v3.24.3
Contractholder Funds
 9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
Contractholder Funds Market Risk Benefits
The following table presents the balances of and changes in MRBs associated with indexed annuities and fixed rate annuities for the nine months ended September 30, 2024 and the year ended December 31, 2023:
September 30, 2024December 31, 2023
Indexed
annuities		Fixed rate annuitiesIndexed
annuities		Fixed rate annuities
(In millions)
Balance, beginning of period, net liability$314 $1 $164 $1 
Balance, beginning of period, before effect of changes in the instrument-specific credit risk$209 $1 $102 $1 
Issuances and benefit payments78 — (10)— 
Attributed fees collected and interest accrual103 — 131 — 
Actual policyholder behavior different from expected 8 — 27 — 
Changes in assumptions and other32 — 29 — 
Effects of market related movements(31)— (70)— 
Balance, end of period, before effect of changes in the instrument-specific credit risk399 1 209 1 
Effect of changes in the instrument-specific credit risk112 — 105 — 
Balance, end of period, net liability511 1 314 1 
Less: reinsured market risk benefits43 — — — 
Balance, end of period, net of reinsurance$468 $1 $314 $1 
Weighted-average attained age of policyholders weighted by total AV (years)68.0472.4768.2872.59
Net amount at risk$1,390 $2 $1,059 $2 

The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRBs amounts in the accompanying unaudited Condensed Consolidated Balance Sheets:
September 30, 2024December 31, 2023
DirectReinsuredNetDirectReinsuredNet
(In millions)
MRB asset
Indexed annuities$91 $43 $134 $88 $— $88 
Total MRB asset $91 $43 $134 $88 $— $88 
MRB liability
Indexed annuities$602 $— $602 $402 $— $402 
Fixed rate annuities1 — 1 1 — 1 
Total MRB liability$603 $— $603 $403 $— $403 

The net MRB liability increased for the nine months ended September 30, 2024, primarily as a result of collection of attributed fees, interest accrual, MRB reserves for contracts issued within the period, and changes in actuarial assumptions. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections.
For the nine months ended September 30, 2024, notable changes made to the inputs to the fair value estimates of MRBs calculations included an increase in risk-free rates leading to a favorable change in the MRBs associated with indexed annuities and fixed rate annuities; increases in the equity market related projections resulted in a decrease in the net amount at risk associated with indexed annuities, leading to a favorable change in the value of the associated MRBs; and an increase in the rider benefit utilization assumption, leading to an unfavorable change in the value of the associated MRBs.
The net MRB liability increased for the year ended December 31, 2023, primarily as a result of attributed fees collected, increases as a result of actual policyholder behavior different than expected and changes in assumptions as discussed below. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections.
For the year ended December 31, 2023, notable changes made to the inputs to the fair value estimates of MRBs calculations included a significant increase in risk-free rates leading to a favorable change in the MRBs associated with indexed annuities and fixed rate annuities; increases in the equity market related projections resulted in a decrease in the net amount at risk associated with indexed annuities, leading to a favorable change in the value of the associated MRBs; and F&G’s credit spread decreased, lead to a corresponding unfavorable change in the MRBs associated with both indexed annuities and fixed rate annuities.
In 2024 and 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuities (indexed annuities and fixed rate annuities) with MRBs. For the nine months ended September 30, 2024, we updated assumptions including surrender rates, rider benefit election utilization and option budgets. For the year ended December 31, 2023,we updated assumptions including surrender rates, partial withdrawal rates, mortality improvement, and option budgets. All updates to these assumptions brought us more in line with our Company and overall industry experience since the prior assumption updates. These updates, in total, led to increases in the net MRB liability for the nine months ended September 30, 2024 and for the year ended December 31, 2023.
Contractholder Funds
The following tables summarize balances of and changes in contractholder funds’ account balances:
September 30, 2024
Indexed annuitiesFixed rate annuitiesUniversal LifeFABN (b)FHLB (b)
(Dollars in millions)
Balance, beginning of year$27,164 $13,443 $2,391 $2,613 $2,539 
Issuances4,829 4,476 157 599 1,803 
Premiums received85 1 361 — — 
Policy charges (a)(140)— (231)— — 
Surrenders and withdrawals(2,807)(1,184)(75)— — 
Benefit payments(368)(233)(13)(791)(1,576)
Interest credited488 476 108 51 89 
Other5 — — (1)(2)
Balance, end of period29,256 16,979 2,698 2,471 2,853 
Embedded derivative adjustment (c)790 — 119 — — 
Gross Liability, end of period30,046 16,979 2,817 2,471 2,853 
Less: Reinsurance410 10,471 883 — — 
Net Liability, after Reinsurance$29,636 $6,508 $1,934 $2,471 $2,853 
Weighted-average crediting rate2.33 %4.26 %5.84 %N/AN/A
Net amount at risk (d)N/AN/A$70,859 N/AN/A
Cash surrender value (e)$26,985 $15,815 $2,088 N/AN/A
(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessment on the basis of the account balance.
(b) FABN and FHLB are considered funding agreements that are investment contracts, which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.
(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.
(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
(e) These amounts are gross of reinsurance.
December 31, 2023
Indexed annuitiesFixed rate annuitiesUniversal LifeFABN (b)FHLB (b)
(Dollars in millions)
Balance, beginning of year$24,766 $9,358 $2,112 $2,613 $1,982 
Issuances4,722 5,061 199 — 1,256 
Premiums received103 1 382 — — 
Policy charges (a)(182)— (261)— — 
Surrenders and withdrawals(2,005)(1,142)(90)— — 
Benefit payments(526)(240)(27)(53)(763)
Interest credited270 405 76 54 64 
Other16 — — (1)— 
Balance, end of period27,164 13,443 2,391 2,613 2,539 
Embedded derivative adjustment (c)243 — 84 — — 
Gross Liability, end of period27,407 13,443 2,475 2,613 2,539 
Less: Reinsurance17 7,520 894 — — 
Net Liability, after Reinsurance$27,390 $5,923 $1,581 $2,613 $2,539 
Weighted-average crediting rate1.40 %4.85 %3.44 %N/AN/A
Net amount at risk (d)N/AN/A$60,389 N/AN/A
Cash surrender value (e)$25,099 $12,505 $1,872 N/AN/A
(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessment on the basis of the account balance.
(b) FABN and FHLB are considered funding agreements that are investment contracts, which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.
(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.
(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
(e) These amounts are gross of reinsurance.
The following table reconciles contractholder funds’ account balances to the contractholder funds liability in the accompanying unaudited Condensed Consolidated Balance Sheets:
September 30, 2024December 31, 2023
(In millions)
Indexed annuities$30,046 $27,407 
Fixed rate annuities16,979 13,443 
Immediate annuities292 311 
Universal life2,817 2,475 
Traditional life5 5 
Funding Agreement-FABN2,471 2,613 
FHLB2,853 2,539 
PRT5 5 
Total$55,468 $48,798 

Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees. For the nine months ended September 30, 2024, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in a decrease in total benefits and other changes in policy reserves of approximately $79 million for the nine months ended September 30, 2024.
For the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder behavior. These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $73 million for the year ended December 31, 2023.
The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums:
September 30, 2024
Range of guaranteed minimum crediting rateAt Guaranteed Minimum
1 Basis Point-50 Basis Points Above
51 Basis Points-150 Basis Points Above
 Greater Than 150 Basis Points Above
 Total
Indexed Annuities(In millions)
0.00%-1.50%$23,095 $1,285 $502 $1,847 $26,729 
1.51%-2.50%700 1 460 1,046 2,207 
Greater than 2.50%317 2 — 1 320 
Total$24,112 $1,288 $962 $2,894 $29,256 
Fixed Rate Annuities
0.00%-1.50%$46 $21 $925 $13,855 $14,847 
1.51%-2.50%4 7 20 460 491 
Greater than 2.50%826 2 3 810 1,641 
Total$876 $30 $948 $15,125 $16,979 
Universal Life
0.00%-1.50%$2,303 $6 $— $22 $2,331 
Greater than 2.50%366 — 1 — 367 
Total$2,669 $6 $1 $22 $2,698 
December 31, 2023
Range of guaranteed minimum crediting rateAt Guaranteed Minimum
 1 Basis Point-50 Basis Points Above
51 Basis Points-150 Basis Points Above
 Greater Than 150 Basis Points Above
 Total
Indexed Annuities(In millions)
0.00%-1.50%$22,392 $1,444 $526 $1,953 $26,315 
1.51%-2.50%196 1 24 250 471 
Greater than 2.50%377 1 — — 378 
Total$22,965 $1,446 $550 $2,203 $27,164 
Fixed Rate Annuities
0.00%-1.50%$23 $25 $1,532 $10,271 $11,851 
1.51%-2.50%5 8 23 453 489 
Greater than 2.50%893 2 4 204 1,103 
Total$921 $35 $1,559 $10,928 $13,443 
Universal Life
0.00%-1.50%$1,987 $5 $— $21 $2,013 
Greater than 2.50%361 16 1 — 378 
Total$2,348 $21 $1 $21 $2,391