as of such date, as determined pursuant to an independent analysis performed by Duff & Phelps.
|
2.
|
Contemporaneous with the Closing, the Company will exchange all of the Class M Shares for the securities described on Exhibit A hereto, as set forth in more detail on Exhibit C. The Company agrees that as of the date on which the Transaction closes, the total economic value of the securities to be received by the Holder is intended to be at least equal to the value of the Class M Shares as of such date, as determined pursuant to an independent analysis performed by Duff & Phelps.
|
3.
|
The Holder hereby agrees to vote all of the Holder’s Class M Shares at the special meeting of the Company’s shareholders concerning the Transaction in favor of (i) the conversion of the series of Class M Common Shares owned by the Holder into other securities as set forth in Exhibits B and C and (ii) the amendment of the Bye-laws to eliminate each series of Class M Common Shares owned by the Holder and all rights relating thereto.
|
1. Acceleration
|
In connection with the closing of the transactions contemplated by the Transaction Agreement (the “Closing”) and immediately before such Closing, all vesting conditions with respect to the outstanding unvested Class M4 and M4 Prime Awards will be accelerated, and the holder shall hold the relevant Class M4 or M4 Prime Shares subject to such awards not subject to any further vesting condition.
|
2. Exchange Terms
|
Contemporaneous with the Closing, each holder of vested Class M Common Shares will exchange such vested Class M Common Shares (the “Exchanged Shares”) for:
(A) A number of Class A Common Shares of AHL with an aggregate value equal to 5% of the fair market value of the Class M Common Shares surrendered (the “Shares”);
(B) A number of warrants to purchase Class A Common Shares of AHL at a specified exercise price, with terms calculated to produce a fair market value equal to 95% of the fair market value of the Exchanged Shares (the “Warrants”) (the foregoing, the “Exchange”).
It is intended that the value of Class A Common Shares and Warrants received in connection with the Exchange as of the Closing will be equal to the value of the Exchanged Shares as of the Closing, including substantially similar “leverage” inherent in the terms and design of the Class M Common Shares.
Fair market value will be determined as follows:
(A) For Class A Common Shares, in accordance with customary valuation methodologies to be agreed between the parties;
(B) For the Class M Common Shares, in accordance with the Duff & Phelps valuation; and
(C) For the Warrants, in accordance with the Duff & Phelps valuation.
Where any calculation would otherwise produce a fractional Class A Common Share, the results of such calculation shall be rounded up to the nearest whole number.
|
3. Vesting
|
Neither the Shares nor the Warrants shall be subject to any vesting conditions.
|
4. Dividend Equivalents
|
In the event dividends are paid with respect to Class A Common Shares prior to the exercise of a Warrant, the terms of any Warrant exercised subsequent to such dividend shall be adjusted so that, upon exercise, the holder receives an additional number of Class A Common Shares to reflect such dividends.
|
5. Exercise Price of Warrants
|
In order to provide the holder with shares and securities with an aggregate value approximately equal to the Exchanged Shares, the exercise price of the Warrants will be approximately equal to (but may not be exactly equal to) the exchange price of the Exchanged Shares.
|
6. Exercise of Warrants
|
A warrant may be exercised either by:
(A) Payment of cash purchase price equal to the exercise price for such Warrant (a “Cash Exercise”); or
(B) Surrender of warrants in exchange for a number of Class A Common Shares equal to (I) the number of Warrants surrendered, multiplied by, (II) (A) the value of Class A Common Shares on the exercise date, less (B) the exercise price of such Warrant, divided by (III) the value of Class A Common Shares on the exercise date (the foregoing, a “Cashless Exercise”).
|
7. Voting Rights of Warrants
|
Consistent with the award agreements for the Shares, Holders of Warrants will not have any voting rights unless and until they exercise their Warrants and receive Class A Common Shares.
|
8. Taxation of Holder
|
For holders who did not file an 83(b) election, such holders of unvested Class M Common Shares whose vesting period is accelerated in connection with the Exchange will recognize ordinary income in an amount equal to the fair market value of such Class M Common Shares as of the vesting acceleration date. For holders who did file an 83(b) election, the acceleration of their unvested Class M Common Shares will not be a taxable event, and such holders will not recognize any income, gain, loss or deduction as a result of such acceleration.
Following acceleration, the Exchange is expected to be tax-free to holders for US federal income tax purposes. The holding period for Shares and Warrants received in the Exchange will include the holding period for the Exchanged Shares. A holder’s basis in Class A Common Shares and Warrants received in the Exchange will equal such holder’s basis in the Exchanged Shares, and will be divided between the Shares and Warrants in accordance with the relative fair market value of each.
Following a Cash Exercise, a holder will have basis in the purchased Class A Common Shares equal to (i) the holder’s basis in the Warrants plus (ii) the amount of cash paid for the Class A Common Shares in the Cash Exercise. The holding period for Class A Common Shares purchased in connection with a Cash Exercise will begin no earlier than the day of such Cash Exercise. Accordingly, any gain recognized on a disposition of such Class A Common Shares purchased in a Cash Exercise and disposed of within one year from the date of such Cash Exercise will be subject to U.S. federal income tax as short-term capital gain.
A Cashless Exercise is expected to be tax-free to holders. Assuming this treatment is correct, the holding period for Class A Common Shares received in a Cashless Exercise will include the holder’s holding period for the Warrants, and a holder’s basis in Class A Common Shares received in such Cashless Exercise will be equal to the basis in the Warrants exchanged. If such holding period is one year or longer, upon a disposition of such Class A Common Shares, any gain or loss will be long-term capital gain or long-term capital loss, as the case may be.
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9. Adjustments for Changes in Capital Structure
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In the event of stock splits, stock dividends or an extraordinary corporate event affecting the capital structure of AHL, the Board of Directors of AHL will adjust the Warrants to the extent necessary to preserve the economic terms of the Warrants. No adjustment will be made for ordinary cash dividends or new issuances of securities by Athene for consideration.
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10. Protective Covenants
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The employee will continue to be subject to the covenants in the award agreement, including but not limited to non-competition, non-solicitation and confidentiality covenants. In addition, customary covenants regarding consistent tax reporting will be included.
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11. Arbitration
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In general, and consistent with the terms of the award agreements for the Shares, disputes, controversies or claims relating to the Exchange (including the terms of the Warrants) are required to be settled by binding arbitration before the American Arbitration Association (the “AAA”) in accordance with the AAA’s then existing National Rules for the Resolution of Employment Disputes. The arbitration will be conducted in the State of Delaware before a neutral arbitrator.
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12. Advisors
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Each holder is advised to consult with his or her personal tax, financial and legal advisors concerning the treatment of the Exchange (tax, value and otherwise), and should not rely on AHL as to such treatment.
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1. Exchange Terms
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Contemporaneous with the closing of the transactions contemplated by the Transaction Agreement (the “Closing”), each holder of vested Class M Common Shares will exchange such vested Class M Common Shares (the “Exchanged Shares”) for:
(A) A number of Class A Common Shares of AHL with an aggregate value equal to 5% of the fair market value of the Class M Common Shares surrendered (the “Shares”);
(B) A number of warrants to purchase Class A Common Shares of AHL at a specified exercise price, with terms calculated to produce a fair market value equal to 95% of the fair market value of the Exchanged Shares (the “Warrants”) (the foregoing, the “Exchange”).
It is intended that the value of Class A Common Shares and Warrants received in connection with the Exchange as of the Closing will be equal to the value of the Exchanged Shares as of the Closing, including substantially similar “leverage” inherent in the terms and design of the Class M Common Shares.
Fair market value will be determined as follows:
(A) For Class A Common Shares, in accordance with customary valuation methodologies to be agreed between the parties;
(B) For the Class M Common Shares, in accordance with the Duff & Phelps valuation; and
(C) For the Warrants, in accordance with the Duff & Phelps valuation.
Where any calculation would otherwise produce a fractional Class A Common Share, the results of such calculation shall be rounded up to the nearest whole number.
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2. Vesting
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Neither the Shares nor the Warrants shall be subject to any vesting conditions.
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3. Dividend Equivalents
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In the event dividends are paid with respect to Class A Common Shares prior to the exercise of a Warrant, the terms of any Warrant exercised subsequent to such dividend shall be adjusted so that, upon exercise, the holder receives an additional number of Class A Common Shares to reflect such dividends.
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4. Exercise Price of Warrants
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In order to provide the holder with shares and securities with an aggregate value approximately equal to the Exchanged Shares, the exercise price of the Warrants will be approximately equal to (but may not be exactly equal to) the exchange price of the Exchanged Shares.
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5. Exercise of Warrants
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A warrant may be exercised either by:
(A) Payment of cash purchase price equal to the exercise price for such Warrant (a “Cash Exercise”); or
(B) Surrender of warrants in exchange for a number of Class A Common Shares equal to (I) the number of Warrants surrendered, multiplied by, (II) (A) the value of Class A Common Shares on the exercise date, less (B) the exercise price of such Warrant, divided by (III) the value of Class A Common Shares on the exercise date (the foregoing, a “Cashless Exercise”).
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6. Voting Rights of Warrants
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Consistent with the award agreements for the Shares, Holders of Warrants will not have any voting rights unless and until they exercise their Warrants and receive Class A Common Shares.
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7. Taxation of Holder
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The Exchange is expected to be tax-free to holders for US federal income tax purposes. The holding period for Shares and Warrants received in the Exchange will include the holding period for the Exchanged Shares. A holder’s basis in Class A Common Shares and Warrants received in the Exchange will equal such holder’s basis in the Exchanged Shares, and will be divided between the Shares and Warrants in accordance with the relative fair market value of each.
Following a Cash Exercise, a holder will have basis in the purchased Class A Common Shares equal to (i) the holder’s basis in the Warrants plus (ii) the amount of cash paid for the Class A Common Shares in the Cash Exercise. The holding period for Class A Common Shares purchased in connection with a Cash Exercise will begin no earlier than the day of such Cash Exercise. Accordingly, any gain recognized on a disposition of such Class A Common Shares purchased in a Cash Exercise and disposed of within one year from the date of such Cash Exercise will be subject to U.S. federal income tax as short-term capital gain.
A Cashless Exercise is expected to be tax-free to holders. Assuming this treatment is correct, the holding period for Class A Common Shares received in a Cashless Exercise will include the holder’s holding period for the Warrants, and a holder’s basis in Class A Common Shares received in such Cashless Exercise will be equal to the basis in the Warrants exchanged. If such holding period is one year or longer, upon a disposition of such Class A Common Shares, any gain or loss will be long-term capital gain or long-term capital loss, as the case may be.
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8. Adjustments for Changes in Capital Structure
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In the event of stock splits, stock dividends or an extraordinary corporate event affecting the capital structure of AHL, the Board of Directors of AHL will adjust the Warrants to the extent necessary to preserve the economic terms of the Warrants. No adjustment will be made for ordinary cash dividends or new issuances of securities by Athene for consideration.
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9. Protective Covenants
|
The employee will continue to be subject to the covenants in the award agreement, including but not limited to non-competition, non-solicitation and confidentiality covenants. In addition, customary covenants regarding consistent tax reporting will be included.
|
10. Arbitration
|
In general and consistent with the terms of the award agreements for the Shares, disputes, controversies or claims relating to the Exchange (including the terms of the Warrants) are required to be settled by binding arbitration before the American Arbitration Association (the “AAA”) in accordance with the AAA’s then existing National Rules for the Resolution of Employment Disputes. The arbitration will be conducted in the State of Delaware before a neutral arbitrator.
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11. Advisors
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Each holder is advised to consult with his or her personal tax, financial and legal advisors concerning the treatment of the Exchange (tax, value and otherwise), and should not rely on AHL as to such treatment.
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Subsidiary
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Jurisdiction of incorporation
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Athene Life Re Ltd.
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Bermuda
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Athene Life Re International Ltd.
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Bermuda
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Athene USA Corporation
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Iowa
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Athene Annuity Re Ltd.
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Bermuda
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Athene HD Investor, L.P.
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Cayman Islands
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Athene Employee Services, LLC
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Iowa
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Athene London Assignment Corporation
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Delaware
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Athene Assignment Corporation
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Delaware
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A-A Onshore Fund, LLC
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Delaware
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Apollo Asia Real Estate AAC Fund, L.P.
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Delaware
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Athene Noctua, LLC
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Delaware
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Athene Annuity & Life Assurance Company
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Delaware
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ACM Trademarks, L.L.C
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Iowa
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ARPH (Headquarters Building), LLC
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Iowa
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Athene Annuity and Life Company
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Iowa
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P.L. Assigned Services, Inc.
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New York
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Athene Annuity & Life Assurance Company of New York
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New York
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Structured Annuity Reinsurance Company
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Iowa
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Athene Securities, LLC
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Iowa
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Centralife Annuities Service, Inc.
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Arizona
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Athene Re USA IV, Inc.
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Vermont
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AREI (CBP), LLC
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Iowa
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AREI (Norwood-TX), LLC
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Iowa
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AREI (US Forest-WY), LLC
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Iowa
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AREI (BLM-NV), LLC
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Iowa
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AREI (Interpark), LLC
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Iowa
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Athene Life Insurance Company of New York
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New York
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AADE RML, LLC
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Iowa
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AAIA RML, LLC
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Iowa
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AAIA RML 3526 Massey Ford, LLC
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Iowa
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Athene Bermuda Employee Company Ltd.
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Bermuda
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Athene IP Holding Ltd.
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Bermuda
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Athene IP Development Limited
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United Kingdom
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Athene North Employment Service Corporation
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Canada
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Athene Co-Invest Reinsurance Affiliate 1A Ltd.
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Bermuda
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Athene Co-Invest Reinsurance Affiliate 1B Ltd.
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Bermuda
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Athene Co-Invest Reinsurance Affiliate LP
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Delaware
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Athene Co-Invest Reinsurance Affiliate International Ltd.
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Bermuda
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Athene Risk Aggregator, LLC
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Delaware
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1.
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I have reviewed this Annual Report on Form 10-K 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)
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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: February 20, 2020
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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 Annual Report on Form 10-K 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)
|
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)
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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: February 20, 2020
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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: February 20, 2020
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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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Date: February 20, 2020
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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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