falsedesktopBHL2020-09-30000073307620000017{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "\t\tPage\nPart I - Financial Information\t\t\nItem 1.\tConsolidated Financial Statements (at September 30 2020 (Unaudited) and December 31 2019 and for the Three Months and Nine Months Ended September 30 2020 and 2019 (Unaudited)):\t\n\tInterim Condensed Consolidated Balance Sheets\t2\n\tInterim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)\t3\n\tInterim Condensed Consolidated Statements of Equity\t4\n\tInterim Condensed Consolidated Statements of Cash Flows\t5\n\tNotes to the Interim Condensed Consolidated Financial Statements (Unaudited):\t\n\tNote 1 - Business Basis of Presentation and Summary of Significant Accounting Policies\t6\n\tNote 2 - Segment Information\t8\n\tNote 3 - Insurance\t11\n\tNote 4 - Investments\t12\n\tNote 5 - Derivatives\t23\n\tNote 6 - Fair Value\t29\n\tNote 7 - Long-term and Short-term Debt\t38\n\tNote 8 - Equity\t38\n\tNote 9 - Other Revenues and Other Expenses\t40\n\tNote 10 - Contingencies Commitments and Guarantees\t41\n\tNote 11 - Related Party Transactions\t44\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t46\nItem 4.\tControls and Procedures\t57\nPart II - Other Information\t\t\nItem 1.\tLegal Proceedings\t57\nItem 1A.\tRisk Factors\t57\nItem 6.\tExhibits\t58\nSignature\t\t59\n", "q10k_tbl_1": "\tSeptember 30 2020\tDecember 31 2019\nAssets\t\t\nInvestments:\t\t\nFixed maturity securities available-for-sale at estimated fair value (amortized cost: $66992 and $63083 respectively; allowance for credit losses of $3 and $0 respectively)\t78139\t69977\nEquity securities at estimated fair value\t114\t147\nMortgage loans (net of allowance for credit losses of $90 and $64 respectively)\t15659\t15664\nPolicy loans\t879\t875\nLimited partnerships and limited liability companies\t2561\t2379\nShort-term investments principally at estimated fair value\t3341\t1482\nOther invested assets principally at estimated fair value (net of allowance for credit losses of $13 and $0 respectively)\t5044\t3224\nTotal investments\t105737\t93748\nCash and cash equivalents\t5663\t2493\nAccrued investment income\t759\t663\nPremiums reinsurance and other receivables\t15542\t14287\nDeferred policy acquisition costs and value of business acquired\t4122\t4809\nCurrent income tax recoverable\t0\t21\nOther assets\t382\t464\nSeparate account assets\t95955\t99668\nTotal assets\t228160\t216153\nLiabilities and Equity\t\t\nLiabilities\t\t\nFuture policy benefits\t44322\t39081\nPolicyholder account balances\t52294\t45121\nOther policy-related balances\t2808\t2801\nPayables for collateral under securities loaned and other transactions\t6970\t4374\nLong-term and short-term debt\t843\t844\nCurrent income tax payable\t50\t0\nDeferred income tax liability\t1666\t1301\nOther liabilities\t4019\t4484\nSeparate account liabilities\t95955\t99668\nTotal liabilities\t208927\t197674\nContingencies Commitments and Guarantees (Note 10)\t\t\nEquity\t\t\nBrighthouse Life Insurance Company's stockholder's equity:\t\t\nCommon stock par value $25000 per share; 4000 shares authorized; 3000 shares issued and outstanding\t75\t75\nAdditional paid-in capital\t18773\t19073\nRetained earnings (deficit)\t(4738)\t(3899)\nAccumulated other comprehensive income (loss)\t5108\t3215\nTotal Brighthouse Life Insurance Company's stockholder's equity\t19218\t18464\nNoncontrolling interests\t15\t15\nTotal equity\t19233\t18479\nTotal liabilities and equity\t228160\t216153\n", "q10k_tbl_2": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenues\t\t\t\t\nPremiums\t173\t206\t549\t649\nUniversal life and investment-type product policy fees\t716\t725\t2114\t2190\nNet investment income\t977\t904\t2508\t2610\nOther revenues\t73\t68\t224\t199\nNet investment gains (losses)\t6\t14\t(46)\t60\nNet derivative gains (losses)\t(1870)\t984\t2227\t(218)\nTotal revenues\t75\t2901\t7576\t5490\nExpenses\t\t\t\t\nPolicyholder benefits and claims\t3150\t1282\t5094\t2836\nInterest credited to policyholder account balances\t272\t263\t792\t771\nAmortization of deferred policy acquisition costs and value of business acquired\t208\t184\t833\t358\nOther expenses\t469\t464\t1326\t1353\nTotal expenses\t4099\t2193\t8045\t5318\nIncome (loss) before provision for income tax\t(4024)\t708\t(469)\t172\nProvision for income tax expense (benefit)\t(858)\t99\t(145)\t(46)\nNet income (loss)\t(3166)\t609\t(324)\t218\nLess: Net income (loss) attributable to noncontrolling interests\t0\t0\t1\t1\nNet income (loss) attributable to Brighthouse Life Insurance Company\t(3166)\t609\t(325)\t217\nComprehensive income (loss)\t(2668)\t1467\t1569\t3032\nLess: Comprehensive income (loss) attributable to noncontrolling interests\t0\t0\t1\t1\nComprehensive income (loss) attributable to Brighthouse Life Insurance Company\t(2668)\t1467\t1568\t3031\n", "q10k_tbl_3": "\tCommon Stock\tAdditional Paid-in Capital\tRetained Earnings (Deficit)\tAccumulated Other Comprehensive Income (Loss)\tBrighthouse Life Insurance Company's Stockholder's Equity\tNoncontrolling Interests\tTotal Equity\nBalance at December 31 2019\t75\t19073\t(3899)\t3215\t18464\t15\t18479\nCumulative effect of change in accounting principle net of income tax (Note 1)\t\t\t(14)\t3\t(11)\t\t(11)\nBalance at January 1 2020\t75\t19073\t(3913)\t3218\t18453\t15\t18468\nDividends paid to parent\t\t(300)\t(500)\t\t(800)\t\t(800)\nChange in noncontrolling interests\t\t\t\t\t0\t(1)\t(1)\nNet income (loss)\t\t\t2841\t\t2841\t1\t2842\nOther comprehensive income (loss) net of income tax\t\t\t\t1392\t1392\t\t1392\nBalance at June 30 2020\t75\t18773\t(1572)\t4610\t21886\t15\t21901\nNet income (loss)\t\t\t(3166)\t\t(3166)\t\t(3166)\nOther comprehensive income (loss) net of income tax\t\t\t\t498\t498\t\t498\nBalance at September 30 2020\t75\t18773\t(4738)\t5108\t19218\t15\t19233\n", "q10k_tbl_4": "\tCommon Stock\tAdditional Paid-in Capital\tRetained Earnings (Deficit)\tAccumulated Other Comprehensive Income (Loss)\tBrighthouse Life Insurance Company's Stockholder's Equity\tNoncontrolling Interests\tTotal Equity\nBalance at December 31 2018\t75\t19073\t(3090)\t718\t16776\t15\t16791\nChange in noncontrolling interests\t\t\t\t\t0\t(1)\t(1)\nNet income (loss)\t\t\t(392)\t\t(392)\t1\t(391)\nOther comprehensive income (loss) net of income tax\t\t\t\t1956\t1956\t\t1956\nBalance at June 30 2019\t75\t19073\t(3482)\t2674\t18340\t15\t18355\nNet income (loss)\t\t\t609\t\t609\t\t609\nOther comprehensive income (loss) net of income tax\t\t\t\t858\t858\t\t858\nBalance at September 30 2019\t75\t19073\t(2873)\t3532\t19807\t15\t19822\n", "q10k_tbl_5": "\tNine Months Ended September 30\t\n\t2020\t2019\nNet cash provided by (used in) operating activities\t648\t1643\nCash flows from investing activities\t\t\nSales maturities and repayments of:\t\t\nFixed maturity securities\t5921\t11160\nEquity securities\t54\t29\nMortgage loans\t1227\t924\nLimited partnerships and limited liability companies\t124\t205\nPurchases of:\t\t\nFixed maturity securities\t(9485)\t(12982)\nEquity securities\t(1)\t(3)\nMortgage loans\t(1236)\t(2625)\nLimited partnerships and limited liability companies\t(423)\t(321)\nCash received in connection with freestanding derivatives\t5280\t1178\nCash paid in connection with freestanding derivatives\t(3281)\t(1704)\nReceipt on loan to affiliate\t100\t0\nIssuance of loan to affiliate\t(100)\t0\nNet change in policy loans\t(4)\t86\nNet change in short-term investments\t(1849)\t(1477)\nNet change in other invested assets\t(17)\t21\nNet cash provided by (used in) investing activities\t(3690)\t(5509)\nCash flows from financing activities\t\t\nPolicyholder account balances:\t\t\nDeposits\t6749\t5279\nWithdrawals\t(1535)\t(1963)\nNet change in payables for collateral under securities loaned and other transactions\t2596\t224\nLong-term and short-term debt issued\t100\t412\nLong-term and short-term debt repaid\t(101)\t(1)\nDividends paid to parent\t(800)\t0\nFinancing element on certain derivative instruments and other derivative related transactions net\t(765)\t179\nOther net\t(32)\t(38)\nNet cash provided by (used in) financing activities\t6212\t4092\nChange in cash cash equivalents and restricted cash\t3170\t226\nCash cash equivalents and restricted cash beginning of period\t2493\t3494\nCash cash equivalents and restricted cash end of period\t5663\t3720\nSupplemental disclosures of cash flow information\t\t\nNet cash paid (received) for:\t\t\nInterest\t67\t30\nIncome tax\t(66)\t0\n", "q10k_tbl_6": "Standard\tDescription\tEffective Date\tImpact on Financial Statements\nASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (\"ASU 2016-13\")\tThe amendments to Topic 326 replace the incurred loss impairment methodology for certain financial instruments with one that reflects expected credit losses based on historical loss information current conditions and reasonable and supportable forecasts. The new guidance also requires that an other-than- temporary impairment on a debt security will be recognized as an allowance going forward such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income but rather a reversal of the previous impairment and recognized through realized investment gains and losses.\tJanuary 1 2020 using the modified retrospective method\tThe Company recorded an after tax net decrease to retained earnings of $14 million and a net increase to accumulated other comprehensive income (loss) (\"AOCI\") of $3 million for the cumulative effect of adoption. The adjustment included establishing or updating the allowance for credit losses on fixed maturity securities mortgage loans and other invested assets.\n", "q10k_tbl_7": "Standard\tDescription\tEffective Date\tImpact on Financial Statements\nASU 2018-12 Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts\tThe amendments to Topic 944 will result in significant changes to the accounting for long-duration insurance contracts. These changes (1) require all guarantees that qualify as market risk benefits to be measured at fair value (2) require more frequent updating of assumptions and modify existing discount rate requirements for certain insurance liabilities (3) modify the methods of amortization for deferred policy acquisition costs (\"DAC\") and (4) require new qualitative and quantitative disclosures around insurance contract asset and liability balances and the judgments assumptions and methods used to measure those balances. The market risk benefit guidance is required to be applied on a retrospective basis while the changes to guidance for insurance liabilities and DAC may be applied to existing carrying amounts on the effective date or on a retrospective basis.\tJanuary 1 2023\tThe Company continues to evaluate the new guidance and therefore is unable to estimate the impact to its financial statements. The most significant impact is expected to be the measurement of liabilities for variable annuity guarantees.\n", "q10k_tbl_8": "\tThree Months Ended September 30 2020\t\t\t\t\n\tAnnuities\tLife\tRun-off\tCorporate & Other\tTotal\n\t(In millions)\t\t\t\t\nPre-tax adjusted earnings\t466\t(75)\t(1443)\t(60)\t(1112)\nProvision for income tax expense (benefit)\t90\t(17)\t(304)\t(15)\t(246)\nPost-tax adjusted earnings\t376\t(58)\t(1139)\t(45)\t(866)\nLess: Net income (loss) attributable to noncontrolling interests\t0\t0\t0\t0\t0\nAdjusted earnings\t376\t(58)\t(1139)\t(45)\t(866)\nAdjustments for:\t\t\t\t\t\nNet investment gains (losses)\t\t\t\t\t6\nNet derivative gains (losses)\t\t\t\t\t(1870)\nOther adjustments to net income (loss)\t\t\t\t\t(1048)\nProvision for income tax (expense) benefit\t\t\t\t\t612\nNet income (loss) attributable to Brighthouse Life Insurance Company\t\t\t\t\t(3166)\nInterest revenue\t467\t116\t383\t17\t\nInterest expense\t0\t0\t0\t17\t\n", "q10k_tbl_9": "\tThree Months Ended September 30 2019\t\t\t\t\n\tAnnuities\tLife\tRun-off\tCorporate & Other\tTotal\n\t(In millions)\t\t\t\t\nPre-tax adjusted earnings\t247\t88\t(543)\t(70)\t(278)\nProvision for income tax expense (benefit)\t50\t18\t(117)\t(60)\t(109)\nPost-tax adjusted earnings\t197\t70\t(426)\t(10)\t(169)\nLess: Net income (loss) attributable to noncontrolling interests\t0\t0\t0\t0\t0\nAdjusted earnings\t197\t70\t(426)\t(10)\t(169)\nAdjustments for:\t\t\t\t\t\nNet investment gains (losses)\t\t\t\t\t14\nNet derivative gains (losses)\t\t\t\t\t984\nOther adjustments to net income (loss)\t\t\t\t\t(12)\nProvision for income tax (expense) benefit\t\t\t\t\t(208)\nNet income (loss) attributable to Brighthouse Life Insurance Company\t\t\t\t\t609\nInterest revenue\t458\t101\t327\t18\t\nInterest expense\t0\t0\t0\t17\t\n", "q10k_tbl_10": "\tNine Months Ended September 30 2020\t\t\t\t\n\tAnnuities\tLife\tRun-off\tCorporate & Other\tTotal\n\t(In millions)\t\t\t\t\nPre-tax adjusted earnings\t1042\t(8)\t(1679)\t(241)\t(886)\nProvision for income tax expense (benefit)\t194\t(3)\t(355)\t(68)\t(232)\nPost-tax adjusted earnings\t848\t(5)\t(1324)\t(173)\t(654)\nLess: Net income (loss) attributable to noncontrolling interests\t0\t0\t0\t1\t1\nAdjusted earnings\t848\t(5)\t(1324)\t(174)\t(655)\nAdjustments for:\t\t\t\t\t\nNet investment gains (losses)\t\t\t\t\t(46)\nNet derivative gains (losses)\t\t\t\t\t2227\nOther adjustments to net income (loss)\t\t\t\t\t(1764)\nProvision for income tax (expense) benefit\t\t\t\t\t(87)\nNet income (loss) attributable to Brighthouse Life Insurance Company\t\t\t\t\t(325)\nInterest revenue\t1327\t273\t873\t48\t\nInterest expense\t0\t0\t0\t51\t\n", "q10k_tbl_11": "\tNine Months Ended September 30 2019\t\t\t\t\n\tAnnuities\tLife\tRun-off\tCorporate & Other\tTotal\n\t(In millions)\t\t\t\t\nPre-tax adjusted earnings\t915\t185\t(587)\t(210)\t303\nProvision for income tax expense (benefit)\t172\t38\t(127)\t(102)\t(19)\nPost-tax adjusted earnings\t743\t147\t(460)\t(108)\t322\nLess: Net income (loss) attributable to noncontrolling interests\t0\t0\t0\t1\t1\nAdjusted earnings\t743\t147\t(460)\t(109)\t321\nAdjustments for:\t\t\t\t\t\nNet investment gains (losses)\t\t\t\t\t60\nNet derivative gains (losses)\t\t\t\t\t(218)\nOther adjustments to net income (loss)\t\t\t\t\t27\nProvision for income tax (expense) benefit\t\t\t\t\t27\nNet income (loss) attributable to Brighthouse Life Insurance Company\t\t\t\t\t217\nInterest revenue\t1344\t284\t942\t40\t\nInterest expense\t0\t0\t0\t43\t\n", "q10k_tbl_12": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nAnnuities\t1014\t1037\t2949\t3052\nLife\t274\t278\t780\t807\nRun-off\t553\t484\t1378\t1487\nCorporate & Other\t39\t40\t112\t110\nAdjustments\t(1805)\t1062\t2357\t34\nTotal\t75\t2901\t7576\t5490\n", "q10k_tbl_13": "\tSeptember 30 2020\tDecember 31 2019\n\t(In millions)\t\nAnnuities\t158154\t152740\nLife\t17288\t16389\nRun-off\t38262\t35132\nCorporate & Other\t14456\t11892\nTotal\t228160\t216153\n", "q10k_tbl_14": "\tSeptember 30 2020\t\t\t\tDecember 31 2019\t\t\t\n\tIn the Event of Death\t\tAt Annuitization\t\tIn the Event of Death\t\tAt Annuitization\t\n\t(Dollars in millions)\t\t\t\t\t\t\t\nAnnuity Contracts (1) (2)\t\t\t\t\t\t\t\t\nVariable Annuity Guarantees\t\t\t\t\t\t\t\t\nTotal account value (3)\t96451\t\t53870\t\t100034\t\t57069\t\nSeparate account value\t91617\t\t52745\t\t95430\t\t56027\t\nNet amount at risk\t8000\t(4)\t7515\t(5)\t6617\t(4)\t4495\t(5)\nAverage attained age of contract holders\t70 years\t\t70 years\t\t69 years\t\t69 years\t\n", "q10k_tbl_15": "\tSeptember 30 2020\tDecember 31 2019\n\tSecondary Guarantees\t\n\t(Dollars in millions)\t\nUniversal Life Contracts\t\t\nTotal account value (3)\t5816\t5957\nNet amount at risk (6)\t69664\t71124\nAverage attained age of policyholders\t67 years\t66 years\nVariable Life Contracts\t\t\nTotal account value (3)\t1174\t1133\nNet amount at risk (6)\t11511\t12082\nAverage attained age of policyholders\t46 years\t45 years\n", "q10k_tbl_16": "\tSeptember 30 2020\t\t\t\t\t\t\tDecember 31 2019\t\t\t\t\n\tAmortized Cost\tAllowance for Credit Losses\tGross Unrealized\t\t\t\tEstimated Fair Value\tAmortized Cost\tAllowance for Credit Losses\tGross Unrealized\t\tEstimated Fair Value\n\tGains\tLosses\t\tGains\t\tLosses\t\n\t(In millions)\t\t\t\t\t\t\t\t\t\t\t\nU.S. corporate\t30759\t2\t4669\t\t132\t\t35294\t27841\t0\t2815\t65\t30591\nForeign corporate\t9553\t1\t1063\t\t100\t\t10515\t9017\t0\t736\t67\t9686\nRMBS\t7727\t0\t652\t\t9\t\t8370\t8600\t0\t440\t10\t9030\nU.S. government and agency\t5574\t0\t3179\t\t0\t\t8753\t5396\t0\t1848\t0\t7244\nCMBS\t5778\t0\t563\t\t9\t\t6332\t5460\t0\t263\t9\t5714\nState and political subdivision\t3413\t0\t935\t\t2\t\t4346\t3326\t0\t687\t2\t4011\nABS\t2676\t0\t55\t\t21\t\t2710\t1940\t0\t21\t11\t1950\nForeign government\t1512\t0\t313\t\t6\t\t1819\t1503\t0\t250\t2\t1751\nTotal fixed maturity securities\t66992\t3\t11429\t\t279\t\t78139\t63083\t0\t7060\t166\t69977\n", "q10k_tbl_17": "\tDue in One Year or Less\tDue After One Year Through Five Years\tDue After Five Years Through Ten Years\tDue After Ten Years\tStructured Securities (1)\tTotal Fixed Maturity Securities\n\t(In millions)\t\t\t\t\t\nAmortized cost\t1465\t7192\t13928\t28226\t16181\t66992\nEstimated fair value\t1480\t7623\t15397\t36227\t17412\t78139\n", "q10k_tbl_18": "\tSeptember 30 2020\t\t\t\tDecember 31 2019\t\t\t\n\tLess than 12 Months\t\t12 Months or Greater\t\tLess than 12 Months\t\t12 Months or Greater\t\n\tEstimated Fair Value\tGross Unrealized Losses\tEstimated Fair Value\tGross Unrealized Losses\tEstimated Fair Value\tGross Unrealized Losses\tEstimated Fair Value\tGross Unrealized Losses\n\t(Dollars in millions)\t\t\t\t\t\t\t\nU.S. corporate\t2965\t111\t185\t21\t1931\t43\t320\t22\nForeign corporate\t849\t36\t403\t64\t577\t12\t510\t55\nRMBS\t419\t9\t12\t0\t802\t6\t346\t4\nU.S. government and agency\t0\t0\t0\t0\t14\t0\t0\t0\nCMBS\t342\t7\t60\t2\t552\t7\t171\t2\nState and political subdivision\t104\t2\t0\t0\t120\t2\t8\t0\nABS\t667\t8\t590\t13\t358\t2\t676\t9\nForeign government\t122\t6\t6\t0\t65\t2\t0\t0\nTotal fixed maturity securities\t5468\t179\t1256\t100\t4419\t74\t2031\t92\nTotal number of securities in an unrealized loss position\t1052\t\t244\t\t686\t\t297\t\n", "q10k_tbl_19": "\tU.S. Corporate\tForeign Corporate\tTotal\n\t(In millions)\nBalance at January 1 2020\t3\t1\t4\nAllowance on securities where credit losses were not previously recorded\t3\t1\t4\nReductions for securities sold\t(1)\t0\t(1)\nWrite-offs charged against allowance (1)\t(3)\t(1)\t(4)\nBalance at September 30 2020\t2\t1\t3\n", "q10k_tbl_20": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tCarrying Value\t% of Total\tCarrying Value\t% of Total\n\t(Dollars in millions)\t\t\t\nCommercial\t9803\t62.6%\t9694\t61.9%\nAgricultural\t3320\t21.2\t3326\t21.2\nResidential\t2626\t16.8\t2708\t17.3\nTotal mortgage loans (1)\t15749\t100.6\t15728\t100.4\nAllowance for credit losses\t(90)\t(0.6)\t(64)\t(0.4)\nTotal mortgage loans net\t15659\t100.0%\t15664\t100.0%\n", "q10k_tbl_21": "\tCommercial\tAgricultural\tResidential\tTotal\n\t(In millions)\t\t\t\nBalance at December 31 2019\t47\t10\t7\t64\nCumulative effect of change in accounting principle\t(20)\t6\t14\t0\nBalance at January 1 2020\t27\t16\t21\t64\nCurrent period provision\t17\t0\t9\t26\nBalance at September 30 2020\t44\t16\t30\t90\n", "q10k_tbl_22": "\t2020\t2019\t2018\t2017\t2016\tPrior\tTotal\n\t(In millions)\t\t\t\t\t\t\nSeptember 30 2020\t\t\t\t\t\t\t\nCommercial mortgage loans\t\t\t\t\t\t\t\nLoan-to-value ratios:\t\t\t\t\t\t\t\nLess than 65%\t288\t1645\t1113\t571\t1121\t3187\t7925\n65% to 75%\t114\t345\t453\t340\t40\t277\t1569\n76% to 80%\t0\t0\t0\t0\t84\t0\t84\nGreater than 80%\t0\t0\t10\t12\t6\t197\t225\nTotal commercial mortgage loans\t402\t1990\t1576\t923\t1251\t3661\t9803\nAgricultural mortgage loans\t\t\t\t\t\t\t\nLoan-to-value ratios:\t\t\t\t\t\t\t\nLess than 65%\t200\t556\t753\t423\t481\t728\t3141\n65% to 75%\t37\t81\t10\t33\t0\t18\t179\nTotal agricultural mortgage loans\t237\t637\t763\t456\t481\t746\t3320\nResidential mortgage loans\t\t\t\t\t\t\t\nPerforming\t200\t428\t478\t116\t43\t1261\t2526\nNonperforming\t1\t5\t5\t1\t0\t88\t100\nTotal residential mortgage loans\t201\t433\t483\t117\t43\t1349\t2626\nTotal\t840\t3060\t2822\t1496\t1775\t5756\t15749\n", "q10k_tbl_23": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tAmortized Cost\t% of Total\tAmortized Cost\t% of Total\n\t(Dollars in millions)\t\t\t\nDebt-service coverage ratios:\t\t\t\t\nGreater than 1.20x\t9259\t94.4%\t9230\t95.2%\n1.00x - 1.20x\t359\t3.7\t298\t3.1\nLess than 1.00x\t185\t1.9\t166\t1.7\nTotal\t9803\t100.0%\t9694\t100.0%\n", "q10k_tbl_24": "\tSeptember 30 2020\t\t\t\n\tCommercial\tAgricultural\tResidential\tTotal\n\t(In millions)\t\t\t\nCurrent\t9803\t3319\t2461\t15583\n30-59 days past due\t0\t0\t65\t65\n60-89 days past due\t0\t0\t69\t69\n90-179 days past due\t0\t1\t16\t17\n180+ days past due\t0\t0\t15\t15\nTotal\t9803\t3320\t2626\t15749\n", "q10k_tbl_25": "\tCommercial\tAgricultural\tResidential\tTotal\n\t(In millions)\t\t\t\nDecember 31 2019\t0\t21\t37\t58\nSeptember 30 2020 (1)\t0\t14\t100\t114\n", "q10k_tbl_26": "\tSeptember 30 2020\tDecember 31 2019\n\t(In millions)\t\nFixed maturity securities\t11150\t6894\nDerivatives\t448\t232\nOther\t(17)\t(15)\nSubtotal\t11581\t7111\nAmounts allocated from:\t\t\nFuture policy benefits\t(4631)\t(2691)\nDAC VOBA and DSI\t(462)\t(332)\nSubtotal\t(5093)\t(3023)\nDeferred income tax benefit (expense)\t(1363)\t(859)\nNet unrealized investment gains (losses)\t5125\t3229\n", "q10k_tbl_27": "\tNine Months Ended September 30 2020\n\t(In millions)\nBalance at December 31 2019\t3229\nUnrealized investment gains (losses) during the period\t4470\nUnrealized investment gains (losses) relating to:\t\nFuture policy benefits\t(1940)\nDAC VOBA and DSI\t(130)\nDeferred income tax benefit (expense)\t(504)\nBalance at September 30 2020\t5125\nChange in net unrealized investment gains (losses)\t1896\n", "q10k_tbl_28": "\tSeptember 30 2020\tDecember 31 2019\n\t(In millions)\t\nSecurities on loan: (1)\t\t\nAmortized cost\t2037\t2031\nEstimated fair value\t3531\t2996\nCash collateral received from counterparties (2)\t3625\t3074\nSecurities collateral received from counterparties (3)\t6\t0\nReinvestment portfolio - estimated fair value\t3764\t3174\n", "q10k_tbl_29": "\tSeptember 30 2020\t\t\tDecember 31 2019\t\t\n\tOpen (1)\t1 Month or Less\t1 to 6 Months\tTotal\tOpen (1)\t1 Month or Less\t\t\t\t1 to 6 Months\t\t\t\t\t\t\t\t\t\t\t\tTotal\t\t\t\t\t\t\t\t\n\t(In millions)\t\t\t\t\t\nU.S. government and agency\t1229\t1801\t593\t3623\t1279\t1094\t\t\t\t701\t\t\t\t\t\t\t\t\t\t\t\t3074\t\t\t\t\t\t\t\t\nForeign corporate\t2\t0\t0\t2\t0\t0\t\t\t\t0\t\t\t\t\t\t\t\t\t\t\t\t0\t\t\t\t\t\t\t\t\nTotal\t1231\t1801\t593\t3625\t1279\t1094\t\t\t\t701\t\t\t\t\t\t\t\t\t\t\t\t3074\t\t\t\t\t\t\t\t\n", "q10k_tbl_30": "\tSeptember 30 2020\tDecember 31 2019\n\t(In millions)\t\nInvested assets on deposit (regulatory deposits) (1)\t10056\t9345\nInvested assets held in trust (reinsurance agreements) (2)\t5518\t4561\nInvested assets pledged as collateral (3)\t5608\t3640\nTotal invested assets on deposit held in trust and pledged as collateral\t21182\t17546\n", "q10k_tbl_31": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tCarrying Amount\tMaximum Exposure to Loss\tCarrying Amount\tMaximum Exposure to Loss\n\t(In millions)\t\t\t\nFixed maturity securities\t13270\t12221\t12959\t12317\nLimited partnerships and LLCs\t2070\t3338\t1892\t3065\nTotal\t15340\t15559\t14851\t15382\n", "q10k_tbl_32": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nInvestment income:\t\t\t\t\nFixed maturity securities\t665\t654\t1990\t1962\nEquity securities\t1\t1\t4\t6\nMortgage loans\t163\t172\t495\t505\nPolicy loans\t9\t12\t23\t34\nLimited partnerships and LLCs (1)\t156\t80\t48\t175\nCash cash equivalents and short-term investments\t6\t25\t38\t52\nOther\t14\t10\t38\t28\nTotal investment income\t1014\t954\t2636\t2762\nLess: Investment expenses\t37\t50\t128\t152\nNet investment income\t977\t904\t2508\t2610\n", "q10k_tbl_33": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nFixed maturity securities\t2\t16\t(24)\t63\nEquity securities\t3\t3\t(4)\t14\nMortgage loans\t3\t(1)\t(23)\t(8)\nLimited partnerships and LLCs\t(1)\t(3)\t(4)\t(8)\nOther\t(1)\t(1)\t9\t(1)\nTotal net investment gains (losses)\t6\t14\t(46)\t60\n", "q10k_tbl_34": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nProceeds\t889\t1371\t2155\t8007\nGross investment gains\t30\t31\t61\t194\nGross investment losses\t(28)\t(15)\t(70)\t(131)\nNet investment gains (losses)\t2\t16\t(9)\t63\n", "q10k_tbl_35": "\t\tSeptember 30 2020\t\t\tDecember 31 2019\t\t\n\tPrimary Underlying Risk Exposure\tGross Notional Amount\tEstimated Fair Value\t\tGross Notional Amount\tEstimated Fair Value\t\n\tAssets\tLiabilities\tAssets\tLiabilities\n\t\t(In millions)\t\t\t\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\t\t\t\nCash flow hedges:\t\t\t\t\t\t\t\nInterest rate forwards\tInterest rate\t330\t90\t0\t420\t22\t0\nForeign currency swaps\tForeign currency exchange rate\t2746\t299\t19\t2701\t176\t27\nTotal qualifying hedges\t\t3076\t389\t19\t3121\t198\t27\nDerivatives Not Designated or Not Qualifying as Hedging Instruments:\t\t\t\t\t\t\t\nInterest rate swaps\tInterest rate\t3015\t707\t24\t7559\t878\t29\nInterest rate caps\tInterest rate\t2350\t1\t0\t3350\t2\t0\nInterest rate options\tInterest rate\t22570\t1481\t178\t29750\t782\t187\nInterest rate forwards\tInterest rate\t7332\t1179\t25\t5418\t94\t114\nForeign currency swaps\tForeign currency exchange rate\t991\t138\t15\t1040\t94\t15\nForeign currency forwards\tForeign currency exchange rate\t157\t0\t2\t138\t0\t1\nCredit default swaps - purchased\tCredit\t18\t0\t0\t18\t0\t0\nCredit default swaps - written\tCredit\t1793\t27\t1\t1613\t36\t0\nEquity index options\tEquity market\t37493\t815\t995\t51509\t850\t1728\nEquity variance swaps\tEquity market\t1098\t13\t22\t2136\t69\t69\nEquity total return swaps\tEquity market\t12997\t63\t222\t7723\t2\t367\nTotal non-designated or non-qualifying derivatives\t\t89814\t4424\t1484\t110254\t2807\t2510\nEmbedded derivatives:\t\t\t\t\t\t\t\nCeded guaranteed minimum income benefits\tOther\tN/A\t321\t0\tN/A\t217\t0\nDirect index-linked annuities\tOther\tN/A\t0\t2256\tN/A\t0\t2253\nDirect guaranteed minimum benefits\tOther\tN/A\t0\t3649\tN/A\t0\t1548\nAssumed guaranteed minimum benefits\tOther\tN/A\t0\t694\tN/A\t0\t442\nAssumed index-linked annuities\tOther\tN/A\t0\t340\tN/A\t0\t339\nTotal embedded derivatives\t\tN/A\t321\t6939\tN/A\t217\t4582\nTotal\t\t92890\t5134\t8442\t113375\t3222\t7119\n", "q10k_tbl_36": "\tNet Derivative Gains (Losses) Recognized for Derivatives\tNet Derivative Gains (Losses) Recognized for Hedged Items\tNet Investment Income\tAmount of Gains (Losses) Deferred in AOCI\n\t(In millions)\t\t\nThree Months Ended September 30 2020\t\t\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\nCash flow hedges:\t\t\t\t\nInterest rate derivatives\t0\t0\t1\t(1)\nForeign currency exchange rate derivatives\t8\t(3)\t8\t(182)\nTotal cash flow hedges\t8\t(3)\t9\t(183)\nDerivatives Not Designated or Not Qualifying as Hedging Instruments:\t\t\t\t\nInterest rate derivatives\t(435)\t0\t0\t0\nForeign currency exchange rate derivatives\t(49)\t(2)\t0\t0\nCredit derivatives\t3\t0\t0\t0\nEquity derivatives\t(751)\t0\t0\t0\nEmbedded derivatives\t(641)\t0\t0\t0\nTotal non-qualifying hedges\t(1873)\t(2)\t0\t0\nTotal\t(1865)\t(5)\t9\t(183)\nThree Months Ended September 30 2019\t\t\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\nCash flow hedges:\t\t\t\t\nInterest rate derivatives\t0\t0\t1\t51\nForeign currency exchange rate derivatives\t0\t0\t9\t106\nTotal cash flow hedges\t0\t0\t10\t157\nDerivatives Not Designated or Not Qualifying as Hedging Instruments:\t\t\t\t\nInterest rate derivatives\t1656\t0\t0\t0\nForeign currency exchange rate derivatives\t49\t(2)\t0\t0\nCredit derivatives\t2\t0\t0\t0\nEquity derivatives\t(18)\t0\t0\t0\nEmbedded derivatives\t(703)\t0\t0\t0\nTotal non-qualifying hedges\t986\t(2)\t0\t0\nTotal\t986\t(2)\t10\t157\n", "q10k_tbl_37": "\tNet Derivative Gains (Losses) Recognized for Derivatives\tNet Derivative Gains (Losses) Recognized for Hedged Items\tNet Investment Income\tAmount of Gains (Losses) Deferred in AOCI\n\t(In millions)\t\t\nNine Months Ended September 30 2020\t\t\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\nCash flow hedges:\t\t\t\t\nInterest rate derivatives\t1\t0\t2\t92\nForeign currency exchange rate derivatives\t12\t(6)\t28\t139\nTotal cash flow hedges\t13\t(6)\t30\t231\nDerivatives Not Designated or Not Qualifying as Hedging Instruments:\t\t\t\t\nInterest rate derivatives\t4321\t0\t0\t0\nForeign currency exchange rate derivatives\t56\t(11)\t0\t0\nCredit derivatives\t1\t0\t0\t0\nEquity derivatives\t(393)\t0\t0\t0\nEmbedded derivatives\t(1754)\t0\t0\t0\nTotal non-qualifying hedges\t2231\t(11)\t0\t0\nTotal\t2244\t(17)\t30\t231\nNine Months Ended September 30 2019\t\t\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\nCash flow hedges:\t\t\t\t\nInterest rate derivatives\t28\t0\t2\t51\nForeign currency exchange rate derivatives\t20\t(23)\t25\t145\nTotal cash flow hedges\t48\t(23)\t27\t196\nDerivatives Not Designated or Not Qualifying as Hedging Instruments:\t\t\t\t\nInterest rate derivatives\t2905\t0\t0\t0\nForeign currency exchange rate derivatives\t71\t(6)\t0\t0\nCredit derivatives\t31\t0\t0\t0\nEquity derivatives\t(1808)\t0\t0\t0\nEmbedded derivatives\t(1436)\t0\t0\t0\nTotal non-qualifying hedges\t(237)\t(6)\t0\t0\nTotal\t(189)\t(29)\t27\t196\n", "q10k_tbl_38": "\tSeptember 30 2020\t\t\tDecember 31 2019\t\t\nRating Agency Designation of Referenced Credit Obligations (1)\tEstimated Fair Value of Credit Default Swaps\tMaximum Amount of Future Payments under Credit Default Swaps\tWeighted Average Years to Maturity (2)\tEstimated Fair Value of Credit Default Swaps\tMaximum Amount of Future Payments under Credit Default Swaps\tWeighted Average Years to Maturity (2)\n\t(Dollars in millions)\t\t\t\t\t\nAaa/Aa/A\t8\t879\t2.5\t11\t615\t2.5\nBaa\t18\t914\t5.5\t25\t998\t5.1\nTotal\t26\t1793\t4\t36\t1613\t4.1\n", "q10k_tbl_39": "\t\tGross Amounts Not Offset on the Consolidated Balance Sheets\t\t\t\t\n\tGross Amount Recognized\tFinancial Instruments (1)\tCollateral Received/Pledged (2)\tNet Amount\tSecurities Collateral Received/Pledged (3)\tNet Amount After Securities Collateral\n\t(In millions)\t\t\t\t\t\nSeptember 30 2020\t\t\t\t\t\t\nDerivative assets\t4843\t(1068)\t(3141)\t634\t(625)\t9\nDerivative liabilities\t1495\t(1068)\t0\t427\t(426)\t1\nDecember 31 2019\t\t\t\t\t\t\nDerivative assets\t3046\t(1458)\t(1100)\t488\t(487)\t1\nDerivative liabilities\t2522\t(1458)\t0\t1064\t(1061)\t3\n", "q10k_tbl_40": "\tSeptember 30 2020\tDecember 31 2019\n\t(In millions)\t\nEstimated fair value of derivatives in a net liability position (1)\t427\t1064\nEstimated Fair Value of Collateral Provided (2):\t\t\nFixed maturity securities\t691\t1473\n", "q10k_tbl_41": "\tSeptember 30 2020\t\t\t\n\tFair Value Hierarchy\t\t\tTotal Estimated Fair Value\n\tLevel 1\tLevel 2\tLevel 3\n\t(In millions)\t\t\t\nAssets\t\t\t\t\nFixed maturity securities:\t\t\t\t\nU.S. corporate\t0\t34595\t699\t35294\nForeign corporate\t0\t10155\t360\t10515\nRMBS\t0\t8370\t0\t8370\nU.S. government and agency\t1733\t7020\t0\t8753\nCMBS\t0\t6325\t7\t6332\nState and political subdivision\t0\t4346\t0\t4346\nABS\t0\t2636\t74\t2710\nForeign government\t0\t1819\t0\t1819\nTotal fixed maturity securities\t1733\t75266\t1140\t78139\nEquity securities\t12\t99\t3\t114\nShort-term investments\t2451\t880\t10\t3341\nDerivative assets: (1)\t\t\t\t\nInterest rate\t0\t3458\t0\t3458\nForeign currency exchange rate\t0\t420\t17\t437\nCredit\t0\t18\t9\t27\nEquity market\t0\t878\t13\t891\nTotal derivative assets\t0\t4774\t39\t4813\nEmbedded derivatives within asset host contracts (2)\t0\t0\t321\t321\nSeparate account assets\t153\t95799\t3\t95955\nTotal assets\t4349\t176818\t1516\t182683\nLiabilities\t\t\t\t\nDerivative liabilities: (1)\t\t\t\t\nInterest rate\t0\t227\t0\t227\nForeign currency exchange rate\t0\t36\t0\t36\nCredit\t0\t0\t1\t1\nEquity market\t0\t1216\t23\t1239\nTotal derivative liabilities\t0\t1479\t24\t1503\nEmbedded derivatives within liability host contracts (2)\t0\t0\t6939\t6939\nTotal liabilities\t0\t1479\t6963\t8442\n", "q10k_tbl_42": "\tDecember 31 2019\t\t\t\n\tFair Value Hierarchy\t\t\tTotal Estimated Fair Value\n\tLevel 1\tLevel 2\tLevel 3\n\t(In millions)\t\t\t\nAssets\t\t\t\t\nFixed maturity securities:\t\t\t\t\nU.S. corporate\t0\t30266\t325\t30591\nForeign corporate\t0\t9554\t132\t9686\nRMBS\t0\t8986\t44\t9030\nU.S. government and agency\t1542\t5702\t0\t7244\nCMBS\t0\t5714\t0\t5714\nState and political subdivision\t0\t3938\t73\t4011\nABS\t0\t1877\t73\t1950\nForeign government\t0\t1751\t0\t1751\nTotal fixed maturity securities\t1542\t67788\t647\t69977\nEquity securities\t14\t125\t8\t147\nShort-term investments\t1004\t473\t5\t1482\nDerivative assets: (1)\t\t\t\t\nInterest rate\t0\t1778\t0\t1778\nForeign currency exchange rate\t0\t265\t5\t270\nCredit\t0\t25\t11\t36\nEquity market\t0\t850\t71\t921\nTotal derivative assets\t0\t2918\t87\t3005\nEmbedded derivatives within asset host contracts (2)\t0\t0\t217\t217\nSeparate account assets\t180\t99485\t3\t99668\nTotal assets\t2740\t170789\t967\t174496\nLiabilities\t\t\t\t\nDerivative liabilities: (1)\t\t\t\t\nInterest rate\t0\t330\t0\t330\nForeign currency exchange rate\t0\t43\t0\t43\nEquity market\t0\t2093\t71\t2164\nTotal derivative liabilities\t0\t2466\t71\t2537\nEmbedded derivatives within liability host contracts (2)\t0\t0\t4582\t4582\nTotal liabilities\t0\t2466\t4653\t7119\n", "q10k_tbl_43": "\t\t\t\t\tSeptember 30 2020\t\t\tDecember 31 2019\t\t\tImpact of Increase in Input on Estimated Fair Value\n\tValuation Techniques\t\tSignificant Unobservable Inputs\t\tRange\t\t\tRange\t\t\nEmbedded derivatives\t\t\t\t\t\t\t\t\t\t\t\nDirect assumed and ceded guaranteed minimum benefits\t0\tOption pricing techniques\t0\tMortality rates\t0.03%\t0\t12.13%\t0.02%\t0\t11.31%\tDecrease (1)\n\t\t\t0\tLapse rates\t0.25%\t0\t15.00%\t0.25%\t0\t16.00%\tDecrease (2)\n\t\t\t0\tUtilization rates\t0.00%\t0\t25.00%\t0.00%\t0\t25.00%\tIncrease (3)\n\t\t\t0\tWithdrawal rates\t0.25%\t0\t10.00%\t0.25%\t0\t10.00%\t(4)\n\t\t\t0\tLong-term equity volatilities\t16.66%\t0\t22.21%\t16.24%\t0\t21.65%\tIncrease (5)\n\t\t\t0\tNonperformance risk spread\t0.99%\t0\t2.39%\t0.54%\t0\t1.99%\tDecrease (6)\n", "q10k_tbl_44": "\tFair Value Measurements Using Significant Unobservable Inputs (Level 3)\t\t\t\t\t\t\n\tFixed Maturity Securities\t\t\t\t\t\t\n\tCorporate (1)\tStructured Securities\tState and Political Subdivision\tEquity Securities\tShort-term Investments\tNet Derivatives (2)\tNet Embedded Derivatives (3)\tSeparate Account Assets (4)\t\t\n\t(In millions)\t\t\t\t\t\t\nThree Months Ended September 30 2020\t\t\t\t\t\t\t\t\t\t\nBalance beginning of period\t894\t173\t0\t3\t0\t20\t(5804)\t3\t\t\nTotal realized/unrealized gains (losses) included in net income (loss) (5) (6)\t(1)\t0\t0\t0\t0\t5\t(641)\t0\t\t\nTotal realized/unrealized gains (losses) included in AOCI\t9\t0\t0\t0\t0\t(10)\t0\t0\t\t\nPurchases (7)\t199\t12\t0\t0\t10\t0\t0\t0\t\t\nSales (7)\t(64)\t(1)\t0\t0\t0\t0\t0\t0\t\t\nIssuances (7)\t0\t0\t0\t0\t0\t0\t0\t0\t\t\nSettlements (7)\t0\t0\t0\t0\t0\t0\t(173)\t0\t\t\nTransfers into Level 3 (8)\t164\t0\t0\t0\t0\t0\t0\t0\t\t\nTransfers out of Level 3 (8)\t(142)\t(103)\t0\t0\t0\t0\t0\t0\t\t\nBalance end of period\t1059\t81\t0\t3\t10\t15\t(6618)\t3\t\t\nThree Months Ended September 30 2019\t\t\t\t\t\t\t\t\t\t\nBalance beginning of period\t748\t108\t74\t4\t0\t(134)\t(3450)\t0\t\t\nTotal realized/unrealized gains (losses) included in net income (loss) (5) (6)\t0\t0\t0\t0\t0\t(2)\t(703)\t0\t\t\nTotal realized/unrealized gains (losses) included in AOCI\t0\t1\t0\t0\t0\t3\t0\t0\t\t\nPurchases (7)\t117\t61\t0\t0\t0\t0\t0\t0\t\t\nSales (7)\t(22)\t(6)\t(1)\t0\t0\t0\t0\t0\t\t\nIssuances (7)\t0\t0\t0\t0\t0\t0\t0\t0\t\t\nSettlements (7)\t0\t0\t0\t0\t0\t0\t(217)\t0\t\t\nTransfers into Level 3 (8)\t49\t29\t0\t0\t0\t0\t0\t0\t\t\nTransfers out of Level 3 (8)\t(84)\t(18)\t0\t0\t0\t2\t0\t0\t\t\nBalance end of period\t808\t175\t73\t4\t0\t(131)\t(4370)\t0\t\t\nChanges in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30 2020 (9)\t0\t0\t0\t0\t0\t5\t(682)\t0\t\t\nChanges in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30 2020 (9)\t10\t0\t0\t0\t0\t(10)\t0\t0\t\t\nChanges in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30 2019 (9)\t0\t0\t0\t0\t0\t(2)\t(778)\t0\t\t\n", "q10k_tbl_45": "\tFair Value Measurements Using Significant Unobservable Inputs (Level 3)\t\t\t\t\t\t\n\tFixed Maturity Securities\t\t\t\t\t\t\n\tCorporate (1)\tStructured Securities\tState and Political Subdivision\tEquity Securities\tShort-term Investments\tNet Derivatives (2)\tNet Embedded Derivatives (3)\tSeparate Account Assets (4)\t\t\n\t(In millions)\t\t\t\t\t\t\nNine Months Ended September 30 2020\t\t\t\t\t\t\t\t\t\t\nBalance beginning of period\t457\t117\t73\t8\t5\t16\t(4365)\t3\t\t\nTotal realized/unrealized gains (losses) included in net income (loss) (5) (6)\t(2)\t0\t0\t(1)\t0\t3\t(1754)\t0\t\t\nTotal realized/unrealized gains (losses) included in AOCI\t14\t2\t0\t0\t0\t10\t0\t0\t\t\nPurchases (7)\t510\t34\t0\t0\t10\t0\t0\t0\t\t\nSales (7)\t(103)\t(3)\t0\t0\t(5)\t(14)\t0\t0\t\t\nIssuances (7)\t0\t0\t0\t0\t0\t0\t0\t0\t\t\nSettlements (7)\t0\t0\t0\t0\t0\t0\t(499)\t0\t\t\nTransfers into Level 3 (8)\t263\t9\t0\t0\t0\t0\t0\t0\t\t\nTransfers out of Level 3 (8)\t(80)\t(78)\t(73)\t(4)\t0\t0\t0\t0\t\t\nBalance end of period\t1059\t81\t0\t3\t10\t15\t(6618)\t3\t\t\nNine Months Ended September 30 2019\t\t\t\t\t\t\t\t\t\t\nBalance beginning of period\t711\t174\t74\t3\t0\t(122)\t(2288)\t1\t\t\nTotal realized/unrealized gains (losses) included in net income (loss) (5) (6)\t0\t1\t0\t0\t0\t(10)\t(1436)\t0\t\t\nTotal realized/unrealized gains (losses) included in AOCI\t11\t3\t0\t0\t0\t5\t0\t0\t\t\nPurchases (7)\t178\t74\t0\t0\t0\t0\t0\t0\t\t\nSales (7)\t(78)\t(24)\t(1)\t0\t0\t0\t0\t(1)\t\t\nIssuances (7)\t0\t0\t0\t0\t0\t0\t0\t0\t\t\nSettlements (7)\t0\t0\t0\t0\t0\t0\t(646)\t0\t\t\nTransfers into Level 3 (8)\t147\t92\t0\t1\t0\t0\t0\t0\t\t\nTransfers out of Level 3 (8)\t(161)\t(145)\t0\t0\t0\t(4)\t0\t0\t\t\nBalance end of period\t808\t175\t73\t4\t0\t(131)\t(4370)\t0\t\t\nChanges in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30 2020 (9)\t(1)\t0\t0\t0\t0\t(11)\t(1848)\t0\t\t\nChanges in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30 2020 (9)\t15\t2\t0\t0\t0\t10\t0\t0\t\t\nChanges in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30 2019 (9)\t0\t1\t0\t0\t0\t(11)\t(1647)\t0\t\t\n", "q10k_tbl_46": "\tSeptember 30 2020\t\t\t\t\t\t\t\t\n\t\t\tFair Value Hierarchy\t\t\t\t\t\t\n\tCarrying Value\tLevel 1\t\tLevel 2\t\tLevel 3\t\tTotal Estimated Fair Value\n\t(In millions)\t\t\t\t\t\t\t\t\nAssets\t\t\t\t\t\t\t\t\t\nMortgage loans\t15659\t\t0\t\t0\t\t16628\t\t16628\nPolicy loans\t879\t\t0\t\t469\t\t940\t\t1409\nOther invested assets\t96\t\t0\t\t81\t\t15\t\t96\nPremiums reinsurance and other receivables\t2923\t\t0\t\t63\t\t3539\t\t3602\nLiabilities\t\t\t\t\t\t\t\t\t\nPolicyholder account balances\t17514\t\t0\t\t0\t\t18707\t\t18707\nLong-term debt\t843\t\t0\t\t39\t\t914\t\t953\nOther liabilities\t1154\t\t0\t\t372\t\t793\t\t1165\nSeparate account liabilities\t1204\t\t0\t\t1204\t\t0\t\t1204\n", "q10k_tbl_47": "\tDecember 31 2019\t\t\t\t\t\t\t\n\t\t\tFair Value Hierarchy\t\t\t\t\t\n\tCarrying Value\tLevel 1\t\tLevel 2\t\tLevel 3\tTotal Estimated Fair Value\n\t(In millions)\t\t\t\t\t\t\t\nAssets\t\t\t\t\t\t\t\t\nMortgage loans\t15664\t\t0\t\t0\t\t16291\t16291\nPolicy loans\t875\t\t0\t\t479\t\t504\t983\nOther invested assets\t51\t\t0\t\t39\t\t12\t51\nPremiums reinsurance and other receivables\t2053\t\t0\t\t41\t\t2427\t2468\nLiabilities\t\t\t\t\t\t\t\t\nPolicyholder account balances\t15474\t\t0\t\t0\t\t15576\t15576\nLong-term debt\t844\t\t0\t\t39\t\t903\t942\nOther liabilities\t943\t\t0\t\t169\t\t777\t946\nSeparate account liabilities\t1186\t\t0\t\t1186\t\t0\t1186\n", "q10k_tbl_48": "\tThree Months Ended September 30 2020\t\t\t\n\tUnrealized Investment Gains (Losses) Net of Related Offsets (1)\tUnrealized Gains (Losses) on Derivatives\tForeign Currency Translation Adjustments\tTotal\n\t(In millions)\t\t\t\nBalance at June 30 2020\t4148\t485\t(23)\t4610\nOCI before reclassifications\t810\t(183)\t8\t635\nDeferred income tax benefit (expense)\t(171)\t39\t(2)\t(134)\nAOCI before reclassifications net of income tax\t4787\t341\t(17)\t5111\nAmounts reclassified from AOCI\t5\t(9)\t0\t(4)\nDeferred income tax benefit (expense)\t(1)\t2\t0\t1\nAmounts reclassified from AOCI net of income tax\t4\t(7)\t0\t(3)\nBalance at September 30 2020\t4791\t334\t(17)\t5108\n", "q10k_tbl_49": "\tThree Months Ended September 30 2019\t\t\t\n\tUnrealized Investment Gains (Losses) Net of Related Offsets (1)\tUnrealized Gains (Losses) on Derivatives\tForeign Currency Translation Adjustments\tTotal\n\t(In millions)\t\t\t\nBalance at June 30 2019\t2521\t172\t(19)\t2674\nOCI before reclassifications\t952\t157\t(4)\t1105\nDeferred income tax benefit (expense)\t(200)\t(33)\t0\t(233)\nAOCI before reclassifications net of income tax\t3273\t296\t(23)\t3546\nAmounts reclassified from AOCI\t(17)\t(1)\t0\t(18)\nDeferred income tax benefit (expense)\t3\t1\t0\t4\nAmounts reclassified from AOCI net of income tax\t(14)\t0\t0\t(14)\nBalance at September 30 2019\t3259\t296\t(23)\t3532\n", "q10k_tbl_50": "\tNine Months Ended September 30 2020\t\t\t\n\tUnrealized Investment Gains (Losses) Net of Related Offsets (1)\tUnrealized Gains (Losses) on Derivatives\tForeign Currency Translation Adjustments\tTotal\n\t(In millions)\t\t\t\nBalance at December 31 2019\t3066\t163\t(14)\t3215\nOCI before reclassifications (2)\t2166\t231\t8\t2405\nDeferred income tax benefit (expense)\t(455)\t(48)\t(11)\t(514)\nAOCI before reclassifications net of income tax\t4777\t346\t(17)\t5106\nAmounts reclassified from AOCI\t18\t(15)\t0\t3\nDeferred income tax benefit (expense)\t(4)\t3\t0\t(1)\nAmounts reclassified from AOCI net of income tax\t14\t(12)\t0\t2\nBalance at September 30 2020\t4791\t334\t(17)\t5108\n", "q10k_tbl_51": "\tNine Months Ended September 30 2019\t\t\t\n\tUnrealized Investment Gains (Losses) Net of Related Offsets (1)\tUnrealized Gains (Losses) on Derivatives\tForeign Currency Translation Adjustments\tTotal\n\t(In millions)\t\t\t\nBalance at December 31 2018\t564\t180\t(26)\t718\nOCI before reclassifications\t3452\t196\t3\t3651\nDeferred income tax benefit (expense)\t(725)\t(41)\t0\t(766)\nAOCI before reclassifications net of income tax\t3291\t335\t(23)\t3603\nAmounts reclassified from AOCI\t(40)\t(50)\t0\t(90)\nDeferred income tax benefit (expense)\t8\t11\t0\t19\nAmounts reclassified from AOCI net of income tax\t(32)\t(39)\t0\t(71)\nBalance at September 30 2019\t3259\t296\t(23)\t3532\n", "q10k_tbl_52": "AOCI Components\tAmounts Reclassified from AOCI\t\t\t\tConsolidated Statements of Operations and Comprehensive Income (Loss) Locations\n\tThree Months Ended September 30\t\tNine Months Ended September 30\t\t\n\t2020\t2019\t2020\t2019\t\n\t(In millions)\t\t\t\t\nNet unrealized investment gains (losses):\t\t\t\t\t\nNet unrealized investment gains (losses)\t3\t17\t(4)\t67\tNet investment gains (losses)\nNet unrealized investment gains (losses)\t(8)\t0\t(14)\t(27)\tNet derivative gains (losses)\nNet unrealized investment gains (losses) before income tax\t(5)\t17\t(18)\t40\t\nIncome tax (expense) benefit\t1\t(3)\t4\t(8)\t\nNet unrealized investment gains (losses) net of income tax\t(4)\t14\t(14)\t32\t\nUnrealized gains (losses) on derivatives - cash flow hedges:\t\t\t\t\t\nInterest rate swaps\t0\t0\t1\t28\tNet derivative gains (losses)\nInterest rate swaps\t1\t1\t2\t2\tNet investment income\nForeign currency swaps\t8\t0\t12\t20\tNet derivative gains (losses)\nGains (losses) on cash flow hedges before income tax\t9\t1\t15\t50\t\nIncome tax (expense) benefit\t(2)\t(1)\t(3)\t(11)\t\nGains (losses) on cash flow hedges net of income tax\t7\t0\t12\t39\t\nTotal reclassifications net of income tax\t3\t14\t(2)\t71\t\n", "q10k_tbl_53": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nCompensation\t79\t71\t234\t217\nContracted services and other labor costs\t50\t66\t180\t162\nTransition services agreements\t35\t62\t86\t189\nEstablishment costs\t40\t20\t133\t93\nPremium and other taxes licenses and fees\t10\t14\t33\t30\nVolume related costs excluding compensation net of DAC capitalization\t147\t144\t419\t436\nInterest expense on debt\t17\t17\t51\t43\nOther\t91\t70\t190\t183\nTotal other expenses\t469\t464\t1326\t1353\n", "q10k_tbl_54": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(In millions)\t\t\t\nPremiums\t\t\t\t\nReinsurance assumed\t2\t(1)\t2\t0\nUniversal life and investment-type product policy fees\t\t\t\t\nReinsurance assumed\t1\t2\t5\t5\nOther revenues\t\t\t\t\nReinsurance assumed\t0\t1\t1\t2\nPolicyholder benefits and claims\t\t\t\t\nReinsurance assumed\t31\t8\t54\t25\nOther expenses\t\t\t\t\nReinsurance assumed\t(7)\t(7)\t(19)\t(23)\n", "q10k_tbl_55": "\tSeptember 30 2020\tDecember 31 2019\n\tAssumed\t\t\t\t\tAssumed\t\t\t\t\t\t\t\t\n\t(In millions)\t\nAssets\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nPremiums reinsurance and other receivables\t24\t\t\t\t\t26\t\t\t\t\t\t\t\t\nLiabilities\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nFuture policy benefits\t125\t\t\t\t\t97\t\t\t\t\t\t\t\t\nPolicyholder account balances\t694\t\t\t\t\t443\t\t\t\t\t\t\t\t\nOther policy-related balances\t12\t\t\t\t\t11\t\t\t\t\t\t\t\t\nOther liabilities\t(7)\t\t\t\t\t(21)\t\t\t\t\t\t\t\t\n", "q10k_tbl_56": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(In millions)\t\nRevenues\t\t\nPremiums\t549\t649\nUniversal life and investment-type product policy fees\t2114\t2190\nNet investment income\t2508\t2610\nOther revenues\t224\t199\nNet investment gains (losses)\t(46)\t60\nNet derivative gains (losses)\t2227\t(218)\nTotal revenues\t7576\t5490\nExpenses\t\t\nPolicyholder benefits and claims\t5094\t2836\nInterest credited to policyholder account balances\t792\t771\nCapitalization of DAC\t(276)\t(271)\nAmortization of DAC and VOBA\t833\t358\nInterest expense on debt\t51\t43\nOther expenses\t1551\t1581\nTotal expenses\t8045\t5318\nIncome (loss) before provision for income tax\t(469)\t172\nProvision for income tax expense (benefit)\t(145)\t(46)\nNet income (loss)\t(324)\t218\nLess: Net income (loss) attributable to noncontrolling interests\t1\t1\nNet income (loss) attributable to Brighthouse Life Insurance Company\t(325)\t217\n", "q10k_tbl_57": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(In millions)\t\nGMLB Riders\t(933)\t(1252)\nOther derivative instruments\t1461\t1114\nNet investment gains (losses)\t(46)\t60\nOther adjustments\t(65)\t(53)\nPre-tax adjusted earnings less net income (loss) attributable to noncontrolling interests\t(887)\t302\nIncome (loss) attributable to Brighthouse Life Insurance Company before provision for income tax\t(470)\t171\nProvision for income tax expense (benefit)\t(145)\t(46)\nNet income (loss) attributable to Brighthouse Life Insurance Company\t(325)\t217\n", "q10k_tbl_58": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(In millions)\t\nNet income (loss) attributable to Brighthouse Life Insurance Company\t(325)\t217\nAdd: Provision for income tax expense (benefit)\t(145)\t(46)\nIncome (loss) attributable to Brighthouse Life Insurance Company before provision for income tax\t(470)\t171\nLess: GMLB Riders\t(933)\t(1252)\nLess: Other derivative instruments\t1461\t1114\nLess: Net investment gains (losses)\t(46)\t60\nLess: Other adjustments\t(65)\t(53)\nPre-tax adjusted earnings less net income (loss) attributable to noncontrolling interests\t(887)\t302\nLess: Provision for income tax expense (benefit)\t(232)\t(19)\nAdjusted earnings\t(655)\t321\n", "q10k_tbl_59": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(In millions)\t\nFee income\t2149\t2197\nNet investment spread\t1060\t1196\nInsurance-related activities\t(2448)\t(1301)\nAmortization of DAC and VOBA\t(358)\t(436)\nOther expenses net of DAC capitalization\t(1289)\t(1353)\nLess: Net income (loss) attributable to noncontrolling interests\t1\t1\nPre-tax adjusted earnings less net income (loss) attributable to noncontrolling interests\t(887)\t302\nProvision for income tax expense (benefit)\t(232)\t(19)\nAdjusted earnings\t(655)\t321\n", "q10k_tbl_60": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(In millions)\t\nLiabilities\t(3710)\t(1968)\nHedges\t2538\t(51)\nCeded reinsurance\t99\t75\nFees (1)\t608\t614\nGMLB DAC\t(468)\t78\nTotal GMLB Riders\t(933)\t(1252)\n", "q10k_tbl_61": "Exhibit No.\tDescription\n31.1*\tCertification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n31.2*\tCertification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n32.1**\tCertification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2**\tCertification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS*\tXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH*\tInline XBRL Taxonomy Extension Schema Document.\n101.CAL*\tInline XBRL Taxonomy Extension Calculation Linkbase Document.\n101.LAB*\tInline XBRL Taxonomy Extension Label Linkbase Document.\n101.PRE*\tInline XBRL Taxonomy Extension Presentation Linkbase Document.\n101.DEF*\tInline XBRL Taxonomy Extension Definition Linkbase Document.\n104*\tThe cover page of Brighthouse Life Insurance Company's Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in Inline XBRL (included within the Exhibit 101 attachments).\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_56", "cf": "q10k_tbl_5"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File Number: 033-03094
Brighthouse Life Insurance Company
(Exact name of registrant as specified in its charter)
Delaware
06-0566090
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
11225 North Community House Road, Charlotte, North Carolina
28277
(Address of principal executive offices)
(Zip Code)
(980) 365-7100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesþ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
þ
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
As of November 9, 2020, 3,000 shares of the registrant’s common stock were outstanding, all of which were owned indirectly by Brighthouse Financial, Inc.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.
Consolidated Financial Statements (at September 30, 2020 (Unaudited) and December 31, 2019 and for the Three Months and Nine Months Ended September 30, 2020 and 2019 (Unaudited)):
(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)
Interim Condensed Consolidated Balance Sheets
September 30, 2020 (Unaudited) and December 31, 2019
(In millions, except share and per share data)
September 30, 2020
December 31, 2019
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $66,992 and $63,083, respectively; allowance for credit losses of $3 and $0, respectively)
$
78,139
$
69,977
Equity securities, at estimated fair value
114
147
Mortgage loans (net of allowance for credit losses of $90 and $64, respectively)
15,659
15,664
Policy loans
879
875
Limited partnerships and limited liability companies
2,561
2,379
Short-term investments, principally at estimated fair value
3,341
1,482
Other invested assets, principally at estimated fair value (net of allowance for credit losses of $13 and $0, respectively)
5,044
3,224
Total investments
105,737
93,748
Cash and cash equivalents
5,663
2,493
Accrued investment income
759
663
Premiums, reinsurance and other receivables
15,542
14,287
Deferred policy acquisition costs and value of business acquired
4,122
4,809
Current income tax recoverable
—
21
Other assets
382
464
Separate account assets
95,955
99,668
Total assets
$
228,160
$
216,153
Liabilities and Equity
Liabilities
Future policy benefits
$
44,322
$
39,081
Policyholder account balances
52,294
45,121
Other policy-related balances
2,808
2,801
Payables for collateral under securities loaned and other transactions
6,970
4,374
Long-term and short-term debt
843
844
Current income tax payable
50
—
Deferred income tax liability
1,666
1,301
Other liabilities
4,019
4,484
Separate account liabilities
95,955
99,668
Total liabilities
208,927
197,674
Contingencies, Commitments and Guarantees (Note 10)
Equity
Brighthouse Life Insurance Company’s stockholder’s equity:
Common stock, par value $25,000 per share; 4,000 shares authorized; 3,000 shares issued and outstanding
75
75
Additional paid-in capital
18,773
19,073
Retained earnings (deficit)
(4,738)
(3,899)
Accumulated other comprehensive income (loss)
5,108
3,215
Total Brighthouse Life Insurance Company’s stockholder’s equity
19,218
18,464
Noncontrolling interests
15
15
Total equity
19,233
18,479
Total liabilities and equity
$
228,160
$
216,153
See accompanying notes to the interim condensed consolidated financial statements.
(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
“BLIC” and the “Company” refer to Brighthouse Life Insurance Company, a Delaware corporation originally incorporated in Connecticut in 1863, and its subsidiaries. Brighthouse Life Insurance Company is a wholly-owned subsidiary of Brighthouse Holdings, LLC (“BH Holdings”), which is a direct wholly-owned subsidiary of Brighthouse Financial, Inc. (“BHF” together with its subsidiaries and affiliates, “Brighthouse Financial”). BLIC offers a range of individual annuities and individual life insurance products. The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.
Consolidation
The accompanying interim condensed consolidated financial statements include the accounts of Brighthouse Life Insurance Company and its subsidiaries, as well as partnerships and limited liability companies (“LLCs”) that the Company controls. Intercompany accounts and transactions have been eliminated.
The Company uses the equity method of accounting for investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value.
Reclassifications
Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the current period presentation as may be discussed when applicable in the Notes to the Interim Condensed Consolidated Financial Statements.
Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity.
The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2019 consolidated balance sheet data was derived from audited consolidated financial statements included in Brighthouse Life Insurance Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2019 Annual Report.
(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Adoption of New Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s consolidated financial statements. ASUs adopted as of September 30, 2020 are summarized as follows:
Standard
Description
Effective Date
Impact on Financial Statements
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”)
The amendments to Topic 326 replace the incurred loss impairment methodology for certain financial instruments with one that reflects expected credit losses based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance also requires that an other-than- temporary impairment on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses.
January 1, 2020 using the modified retrospective method
The Company recorded an after tax net decrease to retained earnings of $14 million and a net increase to accumulated other comprehensive income (loss) (“AOCI”) of $3 million for the cumulative effect of adoption. The adjustment included establishing or updating the allowance for credit losses on fixed maturity securities, mortgage loans, and other invested assets.
ASUs issued but not yet adopted as of September 30, 2020 are summarized as follows:
Standard
Description
Effective Date
Impact on Financial Statements
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts
The amendments to Topic 944 will result in significant changes to the accounting for long-duration insurance contracts. These changes (1) require all guarantees that qualify as market risk benefits to be measured at fair value, (2) require more frequent updating of assumptions and modify existing discount rate requirements for certain insurance liabilities, (3) modify the methods of amortization for deferred policy acquisition costs (“DAC”), and (4) require new qualitative and quantitative disclosures around insurance contract asset and liability balances and the judgments, assumptions and methods used to measure those balances. The market risk benefit guidance is required to be applied on a retrospective basis, while the changes to guidance for insurance liabilities and DAC may be applied to existing carrying amounts on the effective date or on a retrospective basis.
January 1, 2023
The Company continues to evaluate the new guidance and therefore is unable to estimate the impact to its financial statements. The most significant impact is expected to be the measurement of liabilities for variable annuity guarantees.
CARES Act
In response to the worldwide pandemic sparked by the novel coronavirus (the “COVID-19 pandemic”), on March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act contains numerous provisions intended to provide swift aid, including through tax relief, to businesses and individuals affected by the COVID-19 pandemic. The Company does not believe that the CARES Act will have a material impact to its consolidated financial statements at this time. The Company will continue to closely monitor developments related to the COVID-19 pandemic and the CARES Act.
(A Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)
2. Segment Information
The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other.
Annuities
The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security.
Life
The Life segment consists of insurance products and services, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be provided on a tax-advantaged basis.
Run-off
The Run-off segment consists of products no longer actively sold and which are separately managed, including structured settlements, pension risk transfer contracts, certain company-owned life insurance policies, funding agreements and universal life with secondary guarantees.
Corporate & Other
Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the majority of the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements and term life insurance sold direct to consumers, which is no longer being offered for new sales.
Financial Measures and Segment Accounting Policies
Adjusted earnings is a financial measure used by management to evaluate performance, allocate resources and facilitate comparisons to industry results. Consistent with GAAP guidance for segment reporting, adjusted earnings is also used to measure segment performance. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings should not be viewed as a substitute for net income (loss) attributable to Brighthouse Life Insurance Company and excludes net income (loss) attributable to noncontrolling interests.
Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends.
The following are significant items excluded from total revenues, net of income tax, in calculating adjusted earnings:
•Net investment gains (losses);
•Net derivative gains (losses) except earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment; and
The following are significant items excluded from total expenses, net of income tax, in calculating adjusted earnings:
•Amounts associated with benefits related to GMIBs (“GMIB Costs”);
•Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”); and