PHL Variable
Insurance Company, In Rehabilitation
(a wholly owned subsidiary of
PHL Delaware, LLC)
Statutory Financial Statements and
Supplemental Schedules
December 31, 2024, 2023 and 2022




PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Table of Contents
Page
Statutory Financial Statements:
1-3
7-51
Supplemental Schedules:
52-53


i



Independent Auditors’ Report

The Rehabilitator and Special Deputy Rehabilitator
PHL Variable Insurance Company, In Rehabilitation:

Opinions

We have audited the financial statements of PHL Variable Insurance Company, In Rehabilitation (the Company), which comprise the statements of admitted assets, liabilities, capital and surplus as of December 31, 2024 and 2023, and the related statements of income (loss), and changes in capital and surplus, and cash flows for each of the years in the three-year-period ended December 31, 2024, and the related notes to the financial statements.

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the admitted assets, liabilities, capital and surplus of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the for each of the years in the three-year period ended December 31, 2024, in accordance with accounting practices prescribed or permitted by the Connecticut Insurance Department described in Note 2.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles section of our report, the financial statements do not present fairly, in accordance with U.S. generally accepted accounting principles, the financial position of the Company as of December 31, 2024 and 2023, or the results of its operations or its cash flows for each of the years in the three-year period ended December 31, 2024.

Basis for Opinions

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.


Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company using accounting practices prescribed or permitted by the Connecticut Insurance Department, which is a basis of accounting other than U.S. generally accepted accounting principles. Accordingly, the financial statements are not intended to be presented in accordance with U.S. generally accepted accounting principles. The effects on the financial statements of the variances between the statutory accounting practices described in Note 2 and U.S. generally accepted accounting principles, although not reasonably determinable, are presumed to be material and pervasive.

1

Substantial Doubt About the Entity’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has entered rehabilitation proceedings in the Connecticut Superior Court on May 20, 2024, in response to the Company's hazardous financial condition. As discussed in Note 2, the Company has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding this matter are also described in Note 2, including that the ability of the Company to continue as a going concern is dependent on the moratorium enacted as a result of the rehabilitation proceedings and the court approved rehabilitation plan. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting practices prescribed or permitted by the Connecticut Insurance Department. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
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•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Supplementary Information

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information included in the summary of investments - other than investments in related parties, the supplementary insurance information, and the supplementary schedule - reinsurance, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Securities and Exchange Commission. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

/s/ KPMG LLP

Boston, Massachusetts
April 25, 2025


3

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Statements of Admitted Assets, Liabilities, Capital and Surplus
(in thousands)
As of December 31,
2024 2023
Admitted assets:
Bonds $ 653,176  $ 683,640 
Preferred stock 1,086  3,490 
Common stock 1,692  2,363 
Contract loans 74,874  72,430 
Mortgage loans 23,771  46,332 
Cash, cash equivalents and short-term investments 121,121  38,639 
Derivatives 948  5,852 
Receivables for securities 6,512  4,421 
Other invested assets 111,669  120,458 
Total cash and invested assets 994,849  977,625 
Deferred and uncollected premium 5,420  6,039 
Due and accrued investment income 3,211  3,225 
Current federal and foreign income tax recoverable —  1,238 
Receivable from affiliates
 13,599  1,264 
Reinsurance amounts receivable 62,492  25,964 
Other assets 132,747  68,511 
Separate account assets 2,436,013  2,814,232 
Total admitted assets
 $ 3,648,331  $ 3,898,098 
Liabilities:
Reserves for future policy benefits $ 2,540,373  $ 390,248 
Payable to affiliates
 7,880  4,172 
Funds held under coinsurance 806,306  828,587 
Reinsurance payables 36,786  30,523 
Net transfers due to (from) separate accounts 50,815  (85,252)
Other liabilities 28,260  23,062 
Interest maintenance reserve (“IMR”) —  14,750 
Asset valuation reserve (“AVR”) 9,081  12,563 
Separate account liabilities 2,436,013  2,814,232 
Total liabilities 5,915,514  4,032,885 
Capital and surplus:
Common stock, $5,000 par value (1,000 shares authorized; 500 shares issued and outstanding) 2,500  2,500 
Paid-in surplus 283,333  283,333 
Surplus notes 55,000  55,000 
Unassigned surplus (2,608,016) (475,620)
Total capital and surplus (2,267,183) (134,787)
Total liabilities, capital and surplus $ 3,648,331  $ 3,898,098 




The accompanying notes are an integral part of these financial statements.
4

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Statements of Income (Loss) and Changes in Capital and Surplus
(in thousands)
For the years ended
December 31,
2024 2023 2022
Income:
Net investment income and amortization of IMR
 $ 32,923  $ 45,175  $ 52,505 
Separate account net gain (loss) from operations (100,797) 53,249  69,823 
Commissions and expense allowances on reinsurance ceded 26,435  31,874  29,783 
Reserve adjustments on reinsurance ceded (147,014) (235,287) (226,336)
Fees associated with separate account and other miscellaneous income 55,130  59,095  59,901 
Total income (133,323) (45,894) (14,324)
Current and future benefits:
Net transfers (from) to separate accounts, net of reinsurance (485,090) (352,390) (363,142)
Change in reserves for future policy benefits 2,093,888  193,669  24,998 
Total current and future benefits 1,608,798  (158,721) (338,144)
Operating and other expenses:
Commissions 3,924  5,115  5,546 
Other operating expenses 19,188  21,772  19,493 
Reserve adjustments on MODCO assumed and MODCO consideration (48,674) (92,197) (96,465)
Other amounts ceded 307,040  339,752  381,894 
Premium, payroll and miscellaneous taxes 5,536  7,090  7,028 
Total operating and other expenses 287,014  281,532  317,496 
Net gain (loss) from operations before federal income taxes (2,029,135) (168,705) 6,324 
Federal and foreign income tax expense (benefit) (14,517) (6,435) 765 
Net income (loss) from operations before realized capital gains (losses) (2,014,618) (162,270) 5,559 
Realized capital gains (losses), net of income taxes and IMR (66,807) (10,797) 1,979 
Net income (loss) (2,081,425) (173,067) 7,538 
Changes in capital and surplus:
Change in unrealized capital gains (losses), net of tax 2,326  (1,924) (10,253)
Change in deferred income tax —  (29,150) 10,935 
Change in non-admitted assets (9,513) 23,508  (21,462)
Change in liability for reinsurance in unauthorized and certified companies —  2,036  192 
Change in reserve on account of change in valuation basis —  —  434 
Change in asset valuation reserve 3,482  (1,368) 4,184 
Other surplus changes, net (14,666) —  613 
Correction of prior period errors (see Note 2)
 (32,600) —  — 
Net increase (decrease) in capital and surplus (2,132,396) (179,965) (7,819)
Capital and surplus, beginning of year (134,787) 45,178  52,997 
Capital and surplus, end of year $ (2,267,183) $ (134,787) $ 45,178 







The accompanying notes are an integral part of these financial statements.
5

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Statements of Cash Flows
(in thousands)
For the years ended
December 31,
2024 2023 2022
Cash provided by (used for) operations:
Premiums and annuity considerations $ 222,596  $ 278,073  $ 250,727 
Net investment income 42,421  49,357  48,487 
Other income (28,187) 132,800  152,748 
Claims and benefits (677,209) (1,045,343) (954,989)
Commissions and other expenses 23,646  58,450  63,068 
Net transfers from (to) separate accounts 621,157  379,126  293,250 
Federal income taxes recovered (paid) 1,453  6,620  (352)
Net cash provided by (used for) operations 205,877  (140,917) (147,061)
Cash provided by (used for) investments:
Proceeds from sales, maturities and scheduled repayments of bonds 128,780  204,297  294,327 
Proceeds from sales, maturities and scheduled repayments of stocks 2,411  2,169  3,023 
Proceeds from sales, maturities and scheduled repayments of mortgage loans 20,954  1,509  1,319 
Proceeds from sales, maturities and scheduled repayments of other investments 12,060  43,078  56,000 
Cost of bonds acquired (125,292) (1,637) (27,170)
Cost of stocks acquired —  —  (408)
Cost of other investments acquired (28,322) (82,608) (64,187)
Net decrease (increase) in contract loans (2,444) (2,081) 467 
Net cash provided by (used for) investments 8,147  164,727  263,371 
Cash provided by (used for) financing and miscellaneous sources:
Net deposits (withdrawals) of deposit-type contracts (13,310) (7,518) (9,305)
Other cash provided (applied) (118,232) (54,305) (55,117)
Net cash provided by (used for) financing and miscellaneous uses (131,542) (61,823) (64,422)
Net decrease in cash and short-term investments 82,482  (38,013) 51,888 
Cash and short-term investments, beginning of year 38,639  76,652  24,764 
Cash and short-term investments, end of year $ 121,121  $ 38,639  $ 76,652 
















The accompanying notes are an integral part of these financial statements.
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PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statement
(in thousands except where noted in millions or billions)

1.    Description of Business

PHL Variable Insurance Company, In Rehabilitation (“PHL” or the “Company”) is a wholly-owned subsidiary of PHL Delaware, LLC (“PHL Delaware” or the “Parent”). PHL is a provider of life insurance and annuity products. The Company’s life insurance products include universal life, variable universal life and other insurance products. The Company has both single-life and multiple-life products. Under multiple-life policies, several lives may be insured with the policy proceeds paid after the death of the first or last insured. The Company’s annuity products include deferred annuities and fixed indexed annuities. Annuity products accumulate for a number of years before periodic payments begin and enable the contract owner to save for retirement and provide options that protect against outliving assets during retirement. The Company‘s fixed indexed annuity products include single premium deferred equity indexed annuities and also single premium fixed indexed annuities. In November 2019, PHL stopped marketing and selling new business.

Effective October 1, 2019, PHL entered into a combined coinsurance funds withheld and modified coinsurance agreement (the “Concord Treaty”) that reinsures the total retained risk in PHL to a wholly-owned captive subsidiary, Concord Re, Inc. (“Concord”) that is licensed in Connecticut. Concord has a 30-year excess-of-loss agreement (the “XOL Agreement”) with Palisado Re, Inc. (“Palisado”), a subsidiary of PHL with a $450 million limit of coverage.

PHL, Concord, and Palisado (collectively, “PHL Companies”) entered rehabilitation proceedings in the Connecticut Superior Court (the “Court”) on May 20, 2024, as a result of the PHL Companies’ hazardous financial condition. Rehabilitation is a court proceeding that the insurance commissioner of a company’s state of domicile may initiate to take control of a company if it is in a hazardous financial condition.

The Court appointed the Connecticut Insurance Commissioner as the PHL Companies’ Rehabilitator. The Rehabilitator assumed control of the PHL Companies’ assets and will administer them under the Court’s supervision. The Rehabilitator is also empowered to take the necessary or appropriate actions approved by the Court to rehabilitate the PHL Companies.


2.    Summary of Significant Accounting Policies

The significant accounting policies, which are used by PHL in the preparation of its statutory financial statements, are described below.

Basis of presentation

These financial statements were prepared on the basis of accounting practices (“STAT”) prescribed or permitted by the Connecticut Insurance Department (the “Department” or “CID”). These practices are predominately promulgated by the National Association of Insurance Commissioners (the “NAIC”).

These practices differ from accounting principles generally accepted in the United States of America (“U.S. GAAP”). PHL does not prepare financial statements on a U.S. GAAP basis and, as a result, differences from U.S. GAAP are not readily determinable. The major differences from U.S. GAAP practices are as follows:

•       The costs related to acquiring business, principally commissions and certain policy issue expenses are charged to income in the year incurred for STAT and are capitalized as deferred acquisition costs (“DAC”) and then amortized for U.S. GAAP.
•       Statutory concepts such as non-admitted assets, asset valuation reserve and interest maintenance reserve are recognized only for STAT.
•       Bonds are primarily carried at amortized cost for STAT and at fair value for U.S. GAAP.
•       For certain deposit-type contracts in the accumulation stage and for annuity products, deposits are reported as annuity considerations (a revenue item) for statutory reporting, while U.S. GAAP reports these as deposits via the balance sheet.
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PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
•       Under STAT, for universal life and variable annuity contracts, premiums or deposits are recognized as revenue, and withdrawals are recognized as surrender benefits. Benefits, losses and related expenses are matched with premiums over the related contract periods. For U.S. GAAP, amounts received as payments for universal life, variable universal life and other investment-type contracts are considered deposits and are not included in premiums. Withdrawals taken from these contracts are generally considered returns of policyholder account balances and are not included in surrender benefits for U.S. GAAP.
•       Statutory reserves are based on different assumptions than they are under U.S. GAAP.
•       Assets and liabilities are reported net of reinsurance balances for STAT and gross for U.S. GAAP.
•       The statutory provision for federal income taxes represents estimated amounts currently payable based on taxable income or loss reported in the current accounting period as well as changes in estimates related to prior year taxes. Deferred income taxes are provided in accordance with Statement of Statutory Accounting Principles (“SSAP”) No. 101, Income Taxes, a Replacement of SSAP No. 10, and changes in deferred income taxes are recorded through surplus. SSAP No. 101 adopts the U.S. GAAP valuation allowance standard and also limits the recognition of deferred tax assets (“DTAs”) based on certain admissibility criteria. The U.S. GAAP provision would include a provision for taxes currently payable as well as deferred taxes, both of which would be recorded in the income statement. Under SSAP No. 101, in conjunction with SSAP No. 5 as modified to replace the “probable” standard with a “more likely than not” standard, companies must establish a liability related to uncertain tax positions where management determines that it is more likely than not a claimed tax benefit would not be sustained if audited. SSAP No. 101 specifically rejects the corresponding U.S. GAAP guidance. For U.S. GAAP, the Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Accounting for Income Taxes. Income tax expense or benefit is recognized based upon amounts reported in the financial statements and the provisions of currently enacted tax laws. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Valuation allowances on deferred tax assets are recorded to the extent that management concludes that it is more likely than not that an asset will not be realized. For both STAT and U.S. GAAP, the Company assesses all significant tax positions to determine if a liability for an uncertain tax position is necessary and, if so, the impact on the current or deferred income tax balances.
•       For STAT, wholly owned subsidiaries are not consolidated, but subsidiary earnings and losses and other changes in capital and surplus are accounted for as unrealized gains and losses. Dividends received from subsidiaries are treated as investment income. For GAAP, results of wholly owned subsidiaries are consolidated.
•       Surplus notes issued by the Company are recognized as surplus for STAT and debt for U.S. GAAP.
•       Under STAT, we consider forms of security that are acceptable to the Commissioner under Connecticut General Statutes Section 38a-86(a)(4) to recognize the credit for reinsurance. For GAAP, a reinsurance recoverable would be reported as an asset and assessed for impairment related to the credit risk of the reinsurer.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In applying these estimates and assumptions, management makes subjective and complex judgments that frequently require assumptions about matters that are uncertain and inherently subject to change, such as possibility for elevated mortality rates and market volatility. We regularly review our projections and associated assumptions as part of our ongoing assessment of our business performance and risks. Small changes in assumptions or small deviations of actual experience from assumptions can have, and in the past have had, material impacts on our results of operations and financial condition, and as such, the range of scenarios around these projections is significant. Actual results may differ from those estimates. Significant estimates and assumptions used in determining insurance and contractholder liabilities, income taxes, contingencies and valuation allowances for invested assets are discussed throughout the Notes to Statutory Financial Statements.

8
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Recent accounting pronouncements

In 2023, the NAIC adopted revisions to SSAP No. 26, Bonds, and SSAP No. 43, Loan-Backed and Structured Securities, to incorporate the principles-based bond definition for use in determining whether an investment (i.e., security) qualifies for reporting as a bond into statutory accounting guidance and to address the accounting treatment for securities that do qualify as bonds. SSAP No. 2, Cash, Cash Equivalents, Drafts and Short-Term Investments, was also revised to exclude asset-backed securities from being reported as a cash equivalent or short-term investment. In 2024, the NAIC adopted revisions to SSAP No. 21, Other Admitted Assets, to provide guidance for debt securities that do not qualify as bonds under the principles-based definition. The 2024 adopted revisions prescribe accounting guidance (measurement method) for all residual interests regardless of legal form. In 2024, the NAIC also adopted Statutory Issue Paper No. 169, Principles-Based Bond Definition, to provide additional guidance. These revisions all have an effective date of January 1, 2025, and the Company is assessing the impact on its financial position and results of operations.

In 2024, the NAIC adopted revisions to SSAP No. 93, Investments in Tax Credit Structures, to expand guidance for inclusion of all tax credit investments regardless of structure. SSAP No. 94, State and Federal Tax Credits, was also revised to expand and amend guidance to include both purchased and federal tax credits. These revisions have an effective date of January 1, 2025, and the Company is assessing the impact on its financial position and results of operations.

The Company did not adopt any accounting standards during 2024 that had a material impact on these financial statements.

Going concern

As described in Note 1, in response to the PHL Companies’ hazardous financial condition, the PHL Companies entered rehabilitation proceedings in the Connecticut Superior Court on May 20, 2024. On June 25, 2024, the Court approved on a final basis a moratorium order that limits payments under some policies and annuities. The moratorium allows the PHL Companies to mitigate the high outflow of claim payments and is anticipated to be in place in some form until a rehabilitation plan is confirmed by the Court. Although the payments have been limited under the moratorium, the Companies have continued to record liabilities for the full amount of policyholder benefits. The claims payable balance for amounts in excess of the moratorium limits, where claims have already been paid up to the moratorium limit, is $230 million as of December 31, 2024 for the PHL Companies. Additionally, the PHL Companies have recorded a liability for interest on unpaid death claims, as would be required statutorily, of $8.5 million as of December 31, 2024. Claims payable for amounts in excess of the moratorium limits and the related liability for interest on unpaid death claims are reported within other liabilities, net of reinsurance. The Rehabilitator has evaluated the Company’s ability to continue as a going concern and concluded that substantial doubt exists about the Company’s ability to continue as a going concern.

The Company has incurred a net loss of $2.1 billion for the year ended December 31, 2024, with capital and surplus declining to $(2.2) billion at December 31, 2024. As of December 31, 2023, PHL’s RBC dropped to a mandatory control level and remained there during 2024. In recent years, PHL experienced adverse mortality in its universal life business, which contributed to a significant increase in claims volatility and PHL’s deteriorating financial condition.

As described in Note 1, the Concord Treaty provides PHL with reserve relief for certain life and annuity products. During 2023, the value of the underlying collateral supporting this treaty declined significantly, which resulted in the Company recognizing a reserve credit impairment charge of $776 million and $176 million for the years ended December 31, 2024 and 2023, respectively. PHL’s loss of full reserve credit results in PHL retaining additional risk for life and annuity products which places increased demand on the Company’s available capital and liquidity.

Although the Rehabilitator has estimated the Company has sufficient liquidity to meet its obligations for the next twelve months, such ability is subject to the moratorium order entered in the rehabilitation proceeding. Based on the significance of these conditions and events, the Rehabilitator concluded that substantial doubt exists about the Company’s ability to continue as a going concern. The goal of the rehabilitation proceeding is to develop a rehabilitation plan that maximizes the value of assets and equitably administers the business for the benefit of all policy and annuity holders.

9
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Risks and uncertainties

The Company is exposed to various risks and may face difficult economic conditions that could impact the Company’s results of operations, financial condition and liquidity.

Concord Treaty

At December 31, 2024, Concord’s capital and surplus was negative. It is uncertain whether Concord will have sufficient invested and other assets to support the Concord Treaty with PHL. PHL may need to further impair the reserve credit if Concord does not hold assets at least equal to the reserves that PHL is ceding. Included in the risk transferred to Concord are PHL’s older age universal life policies, which have a number of large face amount policies that are not reinsured to third parties and have generated significant losses in recent years as a result of adverse mortality.

Further Receivership Proceedings

As stated in Note 2, the goal of the rehabilitation proceeding is to develop a rehabilitation plan that maximizes the value of assets and equitably administers the business for the benefit of all policy and annuity holders. Depending on the outcome of a rehabilitation plan, there is a risk that some or all of the Company may be liquidated.

Liquidity Challenges

As of year-end 2019, PHL ceased underwriting activities. To mitigate the liquidity challenges posed by large claims and the lack of new revenue, as described in Note 2, on June 25, 2024, the Court approved on a final basis a moratorium order that limits payments under some policies.

XOL Agreement

Concord is a party to the XOL Agreement with Palisado, which provides coverage in the event assets are not sufficient to pay claims (see Note 1). However, for the year ended December 31, 2024, Palisado’s surplus was negative and, the full $450 million of the XOL was no longer available to Concord to support reserve credit to PHL.

Market Factors

Market factors, including interest rates, credit spreads, equity prices, derivative prices and availability, volatility, disruptions and strength of the capital markets, deflation and inflation, and government actions in response thereto could adversely impact results. The Rehabilitator takes measures to mitigate these risks, including the risks associated with investing in a changing interest rate environment. Although rising interest rates are generally positive to the Company’s economics, a sharp rise in interest rates, in the absence of other countervailing changes, would result in deterioration in the net unrealized position of the Company’s investment portfolio and, if long-term interest rates rise dramatically within a six to twelve-month time period, certain products may be exposed to disintermediation risk. Disintermediation risk refers to the risk that policyholders may surrender their contracts in a rising interest rate environment, requiring the liquidation of assets in an unrealized loss position. The Rehabilitator believes this risk is mitigated by the moratorium approved by the Court on June 25, 2024, which limits surrenders on all non-variable life and annuity products. It is also mitigated to some extent by surrender charge and market value adjustment protection provided by certain products, in particular the Company’s fixed indexed annuity and fixed annuity business. Lower interest rates are generally negative to the Company’s economics due to lower investment income and increases in asset adequacy reserves.

10
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Correction of errors from prior periods

The Company’s December 31, 2024 financial statements reflect the correction of prior period errors related to reserve valuation calculations for certain policies. In accordance with SSAP No. 3, Accounting Changes and Corrections of Errors, as of January 1, 2024, the Company recorded a $32.6 million decrease to surplus in the Statements of Income (Loss) and Changes in Capital in Surplus. The Company concluded the effects of these errors were immaterial to previously issued financial statements.

Investments

Investments are recognized in accordance with methods prescribed by the NAIC.

Investments in bonds include public and private placement bonds and mortgage-backed securities. Bonds with an NAIC designation of 1-5 are carried at amortized cost using the interest method while those with an NAIC designation of 6 are carried at the lower of amortized cost or fair value. Mortgage-backed and structured securities are assigned an NAIC designation in accordance with SSAP No. 43, Loan-Backed and Structured Securities. Amortized cost for mortgage-backed and structured securities is determined using the interest method, utilizing anticipated cash flows based upon prepayment assumptions. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and any resulting adjustment is included in net investment income. Amortization is adjusted for significant changes in estimated cash flows from the original purchase assumptions.

Redeemable preferred stock that has a NAIC designation of 1-3 is stated at amortized cost and those with a designation of 4-6 are carried at the lower of amortized cost or fair value. Mandatory convertible preferred, redeemable or perpetual, and perpetual preferred stocks are carried at the lower of fair value or the current effective call price.

With the exception of the Company’s investment in Federal Home Loan Bank (“FHLB”) common stock, unaffiliated common stock is carried at fair value. The Company’s investment in FHLB common stock is carried at cost, which represents the price at which the FHLB will repurchase the stock.

The Company’s only investments in subsidiary relate to Concord and Palisado. No value is admitted for these investments.

Short-term investments and cash equivalents are carried at amortized cost. PHL considers highly liquid investments purchased between ninety days and one year of maturity to be short-term investments and highly liquid investments purchased ninety days or less of maturity to be cash equivalents.

Mortgage loans on real estate are carried at the outstanding principal balance, less any allowances for credit losses.

Contract loans are generally reported at their unpaid balances and are collateralized by the cash values of the related policies.

Other invested assets primarily include limited partnerships, limited liability companies and residual tranches of securitizations. Interests in limited partnerships and limited liability companies are carried at cost adjusted for PHL’s equity in undistributed earnings or losses since acquisition, less allowances for other-than-temporary declines in value, based upon audited financial statements in accordance with SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies. Residual tranches of securitizations are reported at the lower of cost or market. Recognition of net investment income occurs when cash distributions of income are received.

Realized capital gains and losses on investments are determined using the first-in, first-out (“FIFO”) method. Those realized capital gains and losses resulting from interest rate changes are deferred and amortized to income over the stated maturity of the disposed investment utilizing the Interest Maintenance Reserve (“IMR”) Grouped Method. Unrealized capital gains and losses, resulting from changes in the difference between cost and the carrying value of investments, are reflected in the Statements of Income (Loss) and Changes in Capital and Surplus.

11
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The Company’s accounting policy requires that a decline in the value of a bond or equity security below its cost or amortized cost basis be assessed to determine if the decline is other-than-temporary. In addition, for securities expected to be sold, an other-than-temporary impairment (“OTTI”) charge is recognized if the Company does not expect the fair value of a security to recover to its cost or amortized cost basis prior to the expected date of sale.

Securities that are in an unrealized loss position are reviewed at least quarterly to determine if an OTTI is present based on certain quantitative and qualitative factors. The primary factors considered in evaluating whether a decline in value for securities not subject to SSAP No. 43 is other-than-temporary include: (a) the length of time and the extent to which the fair value has been less than cost or amortized cost, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, and (c) whether the debtor is current on contractually obligated payments.

For securities that are not subject to SSAP No. 43, if the decline in value of a bond or equity security is other-than-temporary, a charge is recorded in net realized capital losses equal to the difference between the fair value and cost or amortized cost basis of the security. Impairment losses are recorded through the IMR.

For certain securitized financial assets with contractual cash flows (including asset-backed securities), SSAP No. 43 requires the Company to periodically update its best estimate of cash flows over the life of the security. If management determines that its best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment are less than its amortized cost, then an OTTI charge is recognized equal to the difference between the amortized cost and the Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment. The Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment becomes its new cost basis. Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. As a result, actual results may differ from estimates. In addition, if the Company does not have the intent and ability to hold a security subject to the provisions of SSAP No. 43 until the recovery of value, the security is written down to fair value.

Loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms; changes to interest rates; extensions of maturity; or additions or modifications to covenants. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a “troubled debt restructuring” as defined by authoritative accounting guidance. In a troubled debt restructuring where the Company receives assets in full or partial satisfaction of the debt, any specific valuation allowance is reversed and a direct write down of the loan is recorded for the amount of the allowance and any additional loss, net of recoveries, or any gain is recorded for the difference between the fair value of the assets received and the recorded investment in the loan. Any remaining loan is evaluated prospectively for impairment. When a loan is restructured in a troubled debt restructuring, the impairment of the loan is remeasured using the modified terms and the loan’s original effective yield and the allowance for loss is adjusted accordingly. Subsequent to the modification, income is recognized prospectively based on the modified terms of the loans.

Derivatives

Cash flows associated with derivative instruments and their related gains and losses are presented in the statement of cash flows as either proceeds of other investments or sales of other investments.

Interest Rate Swaps

An interest rate swap is an agreement between two parties to exchange cash flows in the future. Typically, one of the cash flow streams is based on a fixed interest rate set at the inception of the contract, and the other is a floating rate indexed to a reference rate that resets periodically. At the outset of the contract, generally, there is neither an exchange of cash nor a payment of principal by the parties; hence the term “notional principal.” At each settlement date, the fixed and floating interest rates times the notional principal determine the cash flows to be exchanged, and the resulting net payment amount between these interest cash flows is made from one party to the other.

12
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
In 2024, the Company terminated all interest rate swaps. The Company used interest rate swaps to hedge against market risks in assets or liabilities from substantial changes in interest rates. In an interest rate swap, the Company agrees with another party (referred to as the counterparty) to exchange cash flows at specified intervals for a set length of time, based on the specified notional principal amount.

The Company used interest rate swaps to hedge exposure to changes in interest rates. The Company uses interest rate swaps to manage interest rate exposure to certain floating rate available-for-sale debt securities where the terms or expected cash flows of the hedged item closely match the terms or expected cash flows of the swap.

The Company valued qualified hedges at cost and changes in the value of these hedges are reflected directly through net investment income. For interest rate swaps used to hedge the cash flow variability or reinvestment risks associated with asset purchases, the impact was reflected through net investment income as the difference between income between bond coupons and swap payments.

The Company had no unrealized gain (loss) for non-qualified hedges representing interest rate swaps as of December 31, 2024, 2023 and 2022.

The Company had no net gain or loss recognized in unrealized gains (losses) during the reporting period resulting from derivatives that no longer qualify for hedge accounting.

The Company had derivatives accounted for as cash flow hedges of forecasted transactions and no derivative contracts with financing premiums.

Equity Index Options

An equity index option gives the option holder the right to buy or sell the equity index at a predetermined price (strike price) at a specified time (maturity) agreed upon at the inception of the contract. An equity index put option affords the holder the right to sell the equity index at a strike price at the maturity date while an equity index call option affords the holder the right to buy the equity index at the strike price.

The Company uses equity index put and call options. The Company is exposed to credit-related losses in the event of nonperformance by a counterparty’s failure to meet its obligations. Given the Company enters into derivative contracts with highly rated counterparties and diversifies this exposure across a number of counterparties, the Company is exposed to minimum credit risk.

The Company uses equity index put options primarily to hedge against market risks or the so-called “vega” Greek risk exposure (referring to the sensitivity of the fair value of assets and liabilities to changes in equity volatility) associated with certain annuity products. The Company uses equity index options in two instances: 1) To hedge against market risks from changes in equity index price associated with certain annuity products; or 2) To replicate the option payoff profile associated with certain equity-linked life and annuity products. The statutory accounting treatment for these options is that they are valued at fair or market value, and changes in the value of these options are reflected directly through surplus.

The unrealized gain (loss) representing equity index options was $2.0 million, $(1.7) million and $2.4 million as of December 31, 2024, 2023 and 2022, respectively.

The Company had no net gain or loss recognized in unrealized gains (losses) during the reporting period resulting from derivatives that no longer qualify for hedge accounting.

The Company had no derivatives accounted for as cash flow hedges of forecasted transactions and no derivative contracts with financing premiums.

13
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Net investment income

Net investment income primarily represents interest and dividends received or accrued on bonds, preferred stock, mortgage loans, cash equivalents and short-term investments. It also includes amortization of any purchase premium or discount using the interest method, adjusted retrospectively for any change in estimated yield-to-maturity. For partnership investments, income is earned when cash distributions of income are received. Investment income due and accrued that is deemed uncollectible is charged against net investment income in the period such determination is made, while investment income greater than 90 days past due is non-admitted and charged directly to surplus. There was $6.9 million and $7.2 million gross due and accrued investment income at December 31, 2024 and 2023, respectively. There was $3.7 million and $3.9 million due and accrued investment income non-admitted at December 31, 2024 and 2023, respectively. There was $3.2 million and $3.2 million net due and accrued investment income at December 31, 2024 and 2023, respectively.

Non-admitted assets

In accordance with regulatory requirements, certain assets, including certain receivables, certain deferred tax assets and prepaid expenses, are not allowable and must be charged against surplus and are reported in the Statements of Income (Loss) and Changes in Capital and Surplus. Total non-admitted assets at December 31, 2024 and 2023 were $21.2 million and $11.7 million, respectively. Non-admitted deferred tax assets account for $0 and $0 of the total non-admitted asset balance for December 31, 2024 and 2023, respectively. Changes for the years ended December 31, 2024, 2023 and 2022 increased (decreased) surplus by $(9.5) million, $23.5 million and $(21.5) million, respectively.

Separate accounts

Separate account assets and liabilities are funds maintained in accounts to meet specific investment objectives of contractholders who can either choose to bear the full investment risk or can choose guaranteed investment earnings subject to certain conditions.

For contractholders who bear the investment risk, investment income and investment gains and losses accrue directly to such contractholders. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of PHL. The assets and liabilities are carried at fair value in accordance with SSAP No. 56, Separate Accounts, except for fixed index annuity contracts. Fixed index annuity contracts are accounted for at book value in accordance with Commissioner approval under Connecticut General Statute §38a-433. Net investment income and realized investment gains and losses for these accounts are excluded from revenues, and the related liability increases are excluded from benefits and expenses. Amounts assessed to the contractholders for management services are included in revenues.

Appreciation or depreciation of PHL’s interest in the separate accounts, including undistributed net investment income, is reflected in net investment income. Contractholders’ interests in net investment income and realized and unrealized capital gains and losses on separate account assets are not reflected in net income.

PHL’s separate account products include variable annuities, indexed annuities and variable life insurance contracts. Many of PHL’s annuity contracts include various guaranteed minimum death, accumulation, withdrawal and income benefits. The Company currently reinsures a significant portion of the death benefit guarantees associated with its in-force block of business. Reserves for the guaranteed minimum death, accumulation, withdrawal and income benefits are determined in accordance with Actuarial Guideline (“AG”) 43 for indexed annuities and Valuation Manual Section 21 (“VM-21”) for variable annuities.

14
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
For market value adjusted separate accounts, contractholders are credited interest at a guaranteed rate if the account is held until the end of the guarantee period. If funds are withdrawn from the account prior to the end of the guarantee period, a market value adjustment is applied, which means that the funds received may be higher or lower than the account value, depending on whether current interest rates are higher, lower or equal to the guaranteed interest rate. In these separate accounts, appreciation or depreciation of assets, undistributed net investment income and investment or other sundry expenses are reflected as net income or loss in PHL’s interest in the separate accounts and transferred to the general account.

Insurance liabilities

Benefit and loss reserves, included in reserves for future policy benefits, are established in amounts adequate to meet estimated future obligations on policies in force. Benefits to policyholders are charged to operations as incurred.

Reserves for future policy benefits are determined using assumed rates of interest, mortality and morbidity consistent with statutory requirements. Most life insurance reserves for which the 1980 CSO mortality table is used as the mortality basis are determined using a modified preliminary term reserve method. For certain products issued on or after January 1, 2000, PHL adopted the 20 year select factors in the NAIC Valuation of Life Insurance Policies Model Regulation for both the basic and deficiency reserve, and PHL’s X factors for the deficiency reserve. Annuity reserves principally use AG33 and AG35 to calculate reserve balances without guarantees, AG43 to calculate fixed indexed annuity reserve balances with guarantees and VM-21 to calculate variable annuity reserves. AG33 and AG35 use prescribed methods and assumptions to determine the minimum statutory reserves. AG43 requires that reserves for contracts are based on the greater of the Standard Scenario Amount (“SSA”) and the Conditional Tail Expectation Amount (“CTE”). VM-21 requires stochastic projections to calculate CTE amounts under company and prescribed assumptions to determine the final reserve. The Company holds reserves greater than those developed under the minimum statutory reserving rules when it is determined that the minimum statutory reserves are inadequate. Actual results could differ from these estimates and may result in the establishment of additional reserves. The Company monitors actual experience and, where circumstances warrant, revises assumptions and the related estimates for policy reserves.

As of December 31, 2024 and 2023, the Company calculated its reserves for variable annuity products with guaranteed minimum death, accumulation and withdrawal benefits under VM-21. The Company calculates fixed indexed annuity reserves under the SSA of AG43, which exceeded the CTE scenario.

Claim and loss liabilities, included in reserves for future policy benefits, are established in amounts estimated to cover incurred losses. These liabilities are based on individual case estimates for reported losses and estimates of unreported losses based on past experience.

Fees associated with separate accounts and other miscellaneous income

Fees consist of contract charges assessed against the fund values and are recognized when earned.

Premium income and related expenses

Generally, premium income and annuity considerations for fixed payment policies are recognized when due and premium income and annuity considerations for variable payment policies or contracts is recognized as income when paid. Related underwriting expenses, commissions and other costs of acquiring the policies and contracts are charged to operations as incurred.

For deposit-type variable annuity contracts in the accumulation stage, PHL reports deposits as revenues and withdrawals as benefits. This method of reporting applies to deposits and withdrawals for both general account activity and transfers to/from separate accounts.

15
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Stockholder dividends

In Connecticut, without prior approval by the insurance commissioner, the aggregate amount of dividends during any twelve month period shall not exceed the greater of (i) 10% of surplus to policyholders for the preceding calendar year or (ii) net gain from operations for such year. Connecticut law states that no dividend or other distribution exceeding an amount equal to an insurance company’s earned surplus may be paid without prior approval of the insurance commissioner. Based on this calculation, the Company has no dividend capacity for 2025.

Reinsurance

PHL utilizes reinsurance agreements to provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks and provide additional capacity for growth. Reinsurance arrangements do not relieve the Company as primary obligor for policyholder liabilities.

Assets and liabilities related to reinsurance ceded contracts are reported on a net basis.

Other amounts ceded on the Statements of Income (Loss) and Changes in Capital and Surplus reflect certain adjustments related to the reinsurance arrangement with Concord including interest on funds withheld, separate account income and other initial coinsurance reserve adjustments for contract claims.

Contract claims (other liabilities) arising from the moratorium are ceded to reinsurers, and the direct contract claim payable (and corresponding ceded) increase is included in the reinsurance table within Footnote 4.

Pursuant to the moratorium, the Rehabilitator developed an “Override Agreement” as a supplement to PHL reinsurance agreements with third parties. The Override Agreement provides that a reinsurer will pay PHL, on a net basis, for the full insured benefit without diminution as a result of the moratorium. The reinsurance proceeds are placed into reinsurer-specific, interest-bearing, segregated bank accounts (“Segregated Accounts”). Amounts held in the Segregated Accounts may not be withdrawn by PHL or the reinsurer other than in very limited circumstances involving hardships. As of December 31, 2024, amounts reported within the Segregated Accounts totaled $23.3 million, including interest.

Income taxes

PHL Delaware is the direct parent of PHL. Effective starting in 2024, PHL and its subsidiaries, Concord and Palisado, joined the PHL Delaware consolidated return that also includes affiliate Magni Re, LTD. Consequently, PHL, Concord, and Palisado, all joined as parties to the PHL Delaware tax allocation agreement effective January 1, 2024. In January 2025, PHL formed Compass HTH (“Compass”), a wholly owned subsidiary treated as a disregarded entity for tax purposes, and Compass joined as party to the tax allocation agreement effective for January 1, 2025.

In accordance with the 2024 tax sharing agreement, each subsidiary computes their taxable income on a separate company basis and pays its respective tax liability to PHL Delaware. PHL Delaware will utilize the tax losses and other tax attributes of its subsidiaries to offset consolidated taxable income and recognize the tax savings relating to the utilized net operating losses as a benefit in the effective rate reconciliation. Under the tax sharing agreement, PHL Delaware will pay to PHL in the current year the tax benefit of tax attributes attributable to PHL and/or its subsidiaries that are used to reduce group taxable income. PHL will pay to its subsidiary in any subsequent year the tax benefit relating to the portion of such subsidiary’s tax attribute that reduces such subsidiary’s taxable income on a separate company basis.

Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their recorded amounts for financial reporting purposes. Deferred tax assets are admitted in accordance with the admissibility test prescribed by SSAP No. 101. The change in deferred tax is recorded as a component of surplus. The Company’s deferred tax assets were subject to a full valuation allowance as of December 31, 2024.

16
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Surplus notes

On December 28, 2018, the Company issued 9.75% surplus notes that are due December 28, 2048 with a face value of $25.0 million. Interest and principal payments require the prior approval of the Department and may be made only out of surplus funds that the Department determines to be available for such payments under Connecticut insurance law. The interest on the notes is scheduled to be paid on December 28 of each year, commencing December 28, 2019. The Company did not request approval and made no interest payments for these notes in 2024, 2023 or 2022. The 9.75% surplus notes may be redeemed at the option of PHL at any time at the “make-whole” redemption price set forth in the Note Purchase Agreement. Connecticut insurance law provides that the notes are not part of the legal liabilities of PHL. PHL Holdings LLC (“PHL Holdings”), the parent company of PHL Delaware, holds the full balance of the notes.

On December 30, 2013, the Company issued 10.5% surplus notes that are due December 30, 2043 with a face value of $30.0 million. Interest and principal payments require the prior approval of the Department and may be made only out of surplus funds that the Department determines to be available for such payments under Connecticut insurance law. The interest on the notes is scheduled to be paid on December 30 of each year, commencing December 30, 2014. The Company did not request approval and made no interest payments for these notes in 2024, 2023 or 2022. The 10.5% surplus notes may be redeemed at the option of PHL at any time at the “make-whole” redemption price set forth in the Note Purchase Agreement. Connecticut insurance law provides that the notes are not part of the legal liabilities of PHL. PHL Holdings holds the full balance of the notes.

Below are the details on the outstanding surplus notes (in millions):

Item # Date
Issued		 Interest
Rate		 Original
Issue Amount
of Note		 Note Holder
a Related
Party (Y/N)		 Carrying
Value of
Notes
Prior Year		 Carrying
Value of
Notes
Current Year		 Unapproved
Interest
and/or
Principal
1000 12/30/2013 10.50% $ 30.0  Y $ 30.0  $ 30.0  $ — 
1001 12/28/2018 9.75% 25.0  Y 25.0  25.0  — 
Total $ 55.0  $ 55.0  $ 55.0  $ — 

Item # Current
Year
Interest
Expense
Recognized		 Life-to-Date
Interest
Expense
Recognized		 Current
Year
Interest
Offset
Percentage		 Current
Year
Principal
Paid		 Life-to-Date
Principal
Paid		 Date of
Maturity
1000 $ —  $ 15.8  N/A $ —  $ —  12/30/2043
1001 —  —  N/A —  —  12/28/2048
Total $ —  $ 15.8  $ —  $ — 

17
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Item # Are
Surplus Note
payments
contractually
linked
(Y/N)		 Surplus Note
payments
subject to
administrative
offsetting
provisions
(Y/N)		 Were
Surplus Note
proceeds used
to purchase
an asset
directly from
the holder of
the surplus
(Y/N)		 Is Asset
Issuer a
Related
Party
(Y/N)		 Types of
Assets		 Principal
Amount of
Assets
Received
Upon
Issuance		 Book/Adjusted
Carrying
Value of
Assets		 Is Liquidity
Source a
Related
Party to
the Issuer
(Y/N)
1000 N N N N Cash $ 30.0  $ 30.0  N
1001 N N N N Cash 25.0  25.0  N
Total $ 55.0  $ 55.0 

The impact of any restatement due to prior quasi-reorganizations is a follows (in millions):

Change in
Surplus		 Change in
Gross
Paid-in and
Contributed
Surplus
2016 $ —  $ (806.3)

Surplus

The portion of unassigned surplus increased (reduced) by cumulative unrealized gains (losses) was $(7.4) million and $(10.4) million as of December 31, 2024 and 2023, respectively.

Pursuant to SSAP No. 72, Surplus and Quasi-Reorganizations, the Company reclassified its negative unassigned surplus balance of $806.3 million to gross paid-in and contributed surplus as of December 31, 2016, which had the effect of setting the Company’s statutory unassigned surplus to zero as of this date. This change in accounting was approved by the Department.

Non-cash items

The Statements of Cash Flows exclude non-cash items, such as the following:

•Non-cash investment transactions, such as tax-free exchanges;
•Accretion of amortization or accrual of discount for investments;
•Depreciation expense; and
•Modified coinsurance (“MODCO”) reinsurance adjustments, including ceded/assumed premium amounts.

18
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The Statements of Cash Flows exclude the following significant non-cash items for the years ended December 31, 2024, 2023 and 2022, respectively as shown below, ceded under the Concord Treaty:

•$225.4 million, $273.4 million and $256.2 million of premium and annuity considerations for the years ended December 31, 2024, 2023 and 2022, respectively;
•$528.6 million, $803.5 million and $728.8 million of policyholder benefits for the years ended December 31, 2024, 2023 and 2022, respectively; and
•$22.3 million, $242.4 million and ($148.5) million change in funds withheld account for the years ended December 31, 2024, 2023 and 2022, respectively.

The Statements of Cash Flows also excluded the following significant non-cash items for the years ended December 31, 2024, 2023 and 2022:

•$15.0 million, $1.6 million and $6.8 million of non-cash investment exchanges for the years ended December 31, 2024, 2023 and 2022, respectively.


3.    Investments

Information pertaining to PHL’s investments, net investment income and capital gains and losses on investments follows.

Bonds, common stock and preferred stock

The carrying value and fair value of investments in bonds, common stock and preferred stock as of December 31, 2024 were as follows:

Carrying
Value		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Fair
Value
U.S. government $ 24,992  $ —  $ (1,759) $ 23,233 
All other governments 238  —  (46) 192 
Political subdivisions 6,933  3  (1,346) 5,590 
Special revenue 12,787  16  (1,459) 11,344 
Industrial and miscellaneous (unaffiliated) 458,698  3,864  (53,686) 408,876 
Hybrid securities 602  —  (27) 575 
Mortgage-backed and asset-backed securities 148,926  310  (18,639) 130,597 
Total bonds $ 653,176  $ 4,193  $ (76,962) $ 580,407 
Preferred stock
 $ 1,086  $ —  $ —  $ 1,086 
Common stock
 $ 1,692  $ —  $ —  $ 1,692 

19
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The carrying value and fair value of investments in bonds, common stock and preferred stock as of December 31, 2023 were as follows:

Carrying
Value		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Fair
Value
U.S. government $ 24,983  $ 3  $ (2,089) $ 22,897 
All other governments 238  —  (42) 196 
Political subdivisions 7,210  13  (1,159) 6,064 
Special revenue 15,372  21  (1,565) 13,828 
Industrial and miscellaneous (unaffiliated) 422,442  4,578  (47,203) 379,817 
Hybrid securities 2,603  —  (61) 2,542 
Mortgage-backed and asset-backed securities 210,792  87  (33,012) 177,867 
Total bonds $ 683,640  $ 4,702  $ (85,131) $ 603,211 
Preferred stock
 $ 3,490  $ —  $ (36) $ 3,454 
Common stock
 $ 2,363  $ —  $ —  $ 2,363 

The gross unrealized capital gains (losses) on bonds, common stock and preferred stock were not reflected in surplus for the years ended December 31, 2024 and 2023.

The aging of temporarily impaired general account debt securities as of December 31, 2024 was as follows:

Less than 12 months Greater than 12 months Total
Fair
Value
Unrealized
Losses
 Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses
Debt Securities
U.S. government $ 106  $ (5) $ 23,082  $ (1,754) $ 23,188  $ (1,759)
All other governments —  —  192  (46) 192  (46)
Political subdivisions —  —  5,058  (1,346) 5,058  (1,346)
Special revenue 983  (17) 9,814  (1,442) 10,797  (1,459)
Industrial and miscellaneous 150,196  (2,230) 229,293  (51,456) 379,489  (53,686)
Hybrid securities 248  (4) 327  (23) 575  (27)
Mortgage-backed and asset-backed securities 23,387  (740) 90,213  (17,899) 113,600  (18,639)
Total bonds $ 174,920  $ (2,996) $ 357,979  $ (73,966) $ 532,899  $ (76,962)
Number of positions at unrealized loss 187  327  514 

There were 15 below investment grade debt securities that have been in an unrealized loss position for greater than 12 months. Below investment grade unrealized losses greater than 12 months were $3.5 million.

20
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
As of December 31, 2024, securities in an unrealized loss position for greater than 12 months consisted of 327 securities. Unrealized losses were not recognized in earnings on these debt securities since the Company neither intends to sell the securities nor does it believe that it is more likely than not that it will be required to sell these securities before recovery of their amortized cost basis. Additionally, based on a security-by-security analysis, the Company expects to recover the entire amortized cost basis of these securities. In its evaluation of each security, management considered the actual recovery periods for these securities in previous periods of broad market declines. For securities with significant declines, individual security level analysis was performed, which considered any credit enhancements, expectations of defaults on underlying collateral and other available market data, including industry analyst reports and forecasts. Although there may be sustained losses for greater than 12 months on these securities, additional information was obtained related to company performance which did not indicate that the additional losses were other-than-temporary.

The aging of temporarily impaired general account debt securities as of December 31, 2023 was as follows:

Less than 12 months Greater than 12 months Total
Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses
Debt Securities
U.S. government $ 92  $ —  $ 22,741  $ (2,089) $ 22,833  $ (2,089)
All other governments —  —  195  (42) 195  (42)
Political subdivisions —  —  5,469  (1,159) 5,469  (1,159)
Special revenue —  —  13,224  (1,565) 13,224  (1,565)
Industrial and miscellaneous 10,996  (996) 318,095  (46,207) 329,091  (47,203)
Hybrid securities —  —  2,542  (61) 2,542  (61)
Mortgage-backed and asset-backed securities 11,635  (306) 165,533  (32,706) 177,168  (33,012)
Total bonds $ 22,723  $ (1,302) $ 527,799  $ (83,829) $ 550,522  $ (85,131)
Number of positions at unrealized loss 18  436  454 

There were 18 below investment grade debt securities that have been in an unrealized loss position for greater than 12 months. Below investment grade unrealized losses greater than 12 months were $4.3 million.

As of December 31, 2023, securities in an unrealized loss position for greater than 12 months consisted of 436 securities. Unrealized losses were not recognized in earnings on these debt securities since the Company neither intends to sell the securities nor does it believe that it is more likely than not that it will be required to sell these securities before recovery of their amortized cost basis. Additionally, based on a security-by-security analysis, the Company expects to recover the entire amortized cost basis of these securities. In its evaluation of each security, management considered the actual recovery periods for these securities in previous periods of broad market declines. For securities with significant declines, individual security level analysis was performed, which considered any credit enhancements, expectations of defaults on underlying collateral and other available market data, including industry analyst reports and forecasts. Although there may be sustained losses for greater than 12 months on these securities, additional information was obtained related to company performance which did not indicate that the additional losses were other-than-temporary.

21
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The carrying value and fair value of bonds as of December 31, 2024 by maturity are shown below.

Carrying
Value		 Fair
Value
Due in one year or less $ 20,651  $ 23,547 
Due after one year through five years 202,268  191,358 
Due after five years through ten years 127,686  123,900 
Due after ten years 149,780  128,709 
Due after twenty years 152,791  112,893 
Total $ 653,176  $ 580,407 

Corporate bonds are shown based on contractual maturity or contractual sinking fund payments. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties, or PHL may have the right to put or sell the obligations back to the issuers. Mortgage-backed and asset-backed securities (“ABS”) are not due at a single maturity date and therefore are shown based on the expected cash flows of the underlying loans, which includes estimates of anticipated future prepayments.

The carrying values of PHL’s OTTI securities were $9.4 million and $1.3 million as of December 31, 2024 and 2023, respectively. The realized losses on OTTIs for impaired securities were $44.5 million, $0.8 million and $3.0 million in 2024, 2023 and 2022, respectively.

Internal and external prepayment models, which are widely accepted by the industry, are used in calculating the effective yield used in determining the carrying value of mortgage-backed and asset-backed securities. The retrospective method is applied in determining the prepayment adjustment.

Loan-backed securities

The Company has elected to use the book value as of January 1, 1994 as the cost for applying the retrospective adjustment method to securities purchased prior to that date, where historical cash flows are not readily available.

Prepayment assumptions for loan-backed bonds and structured securities were obtained from industry prepayment models or internal estimates. These assumptions are consistent with current interest rates and the economic environment. The retrospective adjustment method is used to value these securities.

As of December 31, 2024, the Company had no OTTI recognized because the present value of cash flows expected to be collected is greater than the amortized cost basis of the securities.

Mortgage loans

The Company invests in mortgage loans that are collateralized by commercial properties, including multi-family residential buildings, which are managed as a single class of commercial mortgage loans. Mortgage loans are stated at original cost, net of principal payments and amortization. The Company segregates its portfolio by property type and geographic location. As of December 31, 2024 and 2023, the market values of mortgage loans were $22.0 million and $42.9 million, respectively. The allowance for loan losses at December 31, 2024 and 2023 were $0.1 million and $0.2 million, respectively.

22
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The following tables reflect the distribution of mortgage loans by property type as of December 31:

2024 2023
Industrial $ 1,425  $ 4,070 
Multifamily 7,246  16,929 
Office 9,368  9,667 
Retail 5,852  12,326 
Self-storage —  3,573 
Total mortgage loans 23,891  46,565 
Less: Allowance for loan losses 120  233 
Net mortgage loans $ 23,771  $ 46,332 

The following tables reflect the distribution of mortgage loans by geographic region as of December 31:

2024 2023
East North Central $ 8,270  $ 14,018 
Mountain 5,112  5,227 
Pacific —  9,834 
South Atlantic 6,253  13,046 
West South Central 4,256  4,440 
Total mortgage loans 23,891  46,565 
Less: Allowance for loan losses 120  233 
Net mortgage loans $ 23,771  $ 46,332 

The following tables summarize the Company’s commercial mortgage loan portfolio, net of allowance, loan-to-value (“LTV”) ratios and debt-service coverage (“DSC”) ratios using available data as of December 31. The ratios are updated as information becomes available.

December 31, 2024
DSC Ratios
Greater
than 2.0x		 1.8x to
2.0x		 1.5x to
1.8x		 1.2x to
1.5x		 1.0x to
1.2x		 Less than
1.0x		 Total
LTV Ratios
0% - 50% $ 13,715  $ —  $ —  $ —  $ —  $ —  $ 13,715 
50% - 60% 4,234  5,822  —  —  —  —  10,056 
60% - 70% —  —  —  —  —  —  — 
70% - 80% —  —  —  —  —  —  — 
80% and greater —  —  —  —  —  —  — 
Total $ 17,949  $ 5,822  $ —  $ —  $ —  $ —  $ 23,771 

23
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
December 31, 2023
DSC Ratios
Greater
than 2.0x		 1.8x to
2.0x		 1.5x to
1.8x		 1.2x to
1.5x		 1.0x to
1.2x		 Less than
1.0x		 Total
LTV Ratios
0% - 50% $ 7,115  $ 4,930  $ —  $ —  $ —  $ —  $ 12,045 
50% - 60% 9,317  —  3,555  —  —  —  12,872 
60% - 70% 10,261  5,953  5,201  —  —  —  21,415 
70% - 80% —  —  —  —  —  —  — 
80% and greater —  —  —  —  —  —  — 
Total $ 26,693  $ 10,883  $ 8,756  $ —  $ —  $ —  $ 46,332 

LTV and DSC ratios are measures frequently used in commercial real estate to determine the quality of a mortgage loan. The LTV ratio is a comparison between the current loan balance and the value assigned to the property and is expressed as a percentage. If the LTV is greater than 100%, this would indicate that the loan amount exceeds the value of the property.

The DSC ratio compares the property’s net operating income to its mortgage debt service payments. If the DSC ratio is less than 1.0x, this would indicate that the property is not generating enough income after expenses to cover the mortgage payment. Therefore, a higher DSC ratio could indicate a better quality loan.

To monitor credit quality, the Company primarily uses RBC code, which is the risk category used in the RBC calculation that is based on debt service coverage ratio and loan-to-value. The codes range from CM1 to CM7, with CM1 being the most stable. The Company holds $23.9 million CM1 loans as of December 31, 2024 and $46.6 million CM1 loans as of December 31, 2023. The maximum percentage of any one loan to the value of the collateral security at the time of the loan, exclusive of insured, guaranteed or purchase money mortgages, acquired during 2024 and 2023 was 62% and 70%, respectively. All loans are current as of December 31, 2024 and 2023. In accordance with the rehabilitation, the Company did not file an RBC filing for the year ended December 31, 2024.

During 2024, the minimum and maximum lending rates for mortgage loans were 3.5% and 4.7%, respectively. There were no taxes, assessments, or amounts advanced not included in the mortgage loan total. There were no impairments on mortgage loans or any loans derecognized as a result of foreclosure for the years ended December 31, 2024, 2023 and 2022.

Other invested assets

Other invested assets as of December 31 are summarized below:

2024 2023
Private equity $ 14,093  $ 9,352 
Direct equity 930  1,126 
Credit funds 9,225  9,264 
Collateralized fund obligation 3,776  4,198 
Mezzanine partnerships 1,077  1,166 
Mortgage and real estate 44,144  41,990 
Surplus debentures
 748  748 
Residual tranches
 37,676  52,614 
Total other invested assets $ 111,669  $ 120,458 

24
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The Company has unfunded commitments related to its investments in limited partnerships in the amount of $40.6 million and $53.5 million as of December 31, 2024 and 2023, respectively. These unfunded commitments include separate account amounts of $23.9 million and $30.6 million as of December 31, 2024 and 2023, respectively. The Company has no investments in joint ventures, partnerships or limited liability companies that exceed 10% of its admitted assets.

Derivative instruments

Derivative instruments as of December 31 are summarized below:

2024 2023
Put options:
Notional amount $ 5,934  $ 41,049 
Fair value $ 416  $ 4,730 
Carrying value $ 416  $ 4,730 
Call options:
Notional amount $ 5,405  $ 23,968 
Fair value $ 532  $ 1,603 
Carrying value $ 532  $ 1,603 
Interest rate swaps:
Notional amount $ —  $ 100,000 
Fair value $ —  $ (15,478)
Carrying value $ —  $ — 
Foreign currency forwards:
Notional amount $ —  $ 47,937 
Fair value $ —  $ (481)
Carrying value $ —  $ (481)

Offsetting and netting of assets and liabilities

For the year ended December 31, 2024, the Company had net derivative assets of $0.9 million, which represented $1.8 million of gross derivative assets offset by $(0.9) million in derivative liabilities. For the year ended December 31, 2023, the Company had net derivative assets of $5.9 million, which represented $11.3 million of gross derivative assets offset by $5.4 million in derivative liabilities.

Restricted assets

Restricted assets (including pledged) relate mainly to statutory requirements of various jurisdictions, FHLB capital stock and derivative collateral pledged to counterparties. Restricted assets were $3.4 million and $3.4 million as of December 31, 2024 and 2023, respectively. These are included as assets on the Statements of Admitted Assets, Liabilities, Capital and Surplus.

25
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The Company is a member of the FHLB of Boston. The Company requested withdrawal from the FHLB which was approved on June 16, 2022 and will be effective on June 16, 2027. The Company has determined the estimated maximum borrowing capacity as $0. The Company calculated this amount in accordance with Connecticut General Statute §38a-55, Hypothecation of Assets, whereby a domestic insurer may not pledge, hypothecate or otherwise encumber its assets to secure its debt in excess of the lesser of 5% of admitted assets or 25% of surplus as reported in its last financial statement filed with the commissioner. The Company owned $0.8 million and $0.8 million of FHLB capital stock as of December 31, 2024 and 2023, respectively, which was not eligible for redemption.

As described in Note 2, pursuant to the moratorium, the Rehabilitator developed an Override Agreement that provides that a reinsurer will pay PHL, on a net basis, for the full insured benefit without diminution as a result of the moratorium, with the reinsurance proceeds placed into Segregated Accounts. As of December 31, 2024, amounts reported within the Segregated Accounts totaled $23.3 million.

5GI Securities

NAIC 5GI is assigned by an insurance company to certain obligations that meet all of the following criteria: (1) documentation necessary to permit a full credit analysis of a security by the NAIC Securities Valuation Office (“SVO”) does not exist or an NAIC Credit Rating Provider (“CRP”) credit rating for a Filing Exemption (“FE”) or Private Letter (“PL”) security is not available; and (2) the issuer or obligor is current on all contracted interest and principal payments; and (3) the insurer has an actual expectation of ultimate payment of all contracted interest and principal.

5GI securities as of December 31 are summarized below:

Number of 5GI Securities Aggregate BACV* Aggregate Fair Value
Current
Year		 Prior
Year		 Current
Year		 Prior
Year		 Current
Year		 Prior
Year
Investment
(1) Bonds - Amortized Cost —  —  $ —  $ —  $ —  $ — 
(2) Loan-backed and structured securities
        - Amortized Cost
 —  —  —  —  —  — 
(3) Preferred Stock - Amortized Cost —  —  —  —  —  — 
(4) Preferred Stock - Fair Value —  1  —  658  —  658 
(5) Total (1+2+3+4) —  1  $ —  $ 658  $ —  $ 658 
———————
*Book Adjusted Carrying Value

Investments in subsidiaries

The table below provides the Company’s loss tracking for subsidiary, controlled and affiliated (“SCA”) entities:

Reporting
Entity’s
Share of
SCA’s
Net Income
(Losses)		 Accumulated
Share of
SCA’s
Net Income
(Losses)		 Reporting
Entity’s
Share of
SCA’s Equity
including
Negative
Equity		 Guaranteed
Obligation/Commitment
for Financial
Support
(Yes/No)
Amount of the Recognized Guarantee under SSAP No. 5
Concord $ (240,013) $ (895,891) $ (608,139) No $ — 
Palisado
 $ (108,164) $ (176,619) $ (129,485) No $ — 

26
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
In 2021, the Department granted Concord permitted practices whereby Concord was authorized to (a) admit a receivable (the “XOL Asset”) in conjunction with the XOL Agreement, (b) not record a deferred tax liability on the XOL Asset, and (c) admit a $150.0 million prepaid expense asset (the “Prepaid Asset”) as an aggregate write-in for other than invested assets. As a result of the rehabilitation, the Department determined that permitted practices granted to the PHL Companies prior to the rehabilitation should be discontinued. As of December 31, 2024 and 2023, the balance of the XOL Asset was $300.7 million and $434.1 million, respectively, with the $300.7 million balance at December 31, 2024 being fully non-admitted. As of December 31, 2024 and 2023, the balance of the Prepaid Asset was $106.7 million and $125.0 million, respectively with the $106.7 million balance at December 31, 2024 being fully non-admitted. The Company had no guaranteed obligation or commitment for financial support to Concord or Palisado and admitted no value in these subsidiaries for the years ended December 31, 2024 and 2023.

Concentration of credit risk of financial instruments

Credit exposure related to issuers and derivatives counterparties is inherent in investments and derivative contracts with positive fair value or asset balances. The Company manages credit risk through the analysis of the underlying obligors, issuers and transaction structures. The Company reviews its debt security portfolio regularly to monitor the performance of obligors and assess the stability of their credit ratings. The Company also manages credit risk through industry and issuer diversification and asset allocation. The Company classifies debt securities into investment grade and below-investment-grade securities based on ratings prescribed by the NAIC. In a majority of cases, these classifications will coincide with ratings assigned by one or more Nationally Recognized Statistical Rating Organizations (“NRSRO”); however, for certain structured securities, the NAIC designations may differ from NRSRO designations based on the amortized cost of the securities in its portfolio. Maximum exposure to an issuer or derivative counterparty is defined by quality ratings, with higher quality issuers having larger exposure limits. As of December 31, 2024, the Company was not exposed to the credit concentration risk of any issuer other than U.S. government and government agencies backed by the faith and credit of the U.S. government, defined as exposure greater than 10% of total admitted assets. The top five largest exposures were NCA Realty Partners, University of Michigan, ALESCO Preferred Funding X, Ltd., AIC Enhanced Loan Fund, LLC and Connecticut Natural Gas. The Company monitors credit exposures by actively monitoring dollar limits on transactions with specific counterparties. The Company has an overall limit on below-investment-grade rated issuer exposure. Additionally, the creditworthiness of counterparties is reviewed periodically. The Company uses ISDA Master Agreements with derivative counterparties which may include Credit Support Annexes with collateral provisions to reduce counterparty credit exposures. To further mitigate the risk of loss on derivatives, the Company only enters into contracts in which the counterparty is a financial institution with a rating of A or higher from at least one NRSRO.

27
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Net investment income

The principal components of net investment income for the years ended December 31 were as follows:

2024 2023 2022
Bonds $ 24,202  $ 35,392  $ 44,969 
Preferred stock 96  151  300 
Common stock 101  —  — 
Mortgage loans 1,299  1,939  1,983 
Contract loans 3,491  3,355  2,967 
Cash and short-term investments 6,199  2,969  970 
Other invested assets 7,099  10,151  8,348 
Derivative instruments (1,832) (2,667) (317)
Amortization of IMR 205  2,605  4,224 
Less:
Other investment expenses 7,937  8,720  10,939 
Net investment income $ 32,923  $ 45,175  $ 52,505 

For the years ended December 31, 2024, 2023 and 2022, the Company had 0 securities called or redeemed by the issuer, resulting in income from prepayment penalties and acceleration fees of $0.

Capital gains and losses

The principal components of realized gains (losses) and changes in unrealized capital gains (losses) on investments for the years ended December 31 were as follows:

Realized Change in Unrealized
2024 2023 2022 2024 2023 2022
Bonds $ (11,707) $ (4,231) $ (2,323) $ 222  $ (250) $ 611 
Preferred stock (89) (70) (654) 96  431  (964)
Common stock —  —  (383) (670) (600) 751 
Short-term investments 48  (255) 4  —  —  — 
Other invested assets (34,892) 303  6,822  652  227  (15,639)
Derivative instruments (5,401) (446) (2,044) 2,026  (1,732) 2,263 
Mortgage loans (250) 337  24  —  —  — 
Income tax benefit (expense) (14,516) (6,435) 533  —  —  2,725 
Net capital gains (losses) $ (66,807) $ (10,797) $ 1,979  $ 2,326  $ (1,924) $ (10,253)

Realized losses include other-than-temporary impairments of $44.5 million, $0.8 million and $3.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

28
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The proceeds and related gross realized gains and losses from sales of stocks and bonds for the years ended December 31 were as follows:

2024 2023 2022
Proceeds from sales $ 134,217  $ 202,512  $ 297,927 
Gross gains on sales 3  1,360  8,038 
Gross losses on sales (65,182) (30,173) (16,820)


4.    Reserves for Future Policy Benefits and Reinsurance

The balances for PHL’s major categories of reserves for future policy benefits as of December 31 are summarized below:

2024 2023
Life insurance reserves $ 1,684,024  $ 1,700,052 
Annuity reserves 545,582  268,184 
Deficiency reserves 18,772  18,571 
Various 1,300,000  284,688 
Total before reinsurance ceded 3,548,378  2,271,495 
Less: Reinsurance ceded 1,008,005  1,881,247 
Reserves for future policy benefits $ 2,540,373  $ 390,248 

Ceded reserves for 2024 and 2023 include the reserves ceded to Concord as further discussed in the reinsurance section of this footnote.

The Company waives deduction of deferred fractional premiums upon death of an insured and returns any portion of the final premium beyond the date of death. Surrender values are not promised in excess of the legally computed reserves.

For a policy on which the substandard extra premiums are based upon a multiple of standard mortality, the substandard extra reserve is based upon the excess of such multiple over standard mortality. For a policy carrying a flat extra premium, the extra reserve is one half of the flat extra premium.

As of December 31, 2024 and 2023, the Company had $1.1 billion and $1.2 billion, respectively, of life insurance in force for which the gross premiums are less than net premiums according to the standard of valuation set by the Department. Reserves to cover the above insurance totaled $18.8 million and $18.6 million as of December 31, 2024 and 2023, respectively.

Tabular cost has been determined from the basic data for the calculation of policy reserves. Tabular less actual reserves released has been determined from the basic data for the calculation of reserves and reserves released. Tabular interest has been determined from the basic data for the calculation of policy reserves. Prior to this reporting period, Concord and Palisado were exempted from recording asset adequacy reserves (“AAR”) in accordance with Section 38a-53-2 of the Regulations of Connecticut State Agencies (“AOMR Regulation”) pursuant to CGS Sec. 38a-91oo. As of December 31, 2023, the AAR for the Companies was $0. However, in September 2024, the CID informed the Companies that cash flow testing (“CFT”) will be required effective May 20, 2024, with any additional reserves to be carried by PHL that reflect any deficiency. As of December 31, 2024, the estimate of the Companies’ AAR is approximately $1.3 billion. The estimate is based on the CFT models and methodology employed in the “normal course” of reserve testing plus certain revised actuarial projection assumptions (e.g., lapse, mortality, interest rates), that are based on the Companies’ recent experience data and updated interest rate assumptions as developed by the Rehabilitator and its advisors.
29
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
In 2022, PHL updated its valuation rates for a small subset of payout annuities, increasing valuation rates from below statutory maximums to the lesser of statutory maximums or previously established strengthened valuation rates. This was recorded as a change in reserve basis and resulted in a beginning reserve reduction of $0.4 million for the year ended December 31, 2022.

Withdrawal characteristics

Withdrawal characteristics of annuity actuarial reserves and deposit liabilities as of December 31 were as follows:

2024
General
Account		 Separate
Account
with
Guarantees		 Separate
Account
Non-guaranteed		 Total % of total
Individual Annuities
Subject to discretionary withdrawal:
- with market value adjustment $ 25,724  $ 1,003,071  $ —  $ 1,028,795  36  %
- at book value less surrender charge of 5% or more —  —  —  —  —  %
- at market value —  —  532,251  532,251  19  %
Subtotal 25,724  1,003,071  532,251  1,561,046  55  %
Subject to discretionary withdrawal - without adjustment:
- at book value (minimal or no charge or adjustment) 143,916  676,520  —  820,436  29  %
- not subject to discretionary withdrawal 430,554  —  16,447  447,001  16  %
Total individual annuity actuarial reserves 600,194  1,679,591  548,698  2,828,483  100  %
Less: Reinsurance ceded 128,609  —  —  128,609 
Total individual annuity actuarial reserves,
  net of reinsurance		 $ 471,585  $ 1,679,591  $ 548,698  $ 2,699,874 

2023
General
Account		 Separate
Account
with
Guarantees		 Separate
Account
Non-guaranteed		 Total % of total
Individual Annuities
Subject to discretionary withdrawal:
- with market value adjustment $ 50,905  $ 1,350,730  $ —  $ 1,401,635  45  %
- at book value less surrender charge of 5% or more 334  —  —  334  —  %
- at market value —  —  700,284  700,284  22  %
Subtotal 51,239  1,350,730  700,284  2,102,253  67  %
Subject to discretionary withdrawal - without adjustment:
- at book value (minimal or no charge or adjustment) 152,940  507,271  —  660,211  21  %
- not subject to discretionary withdrawal 348,694  —  13,065  361,759  12  %
Total individual annuity actuarial reserves 552,873  1,858,001  713,349  3,124,223  100  %
Less: Reinsurance ceded 417,229  —  —  417,229 
Total individual annuity actuarial reserves,
  net of reinsurance		 $ 135,644  $ 1,858,001  $ 713,349  $ 2,706,994 

30
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
2024
General
Account		 Separate
Account
with
Guarantees		 Separate
Account
Non-guaranteed		 Total % of total
Deposit-Type Contracts (no life contingencies)
Subject to discretionary withdrawal:
- with market value adjustment $ —  $ —  $ —  $ —  —  %
- at book value less surrender charge of 5% or more —  —  —  —  —  %
- at market value —  —  792  792  3  %
Subtotal —  —  792  792  3  %
Subject to discretionary withdrawal - without adjustment:
- at book value (minimal or no charge or adjustment) 24,808  —  —  24,808  83  %
Not subject to discretionary withdrawal 4,121  —  —  4,121  14  %
Total deposit fund liabilities 28,929  —  792  29,721  100  %
Less: Reinsurance ceded 28,929  —  —  28,929 
Total deposit fund liabilities,
  net of reinsurance		 $ —  $ —  $ 792  $ 792 

2023
General
Account		 Separate
Account
with
Guarantees		 Separate
Account
Non-guaranteed		 Total % of total
Deposit-Type Contracts (no life contingencies)
Subject to discretionary withdrawal:
- with market value adjustment $ —  $ —  $ —  $ —  —  %
- at book value less surrender charge of 5% or more —  —  —  —  —  %
- at market value —  —  736  736  2  %
Subtotal —  —  736  736  2  %
Subject to discretionary withdrawal - without adjustment:
- at book value (minimal or no charge or adjustment) 24,121  —  —  24,121  79  %
Not subject to discretionary withdrawal 5,861  —  —  5,861  19  %
Total deposit fund liabilities 29,982  —  736  30,718  100  %
Less: Reinsurance ceded 29,982  —  —  29,982 
Total deposit fund liabilities,
  net of reinsurance		 $ —  $ —  $ 736  $ 736 

31
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Withdrawal characteristics of life actuarial reserves as of December 31, 2024 were as follows:

General Account Separate Account - Non-guaranteed
Account
Value		 General
Account
Cash Value		 Reserve Account
Value		 Cash
Value		 Reserve
Subject to discretionary withdrawal,
surrender values or policy loans:
- Term policies with cash value $ 52,827  $ 52,827  $ 137,980  $ —  $ —  $ — 
- Universal life 448,482  436,411  518,978  —  —  — 
- Universal life with secondary guarantees 90,805  88,647  479,664  —  —  — 
- Indexed universal life 24,906  24,455  24,599  —  —  — 
- Indexed universal life with secondary
 guarantees
 —  —  —  —  —  — 
- Indexed life —  —  —  —  —  — 
- Other permanent cash value life insurance 12,405  12,405  17,470  —  —  — 
- Variable life —  —  —  —  —  — 
- Variable universal life 23,304  23,254  24,226  121,814  121,824  121,909 
- Miscellaneous reserves —  —  —  —  —  — 
Not subject to discretionary withdrawal,
with no cash value:
- Term policies without cash value XXX XXX 419,021  XXX XXX — 
- Accidental death benefits XXX XXX 279  XXX XXX — 
- Disability-active lives XXX XXX 2,731  XXX XXX — 
- Disability-disabled lives XXX XXX 4,105  XXX XXX — 
- Miscellaneous reserves XXX XXX 1,318,840  XXX XXX — 
Total (gross: direct + assumed) 652,729  637,999  2,947,893  121,814  121,824  121,909 
Less: Reinsurance ceded 577,898  563,139  879,105  —  —  — 
Total, net $ 74,831  $ 74,860  $ 2,068,788  $ 121,814  $ 121,824  $ 121,909 

32
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Withdrawal characteristics of life actuarial reserves as of December 31, 2023 were as follows:

General Account Separate Account - Non-guaranteed
Account
Value		 General
Account
Cash Value		 Reserve Account
Value		 Cash
Value		 Reserve
Subject to discretionary withdrawal,
surrender values or policy loans:
- Term policies with cash value $ 43,981  $ 43,981  $ 136,366  $ —  $ —  $ — 
- Universal life 474,505  460,499  520,530  —  —  — 
- Universal life with secondary guarantees 99,268  95,520  490,703  —  —  — 
- Indexed universal life 21,321  20,800  20,920  —  —  — 
- Indexed universal life with secondary
 guarantees
 —  —  —  —  —  — 
- Indexed life —  —  —  —  —  — 
- Other permanent cash value life insurance 10,867  10,867  15,234  —  —  — 
- Variable life —  —  —  —  —  — 
- Variable universal life 22,409  22,413  22,738  141,579  141,587  141,710 
- Miscellaneous reserves —  —  —  —  —  — 
Not subject to discretionary withdrawal,
with no cash value:
- Term policies without cash value XXX XXX 486,581  XXX XXX — 
- Accidental death benefits XXX XXX 277  XXX XXX — 
- Disability-active lives XXX XXX 3,172  XXX XXX — 
- Disability-disabled lives XXX XXX 3,455  XXX XXX — 
- Miscellaneous reserves XXX XXX 18,647  XXX XXX — 
Total (gross: direct + assumed) 672,351  654,080  1,718,622  141,579  141,587  141,710 
Less: Reinsurance ceded 599,936  581,665  1,464,018  —  —  — 
Total, net $ 72,415  $ 72,415  $ 254,603  $ 141,579  $ 141,587  $ 141,710 

Reinsurance

The Company’s reinsurance program varies based on the type of risk, for example:

•On July 18, 2023, Scottish Re (US), Inc. (“SRUS”) was ordered into liquidation by the State of Delaware. As a result of the Liquidation Order, all reinsurance agreements in which SRUS was the reinsurer were terminated on September 30, 2023. As a result, management recorded an impairment of $7.7 million on net claims recoverable from SRUS. As a result of the SRUS termination, the Company recaptured the associated SRUS treaties. The related reserve credit in the amount of $54.7 million was reduced to $0, as of the termination date.
•Effective October 1, 2019, the Company entered into a reinsurance agreement with Concord to reinsure all of the Company’s net retained business on a coinsurance funds withheld and modified coinsurance basis. The Company entered into the agreement to manage its long-term risk exposure and liquidity. The reserves ceded to Concord for these policies were $0.5 billion and $1.3 billion for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, these ceded reserves were collateralized by funds withheld of $806.3 million. As of December 31, 2023, these ceded reserves were collateralized by funds withheld of $828.6 million, and Concord’s XOL receivable and the Prepaid Asset of $434.1 million and $125.0 million, respectively.
•Effective October 1, 2017, the Company entered into an aggregate excess of loss reinsurance agreement with an affiliate reinsurer to reinsure aggregate losses on certain universal life contracts in excess of the annual attachment points specified in the treaty. The Company entered into the reinsurance treaty to manage surplus volatility associated with the Company's mortality risk.
33
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
•Effective April 1, 2016, the Company entered into a MODCO treaty with affiliate, Nassau Re (Cayman) Ltd., to reinsure 50% of the existing inforce business and future sales of the Company's fixed indexed annuity contracts. Under MODCO reinsurance, the assets held for the reinsured policies, and the liabilities associated with the business are retained by the Company, and the economic risks and rewards related to the business will be ceded to Nassau Re (Cayman) Ltd. through MODCO adjustments. Effective July 1, 2017 (“Amendment Date”), the treaty was amended to include reinsurance coverage on new Term business issued on or after the Amendment Date. Effective October 1, 2018, new issues of fixed indexed annuity were no longer reinsured under the treaty.
•Effective June 30, 2015, the Company entered into a MODCO reinsurance agreement with affiliate, Nassau Life Insurance Company (“NNY”). This agreement provides that NNY will retrocede, and the Company will reinsure, 80% of the inforce group executive ordinary (“GEO”) corporate-owned whole life insurance policies assumed by NNY from a third-party. Under MODCO, the assets, which are equal to the statutory reserves held for the reinsured policies, and liabilities associated with the assumed business are retained by NNY and the Company will receive the economic risks and rewards related to the assumed business through MODCO adjustments. Effective March 31, 2021, PHL entered into a MODCO reinsurance agreement, whereby PHL retroceded and Nassau Life and Annuity Company (“NLA”) reinsures 100% of these policies assumed by PHL from NNY. As of the effective date, NLA receives the economic risks and rewards related to the assumed business through MODCO adjustments. The Company received a ceding commission of $150 million for this reinsurance transaction, which was paid to Concord who reinsures that business under the existing Coinsurance Funds Withheld arrangement. In addition, Concord prepaid a portion of its future operating expenses. In 2021, the Department granted Concord permitted practices whereby Concord was authorized to admit the $150.0 million Prepaid Asset as an aggregate write-in for other than invested assets. As a result of the rehabilitation, the Department determined that permitted practices granted to the PHL Companies prior to the rehabilitation should be discontinued. As of December 31, 2024, the balance of the Prepaid Asset was $106.7 million, which was fully non-admitted. As of December 31, 2023, the balance of the Prepaid Asset was $125.0 million.
•For business sold prior to December 31, 2010, the Company’s retention limit on any one life is $10 million for single life and joint first-to-die policies and $12 million for joint last-to-die policies. Beginning January 1, 2011, the Company’s retention limit on new business is $5 million for single life and joint first-to-die policies and $6 million for second-to-die policies.
•Effective October 1, 2009, the Company ceded all benefit risks, net of existing reinsurance, on all the remaining term insurance that was not part of the November 30, 2008 transaction.
•Effective November 30, 2008, the Company ceded all the benefit risks, net of existing reinsurance, on all the term life business inforce as of December 31, 2008, excluding the term plans introduced in 2008.
•Effective September 30, 2008, the Company entered into an agreement with affiliate, NNY, to cede 90% of all the benefit risks on Phoenix Accumulator Universal Life III and IV policies sold by PHL from January 1 to December 31, 2008. The reserves ceded to NNY for these policies were $56.2 million and $56.4 million at December 31, 2024 and 2023, respectively.
•On October 8, 2007, the Company entered into a reinsurance agreement, which covers 60% of the base contract for the Phoenix Portfolio Advisors deferred variable annuity. Any riders are not covered.

34
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Additional information on direct business written and reinsurance assumed and ceded for the years ended December 31 is set forth below:

2024 2023 2022
Direct premiums and annuity considerations $ 374,184  $ 420,413  $ 403,853 
Reinsurance assumed - non-affiliate 398  280  336 
Reinsurance assumed - affiliate 4,379  3,864  4,872 
Reinsurance ceded - non-affiliate (95,100) (95,484) (106,229)
Reinsurance ceded - affiliate (283,861) (329,073) (302,832)
Net premiums and annuity considerations $ —  $ —  $ — 
Direct commissions and expense allowance $ 3,612  $ 4,581  $ 5,159 
Reinsurance assumed - non-affiliate 100  290  101 
Reinsurance assumed - affiliate 211  244  286 
Reinsurance ceded - non-affiliate (522) (200) (1,281)
Reinsurance ceded - affiliate (25,913) (31,674) (28,501)
Net commissions and expense allowance $ (22,512) $ (26,759) $ (24,236)
Direct policy and contract claims incurred $ 512,892  755,469  746,974 
Reinsurance assumed - non-affiliate 1,074  2,314  2,155 
Reinsurance assumed - affiliate 23,310  82,756  81,636 
Reinsurance ceded - non-affiliate (126,864) (200,194) (174,515)
Reinsurance ceded - affiliate (410,412) (640,345) (656,250)
Net policy and contract claims incurred $ —  $ —  $ — 
Direct policy and contract claims payable $ 378,245  $ 164,799 
Reinsurance assumed - non-affiliate 102  566 
Reinsurance ceded - non-affiliate (42,600) (55,827)
Reinsurance ceded - affiliate (325,245) (100,676)
Net policy and contract claims payable $ 10,502  $ 8,862 
Direct life insurance in force $ 26,724,133  $ 31,553,595 
Reinsurance assumed 1,797,140  1,701,733 
Reinsurance ceded (28,521,273) (33,255,328)
Net insurance in force $ —  $ — 

The affiliate amounts in the tables above include amounts from affiliates.

35
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
In the event all, including affiliated, reinsurance agreements were to be terminated, the Company estimates the aggregate reduction in surplus would be $957.6 million, $622.7 million and $410.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company entered into a multi-product reinsurance agreement with Concord in 2019 to manage the Company’s long-term risk exposure. Included in the multi-product reinsurance agreement are variable annuity contracts containing guaranteed minimum death benefits and guaranteed living benefits.


5.    Premium and Annuity Considerations Deferred and Uncollected

Deferred and uncollected life insurance premiums and annuity considerations as of December 31, 2024 were as follows:

Type of Business Gross Net of Loading
Ordinary new $ 8  $ 2 
Ordinary renewal 7,118  5,418 
Total $ 7,126  $ 5,420 

Deferred and uncollected life insurance premiums and annuity considerations as of December 31, 2023 were as follows:

Type of Business Gross Net of Loading
Ordinary new $ 28  $ 13 
Ordinary renewal 7,803  6,026 
Total $ 7,831  $ 6,039 


6.    Separate Accounts

The Company utilizes separate accounts to record and account for assets and liabilities for particular lines of business and/or transactions. For the current reporting year, the Company reported assets and liabilities from the following product lines/transactions into a separate account: Variable annuity, fixed indexed annuity and variable universal life. Separate account products are authorized by Connecticut General Statute §38a-433 as discussed in Footnote 2.

Effective July 2018, the Company started accounting for fixed indexed annuity contracts at book value in accordance with Commissioner approval under Connecticut General Statute §38a-433. All remaining separate accounts are accounted for at fair value in accordance with SSAP No. 56.

In accordance with the products/transactions recorded within the separate account, all assets are considered legally insulated from the general account. The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. As of December 31, 2024 and 2023, the Company’s separate account statement included legally insulated assets of $2,436.0 million and $2,814.2 million, respectively.

In accordance with the products/transactions recorded within the separate account, some separate account liabilities are guaranteed by the general account. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account.

36
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
To compensate the general account for the risk taken, the separate account paid risk charges of $39.0 million, $43.4 million, $46.1 million, $49.1 million and $51.2 million for the years ended December 31, 2024, 2023, 2022, 2021 and 2020, respectively. The general account paid $4.6 million, $8.4 million, $7.9 million, $8.4 million and $7.2 million relating to separate account guarantees for the years ended December 31, 2024, 2023, 2022, 2021 and 2020, respectively.

The Company does not engage in securities lending transactions within the separate accounts.

Surrenders and withdrawals were $420.9 million, $285.9 million and $278.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, and were reported as benefits in the Statements of Income (Loss) and Changes in Capital and Surplus.

The analysis of PHL’s separate accounts as of December 31, 2024 was as follows:

Guaranteed Non-
guaranteed		 Total
Premium considerations or deposits for the year ended December 31, 2024 $ 1,359  $ 8,238  $ 9,597 
Reserves for account with assets at fair value as of December 31, 2024 $ 3,590  $ 671,458  $ 675,048 
Reserves for account with assets at amortized cost as of December 31, 2024 1,676,243  —  1,676,243 
Total reserves $ 1,679,833  $ 671,458  $ 2,351,291 
By withdrawal characteristics:
Subject to discretionary withdrawal:
With market value adjustment $ 1,672,542  $ —  $ 1,672,542 
Without market value adjustment and with current surrender charge
  of 5% or more
 —  —  — 
At fair value —  655,011  655,011 
At market value without fair value adjustment and with current
 surrender charge less than 5%
 7,291  —  7,291 
Not subject to discretionary withdrawal —  16,447  16,447 
Total $ 1,679,833  $ 671,458  $ 2,351,291 

37
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The analysis of PHL’s separate accounts as of December 31, 2023 was as follows:

Guaranteed Non-
guaranteed		 Total
Premium considerations or deposits for the year ended December 31, 2023 $ 128  $ 52,381  $ 52,509 
Reserves for account with assets at fair value as of December 31, 2023 $ 3,631  $ 855,795  $ 859,426 
Reserves for account with assets at amortized cost as of December 31, 2023 1,854,371  —  1,854,371 
Total reserves $ 1,858,002  $ 855,795  $ 2,713,797 
By withdrawal characteristics:
Subject to discretionary withdrawal:
With market value adjustment $ 1,849,673  $ —  $ 1,849,673 
Without market value adjustment and with current surrender charge
  of 5% or more
 —  —  — 
At fair value —  842,730  842,730 
At market value without fair value adjustment and with current
  surrender charge less than 5%		 8,329  —  8,329 
Not subject to discretionary withdrawal —  13,065  13,065 
Total $ 1,858,002  $ 855,795  $ 2,713,797 

The net transfers to and from the separate accounts, included in annuity deposit funds and net transfers to separate accounts in the Statements of Income (Loss) and Changes in Capital and Surplus at December 31, 2024 and 2023 were as follows:

2024 2023 2022
Transfers to separate accounts $ 6,159  $ 3,701  $ 2,134 
Transfers from separate accounts (491,249) (356,091) (365,276)
Net transfers from (to) separate account (485,090) (352,390) (363,142)
Reconciling adjustments:
MODCO allowance —  —  — 
Total adjustments —  —  — 
Adjusted transfers from (to) separate accounts (485,090) (352,390) (363,142)
Transfers as reported in the Statements of Income (Loss) and
Changes in Capital and Surplus
 $ (485,090) $ (352,390) $ (363,142)


38
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
7.    Federal Income Taxes

The components of the net deferred tax asset (liability) at period end and the change in those components are as follows:

December 31, 2024 December 31, 2023 Change
Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total
Gross deferred tax assets $ 490,341  $ 33,692  $ 524,033  $ 77,894  $ 7,209  $ 85,103  $ 412,447  $ 26,483  $ 438,930 
Statutory valuation allowance 483,654  28,669  512,323  68,938  1,067  70,005  414,716  27,602  442,318 
Adjusted gross deferred tax assets 6,687  5,023  11,710  8,956  6,142  15,098  (2,269) (1,119) (3,388)
Less: Deferred tax assets non-admitted —  —  —  —  —  —  —  —  — 
Subtotal net admitted deferred tax assets 6,687  5,023  11,710  8,956  6,142  15,098  (2,269) (1,119) (3,388)
Less: Deferred tax liabilities 6,687  5,023  11,710  8,956  6,142  15,098  (2,269) (1,119) (3,388)
Net deferred tax assets $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 

December 31, 2024 December 31, 2023 Change
Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total
Federal income taxes paid in prior years
 recoverable through loss carrybacks
 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Adjusted gross deferred tax assets expected to
 be realized after application of the threshold
 limitation
 —  —  —  —  —  —  —  —  — 
1) Adjusted gross deferred tax assets expected to
 be realized following the balance sheet date
 —  —  —  —  —  —  —  —  — 
2) Adjusted gross deferred tax assets allowed
 per limitation threshold
 XXX XXX (335,817) XXX XXX (20,218) XXX XXX (315,599)
Adjusted gross deferred tax assets offset by
 gross deferred tax liabilities
 6,687  5,023  11,710  8,956  6,142  15,098  (2,269) (1,119) (3,388)
Deferred tax assets admitted as the result of
application of SSAP No. 101
 $ 6,687  $ 5,023  $ 11,710  $ 8,956  $ 6,142  $ 15,098  $ (2,269) $ (1,119) $ (3,388)

2024 2023
Ratio percentage used to determine recovery period and threshold limitation amount —  % —  %
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation $ (2,238,783) $ (134,787)

December 31, 2024 December 31, 2023 Change
Ordinary Capital Ordinary Capital Ordinary Capital
Impact of tax planning strategies
Adjusted gross DTAs $ 6,687  $ 5,023  $ 8,956  $ 6,142  $ (2,269) $ (1,119)
% of total adjusted gross DTAs —  % —  % —  % —  % —  % —  %
Net admitted adjusted DTAs $ 6,687  $ 5,023  $ 8,956  $ 6,142  $ (2,269) $ (1,119)
% of total net admitted adjusted gross DTAs —  % —  % —  % —  % —  % —  %

Management believes that there is insufficient positive evidence to support that it is more likely than not that the Company will realize the full tax benefits associated with its deferred tax assets and, consequently, it has recorded a full valuation allowance for statutory accounting purposes.

Regarding deferred tax liabilities that are not recognized, the Company has no temporary differences for which deferred tax liabilities have not been established.

39
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The components of current income taxes incurred in the Statements of Income (Loss) and Changes in Capital and Surplus and the net deferred tax asset (liability) recognized in the Company’s Statements of Admitted Assets, Liabilities, Capital and Surplus at December 31, 2024 and 2023 were as follows:

2024 2023 Change
Current income tax:
Federal $ (14,517) $ (6,435) $ (8,082)
Subtotal (14,517) (6,435) (8,082)
Federal income tax on net capital gains (losses) 14,517  6,435  8,082 
Federal and foreign income tax expense (benefit) incurred $ —  $ —  $ — 
Deferred tax assets:
Ordinary:
Future policyholder benefits $ 297,814  $ 7,505  $ 290,309 
Investments 8,776  5,678  3,098 
Deferred acquisition costs 39,890  35,193  4,697 
Net operating loss carryforward 140,577  25,608  114,969 
Non-admitted assets 2,412  2,478  (66)
Other (including items <5% of total ordinary tax assets) 872  1,432  (560)
Subtotal 490,341  77,894  412,447 
Statutory valuation allowance adjustment
 483,654  68,938  414,716 
Non-admitted —  —  — 
Admitted ordinary deferred tax assets $ 6,687  $ 8,956  $ (2,269)
Capital:
Investments $ 33,692  $ 7,209  $ 26,483 
Subtotal 33,692  7,209  26,483 
Non-admitted —  —  — 
Statutory valuation allowance
 28,669  1,067  27,602 
Admitted capital deferred tax assets 5,023  6,142  (1,119)
Admitted deferred tax assets $ 11,710  $ 15,098  $ (3,388)
Deferred tax liabilities:
Ordinary:
Investments $ 4,079  $ 3,742  $ 337 
Policyholder reserves 2,608  5,214  (2,606)
Subtotal 6,687  8,956  (2,269)
Capital:
Investments 5,023  6,142  (1,119)
Deferred tax liabilities 11,710  15,098  (3,388)
Net admitted deferred tax assets (liabilities)
 $ —  $ —  $ — 

40
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Reconciliation of federal income tax rate to actual effective rate:

December 31, 2024
Amount Tax Effect Effective
Tax Rate
Income (loss) before taxes $ (2,085,625) $ (437,981) 21.0  %
Interest maintenance reserve (24,566) (5,159) 0.2  %
Dividends received deduction (1,228) (258) —  %
Tax sharing agreement (“TSA”) relief
 (218) (46) —  %
Return to provision 401  84  —  %
Change in non-admitted assets 304  64  —  %
Prior period adjustment 2,292  481  —  %
Change in valuation allowance
 2,108,602  442,806  (21.2  %)
Other 38  9  —  %
Total statutory income tax $ —  $ —  —  %
Federal income taxes incurred $ (14,563) 0.7  %
Tax on capital gains (losses)
 14,517  (0.7  %)
Prior year overaccrual (underaccrual)
 46  —  %
Total statutory income tax $ —  —  %

December 31, 2023
Amount Tax Effect Effective
Tax Rate
Income (loss) before taxes
 $ (173,068) $ (36,344) 21.0  %
Interest maintenance reserve (13,574) (2,851) 1.6  %
Dividends received deduction (1,629) (342) 0.2  %
TSA relief (7,320) (1,537) 0.9  %
Return to provision 293  62  —  %
Change in non-admitted assets 2,623  551  (0.3  %)
Change in valuation allowance
 331,431  69,601  (40.2  %)
Other 51  9  —  %
Total statutory income tax $ 138,807  $ 29,149  (16.8  %)
Federal income taxes incurred $ (7,943) 4.6  %
Tax on capital gains (losses)
 6,435  (3.7  %)
Prior year overaccrual (underaccrual)
 1,507  (0.9  %)
Change in net deferred income tax expense (benefit)
 29,150  (16.8  %)
Total statutory income tax $ 29,149  (16.8  %)

41
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
December 31, 2022
Amount Tax Effect Effective
Tax Rate
Income (loss) before taxes
 $ 7,770  $ 1,632  21.0  %
Interest maintenance reserve (6,247) (1,312) (16.9  %)
Dividends received deduction (1,922) (404) (5.2  %)
TSA relief (42,606) (8,947) (115.1  %)
Return to provision (233) (49) (0.6  %)
Change in non-admitted assets (7,715) (1,620) (20.8  %)
Prior period adjustment (124) (26) (0.3  %)
Other 113  24  0.3  %
Total statutory income tax $ (50,964) $ (10,702) (137.7  %)
Federal income taxes incurred $ 745  9.6  %
Tax on capital gains (losses)
 (533) (6.9  %)
Prior year overaccrual (underaccrual)
 20  0.3  %
Change in net deferred income tax expense (benefit)
 (10,934) (140.7  %)
Total statutory income tax $ (10,702) (137.7  %)

Carryforwards, recoverable taxes and IRC 6603 deposits:

2024 2023
The Company had net operating loss carryforwards of $ 669,418  $ 121,941 

As of December 31, 2024, the Company has a net operating loss carryforward of $669.4 million. The balance of the Company’s net operating losses is not subject to expiration.

There is no income tax expense for 2024, 2023 and 2022 that is available for recoupment in the event of future net capital losses.

There was no aggregate amount of deposits reported as admitted assets under Section 6603 of the Internal Revenue Code as of December 31, 2024 or 2023.

The Company’s U.S. federal income tax return for years 2021 and after may be selected for review by tax authorities. The Company does not anticipate any material assessments or adjustments to the Company’s liability resulting from the tax examinations of prior open year periods.

Uncertain tax positions are assessed under the applicable statutory accounting guidance. There were no unrecognized tax benefits relating to uncertain tax positions for the years ended December 31, 2024 and 2023. As of December 31, 2024, the Company has recognized no amount for interest or penalties related to uncertain tax positions. Based upon existing information, the Company does not expect a material change in the recognized liability in the next 12 months. The Company has no tax loss contingencies for which it is reasonably possible that the total liability will significantly increase within twelve months of the reporting date.

42
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
PHL Delaware is the direct parent of PHL. Effective starting in 2024, PHL and its subsidiaries Concord and Palisado joined the PHL Delaware consolidated return that also includes affiliate Magni Re, LTD. Consequently, PHL, Concord, and Palisado, all joined as parties to the PHL Delaware tax allocation agreement effective January 1, 2024. In January 2025, PHL formed Compass, a wholly owned subsidiary treated as a disregarded entity for tax purposes, and Compass joined as party to the tax allocation agreement effective for January 1, 2025.

In accordance with the 2024 tax sharing agreement, each subsidiary computes their taxable income on a separate company basis and pays its respective tax liability to PHL Delaware. PHL Delaware will utilize the tax losses and other tax attributes of its subsidiaries to offset consolidated taxable income and recognize the tax savings relating to the utilized net operating losses as a benefit in the effective rate reconciliation. Under the tax sharing agreement, PHL Delaware will pay to PHL in the current year the tax benefit of tax attributes attributable to PHL and/or its subsidiaries that are used to reduce group taxable income. PHL will pay to its subsidiary in any subsequent year the tax benefit relating to the portion of such subsidiary’s tax attribute that reduces such subsidiary’s taxable income on a separate company basis.

Prior to 2024, PHL was ineligible to join the life/non-life consolidated return as it did not satisfy the five-year waiting period for life insurance companies to join non-life groups under Treas. Reg. 1.1502-47. In accordance with the PHL intercompany tax sharing agreement, each subsidiary computes their taxable income on a separate company basis and pays its respective tax liability to PHL. PHL will utilize the losses of its subsidiaries to offset consolidated taxable income and recognize the tax savings relating to the utilized net operating losses as a benefit in the effective rate reconciliation. Under the PHL tax sharing agreement, a subsidiary’s tax losses are maintained on a separate company basis and carryforward to reduce such subsidiary’s taxable income in future periods.

The Tax Cuts and Jobs Act provides a base erosion and anti-abuse tax (“BEAT”) which represents minimum tax calculated on a base equal to the taxpayer’s taxable income determined without regard to: (1) the tax benefits arising from base erosion payments, and (2) the applicable base erosion percentage of any NOL allowed for the tax year. The BEAT rate is 10% for tax years beginning in 2019 through 2025 and 12.5% for tax years beginning after December 31, 2025. The Company is a member of an “Aggregate Group” within the meaning of the IRC and the Aggregate Group’s base erosion payments are less than 3% of the Aggregate Group’s total deductions for the years ended December 31, 2024 and 2023. Accordingly, the BEAT liability was $0 for the years ended December 31, 2024 and 2023.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “Act”). Effective for tax years beginning after December 31, 2022, the Act includes a new corporate alternative minimum tax (“CAMT”) on certain corporations. The Company has determined, as of the reporting date, that they are not subject to the CAMT in 2024.


8.    Related Party Transactions

The Nassau Companies of New York (“NCNY”), an affiliate, provides services and facilities to the Company that are reimbursed through an administrative services agreement. Expenses determined under the agreement were $12.2 million, $13.7 million and $11.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. The amounts payable to NCNY were $5.4 million and $0.8 million as of December 31, 2024 and 2023, respectively.

1851 Securities Inc., a wholly owned subsidiary of NSRE BD Holdco LLC, an affiliate, is the principal underwriter of the Company’s variable universal life insurance policies and variable annuity contracts. Commissions paid by NNY on the Company’s behalf were $2.1 million, $2.3 million and $2.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. There were no amounts payable as of December 31, 2024 and 2023.

NNY pays commissions to producers who sold the Company’s non-registered life and annuity products. The Company reimbursed NNY for commissions paid on the Company’s behalf of $3.4 million, $4.4 million and $4.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. Commission amounts payable to NNY were $0.2 million and $0.2 million as of December 31, 2024 and 2023, respectively.

43
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The Company’s affiliate, Nassau Asset Management LLC (“NAMCO”), provides investment and related advisory services through an Investment Management Agreement. Expenses incurred under this agreement were $7.4 million, $8.6 million and $10.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. There were no amounts due to NAMCO as of December 31, 2024 and 2023, respectively.

The general accounts of the Company has investments in various classes of notes of Nassau 2017-I Ltd., Nassau 2018-I Ltd., Nassau 2018-II Ltd., Nassau 2019-II Ltd., Nassau 2020-I Ltd., Nassau 2022-I Ltd., Nassau Euro CLO II DAC and NCC US 2023-1 WH (the “Nassau CLOs”) totaling $67.8 million par with a fair value of $45.6 million and $75.6 million par with a fair value of $53.6 million at December 31, 2024 and 2023, respectively. The separate accounts of the Company has investments in various classes of notes of Nassau 2017-I Ltd., Nassau 2017-II LTD., Nassau 2018-I Ltd., Nassau 2018-II Ltd., Nassau 2019-I Ltd., Nassau 2020-I Ltd., Nassau 2020-II Ltd., Nassau 2021-I Ltd., Nassau Euro CLO I DAC and Nassau Euro CLO III DAC (the “Nassau CLOs”) totaling $121.3 million par with a fair value of $57.0 million and $146.7 million par with a fair value of $70.0 million at December 31, 2024 and 2023, respectively. The Nassau CLOs are managed by NGC CLO Manager, LLC and NGC UK LLP, affiliates of PHL.

In September 2019, the Company invested cash and available-for-sale debt securities in Nassau 2019 CFO, LLC (“Nassau CFO”), a collateralized fund obligation managed by an affiliate. The Company’s equity investment in Nassau CFO was $9.7 million and $10.8 million at December 31, 2024 and 2023, respectively. The Company recorded net investment income from equity investments in Nassau CFO of $0.0 million and $0 for the years ended December 31, 2024 and 2023, respectively. The Company also invested in Class B Notes issued by Nassau CFO, which have a par value of $7.2 million and $10.3 million, and a fair value of $6.5 million and $9.4 million, at December 31, 2024 and 2023, respectively, and the Company recognized $0.7 million and $0.8 million of net investment income for the years ended December 31, 2024 and 2023, respectively.

In July 2019, the Company committed $10 million to Nassau Private Credit Onshore Fund LP. In April 2021, the Company made an additional commitment of $10 million. In June 2022, the Company made an additional commitment of $6.0 million. The Company's investment in Nassau Private Credit Onshore Fund LP has a fair value of $20.8 million and a remaining commitment of $10.7 million as of December 31, 2024.

In September 2022, the Company sold certain of its limited partnership and other invested assets to Nassau CFO 2022, a collateralized fund obligation managed by an affiliate. The Company received cash, Class C Notes, and Subordinated Notes issued by Nassau CFO 2022 as consideration with no gain or loss recognized on the sale. The Company's investment in Class C Notes issued by Nassau CFO 2022 have a par of $9.5 million and fair value of $9.5 million. The Company’s investment in Subordinated Notes issued by Nassau CFO 2022 have a par of $52.8 million and fair value of $59.4 million.

See Note 4 for additional information on reinsurance agreements with affiliates.

Loans receivable from related parties at December 31, 2024 and 2023 included a $0 and $34.9 million, respectively, secured loan to a related party, DSM Sands. This loan was fully impaired in 2024 as the borrower is no longer expected to have sufficient liquidity to repay the loans. The loans had semi-annual principal payments that began in 2022 with the final principal payment due in 2037 and charge interest at 8.5%. Interest income included in other miscellaneous income for the general account for these loans was $1.5 million, $3.1 million and $3.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, in the Statements of Income (Loss) and Changes in Capital and Surplus. The loans were carried at amortized cost in the general account and presented as other assets on the Statements of Admitted Assets, Liabilities, Capital and Surplus. The Company also made a loan from its separate account to the same related party. This loan was also fully impaired in 2024. This loan is carried at amortized cost in the separate account and had a balance of $0 and $118.0 million as of December 31, 2024 and 2023, respectively. Interest income included in the separate account for this loan was $5.0 million, $10.4 million and $10.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.


44
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
9.    Fair Value Disclosures of Financial Instruments

The fair value of an asset is the amount at which that asset could be bought or sold in a current arms-length transaction. Included in several investment related line items in the financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or, for certain bonds and preferred stock when carried at the lower of cost or market. The fair values presented for certain financial instruments are estimates which, in many cases, may differ significantly from the amounts which could be realized upon immediate liquidation. In cases where market prices are not available, estimates of fair value are based on discounted cash flow analyses, which utilize current interest rates for similar financial instruments, which have comparable terms and credit quality.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Bonds and preferred stock

The Company uses pricing vendors to estimate fair value for the majority of its public bonds and preferred stocks. The pricing vendors’ estimates are based on market data and use pricing models that vary by asset class and incorporate available trade, bid and other market information. When pricing vendors are unable to obtain evaluations based on market data, fair value is determined by obtaining a direct broker quote or by using an internal model. For the majority of private bonds and preferred stock, fair value is determined using a discounted cash flow model, which utilizes a discount rate based upon the average of spreads derived from public bond indices summed with a liquidity premium and takes into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. When the discounted cash flow model is not appropriate, the Company uses third party broker quotes or other internally developed values. Short-term investments include securities with a maturity of one year or less but greater than three months at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value.

Common stock

Fair values are based on quoted market prices, where available. If a quoted market price is not available, fair values are estimated using independent pricing sources or internally developed pricing models.

Cash, cash equivalents, and short-term investments

The carrying amounts reported in the accompanying Statements of Admitted Assets, Liabilities, Capital and Surplus for these financial instruments approximate their fair values.

Derivatives

Fair values for over-the-counter (“OTC”), centrally cleared and exchange-traded derivative financial instruments, principally forwards, options and swaps, represent the present value of amounts estimated to be received from or paid to a marketplace participant in settlement of these instruments (i.e., the amount the Company would expect to receive in a derivative asset assignment or would expect to pay to have a derivative liability assumed). When pricing is not directly from counterparty’s valuation, then derivatives are valued using pricing models based on the net present value of estimated future cash flows and directly observed prices from exchange-traded derivatives or other OTC trades, while taking into account the counterparty’s credit ratings, or the Company’s own credit ratings, as appropriate. Determining the fair value for OTC derivative contracts can require a significant level of estimation and management judgment.

45
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
New and/or complex instruments may have immature or limited markets. As a result, the pricing models used for valuation often incorporate significant estimates and assumptions that market participants would use in pricing the instrument, which may impact the results of operations reported in the financial statements. For long-dated and illiquid contracts, extrapolation methods are applied to observed market data in order to estimate inputs and assumptions that are not directly observable. This enables the Company to mark-to-market all positions consistently when only a subset of prices are directly observable. Values for OTC derivatives are verified using observed information about the costs of hedging the risk and other trades in the market. As the markets for these products develop, the Company will continually refine its pricing models to correlate more closely to the market risk of these instruments.

Residual tranches, surplus debentures and certified capital companies (“capcos”)

Fair values for residual tranches, surplus debentures and capcos are based on quoted market prices, where available, or quoted market prices of comparable instruments. If a quoted market price is not available, fair values are estimated using independent pricing sources or internally developed pricing models.

Mortgage loans

The Company’s mortgage loans on real estate are all commercial mortgage loans, which are reported at amortized cost, less impairment write-downs and allowance for loan losses. Loans are considered impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. When the Company determines that a loan is impaired, a valuation allowance is established for the excess carrying value of the loan over its estimated collateral value.

Investment contracts

PHL determines the fair value of deferred annuities with an interest guarantee of one year or less at the amount of the policy reserve. In determining the fair value of deferred annuities with interest guarantees greater than one year, the Company uses a discount rate equal to the appropriate U.S. Treasury rate plus 100 basis points to determine the present value of the projected account value of the policy at the end of the current guarantee period.

Financial assets and liabilities measured at fair value

The Company’s financial assets and liabilities carried at fair value have been classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100, Fair Value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

•Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 securities include highly liquid government bonds and exchange-traded equities.
•Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Examples of such instruments include government-backed mortgage products, certain collateralized mortgage and debt obligations and certain high-yield debt securities.
•Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect management’s own assumptions about inputs in which market participants would use in pricing these types of assets or liabilities. Level 3 financial instruments include values which are determined using pricing models and third-party evaluation. Additionally, the determination of some fair value estimates utilizes significant management judgments or best estimates.

46
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The following table provides information as of December 31, 2024 about the Company’s financial assets and liabilities measured and reported at fair value on a recurring basis.

2024
Level 1 Level 2 Level 3 Total
Assets at fair value:
Bonds $ —  $ —  $ 7,585  $ 7,585 
Preferred stock —  428  658  1,086 
Common stock [1] —  —  1,692  1,692 
Subtotal —  428  9,935  10,363 
Derivative assets —  1,814  —  1,814 
Other invested assets —  8,369  79  8,448 
Separate account assets 779,873  55,731  66,099  901,703 
Total assets at fair value $ 779,873  $ 66,342  $ 76,113  $ 922,328 
Liabilities at fair value:
Derivative liabilities $ —  $ 866  $ —  $ 866 
Total liabilities at fair value $ —  $ 866  $ —  $ 866 
———————
[1]Includes $767 Membership FHLB common stock.

The following table provides information as of December 31, 2023 about the Company’s financial assets and liabilities measured and reported at fair value on a recurring basis.

2023
Level 1 Level 2 Level 3 Total
Assets at fair value:
Bonds $ —  $ —  $ 15,493  $ 15,493 
Preferred stock —  832  658  1,490 
Common stock [1] —  —  2,363  2,363 
Subtotal —  832  18,514  19,346 
Derivative assets —  11,320  —  11,320 
Other invested assets —  28,726  2,878  31,604 
Separate account assets 898,135  100,365  62,121  1,060,621 
Total assets at fair value $ 898,135  $ 141,243  $ 83,513  $ 1,122,891 
Liabilities at fair value:
Derivative liabilities $ —  $ 20,945  $ —  $ 20,945 
Total liabilities at fair value $ —  $ 20,945  $ —  $ 20,945 
———————
[1]Includes $767 Membership FHLB common stock.

47
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are not included in the Company’s revenues and expenses or surplus.

Changes in Level 3 Assets and Liabilities Measured at Fair Value

The following table summarizes the changes in assets and liabilities classified in Level 3. Gains and losses reported in this table may include changes in fair value that are attributable to both observable and unobservable inputs.

2024 2023 2022
Level 3 Assets:
Balance, beginning of period $ 83,513  $ 127,168  $ 70,830 
Purchases —  15,448  118,115 
Sales (4,448) (6,852) (1,218)
Transfers into level 3 4,064  19,283  5,534 
Transfers out of level 3 (6,000) (74,111) (62,611)
Realized gains (losses)
 (9,169) 2,241  875 
Unrealized gains (losses) 8,153  336  (4,357)
Balance, end of period $ 76,113  $ 83,513  $ 127,168 

Transfers into Level 3 primarily represent private securities for which Level 2 input assumptions for valuation pricing were no longer available. Transfers out of Level 3 for the year ended December 31, 2024 were due to the increased market observability of similar assets and/or securities previously being held at fair value now being carried at amortized cost.

Transfers out of Level 3 for the years ended December 31, 2023 and 2022 primarily represented separate account assets backing fixed indexed annuity contracts being accounted for at book value as discussed in Footnote 2.

For Level 3, inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect management’s best estimate of what hypothetical market participants would use to determine fair value. Examples of valuation techniques used based on unobservable inputs include, but are not limited to, internal models, direct broker quotes and professional judgment.

Below is a listing of the aggregate fair value for all financial instruments as of December 31, 2024 and the level within the fair value hierarchy:

Aggregate
Fair Value		 Admitted
Assets		 Level 1 Level 2 Level 3 Not
Practicable
(Carrying
Value)
Financial Instruments:
Bonds $ 580,407  $ 653,176  $ —  $ 342,207  $ 238,200  $ — 
Preferred stock 1,086  1,086  —  428  658  — 
Common stock 1,692  1,692  —  —  1,692  — 
Residual tranches & surplus debentures
 42,332  38,837  —  42,253  79  — 
Cash, cash equivalents & short-term investments
 121,109  121,121  94,362  26,747  —  — 
Derivatives 948  948  —  948  —  — 
Mortgage loans 21,775  23,771  —  —  21,775  — 
Separate account assets 2,161,762  2,291,523  779,873  690,336  691,553  — 
Total financial instruments $ 2,931,111  $ 3,132,154  $ 874,235  $ 1,102,919  $ 953,957  $ — 

48
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
As of December 31, 2024, the Company had no investments where it is not practicable to estimate fair value.

Below is a listing of the aggregate fair value for all financial instruments as of December 31, 2023 and the level within the fair value hierarchy:

Aggregate
Fair Value		 Admitted
Assets		 Level 1 Level 2 Level 3 Not
Practicable
(Carrying
Value)
Financial Instruments:
Bonds $ 603,211  $ 683,640  $ —  $ 275,593  $ 327,618  $ — 
Preferred stock 3,454  3,490  —  832  2,622  — 
Common stock 2,363  2,363  —  —  2,363  — 
Residual tranches & surplus debentures
 53,731  53,362  —  50,853  2,878  — 
Cash, cash equivalents & short-term investments
 38,639  38,639  38,639  —  —  — 
Derivatives (9,625) 5,852  —  (9,625) —  — 
Mortgage loans 42,945  46,332  —  —  42,945  — 
Separate account assets 2,555,532  2,814,232  898,135  743,349  914,048  — 
Total financial instruments $ 3,290,250  $ 3,647,910  $ 936,774  $ 1,061,002  $ 1,292,474  $ — 

As of December 31, 2023, the Company had no investments where it is not practicable to estimate fair value.

For the years ended December 31, 2024 and 2023, Level 3 bonds and separate account assets were primarily private placement debt securities priced using the Company’s internal discounted cash flow model. Market spreads used in the model were unobservable. Nearly all of these securities were in the Industrial and Miscellaneous category.


10.    Commitments and Contingencies

Litigation and regulatory matters

The Company is regularly involved in litigation and arbitration, both as a defendant and as a plaintiff. The litigation and arbitration naming the Company as a defendant ordinarily involves the Company’s businesses and operations. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages.

The Company periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations related to the Company’s products and practices. It is the Company’s practice to cooperate fully in these matters.

As reported in Note 1, in response to the PHL Companies’ hazardous financial condition, the PHL Companies entered rehabilitation proceedings in the Connecticut Superior Court on May 20, 2024. At the time of the Rehabilitator Order, the Companies were parties to a number of lawsuits in federal and state courts throughout the country. The Rehabilitator assessed the status of all pending proceedings, and where appropriate based on the status and merits of the proceedings, stayed the proceedings pursuant to the Rehabilitation Order.

It is not feasible to predict or determine the ultimate outcome of all litigation, arbitration or regulatory proceedings or to provide reasonable ranges of potential losses. Given the Company’s current financial condition as more fully described in Note 2, and the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, arbitration and regulatory investigations, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the results of operations or cash flows in particular annual periods.

49
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
Cost of insurance litigation related to the 2021 adjustment

On April 15, 2022, a putative class action was filed against PHL Variable Insurance Company in the United States District Court for the District of Connecticut challenging certain increases to cost of insurance charges implemented by the Company in 2021. Kenney v. PHL Variable Insurance Company, 3:22-cv-00552. On June 21, 2022, the Company filed its answer. On February 14, 2024, an amended class action complaint was filed in the Kenney case. The amended complaint adds a new plaintiff, Arbuckle Funding LLC, as well as nine new defendants including two subsidiaries of the Company, Concord Re, Inc. and Palisado Re, Inc., as well as seven Nassau entities, including Nassau Insurance Group Holdings, L.P.; Nassau Insurance Group Holdings GP, LLC; Nassau Financial Group GP Ltd.; Nassau Financial Group, L.P.; Nassau Asset Management LLC; The Nassau Companies of New York; and The Nassau Companies. The amended complaint retains its breach of contract cause of action against the Company challenging the cost of insurance charges implemented in 2021 and adds the Nassau defendants to the breach of contract cause of action under an “alter ego” theory. The amended class action complaint also alleges a new cause of action for fraudulent transfer against all defendants and a new cause of action against the Nassau entities for interference with contract. Pursuant to the rehabilitation proceedings, this matter has been stayed. The Company disputes the allegations in the complaint and intends a vigorous defense.


11.    Other Commitments

As part of its normal investment activities, the Company enters into agreements to fund limited partnerships that make debt and equity investments. As of December 31, 2024, the Company had unfunded commitments of $40.6 million, which includes $23.9 million relating to separate account commitments.


12.    Information about Financial Instruments with Off-Balance Sheet Risk

The Company, at December 31, 2024 and 2023, held the following financial instruments with off-balance sheet risk:

Assets* Liabilities*
2024 2023 2024 2023
Swaps $ —  $ 100,000  $ —  $ 47,937 
Total $ —  $ 100,000  $ —  $ 47,937 
———————
* Notional amount

The Company uses derivative instruments including interest rate swaps and equity index options. A more detailed description of these instruments is provided in Footnote 2 - “Summary of Significant Accounting Policies.”

The Company is not exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments as the interest rate swaps are fully collateralized. The credit exposure of interest rate swaps is represented by the fair value (market value) of contracts with a positive fair value (market value) at the reporting date. As a result of the Company entering rehabilitation, the counterparty terminated all interest rate swaps. The termination resulted in a loss of $18.4 million.

The Company is required to put up collateral for any interest rate swap contracts that are entered. The amount of collateral that is required is determined by the exchange on which it is traded. The Company had posted $0 cash in 2023 and 2024 to satisfy this requirement.

50
PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Notes to Statutory Financial Statements
 (continued)
(in thousands except where noted in millions or billions)
The current credit exposure of the Company’s derivative contracts is limited to the fair value at the reporting date. Credit risk is managed by diversifying the Company’s exposure amounts to several derivative counterparties – mostly highly rated counterparties rated A+ or higher – and agreeing to certain collateral posting provisions via the ISDA Credit Support Annex (“CSA”). The Company also attempts to minimize its exposure to credit risk through the use of issuer limits and various credit monitoring techniques. The Company held $0 cash in 2024, of collateral pledged by third parties related to over-the-counter derivative transactions.


13.    Subsequent Events

The Company evaluated events subsequent to December 31, 2024 and through April 25, 2025, the date of issuance of these financial statements. There were no events occurring subsequent to the end of the year that merited recognition or disclosure in these financial statements.


51

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Supplemental Schedule
Summary of Investments - Other than Investments in Related Parties
December 31, 2024
(in thousands)
Amortized
Cost		 Fair
Value		 Amount shown
in the
Balance Sheet
Fixed maturities:
Bonds:
U.S. government and government agencies and authorities
 $ 24,992  23,233  $ 24,992 
States, municipalities and political subdivisions
 —  —  — 
Foreign governments
 238  192  238 
All other corporate bonds [1]
 618,134  547,780  618,051 
Redeemable preferred stock
 1,158  1,086  1,086 
Total fixed maturities
 644,522  572,291  644,367 
Equity securities:
Common stock:
Industrial, miscellaneous and all other
 2,262  1,692  1,692 
Nonredeemable preferred stock
 —  —  — 
Total equity securities
 2,262  1,692  1,692 
Mortgage loans
 23,771  21,655  23,771 
Real estate, at depreciated cost
 —  XXX — 
Contract loans
 74,874  XXX 74,874 
Other invested assets [1]
 54,523  58,430  54,523 
Cash and short-term investments
 121,121  121,109  121,121 
Receivables for securities
 6,512  XXX 6,512 
Total cash and invested assets
 $ 927,585  $ 926,860 
———————
[1] Amortized cost and fair value amounts exclude $67,041 and $66,346, respectively, of related-party bonds and other invested assets.























See accompanying independent auditors’ report.

52

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Supplemental Schedule
Summary of Investments - Other than Investments in Related Parties
December 31, 2023
 (continued)
(in thousands)
Amortized
Cost		 Fair
Value		 Amount shown
in the
Balance Sheet
Fixed maturities:
Bonds:
U.S. government and government agencies and authorities
 $ 24,983  $ 22,897  $ 24,983 
States, municipalities and political subdivisions
 —  —  — 
Foreign governments
 238  195  238 
All other corporate bonds [1]
 648,082  572,252  647,777 
Redeemable preferred stock
 3,658  3,454  3,490 
Total fixed maturities
 676,961  598,798  676,488 
Equity securities:
Common stock:
Industrial, miscellaneous and all other
 2,262  2,363  2,363 
Nonredeemable preferred stock
 —  —  — 
Total equity securities
 2,262  2,363  2,363 
Mortgage loans
 46,332  42,712  46,332 
Real estate, at depreciated cost
 —  XXX — 
Contract loans
 72,430  XXX 72,430 
Other invested assets [1]
 65,006  65,375  65,006 
Cash and short-term investments
 38,639  38,639  38,639 
Receivables for securities
 4,421  XXX 4,421 
Total cash and invested assets
 $ 906,051  $ 905,679 
———————
[1] Amortized cost and fair value amounts exclude $67,411 and $57,834, respectively, of related-party bonds and other invested assets.























See accompanying independent auditors’ report.

53

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Supplementary Insurance Information
For the years ended December 31, 2024 and 2023
(in thousands)

As of December 31, For the years ended December 31,
Future policy
benefits,
losses and
claims		 Other
policy claims
and benefits
payable		 Premium
and annuity
considerations		 Net
investment
income		 Benefits,
claims and
losses		 Other
operating
expenses
2024:
Insurance Segment $ 2,540,373  $ 7,880  $ —  $ 32,923  $ 1,608,798  $ 287,014 
2023:
Insurance Segment $ 390,248  $ 4,172  —  $ 45,175  $ (158,721) $ 281,532 
2022:
Insurance Segment $ 197,111  $ 10,613  $ —  $ 52,505  $ (338,144) $ 317,496 







































See accompanying independent auditors’ report

54

PHL Variable Insurance Company, In Rehabilitation
(a wholly owned subsidiary of PHL Delaware, LLC)
Supplementary Schedule - Reinsurance
For the years ended December 31, 2024, 2023 and 2022
(in thousands)
Gross
amount		 Reinsurance
ceded		 Reinsurance
assumed		 Net
amount		 Percentage of
assumed to net
Life insurance in force:
2024
 $ 26,724,133  $ 28,521,273  $ 1,797,140  $ —  —%
2023
 31,553,595  33,255,328  1,701,733  —  —%
2022
 35,052,179  36,735,761  1,683,582  —  —%
Life insurance premiums:
2024
 $ 374,184  $ 378,961  $ 4,777  $ —  —%
2023
 420,413  424,557  4,144  —  —%
2022
 403,853  409,061  5,208  —  —%







































See accompanying independent auditors’ report

55

  

 

 

 

 

Financial Statements

 

 

PHLVIC Variable Universal Life Account

December 31, 2024

With Report of Independent Registered Public Accounting Firm

 

 

 

 

PHLVIC Variable Universal Life Account

 

Financial Statements

 

December 31, 2024

 

 

Contents

 

Audited Financial Statements

 

Statements of Net Assets 5
Statements of Operations and Change in Net Assets 7
Notes to Financial Statements 25
Note 1. Organization 25
Note 2. Additions, Mergers, Liquidations and Name Changes 27
Note 3. Significant Accounting Policies 27
Note 4. Purchases and Proceeds from Sales of Investments 30
Note 5. Related Party Transactions and Charges and Deductions 32
Note 6. Summary of Unit Transactions 35
Note 7. Financial Highlights 38
Note 8. Subsequent Events 49
Report of Independent Registered Public Accounting Firm 50

 

 

 

 

PHLVIC Variable Universal Life Account

Statements of Net Assets

December 31, 2024

 

Subaccount Number of
Shares		 Cost Assets at
Market Value		 Net Assets Units
Outstanding		 Range of Unit Values
               
Alger Capital Appreciation Portfolio 2,455 $      87,375 $    284,454 $    284,454 9,047 $ 31.44 $ 31.44
AMT Sustainable Equity Portfolio 129,448 3,401,288 5,189,566 5,189,566 2,488,226 2.07 2.09
CVT S&P MidCap 400 Index Portfolio (b) 4,376 399,799 562,184 562,184 114,837 4.71 4.91
DWS Equity 500 Index VIP 204,615 2,883,724 6,365,566 6,365,566 474,138 5.40 17.28
DWS Small Cap Index VIP 16,755 261,909 243,283 243,283 61,733 3.76 3.95
Federated Hermes Fund for U.S. Government Securities II 263,905 2,949,249 2,393,620 2,393,620 845,459 1.35 3.39
Federated Hermes Government Money Fund II 2,863,179 2,863,179 2,863,179 2,863,179 2,501,265 1.10 1.14
Federated Hermes High Income Bond Fund II 79,811 523,344 453,328 453,328 62,144 2.67 8.48
Fidelity® VIP Contrafund® Portfolio 77,690 2,403,161 4,465,612 4,465,612 247,804 5.48 22.25
Fidelity® VIP Growth Opportunities Portfolio 168,014 2,917,982 13,864,474 13,864,474 878,024 8.35 28.26
Fidelity® VIP Growth Portfolio 24,623 1,128,643 2,362,608 2,362,608 137,858 6.84 22.53
Fidelity® VIP Investment Grade Bond Portfolio 268,312 3,419,472 2,900,450 2,900,450 1,660,513 1.68 1.77
Franklin Income VIP Fund 120,310 1,751,308 1,727,651 1,727,651 653,873 2.49 2.87
Franklin Mutual Shares VIP Fund 126,227 2,172,996 2,068,861 2,068,861 483,874 2.41 8.39
Guggenheim VT Long Short Equity Fund - - - - - 2.88 2.88
Invesco V.I. American Franchise Fund 42,862 1,722,868 3,408,800 3,408,800 606,200 5.46 5.63
Invesco V.I. Capital Appreciation Fund 2,561 109,853 153,021 153,021 27,887 4.93 5.65
Invesco V.I. Core Equity Fund 13,681 360,286 459,968 459,968 101,031 4.55 4.55
Invesco V.I. Equity and Income Fund 21,394 351,509 370,753 370,753 107,392 3.15 3.54
Invesco V.I. Global Fund 20,647 704,117 798,198 798,198 211,116 3.42 4.01
Invesco V.I. Main Street Mid Cap Fund® 13,522 181,555 150,900 150,900 35,448 4.26 4.26
Invesco V.I. Main Street Small Cap Fund® 110,217 1,578,598 3,140,094 3,140,094 710,289 4.07 4.84
Lazard Retirement US Small Cap Equity Select Portfolio 7,136 218,336 103,186 103,186 25,066 4.12 4.12
Lord Abbett Series Fund Bond Debenture Portfolio 26,833 311,549 279,063 279,063 99,128 2.39 2.85
Lord Abbett Series Fund Growth and Income Portfolio 132,158 3,819,348 5,275,747 5,275,747 1,267,408 3.26 4.17
Lord Abbett Series Fund Mid Cap Stock Portfolio 15,534 325,405 410,864 410,864 112,913 3.00 3.67
Morningstar Aggressive Growth ETF Asset Allocation Portfolio 94,422 874,276 1,452,218 1,452,218 476,825 3.05 3.05
Morningstar Balanced ETF Asset Allocation Portfolio 84,427 885,044 941,361 941,361 416,270 2.26 2.26
Morningstar Growth ETF Asset Allocation Portfolio 246,700 2,519,330 3,046,742 3,046,742 1,131,117 2.62 2.72
Morningstar Income and Growth ETF Asset Allocation Portfolio 10,642 112,891 110,036 110,036 61,202 1.77 1.84
Neuberger Berman AMT Mid Cap Growth Portfolio 7,494 186,516 199,491 199,491 78,176 2.55 2.55

 

(b) Name change. See Note 2.

 

 

The accompanying notes are an integral part of these financial statements.

 

5

 

PHLVIC Variable Universal Life Account

Statements of Net Assets (continued)

December 31, 2024

 

SubAccount Number of
Shares		 Cost Assets at
Market Value		 Net Assets Units
Outstanding		 Range of Unit Values
               
PIMCO CommodityReal Return® Strategy Portfolio 413,720 $4,655,783 $2,300,282 $2,300,282 2,908,386 $  0.65 $  0.92
PIMCO Real Return Portfolio 35,977 481,708 414,095 414,095 223,164 1.59 1.86
PIMCO Total Return Portfolio 17,279 177,459 156,203 156,203 81,768 1.70 1.94
Rydex VT Inverse Government Long Bond Strategy Fund 19 6,809 2,246 2,246 5,301 0.42 0.42
Rydex VT Nova Fund 110 3,948 23,391 23,391 2,002 11.68 11.68
Templeton Developing Markets VIP Fund 35,141 410,839 296,940 296,940 179,117 1.24 1.70
Templeton Foreign VIP Fund 67,969 954,539 935,252 935,252 275,204 1.33 5.28
Templeton Growth VIP Fund 144,289 1,750,520 1,800,728 1,800,728 623,346 1.74 6.17
TVST Touchstone Balanced Fund 13,093 160,749 170,075 170,075 48,476 3.48 3.66
TVST Touchstone Bond Fund 189,072 1,924,063 1,603,334 1,603,334 965,498 1.64 1.69
TVST Touchstone Common Stock Fund 753,422 7,671,147 9,613,661 9,613,661 1,709,032 5.51 5.87
TVST Touchstone Small Company Fund 103,031 1,267,470 1,527,954 1,527,954 320,393 4.64 5.14
Virtus Duff & Phelps Real Estate Securities Series 219,333 5,134,688 4,599,403 4,599,403 759,811 3.05 15.61
Virtus KAR Capital Growth Series 29,876 503,169 1,067,754 1,067,754 75,902 4.93 14.27
Virtus KAR Enhanced Core Equity Series 279,861 3,541,934 3,363,934 3,363,934 362,474 3.02 9.73
Virtus KAR Small-Cap Growth Series 89,354 1,635,433 2,272,271 2,272,271 98,851 5.60 28.46
Virtus KAR Small-Cap Value Series 383,279 5,239,345 6,193,790 6,193,790 910,249 3.43 12.67
Virtus Newfleet Multi-Sector Intermediate Bond Series 342,966 3,076,703 2,922,067 2,922,067 951,346 2.25 6.63
Virtus SGA International Growth Series 890,943 13,516,878 11,270,431 11,270,431 4,703,994 1.39 6.71
Virtus VIT Tactical Allocation Series (b) 35,926 499,531 465,241 465,241 62,704 2.92 8.65
Wanger Acorn 121,576 2,717,016 1,850,389 1,850,389 148,189 3.79 14.32
Wanger International 161,507 4,631,936 2,978,195 2,978,195 869,216 1.65 10.51

 

(b) Name change. See Note 2.

 

 

The accompanying notes are an integral part of these financial statements.

 

6

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets

Years Ended December 31, 2024 and 2023

 

  Alger Capital
Appreciation
Portfolio		 AMT Sustainable
Equity Portfolio		 CVT S&P MidCap
400 Index
Portfolio (b)
Net assets as of December 31, 2022 $   149,144 $  5,046,934 $    600,958
Investment income (loss):
Dividend distributions - 4,164 7,872
Investment Expenses:
Mortality and expense risk and administrative charges - (63) -
Net investment income (loss) - 4,101 7,872
Increase (decrease) in net assets from operations:
Capital gain distributions - 87,489 26,561
Realized capital gain (loss) on investments 257 46,994 2,417
Change in unrealized appreciation (depreciation) 63,921 1,152,535 59,846
Net gain (loss) on investments 64,178 1,287,018 88,824
Net increase (decrease) in net assets from operations 64,178 1,291,119 96,696
Contract owner transactions:
Deposits 3,589 204,886 17,819
Terminations, withdrawals and annuity payments (220) (347,297) (1,810)
Transfers between subaccounts, net 342 (55,514) 3,350
Maintenance charges and mortality adjustments (4,880) (172,080) (26,721)
Increase (decrease) in net assets from contract transactions (1,169) (370,005) (7,362)
Total increase (decrease) in net assets 63,009 921,114 89,334
Net assets as of December 31, 2023 $   212,153 $  5,968,048 $    690,292
Investment income (loss):
Dividend distributions - - 7,186
Investment Expenses:
Mortality and expense risk and administrative charges - (50) -
Net investment income (loss) - (50) 7,186
Increase (decrease) in net assets from operations:
Capital gain distributions - 246,696 25,900
Realized capital gain (loss) on investments 10,690 626,120 27,567
Change in unrealized appreciation (depreciation) 87,294 485,042 23,927
Net gain (loss) on investments 97,984 1,357,858 77,394
Net increase (decrease) in net assets from operations 97,984 1,357,808 84,580
Contract owner transactions:
Deposits 3,380 174,485 11,749
Terminations, withdrawals and annuity payments (23,785)   (1,703,150) (208,690)
Transfers between subaccounts, net 437 (436,494) 9,399
Maintenance charges and mortality adjustments (5,715) (171,131) (25,146)
Increase (decrease) in net assets from contract transactions (25,683)   (2,136,290) (212,688)
Total increase (decrease) in net assets 72,301 (778,482) (128,108)
Net assets as of December 31, 2024 $   284,454 $  5,189,566 $    562,184

 

(b) Name change. See Note 2.

 

 

The accompanying notes are an integral part of these financial statements.

 

7

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  DWS Equity 500
Index VIP		 DWS Small Cap
Index VIP		 Federated Hermes
Fund for U.S.
Government
Securities II
Net assets as of December 31, 2022 $  7,073,116 $   244,377 $  3,447,203
Investment income (loss):
Dividend distributions 104,246 2,880 86,024
Investment Expenses:
Mortality and expense risk and administrative charges (262) (7) (390)
Net investment income (loss) 103,984 2,873 85,634
Increase (decrease) in net assets from operations:
Capital gain distributions 393,346 6,173 -
Realized capital gain (loss) on investments 48,954 580 (92,682)
Change in unrealized appreciation (depreciation) 1,228,450 30,633 114,659
Net gain (loss) on investments 1,670,750 37,386 21,977
Net increase (decrease) in net assets from operations 1,774,734 40,259 107,611
Contract owner transactions:
Deposits 147,638 11,008 195,543
Terminations, withdrawals and annuity payments (378,495) (17,905) (626,195)
Transfers between subaccounts, net 72,844 5,404 51,374
Maintenance charges and mortality adjustments (313,227) (8,171) (176,596)
Increase (decrease) in net assets from contract transactions (471,240) (9,664) (555,874)
Total increase (decrease) in net assets 1,303,494 30,595 (448,263)
Net assets as of December 31, 2023 $  8,376,610 $   274,972 $  2,998,940
Investment income (loss):
Dividend distributions 112,437 3,203 103,858
Investment Expenses:
Mortality and expense risk and administrative charges (325) (7) (314)
Net investment income (loss) 112,112 3,196 103,544
Increase (decrease) in net assets from operations:
Capital gain distributions 535,637 7,506 -
Realized capital gain (loss) on investments 1,422,741 8,175 (116,869)
Change in unrealized appreciation (depreciation) (99,637) 10,535 36,564
Net gain (loss) on investments 1,858,741 26,216 (80,305)
Net increase (decrease) in net assets from operations 1,970,853 29,412 23,239
Contract owner transactions:
Deposits 110,690 7,471 150,641
Terminations, withdrawals and annuity payments (3,718,711) (64,236) (710,279)
Transfers between subaccounts, net (93,256) 3,350 53,649
Maintenance charges and mortality adjustments (280,620) (7,686) (122,570)
Increase (decrease) in net assets from contract transactions (3,981,897) (61,101) (628,559)
Total increase (decrease) in net assets (2,011,044) (31,689) (605,320)
Net assets as of December 31, 2024 $  6,365,566 $   243,283 $  2,393,620

 

 

The accompanying notes are an integral part of these financial statements.

 

8

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  Federated Hermes
Government
Money Fund II		 Federated Hermes
High Income Bond
Fund II		 Fidelity® VIP
Contrafund®
Portfolio
Net assets as of December 31, 2022 $  2,331,344 $   629,982 $  3,348,215
Investment income (loss):
Dividend distributions 102,452 38,000 14,872
Investment Expenses:
Mortality and expense risk and administrative charges (24) - (24)
Net investment income (loss) 102,428 38,000 14,848
Increase (decrease) in net assets from operations:
Capital gain distributions - - 135,017
Realized capital gain (loss) on investments - 472 24,805
Change in unrealized appreciation (depreciation) - 39,962 906,147
Net gain (loss) on investments - 40,434 1,065,969
Net increase (decrease) in net assets from operations 102,428 78,434 1,080,817
Contract owner transactions:
Deposits 172,100 17,950 80,346
Terminations, withdrawals and annuity payments (111,366) (11,897) (97,694)
Transfers between subaccounts, net 181,952 6,032 (17,384)
Maintenance charges and mortality adjustments (374,560) (29,775) (219,656)
Increase (decrease) in net assets from contract transactions (131,874) (17,690) (254,388)
Total increase (decrease) in net assets (29,446) 60,744 826,429
Net assets as of December 31, 2023 $  2,301,898 $   690,726 $  4,174,644
Investment income (loss):
Dividend distributions 106,382 36,204 4,043
Investment Expenses:
Mortality and expense risk and administrative charges (18) - (34)
Net investment income (loss) 106,364 36,204 4,009
Increase (decrease) in net assets from operations:
Capital gain distributions - - 506,502
Realized capital gain (loss) on investments - (13,469) 355,623
Change in unrealized appreciation (depreciation) - 11,079 457,713
Net gain (loss) on investments - (2,390) 1,319,838
Net increase (decrease) in net assets from operations 106,364 33,814 1,323,847
Contract owner transactions:
Deposits 319,209 10,962 70,294
Terminations, withdrawals and annuity payments (736,213) (193,033) (861,293)
Transfers between subaccounts, net 1,280,806 (67,871) 1,176
Maintenance charges and mortality adjustments (408,885) (21,270) (243,056)
Increase (decrease) in net assets from contract transactions 454,917 (271,212)   (1,032,879)
Total increase (decrease) in net assets 561,281 (237,398) 290,968
Net assets as of December 31, 2024 $  2,863,179 $   453,328 $  4,465,612

 

 

The accompanying notes are an integral part of these financial statements.

 

9

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  Fidelity® VIP
Growth
Opportunities
Portfolio		 Fidelity® VIP
Growth Portfolio		 Fidelity® VIP
Investment Grade
Bond Portfolio
Net assets as of December 31, 2022 $ 10,711,739 $  2,092,478 $  3,044,740
Investment income (loss):
Dividend distributions - 843 79,938
Investment Expenses:
Mortality and expense risk and administrative charges (457) (41) (39)
Net investment income (loss) (457) 802 79,899
Increase (decrease) in net assets from operations:
Capital gain distributions - 106,351 -
Realized capital gain (loss) on investments 34,818 (5,670) (13,169)
Change in unrealized appreciation (depreciation) 4,739,052 613,036 117,472
Net gain (loss) on investments 4,773,870 713,717 104,303
Net increase (decrease) in net assets from operations 4,773,413 714,519 184,202
Contract owner transactions:
Deposits 346,856 59,319 119,956
Terminations, withdrawals and annuity payments (514,439) (199,895) (97,050)
Transfers between subaccounts, net (185,693) (32,517) 120,498
Maintenance charges and mortality adjustments (453,614) (127,774) (165,377)
Increase (decrease) in net assets from contract transactions (806,890) (300,867) (21,973)
Total increase (decrease) in net assets 3,966,523 413,652 162,229
Net assets as of December 31, 2023 $ 14,678,262   $  2,506,130   $  3,206,969
Investment income (loss):
Dividend distributions - - 103,319
Investment Expenses:
Mortality and expense risk and administrative charges (543) (57) (17)
Net investment income (loss) (543) (57) 103,302
Increase (decrease) in net assets from operations:
Capital gain distributions - 506,281 -
Realized capital gain (loss) on investments 2,730,222 423,283 (18,584)
Change in unrealized appreciation (depreciation) 2,244,038 (237,681) (21,301)
Net gain (loss) on investments 4,974,260 691,883 (39,885)
Net increase (decrease) in net assets from operations 4,973,717 691,826 63,417
Contract owner transactions:
Deposits 285,625 56,686 107,602
Terminations, withdrawals and annuity payments (4,469,128) (758,362) (726,164)
Transfers between subaccounts, net (1,134,789) (1,806) 412,601
Maintenance charges and mortality adjustments (469,213) (131,866) (163,975)
Increase (decrease) in net assets from contract transactions (5,787,505) (835,348) (369,936)
Total increase (decrease) in net assets (813,788) (143,522) (306,519)
Net assets as of December 31, 2024 $ 13,864,474 $  2,362,608 $  2,900,450

 

 

The accompanying notes are an integral part of these financial statements.

 

10

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  Franklin Income
VIP Fund		 Franklin Mutual
Shares VIP Fund		 Guggenheim VT
Long Short Equity
Fund
Net assets as of December 31, 2022 $  1,713,150 $  2,079,490 $     6,426
Investment income (loss):
Dividend distributions 91,002 40,541 19
Investment Expenses:
Mortality and expense risk and administrative charges (26) (14) -
Net investment income (loss) 90,976 40,527 19
Increase (decrease) in net assets from operations:
Capital gain distributions 110,323 186,597 -
Realized capital gain (loss) on investments (5,235) 6,311 2
Change in unrealized appreciation (depreciation) (57,134) 36,704 817
Net gain (loss) on investments 47,954 229,612 819
Net increase (decrease) in net assets from operations 138,930 270,139 838
Contract owner transactions:
Deposits 66,691 93,947 1,222
Terminations, withdrawals and annuity payments (124,540) (144,811) -
Transfers between subaccounts, net 59,538 10,839 -
Maintenance charges and mortality adjustments (60,115) (97,641) (912)
Increase (decrease) in net assets from contract transactions (58,426) (137,666) 310
Total increase (decrease) in net assets 80,504 132,473 1,148
Net assets as of December 31, 2023 $  1,793,654 $  2,211,963 $     7,574
Investment income (loss):
Dividend distributions 97,990 41,221 12
Investment Expenses:
Mortality and expense risk and administrative charges (19) (5) -
Net investment income (loss) 97,971 41,216 12
Increase (decrease) in net assets from operations:
Capital gain distributions 8,028 42,867 -
Realized capital gain (loss) on investments 6,010 59,896 3,188
Change in unrealized appreciation (depreciation) 17,836 99,773   (2,586)
Net gain (loss) on investments 31,874 202,536 602
Net increase (decrease) in net assets from operations 129,845 243,752 614
Contract owner transactions:
Deposits 61,898 82,218 710
Terminations, withdrawals and annuity payments (213,216) (349,658) -
Transfers between subaccounts, net 12,699 (27,637)   (8,198)
Maintenance charges and mortality adjustments (57,229) (91,777) (700)
Increase (decrease) in net assets from contract transactions (195,848) (386,854) (8,188)
Total increase (decrease) in net assets (66,003) (143,102)   (7,574)
Net assets as of December 31, 2024 $  1,727,651 $  2,068,861 $            -

 

 

The accompanying notes are an integral part of these financial statements.

 

11

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  Invesco V.I.
American
Franchise Fund		 Invesco V.I.
Capital
Appreciation Fund		 Invesco V.I. Core
Equity Fund
Net assets as of December 31, 2022 $  2,662,133 $   154,094 $   380,063
Investment income (loss):
Dividend distributions - - 2,949
Investment Expenses:
Mortality and expense risk and administrative charges (145) - -
Net investment income (loss) (145) - 2,949
Increase (decrease) in net assets from operations:
Capital gain distributions 69,485 - 9,515
Realized capital gain (loss) on investments 33,191 7,274 6,328
Change in unrealized appreciation (depreciation) 950,551 42,928 64,454
Net gain (loss) on investments 1,053,227 50,202 80,297
Net increase (decrease) in net assets from operations 1,053,082 50,202 83,246
Contract owner transactions:
Deposits 90,089 4,244 10,955
Terminations, withdrawals and annuity payments (168,460) (42,225) (49,178)
Transfers between subaccounts, net (2,167) 52 2,250
Maintenance charges and mortality adjustments (169,118) (5,015) (24,035)
Increase (decrease) in net assets from contract transactions (249,656) (42,944) (60,008)
Total increase (decrease) in net assets 803,426 7,258 23,238
Net assets as of December 31, 2023 $  3,465,559 $   161,352 $   403,301
Investment income (loss):
Dividend distributions - - 3,075
Investment Expenses:
Mortality and expense risk and administrative charges (183) - -
Net investment income (loss) (183) - 3,075
Increase (decrease) in net assets from operations:
Capital gain distributions - - 36,924
Realized capital gain (loss) on investments 416,216 13,761 9,437
Change in unrealized appreciation (depreciation) 684,863 37,035 50,875
Net gain (loss) on investments 1,101,079 50,796 97,236
Net increase (decrease) in net assets from operations 1,100,896 50,796 100,311
Contract owner transactions:
Deposits 72,086 5,035 11,524
Terminations, withdrawals and annuity payments (1,049,767) (57,188) (30,459)
Transfers between subaccounts, net (7,220) (331) 191
Maintenance charges and mortality adjustments (172,754) (6,643) (24,900)
Increase (decrease) in net assets from contract transactions (1,157,655) (59,127) (43,644)
Total increase (decrease) in net assets (56,759) (8,331) 56,667
Net assets as of December 31, 2024 $  3,408,800 $   153,021 $   459,968

 

 

The accompanying notes are an integral part of these financial statements.

 

12

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

Invesco V.I. Equity

and Income Fund

 

Invesco V.I. Global

Fund

 

Invesco V.I. Main

Street Mid Cap  
Fund®

Net assets as of December 31, 2022  $371,227  $554,179  $183,108
Investment income (loss):            
Dividend distributions   5,738   -   568
Investment Expenses:            
Mortality and expense risk and administrative charges   -   -   -
Net investment income (loss)   5,738   -   568
Increase (decrease) in net assets from operations:            
Capital gain distributions   17,420   78,439   -
Realized capital gain (loss) on investments   (1,056)   2,975   114
Change in unrealized appreciation (depreciation)   9,705   108,356   25,768
Net gain (loss) on investments   26,069   189,770   25,882
Net increase (decrease) in net assets from operations   31,807   189,770   26,450
Contract owner transactions:            
Deposits   10,865   22,086   7,445
Terminations, withdrawals and annuity payments   (25,040)   (7,188)   (2,637)
Transfers between subaccounts, net   (35,327)   2,782   1,545
Maintenance charges and mortality adjustments   (16,187)   (19,318)   (6,758)
Increase (decrease) in net assets from contract transactions   (65,689)   (1,638)   (405)
Total increase (decrease) in net assets   (33,882)   188,132   26,045
Net assets as of December 31, 2023  $337,345  $742,311  $209,153
Investment income (loss):            
Dividend distributions   5,798   -   481
Investment Expenses:            
Mortality and expense risk and administrative charges   -   -   -
Net investment income (loss)   5,798   -   481
Increase (decrease) in net assets from operations:            
Capital gain distributions   14,163   48,454   3,463
Realized capital gain (loss) on investments   1,661   41,138   13,682
Change in unrealized appreciation (depreciation)   18,508   28,253   10,494
Net gain (loss) on investments   34,332   117,845   27,639
Net increase (decrease) in net assets from operations   40,130   117,845   28,120
Contract owner transactions:            
Deposits   4,004   18,541   5,315
Terminations, withdrawals and annuity payments   (16,507)   (156,339)   (86,100)
Transfers between subaccounts, net   18,744   99,906   1,340
Maintenance charges and mortality adjustments   (12,963)   (24,066)   (6,928)
Increase (decrease) in net assets from contract transactions    (6,722)   (61,958)   (86,373)
Total increase (decrease) in net assets   33,408   55,887   (58,253)
Net assets as of December 31, 2024  $370,753  $798,198  $150,900

 

 

The accompanying notes are an integral part of these financial statements.

 

13

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

Invesco V.I. Main

Street Small Cap

Fund®

 

Lazard Retirement

US Small Cap

Equity Select

Portfolio

 

Lord Abbett Series

Fund Bond
Debenture

Portfolio

Net assets as of December 31, 2022  $3,343,574  $157,114  $451,338
Investment income (loss):            
Dividend distributions   32,745   -   24,001
Investment Expenses:            
Mortality and expense risk and administrative charges   (47)   -   -
Net investment income (loss)   32,698   -   24,001
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   -
Realized capital gain (loss) on investments   7,410   (51)   7
Change in unrealized appreciation (depreciation)   544,368   15,882   5,316
Net gain (loss) on investments   551,778   15,831   5,323
Net increase (decrease) in net assets from operations   584,476   15,831   29,324
Contract owner transactions:            
Deposits   131,464   8,005   19,277
Terminations, withdrawals and annuity payments   (193,893)   (3,210)   (11,968)
Transfers between subaccounts, net   75,614   20   11,333
Maintenance charges and mortality adjustments   (114,795)   (4,947)   (22,008)
Increase (decrease) in net assets from contract transactions   (101,610)   (132)   (3,366)
Total increase (decrease) in net assets   482,866   15,699   25,958
Net assets as of December 31, 2023  $3,826,440  $172,813  $477,296
Investment income (loss):            
Dividend distributions   -   -   15,498
Investment Expenses:            
Mortality and expense risk and administrative charges   (34)   -   -
Net investment income (loss)   (34)   -   15,498
Increase (decrease) in net assets from operations:            
Capital gain distributions   116,749   3,552   -
Realized capital gain (loss) on investments   214,536   (2,352)   (10,387)
Change in unrealized appreciation (depreciation)   95,717   13,881   22,183
Net gain (loss) on investments   427,002   15,081   11,796
Net increase (decrease) in net assets from operations   426,968   15,081   27,294
Contract owner transactions:            
Deposits   114,241   5,699   14,564
Terminations, withdrawals and annuity payments   (1,081,523)   (84,041)   (235,036)
Transfers between subaccounts, net   (35,611)   (1,800)   11,428
Maintenance charges and mortality adjustments   (110,421)   (4,566)   (16,483)
Increase (decrease) in net assets from contract transactions    (1,113,314)   (84,708)   (225,527)
Total increase (decrease) in net assets   (686,346)   (69,627)   (198,233)
Net assets as of December 31, 2024  $3,140,094  $103,186  $279,063

 

 

The accompanying notes are an integral part of these financial statements.

 

14

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

Lord Abbett Series

Fund Growth and

Income Portfolio

 

Lord Abbett Series

Fund Mid Cap

Stock Portfolio

 

Morningstar

Aggressive Growth  
ETF Asset

Allocation Portfolio

Net assets as of December 31, 2022  $5,967,270  $577,380  $1,233,083
Investment income (loss):            
Dividend distributions   57,815   2,587   22,200
Investment Expenses:            
Mortality and expense risk and administrative charges   (247)   -   -
Net investment income (loss)   57,568   2,587   22,200
Increase (decrease) in net assets from operations:            
Capital gain distributions   125,558   16,200   27,693
Realized capital gain (loss) on investments   11,171   3,936   6,571
Change in unrealized appreciation (depreciation)   564,119   59,767   147,413
Net gain (loss) on investments   700,848   79,903   181,677
Net increase (decrease) in net assets from operations   758,416   82,490   203,877
Contract owner transactions:            
Deposits   198,759   22,443   106,083
Terminations, withdrawals and annuity payments   (234,274)   (19,436)   (79,422)
Transfers between subaccounts, net   8,082   (17,827)   71,390
Maintenance charges and mortality adjustments   (278,023)   (60,017)   (106,185)
Increase (decrease) in net assets from contract transactions   (305,456)   (74,837)   (8,134)
Total increase (decrease) in net assets   452,960   7,653   195,743
Net assets as of December 31, 2023  $6,420,230  $585,033  $1,428,826
Investment income (loss):            
Dividend distributions   44,392   1,872   18,151
Investment Expenses:            
Mortality and expense risk and administrative charges   (270)   -   -
Net investment income (loss)   44,122   1,872   18,151
Increase (decrease) in net assets from operations:            
Capital gain distributions   385,504   42,307   21,022
Realized capital gain (loss) on investments   481,249   49,701   19,852
Change in unrealized appreciation (depreciation)   282,883   (19,774)   140,329
Net gain (loss) on investments   1,149,636   72,234   181,203
Net increase (decrease) in net assets from operations   1,193,758   74,106   199,354
Contract owner transactions:            
Deposits   154,504   18,343   90,576
Terminations, withdrawals and annuity payments   (2,171,635)   (207,323)   (121,832)
Transfers between subaccounts, net   (68,535)   (822)   (37,149)
Maintenance charges and mortality adjustments   (252,575)   (58,473)   (107,557)
Increase (decrease) in net assets from contract transactions    (2,338,241)   (248,275)   (175,962)
Total increase (decrease) in net assets   (1,144,483)   (174,169)   23,392
Net assets as of December 31, 2024  $5,275,747  $410,864  $1,452,218

 

 

The accompanying notes are an integral part of these financial statements.

 

15

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

  

  

Morningstar

Balanced ETF  
Asset Allocation

Portfolio

 

Morningstar

Growth ETF Asset

Allocation Portfolio

 

Morningstar

Income and  
Growth ETF Asset
Allocation Portfolio

Net assets as of December 31, 2022  $1,417,392  $3,696,287  $309,450
Investment income (loss):            
Dividend distributions   30,777   64,604   4,214
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (703)   (157)
Net investment income (loss)   30,777   63,901   4,057
Increase (decrease) in net assets from operations:            
Capital gain distributions   35,824   83,635   1,960
Realized capital gain (loss) on investments   31   35,505   (11,031)
Change in unrealized appreciation (depreciation)   116,224   337,969   31,048
Net gain (loss) on investments   152,079   457,109   21,977
Net increase (decrease) in net assets from operations   182,856   521,010   26,034
Contract owner transactions:            
Deposits   81,983   180,297   10,866
Terminations, withdrawals and annuity payments   -   (434,231)   (125,220)
Transfers between subaccounts, net   (78)   809   2,615
Maintenance charges and mortality adjustments   (59,983)   (173,509)   (17,539)
Increase (decrease) in net assets from contract transactions   21,922   (426,634)   (129,278)
Total increase (decrease) in net assets   204,778   94,376   (103,244)
Net assets as of December 31, 2023  $1,622,170  $3,790,663  $206,206
Investment income (loss):            
Dividend distributions   16,333   44,200   2,427
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (826)   (73)
Net investment income (loss)   16,333   43,374   2,354
Increase (decrease) in net assets from operations:            
Capital gain distributions   8,756   60,824   704
Realized capital gain (loss) on investments   8,429   169,150   (1,899)
Change in unrealized appreciation (depreciation)   76,447   217,107   12,210
Net gain (loss) on investments   93,632   447,081   11,015
Net increase (decrease) in net assets from operations   109,965   490,455   13,369
Contract owner transactions:            
Deposits   44,254   164,330   7,637
Terminations, withdrawals and annuity payments   (781,159)   (328,340)   (106,511)
Transfers between subaccounts, net   891   (903,220)   1,352
Maintenance charges and mortality adjustments   (54,760)   (167,146)   (12,017)
Increase (decrease) in net assets from contract transactions    (790,774)   (1,234,376)   (109,539)
Total increase (decrease) in net assets   (680,809)   (743,921)   (96,170)
Net assets as of December 31, 2024  $941,361  $3,046,742  $110,036

 

 

The accompanying notes are an integral part of these financial statements.

 

16

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

  

  

Neuberger Berman

AMT Mid Cap

Growth Portfolio

 

PIMCO
CommodityReal

Return® Strategy

Portfolio

 

PIMCO Real
Return Portfolio

Net assets as of December 31, 2022  $231,747  $2,554,883  $420,628
Investment income (loss):            
Dividend distributions   -   375,644   12,192
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (25)   -
Net investment income (loss)   -   375,619   12,192
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   -
Realized capital gain (loss) on investments   2,413   (3,867)   (2,009)
Change in unrealized appreciation (depreciation)   37,610   (575,039)   4,325
Net gain (loss) on investments   40,023   (578,906)   2,316
Net increase (decrease) in net assets from operations   40,023   (203,287)   14,508
Contract owner transactions:            
Deposits   8,651   118,832   6,920
Terminations, withdrawals and annuity payments   (15,396)   (157,500)   (12,080)
Transfers between subaccounts, net   (95)   296,529   16,607
Maintenance charges and mortality adjustments   (11,781)   (78,828)   (23,484)
Increase (decrease) in net assets from contract transactions   (18,621)   179,033   (12,037)
Total increase (decrease) in net assets   21,402   (24,254)   2,471
Net assets as of December 31, 2023  $253,149  $2,530,629  $423,099
Investment income (loss):            
Dividend distributions   -   51,065   10,775
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (11)   -
Net investment income (loss)   -   51,054   10,775
Increase (decrease) in net assets from operations:            
Capital gain distributions   12,107   -   -
Realized capital gain (loss) on investments   (9,470)   (18,616)   (1,428)
Change in unrealized appreciation (depreciation)   46,353   63,270   (505)
Net gain (loss) on investments   48,990   44,654   (1,933)
Net increase (decrease) in net assets from operations   48,990   95,708   8,842
Contract owner transactions:            
Deposits   7,867   103,271   5,762
Terminations, withdrawals and annuity payments   (101,087)   (708,551)   (20,667)
Transfers between subaccounts, net   2,535   355,044   20,123
Maintenance charges and mortality adjustments   (11,963)   (75,819)   (23,064)
Increase (decrease) in net assets from contract transactions    (102,648)   (326,055)   (17,846)
Total increase (decrease) in net assets   (53,658)   (230,347)   (9,004)
Net assets as of December 31, 2024  $199,491  $2,300,282  $414,095

 

 

The accompanying notes are an integral part of these financial statements.

 

17

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023 

 

  

PIMCO Total
Return Portfolio

 

Rydex VT Inverse

Government Long
Bond Strategy

Fund

 

Rydex VT Nova

Fund

Net assets as of December 31, 2022  $485,862  $4,437  $15,348
Investment income (loss):            
Dividend distributions   15,380   -   -
Investment Expenses:            
Mortality and expense risk and administrative charges   (15)   -   -
Net investment income (loss)   15,365   -   -
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   -
Realized capital gain (loss) on investments   (31,779)   (919)   5
Change in unrealized appreciation (depreciation)   38,591   1,105   5,747
Net gain (loss) on investments   6,812   186   5,752
Net increase (decrease) in net assets from operations   22,177   186   5,752
Contract owner transactions:            
Deposits   20,201   163   -
Terminations, withdrawals and annuity payments   (151,799)   -   -
Transfers between subaccounts, net   16,448   -   9,665
Maintenance charges and mortality adjustments   (29,881)   (522)   (1,680)
Increase (decrease) in net assets from contract transactions   (145,031)   (359)   7,985
Total increase (decrease) in net assets   (122,854)   (173)   13,737
Net assets as of December 31, 2023  $363,008  $4,264  $29,085
Investment income (loss):            
Dividend distributions   9,868   92   -
Investment Expenses:            
Mortality and expense risk and administrative charges   (8)   -   -
Net investment income (loss)   9,860   92   -
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   -
Realized capital gain (loss) on investments   (34,713)   (5,825)   3,052
Change in unrealized appreciation (depreciation)   32,746   6,310   4,503
Net gain (loss) on investments   (1,967)   485   7,555
Net increase (decrease) in net assets from operations   7,893   577   7,555
Contract owner transactions:            
Deposits   19,581   163   -
Terminations, withdrawals and annuity payments   (224,113)   (2,479)   (10,430)
Transfers between subaccounts, net   11,050   -   (947)
Maintenance charges and mortality adjustments   (21,216)   (279)   (1,872)
Increase (decrease) in net assets from contract transactions    (214,698)   (2,595)   (13,249)
Total increase (decrease) in net assets   (206,805)   (2,018)   (5,694)
Net assets as of December 31, 2024  $156,203  $2,246  $23,391

 

 

The accompanying notes are an integral part of these financial statements.

 

18

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

Templeton

Developing

Markets VIP Fund

 

Templeton Foreign

VIP Fund

 

Templeton Growth

VIP Fund

Net assets as of December 31, 2022  $299,883  $934,930  $1,709,779
Investment income (loss):            
Dividend distributions   6,378   32,073   59,883
Investment Expenses:            
Mortality and expense risk and administrative charges   (12)   (8)   (29)
Net investment income (loss)   6,366   32,065   59,854
Increase (decrease) in net assets from operations:            
Capital gain distributions   231   -   -
Realized capital gain (loss) on investments   4,096   24,335   (294)
Change in unrealized appreciation (depreciation)   26,988   132,173   281,578
Net gain (loss) on investments   31,315   156,508   281,284
Net increase (decrease) in net assets from operations   37,681   188,573   341,138
Contract owner transactions:            
Deposits   11,744   46,717   85,745
Terminations, withdrawals and annuity payments   (5,014)   (54,287)   (110,364)
Transfers between subaccounts, net   (13,516)   (25,093)   (55,269)
Maintenance charges and mortality adjustments   (16,292)   (47,226)   (80,992)
Increase (decrease) in net assets from contract transactions   (23,078)   (79,889)   (160,880)
Total increase (decrease) in net assets   14,603   108,684   180,258
Net assets as of December 31, 2023  $314,486  $1,043,614  $1,890,037
Investment income (loss):            
Dividend distributions   12,437   25,230   18,345
Investment Expenses:            
Mortality and expense risk and administrative charges   (14)   (9)   (22)
Net investment income (loss)   12,423   25,221   18,323
Increase (decrease) in net assets from operations:            
Capital gain distributions   2,390   -   6,279
Realized capital gain (loss) on investments   2,062   8,668   1,861
Change in unrealized appreciation (depreciation)   7,316   (37,136)   78,519
Net gain (loss) on investments   11,768   (28,468)   86,659
Net increase (decrease) in net assets from operations   24,191   (3,247)   104,982
Contract owner transactions:            
Deposits   7,034   42,323   79,990
Terminations, withdrawals and annuity payments   (29,008)   (110,101)   (227,227)
Transfers between subaccounts, net   (3,421)   6,634   30,205
Maintenance charges and mortality adjustments   (16,342)   (43,971)   (77,259)
Increase (decrease) in net assets from contract transactions    (41,737)   (105,115)   (194,291)
Total increase (decrease) in net assets   (17,546)   (108,362)   (89,309)
Net assets as of December 31, 2024  $296,940  $935,252  $1,800,728

 

 

The accompanying notes are an integral part of these financial statements.

 

19

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023 

 

  

TVST Touchstone

Balanced Fund

 

TVST Touchstone

Bond Fund

  TVST Touchstone
Common Stock
Fund
Net assets as of December 31, 2022  $225,758  $1,779,693  $9,305,623
Investment income (loss):            
Dividend distributions   3,375   86,889   43,086
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (16)   (50)
Net investment income (loss)   3,375   86,873   43,036
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   649,984
Realized capital gain (loss) on investments   488   (2,302)   42,003
Change in unrealized appreciation (depreciation)   37,205   25,235   1,642,082
Net gain (loss) on investments   37,693   22,933   2,334,069
Net increase (decrease) in net assets from operations   41,068   109,806   2,377,105
Contract owner transactions:            
Deposits   10,688   97,223   424,073
Terminations, withdrawals and annuity payments   (7,758)   (96,325)   (772,357)
Transfers between subaccounts, net   10,504   100,695   (331,184)
Maintenance charges and mortality adjustments   (15,151)   (72,412)   (328,233)
Increase (decrease) in net assets from contract transactions   (1,717)   29,181   (1,007,701)
Total increase (decrease) in net assets   39,351   138,987   1,369,404
Net assets as of December 31, 2023  $265,109  $1,918,680  $10,675,027
Investment income (loss):            
Dividend distributions   2,997   86,165   59,453
Investment Expenses:            
Mortality and expense risk and administrative charges   -   -   -
Net investment income (loss)   2,997   86,165   59,453
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   664,226
Realized capital gain (loss) on investments   2,117   (25,837)   876,682
Change in unrealized appreciation (depreciation)   21,147   (14,159)   473,776
Net gain (loss) on investments   23,264   (39,996)   2,014,684
Net increase (decrease) in net assets from operations   26,261   46,169   2,074,137
Contract owner transactions:            
Deposits   5,079   83,907   374,507
Terminations, withdrawals and annuity payments   (110,072)   (549,549)   (2,775,946)
Transfers between subaccounts, net   (7,485)   173,627   (411,573)
Maintenance charges and mortality adjustments   (8,817)   (69,500)   (322,491)
Increase (decrease) in net assets from contract transactions    (121,295)   (361,515)   (3,135,503)
Total increase (decrease) in net assets   (95,034)   (315,346)   (1,061,366)
Net assets as of December 31, 2024  $170,075  $1,603,334  $9,613,661

 

 

The accompanying notes are an integral part of these financial statements.

 

20

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

TVST Touchstone

Small Company

Fund

 

Virtus Duff &

Phelps Real Estate
Securities Series

 

Virtus KAR Capital

Growth Series

Net assets as of December 31, 2022  $1,615,021  $4,896,393  $935,930
Investment income (loss):            
Dividend distributions   3,661   109,617   -
Investment Expenses:            
Mortality and expense risk and administrative charges   (8)   (173)   -
Net investment income (loss)   3,653   109,444   -
Increase (decrease) in net assets from operations:            
Capital gain distributions   7,544   52,972   74,808
Realized capital gain (loss) on investments   256   664   (375)
Change in unrealized appreciation (depreciation)   244,187   380,758   242,284
Net gain (loss) on investments   251,987   434,394   316,717
Net increase (decrease) in net assets from operations   255,640   543,838   316,717
Contract owner transactions:            
Deposits   64,651   175,640   36,219
Terminations, withdrawals and annuity payments   (144,446)   (259,528)   (71,470)
Transfers between subaccounts, net   26,123   294,771   39,590
Maintenance charges and mortality adjustments   (50,384)   (179,703)   (48,168)
Increase (decrease) in net assets from contract transactions   (104,056)   31,180   (43,829)
Total increase (decrease) in net assets   151,584   575,018   272,888
Net assets as of December 31, 2023  $1,766,605  $5,471,411  $1,208,818
Investment income (loss):            
Dividend distributions   6,422   86,492   -
Investment Expenses:            
Mortality and expense risk and administrative charges   -   (173)   -
Net investment income (loss)   6,422   86,319   -
Increase (decrease) in net assets from operations:            
Capital gain distributions   50,775   51,135   147,608
Realized capital gain (loss) on investments   76,342   (3,734)   50,954
Change in unrealized appreciation (depreciation)   87,443   432,138   88,765
Net gain (loss) on investments   214,560   479,539   287,327
Net increase (decrease) in net assets from operations   220,982   565,858   287,327
Contract owner transactions:            
Deposits   57,301   151,158   32,217
Terminations, withdrawals and annuity payments   (469,737)   (1,489,752)   (459,592)
Transfers between subaccounts, net   420   67,816   48,675
Maintenance charges and mortality adjustments   (47,617)   (167,088)   (49,691)
Increase (decrease) in net assets from contract transactions    (459,633)   (1,437,866)   (428,391)
Total increase (decrease) in net assets   (238,651)   (872,008)   (141,064)
Net assets as of December 31, 2024  $1,527,954  $4,599,403  $1,067,754

 

 

The accompanying notes are an integral part of these financial statements.

 

21

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

  

  

Virtus KAR

Enhanced Core
Equity Series

 

Virtus KAR Small-
Cap Growth Series

 

Virtus KAR Small-

Cap Value Series

Net assets as of December 31, 2022  $4,059,718  $2,583,397  $6,455,398
Investment income (loss):            
Dividend distributions   116,362   -   36,816
Investment Expenses:            
Mortality and expense risk and administrative charges   (118)   (4)   (195)
Net investment income (loss)   116,244   (4)   36,621
Increase (decrease) in net assets from operations:            
Capital gain distributions   34,788   181,670   269,435
Realized capital gain (loss) on investments   (6,078)   15,610   1,189
Change in unrealized appreciation (depreciation)   (93,789)   292,426   902,385
Net gain (loss) on investments   (65,079)   489,706   1,173,009
Net increase (decrease) in net assets from operations   51,165   489,702   1,209,630
Contract owner transactions:            
Deposits   121,123   55,447   228,554
Terminations, withdrawals and annuity payments   (152,111)   (191,289)   (344,021)
Transfers between subaccounts, net   40,305   (3,313)   243,000
Maintenance charges and mortality adjustments   (210,876)   (135,119)   (268,875)
Increase (decrease) in net assets from contract transactions   (201,559)   (274,274)   (141,342)
Total increase (decrease) in net assets   (150,394)   215,428   1,068,288
Net assets as of December 31, 2023  $3,909,324  $2,798,825  $7,523,686
Investment income (loss):            
Dividend distributions   102,030   -   34,816
Investment Expenses:            
Mortality and expense risk and administrative charges   (128)   (2)   (199)
Net investment income (loss)   101,902   (2)   34,617
Increase (decrease) in net assets from operations:            
Capital gain distributions   1,625   183,743   511,852
Realized capital gain (loss) on investments   38,406   (66,072)   (18,723)
Change in unrealized appreciation (depreciation)   211,952   99,074   115,796
Net gain (loss) on investments   251,983   216,745   608,925
Net increase (decrease) in net assets from operations   353,885   216,743   643,542
Contract owner transactions:            
Deposits   93,517   42,269   184,173
Terminations, withdrawals and annuity payments   (813,008)   (655,594)   (1,925,860)
Transfers between subaccounts, net   5,196   (10,108)   27,328
Maintenance charges and mortality adjustments   (184,980)   (119,864)   (259,079)
Increase (decrease) in net assets from contract transactions    (899,275)   (743,297)   (1,973,438)
Total increase (decrease) in net assets   (545,390)   (526,554)   (1,329,896)
Net assets as of December 31, 2024  $3,363,934  $2,272,271  $6,193,790

 

 

The accompanying notes are an integral part of these financial statements.

 

22

 

 

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023

 

  

Virtus Newfleet
Multi-Sector 

Intermediate Bond

Series

 

Virtus SGA

International

Growth Series

 

Virtus VIT Tactical

Allocation

Series (b)

Net assets as of December 31, 2022  $3,415,646  $13,681,002  $412,932
Investment income (loss):            
Dividend distributions   162,909   14,869   5,146
Investment Expenses:            
Mortality and expense risk and administrative charges   (67)   (339)   (43)
Net investment income (loss)   162,842   14,530   5,103
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   -   29,193
Realized capital gain (loss) on investments   (1,409)   (19,320)   737
Change in unrealized appreciation (depreciation)   128,985   2,385,981   54,988
Net gain (loss) on investments   127,576   2,366,661   84,918
Net increase (decrease) in net assets from operations   290,418   2,381,191   90,021
Contract owner transactions:            
Deposits   181,014   627,845   11,871
Terminations, withdrawals and annuity payments   (171,362)   (868,374)   (7,419)
Transfers between subaccounts, net   58,126   (158,569)   10,807
Maintenance charges and mortality adjustments   (167,546)   (549,867)   (31,155)
Increase (decrease) in net assets from contract transactions   (99,768)   (948,965)   (15,896)
Total increase (decrease) in net assets   190,650   1,432,226   74,125
Net assets as of December 31, 2023  $3,606,296  $15,113,228  $487,057
Investment income (loss):            
Dividend distributions   166,850   29,561   9,285
Investment Expenses:            
Mortality and expense risk and administrative charges   (40)   (306)   (52)
Net investment income (loss)   166,810   29,255   9,233
Increase (decrease) in net assets from operations:            
Capital gain distributions   -   25,422   41,608
Realized capital gain (loss) on investments   12,506   (8,998)   6,430
Change in unrealized appreciation (depreciation)   20,455   (789,422)   8,002
Net gain (loss) on investments   32,961   (772,998)   56,040
Net increase (decrease) in net assets from operations   199,771   (743,743)   65,273
Contract owner transactions:            
Deposits   148,042   524,534   11,515
Terminations, withdrawals and annuity payments   (1,075,191)   (3,901,038)   (48,797)
Transfers between subaccounts, net   188,927   743,020   (23,249)
Maintenance charges and mortality adjustments   (145,778)   (465,570)   (26,558)
Increase (decrease) in net assets from contract transactions    (884,000)   (3,099,054)   (87,089)
Total increase (decrease) in net assets   (684,229)   (3,842,797)   (21,816)
Net assets as of December 31, 2024  $2,922,067  $11,270,431  $465,241

 

(b)Name change. See Note 2.

 

 

The accompanying notes are an integral part of these financial statements.

 

23

 

  

PHLVIC Variable Universal Life Account

Statements of Operations and Change in Net Assets (continued)

Years Ended December 31, 2024 and 2023 

 

   Wanger Acorn  Wanger
International
Net assets as of December 31, 2022  $1,373,787  $3,591,886
Investment income (loss):        
Dividend distributions   -   12,194
Investment Expenses:        
Mortality and expense risk and administrative charges   (49)   (83)
Net investment income (loss)   (49)   12,111
Increase (decrease) in net assets from operations:        
Capital gain distributions   -   -
Realized capital gain (loss) on investments   44   2,030
Change in unrealized appreciation (depreciation)   328,924   583,392
Net gain (loss) on investments   328,968   585,422
Net increase (decrease) in net assets from operations   328,919   597,533
Contract owner transactions:        
Deposits   39,535   162,427
Terminations, withdrawals and annuity payments   (137,221)   (226,427)
Transfers between subaccounts, net   485,141   75,414
Maintenance charges and mortality adjustments   (87,192)   (159,928)
Increase (decrease) in net assets from contract transactions   300,263   (148,514)
Total increase (decrease) in net assets   629,182   449,019
Net assets as of December 31, 2023  $2,002,969  $4,040,905
Investment income (loss):        
Dividend distributions   -   51,164
Investment Expenses:        
Mortality and expense risk and administrative charges   (67)   (77)
Net investment income (loss)   (67)   51,087
Increase (decrease) in net assets from operations:        
Capital gain distributions   -   -
Realized capital gain (loss) on investments   71,271   6,453
Change in unrealized appreciation (depreciation)   190,156   (322,390)
Net gain (loss) on investments   261,427   (315,937)
Net increase (decrease) in net assets from operations   261,360   (264,850)
Contract owner transactions:        
Deposits   41,824   136,924
Terminations, withdrawals and annuity payments   (411,538)   (1,002,584)
Transfers between subaccounts, net   53,533   208,580
Maintenance charges and mortality adjustments   (97,759)   (140,780)
Increase (decrease) in net assets from contract transactions    (413,940)   (797,860)
Total increase (decrease) in net assets   (152,580)   (1,062,710)
Net assets as of December 31, 2024  $1,850,389  $2,978,195

 

 

The accompanying notes are an integral part of these financial statements.

  

24

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements

December 31, 2024

 

Note 1. Organization

 

The PHLVIC Variable Universal Life (the “Separate Account”), is a separate account of PHL Variable Insurance Company (“PHL”, ”PHL Variable”, the Company, “we” or “us”). PHL is a wholly-owned subsidiary of PHL Delaware, LLC (“PHL Delaware” or the “Parent”). PHL is a provider of life insurance and annuity products. In November 2019, PHL stopped marketing and selling new business.

 

PHL Variable Insurance Company (“PHL”) and its subsidiaries, Concord Re, Inc. and Palisado Re, Inc. (collectively, the “PHL Companies”) entered rehabilitation proceedings in the Connecticut Superior Court (the “Court”) on May 20, 2024, as a result of the PHL Companies’ hazardous financial condition. Rehabilitation is a court proceeding that the insurance commissioner of a company’s state of domicile may initiate to take control of the company if it is in a hazardous financial condition.

 

The Court appointed the Connecticut Insurance Commissioner as the PHL Companies’ Rehabilitator. The Rehabilitator assumed control of the PHL Companies’ assets and will administer them under the Court’s supervision. The Rehabilitator is also empowered to take the necessary or appropriate actions approved by the Court to rehabilitate the PHL Companies.

 

On June 25, 2024, the Court approved on a final basis a moratorium order that limits payments under some policies and annuities. The moratorium allows the PHL Companies to mitigate the high outflow of claim payments and is anticipated to be in place in some form until a rehabilitation plan is confirmed by the Court. Although the payments have been limited under the moratorium, the PHL Companies have continued to record liabilities for the full amount of policyholder benefits.

 

While the Separate Account remains insulated from PHL’s general account, the Separate Account only supports the value of investments in variable investment options and does not support financial guarantees from PHL’s general account. In liquidation, all payments out of PHL Variable’s general account assets would cease and state guaranty associations would provide limited coverage to policyholders on an ongoing basis subject to statutory limits and conditions. In addition, financial guarantees from PHL’s general account arising from contracts in the Separate Account may be subject to the moratorium.

 

The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended and was established on December 7, 1994. As directed by the owners, amounts directed to each subaccount are invested in a designated mutual fund as follows:

 

Subaccount Share Class
   

Alger Capital Appreciation Portfolio 

Class I-2 

AMT Sustainable Equity Portfolio Class S
CVT S&P MidCap 400 Index Portfolio Class I
DWS Equity 500 Index VIP Class A
DWS Small Cap Index VIP Class A
Federated Hermes Fund for U.S. Government Securities II Primary
Federated Hermes Government Money Fund II Service
Federated Hermes High Income Bond Fund II Primary
Fidelity® VIP Contrafund® Portfolio Service Class
Fidelity® VIP Growth Opportunities Portfolio Service Class
Fidelity® VIP Growth Portfolio Service Class
Fidelity® VIP Investment Grade Bond Portfolio Service Class
Franklin Income VIP Fund Class 2
Franklin Mutual Shares VIP Fund Class 2
Guggenheim VT Long Short Equity Fund -

 

25

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 1. Organization (continued) 

 

Subaccount Share Class
   
Invesco V.I. American Franchise Fund Series I
Invesco V.I. Capital Appreciation Fund Series II
Invesco V.I. Core Equity Fund Series I
Invesco V.I. Equity and Income Fund Series II
Invesco V.I. Global Fund Series II
Invesco V.I. Main Street Mid Cap Fund® Series I
Invesco V.I. Main Street Small Cap Fund® Series II
Lazard Retirement US Small Cap Equity Select Portfolio Service
Lord Abbett Series Fund Bond Debenture Portfolio Class VC
Lord Abbett Series Fund Growth and Income Portfolio Class VC
Lord Abbett Series Fund Mid Cap Stock Portfolio Class VC
Morningstar Aggressive Growth ETF Asset Allocation Portfolio Class II
Morningstar Balanced ETF Asset Allocation Portfolio Class II
Morningstar Growth ETF Asset Allocation Portfolio Class II
Morningstar Income and Growth ETF Asset Allocation Portfolio Class II
Neuberger Berman AMT Mid Cap Growth Portfolio S Class
PIMCO CommodityReal Return® Strategy Portfolio Advisor Class
PIMCO Real Return Portfolio Advisor Class
PIMCO Total Return Portfolio Advisor Class
Rydex VT Inverse Government Long Bond Strategy Fund -
Rydex VT Nova Fund -
Templeton Developing Markets VIP Fund Class 2
Templeton Foreign VIP Fund Class 2
Templeton Growth VIP Fund Class 2
TVST Touchstone Balanced Fund -
TVST Touchstone Bond Fund -
TVST Touchstone Common Stock Fund -
TVST Touchstone Small Company Fund -
Virtus Duff & Phelps Real Estate Securities Series Class A
Virtus KAR Capital Growth Series Class A
Virtus KAR Enhanced Core Equity Series Class A
Virtus KAR Small-Cap Growth Series Class A
Virtus KAR Small-Cap Value Series Class A
Virtus Newfleet Multi-Sector Intermediate Bond Series Class A
Virtus SGA International Growth Series Class A
Virtus VIT Tactical Allocation Series Class A
Wanger Acorn -
Wanger International -

 

Fifty-three subaccounts are currently offered by the Separate Account, all of which had activity.

 

Additionally, contract owners may direct the allocation of their premium payments and contract value between the Separate Account and the Guaranteed Interest Account (“GIA”).

 

26

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 1. Organization (continued)

 

PHL Variable and the Separate Account are subject to regulation by the State of Connecticut Department of Insurance and the U.S. Securities and Exchange Commission (“SEC”). The assets and liabilities of the Separate Account are clearly identified and distinguished from PHL Variable’s other asset and liabilities. Premium payments and contract value allocated by a contract owner to the GIA are not legally insulated and are subject to claims against PHL Variable’s general account assets.

 

Note 2. Additions, Mergers, Liquidations and Name Changes

 

A.Additions

 

There were no fund additions in 2023 or 2024.

 

B.Mergers

 

As a result of restructuring, the following underlying fund that was previously offered is no longer available as an investment option to our Contract Owners. Any Contract Owner allocations that remained in this fund were redeemed and used to purchase shares of the surviving fund as indicated:

 

Date Surviving Subaccount Closed Subaccount
     

April 21, 2023 

Wanger Acorn 

Wanger Select 

 

C.Liquidations

 

There were no fund liquidations in 2023 or 2024.

 

D.Name Changes

 

During the last two years the following subaccount name changes were made effective:

 

Date New Name Old Name
     

September 1, 2023 

 Lazard Retirement US Small Cap Equity Select Portfolio

Lazard Retirement US Small -Mid Cap Equity 

April 29, 2024 Virtus VIT Tactical Allocation Series Virtus VIT Strategic Allocation Series
May 1, 2024 CVT S&P MidCap 400 Index Portfolio Calvert VP S&P MidCap 400 Index Portfolio

 

Note 3. Significant Accounting Policies

 

Investment Valuation

 

Investments in mutual fund shares are carried in the statements of net assets at market value (net asset value of the underlying mutual fund). Investment transactions are accounted for on the trade date. Realized capital gains and losses on sales of investments are determined based on the average cost of investments sold. The difference between cost and current market value of investments owned on the day of measurement is recorded as unrealized appreciation or depreciation of investments.

 

Market Risk

 

Each subaccount invests in shares of a single underlying fund. The investment performance of each subaccount will reflect the investment performance of the underlying fund less separate account expenses. There is no assurance that the investment objective of any underlying fund will be met. A fund calculates a daily net asset value per share ("NAV") which is based on the market value of its investment portfolio. The amount of risk varies

 

27

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 3. Significant Accounting Policies (continued)

 

significantly between subaccounts. Due to the level of risk associated with certain investment portfolios, it is at least reasonably possible that changes in the values of investment portfolios will occur in the near term and that such changes could materially affect contract holder’s investments in the funds and the amounts reported in the statements of net assets. The contract holder assumes all of the investment performance risk for the subaccounts selected.

 

Reinvestment of Dividends

 

Dividend and capital gain distributions paid by the mutual funds to the Separate Account are reinvested in additional shares of each respective fund. Dividend income and capital gain distributions are recorded as income on the ex- dividend date.

 

Federal Income Taxes

 

The operations of the Separate Account are included in the federal income tax return of PHL, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (IRC). Under the current provisions of the IRC, PHL does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under contracts. Based on this, no charge is being made currently to the Separate Account for federal income taxes. PHL will review periodically the status of this policy in the event of changes in the tax law.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

In applying these estimates and assumptions, management makes subjective and complex judgments that frequently require assumptions about matters that are uncertain and inherently subject to change such as possibility for elevated mortality and investment market volatility.

 

Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

 

The Separate Account invests in shares of open-end mutual funds, which process contract holders directed purchases, sales and transfers on a daily basis at the funds’ computed net asset values (NAVs). The fair value of the Separate Account’s assets is based on the NAVs of mutual funds, which are obtained from the custodians and reflect the fair values of the mutual fund investments. The NAV is calculated daily and is based on the fair values of the underlying securities.

 

Because the fund provides liquidity for the investments through purchases and redemptions at NAV, this may represent the fair value of the investment in the fund. That is, for an open-ended mutual fund, the fair value of an investment in the fund would not be expected to be higher than the amount that a new investor would be required to spend in order to directly invest in the mutual fund. Similarly, the hypothetical seller of the investment would not be expected to accept less in proceeds than it could receive by directly redeeming its investment with the fund.

 

The Separate Account measures the fair value of its investment in the Fund on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

 

•  Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Separate Account has the ability to access.

  

28

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 3. Significant Accounting Policies (continued)

 

•  Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.

 

•  Level 3 – Unobservable inputs for the asset or liability, to the extent observable inputs are not available, representing the Separate Account’s own assumptions about the assumptions a market participant would use in valuing the assets or liability, and would be based on the best information available.

 

Investments in Fund shares are valued using the reported net asset value of the respective Funds at the end of each New York Stock Exchange business day, as determined by the respective Funds. Investments held by the Separate Account are Level 1 within the hierarchy. There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2024.

 

The Separate Account had no financial liabilities as of December 31, 2024.

 

Segment Disclosures

 

In this reporting period, the Separate Account adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Adoption of the new standard impacted financial statement disclosures only and did not affect the financial position or the results of operations for the subaccounts of the Separate Account. An operating segment is defined in Topic 280 as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The CODM is the Accounting Operations Department, who is responsible for reviewing subaccount financial statements and related Separate Account controls. The Separate Account represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the Fund’s long-term strategic asset allocation is pre-determined in accordance with the terms of its prospectus, based on the investment selections of its contract holders. The financial information which is used by the CODM to assess the segment’s performance and to make resource allocation decisions for the Fund’s single segment, is consistent with that presented within the Fund’s financial statements. Segment assets are reported on the Statements of Operations and Change in Net Assets as net assets and significant segment expenses are reported in the Statements of Operations and Change in Net Assets. The CODM does not evaluate the business using asset or subaccount expense information.

 

29

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 4. Purchases and Proceeds from Sales of Investments

 

The cost of investment purchases and proceeds from investments sold for the years ended December 31, 2024 and 2023, were as follows:

 

   2024  2023

Subaccount 

 

Cost of Purchases 

 

Proceeds from

Sales

 

Cost of Purchases

 

Proceeds from

Sales

                     
Alger Capital Appreciation Portfolio  $2,823   $28,506   $3,537   $4,707 
AMT Sustainable Equity Portfolio   366,773    2,256,417    272,159    550,574 
CVT S&P MidCap 400 Index Portfolio (b)   88,246    267,848    84,953    57,884 
DWS Equity 500 Index VIP   2,816,247    6,150,395    802,346    776,256 
DWS Small Cap Index VIP   25,594    75,993    24,835    25,453 
Federated Hermes Fund for U.S. Government Securities II   286,916    811,932    308,643    778,883 
Federated Hermes Government Money Fund II   1,670,190    1,108,909    445,122    474,568 
Federated Hermes High Income Bond Fund II   103,038    338,047    110,024    89,713 
Fidelity® VIP Contrafund® Portfolio   575,800    1,098,168    267,492    372,015 
Fidelity® VIP Growth Opportunities Portfolio   194,068    5,982,116    412,691    1,220,038 
Fidelity® VIP Growth Portfolio   572,759    901,884    191,334    385,047 
Fidelity® VIP Investment Grade Bond Portfolio   582,704    849,339    345,121    287,195 
Franklin Income VIP Fund   226,275    316,124    378,079    235,206 
Franklin Mutual Shares VIP Fund   220,984    523,753    374,321    284,863 
Guggenheim VT Long Short Equity Fund   645    8,821    1,173    844 
Invesco V.I. American Franchise Fund   75,412    1,233,249    150,309    330,624 
Invesco V.I. Capital Appreciation Fund   8,241    67,368    4,936    47,879 
Invesco V.I. Core Equity Fund   49,492    53,138    22,429    69,972 
Invesco V.I. Equity and Income Fund   43,448    30,208    53,140    95,671 
Invesco V.I. Global Fund   198,769    212,274    108,694    31,892 
Invesco V.I. Main Street Mid Cap Fund®   9,666    92,095    8,772    8,610 
Invesco V.I. Main Street Small Cap Fund®   229,042    1,225,641    207,769    276,682 
Lazard Retirement US Small Cap Equity Select Portfolio   8,590    89,745    7,450    7,582 
Lord Abbett Series Fund Bond Debenture Portfolio   39,397    249,426    53,403    32,768 
Lord Abbett Series Fund Growth and Income Portfolio   542,276    2,450,891    367,683    490,014 
Lord Abbett Series Fund Mid Cap Stock Portfolio   61,694    265,792    41,448    97,497 
Morningstar Aggressive Growth ETF Asset Allocation Portfolio   148,976    285,766    218,529    176,770 

 

(b) Name change. See Note 2.                                

 

30

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 4. Purchases and Proceeds from Sales of Investments (continued)

  

   2024  2023

Subaccount 

 

Cost of Purchases 

 

Proceeds from

Sales

 

Cost of Purchases

 

Proceeds from

Sales

                     
Morningstar Balanced ETF Asset Allocation Portfolio  $66,825   $832,510   $159,167   $70,643 
Morningstar Growth ETF Asset Allocation Portfolio   263,147    1,393,325    337,862    616,959 
Morningstar Income and Growth ETF Asset Allocation Portfolio   11,892    118,373    17,203    140,465 
Neuberger Berman AMT Mid Cap Growth Portfolio   22,474    113,015    8,392    27,014 
PIMCO CommodityReal Return® Strategy Portfolio   420,607    695,609    754,101    199,449 
PIMCO Real Return Portfolio   36,246    43,318    35,314    35,159 
PIMCO Total Return Portfolio   35,904    240,742    47,950    177,617 
Rydex VT Inverse Government Long Bond Strategy Fund   227    2,730    122    481 
Rydex VT Nova Fund   -    13,250    9,958    1,973 
Templeton Developing Markets VIP Fund   38,478    65,401    27,299    43,780 
Templeton Foreign VIP Fund   158,013    237,906    162,158    209,982 
Templeton Growth VIP Fund   182,583    352,271    171,300    272,326 
TVST Touchstone Balanced Fund   11,283    129,582    24,365    22,708 
TVST Touchstone Bond Fund   304,586    579,937    249,240    133,187 
TVST Touchstone Common Stock Fund   1,041,196    3,453,021    1,034,364    1,349,044 
TVST Touchstone Small Company Fund   122,869    525,306    96,147    189,006 
Virtus Duff & Phelps Real Estate Securities Series   351,653    1,652,064    532,867    339,271 
Virtus KAR Capital Growth Series   214,872    495,655    150,558    119,580 
Virtus KAR Enhanced Core Equity Series   163,006    958,753    247,332    297,858 
Virtus KAR Small-Cap Growth Series   355,418    914,974    386,708    479,315 
Virtus KAR Small-Cap Value Series   713,541    2,140,511    664,269    499,555 
Virtus Newfleet Multi-Sector Intermediate Bond Series   397,534    1,114,723    356,774    293,699 
Virtus SGA International Growth Series   1,057,856    4,102,233    561,997    1,496,431 
Virtus VIT Tactical Allocation Series (b)   58,438    94,685    51,918    33,519 
Wanger Acorn   76,201    490,208    512,147    211,932 
Wanger International   283,371    1,030,143    180,019    316,421 

 

(b)Name change. See Note 2.

 

31

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 5. Related Party Transactions and Charges and Deductions

 

Related Party Transactions 

PHL Variable and its affiliate, 1851 Securities, Inc. (“1851 Securities”), provide services to the Separate Account. PHL Variable is the insurer who provides the contract benefits as well as administrative and contract maintenance services to the Separate Account. 1851 Securities, a registered broker/dealer, is the principal underwriter and distributor for the Separate Account.

 

Charges and Deductions 

PHL Variable makes deductions from the contract to compensate for the various expenses in selling, maintaining, underwriting, and issuing the contracts and providing guaranteed insurance benefits.

 

Certain charges are deducted from the contracts as a daily reduction in Unit Value. The charges are included in a separate line item entitled “Mortality and expense risk and administrative charges” in the accompanying Statements of Operations and Change in Net Assets. Other periodic charges are taken out as a transaction on a monthly basis. Those charges appear on the Statements of Operations and Change in Net Assets on line “Maintenance charges and mortality adjustments”. The contract charges are described below:

 

A.Contract Maintenance Charges

 

The Separate Account is assessed periodic Contract Maintenance Charges which are designed to compensate PHL Variable for certain costs associated with maintenance. The charges assessed to the Separate Account for Contract Maintenance Charges are outlined as follows:

 

Administration Charge – In accordance with terms of the contracts, PHL Variable makes deductions for administrative charges. These charges are typically a flat dollar amount, but could also vary by face amount of coverage. Below is a table that summarizes the guaranteed maximum monthly deduction for the various plans offered by PHL Variable:

 

Plan Guaranteed Maximum Monthly Admin Charge
Phoenix Benefit Choice VUL $7
Phoenix Edge SVUL

Policy Options A or B $0.01 per $1,000 of face amount, capped at $75, in years 1-15 

Policy Option C $0.08 per $1,000 of face amount, capped at $200, in years 1-15 

Phoenix Edge VUL None
Phoenix Executive VUL (08XVUL) $20
Phoenix Express VUL (06PEXVUL) Varies based on issue age and face amount, capped at $80
Phoenix Express VUL (V616) $.35 per $1,000 of face amount
Phoenix Joint Edge VUL $10

 

Contract Surrender Charge – In accordance with terms of the contracts, PHL Variable charges a deduction for surrender charges. Because a contract value and duration may vary, the surrender charge may also vary. Below is a table that summarizes the surrender charge schedule for the various plans offered by PHL Variable:

  

32

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 5. Related Party Transactions and Charges and Deductions

 

Plan Surrender Charge
Phoenix Benefit Choice VUL 10 year schedule for base policy, 15 year schedule for level term rider
Phoenix Edge SVUL Option A -15 year schedule – decreasing to zero by year 16
  Option B -10 year schedule – decreasing to zero by year 11
  Option C - 5 year schedule – decreasing to zero by year 6
Phoenix Edge VUL Option A -15 year schedule – decreasing to zero by year 16
  Option B -10 year schedule – decreasing to zero by year 11
  Option C - 5 year schedule – decreasing to zero by year 6
Phoenix Executive VUL (08XVUL) None
Phoenix Express VUL 7 year schedule – level for 7 years then zero starting in year 8
Phoenix Joint Edge VUL 10 year schedule

 

Cost of Insurance Charge – In accordance with terms of the contracts, PHL Variable makes monthly deductions for costs of insurance to cover PHL Variable’s anticipated mortality costs. Because a contract account value and death benefit may vary from month to month, the cost of insurance charge may also vary.

 

Monthly Mortality and Expense Risk Fees (“M&E Fees”) – The M&E Fees are typically deducted daily from contract value allocated to the variable subaccounts, however, certain products assess the M&E Fees monthly. In accordance with terms of the contracts, PHL Variable will make either monthly or daily deductions.

 

All of the above expenses are reflected as redemption of units, and are included in a separate line item entitled “Maintenance charges and mortality adjustments” in the accompanying Statements of Operations and Change in Net Assets.

 

B.Optional Rider and Benefit Charges

 

PHL may deduct other charges and fees based on the selection of Other Optional Contract Riders and Benefits. These expenses are included in a separate line item entitled “Terminations, withdrawals and annuity payments” in the accompanying Statements of Operations and Change in Net Assets. This expense is reflected as redemption of units.

 

C.Daily M&E

 

As mentioned above, the M&E is typically deducted daily from contract value allocated to the variable subaccounts. These expenses are included in separate line item “Mortality and expense risk and administrative charges” in the accompanying Statements of Operations and Change in Net Assets. This expense is reflected as a daily reduction of unit values.

 

Below is a table that summarizes the annual equivalent M&E Fees deductions for the various plans offered by PHL:

 

33

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 5. Related Party Transactions and Charges and Deductions

 

Annual M&E Factor
Plan Assessed Daily Assessed Monthly
Phoenix Benefit Choice VUL (Years 1-20) 0.500%
Phoenix Benefit Choice VUL (Years 21+) 0.300%
Phoenix Executive VUL 0.900%
Phoenix Express VUL 0.480%
Phoenix Express VUL (V616) 0.120%
Phoenix Joint Edge VUL (Years 1-20) 0.500%
Phoenix Joint Edge VUL (Years 21+) 0.300%
The Phoenix Edge SVUL 0.900%
The Phoenix Edge VUL 0.900%

 

D. Other Charges

 

PHL may deduct other charges depending on the contract terms.

 

34

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 6. Summary of Unit Transactions

 

The changes in units outstanding for the periods December 31, 2024 and 2023, were as follows:

 

2024 2023
Net Net
Units Units Increase Units Units Increase
Subaccount Issued Redeemed (Decrease) Issued Redeemed (Decrease)
               
Alger Capital Appreciation Portfolio 110 (1,058) (948)   199 (261) (62)
AMT Sustainable Equity Portfolio 62,985 (1,166,587) (1,103,602)   122,541 (375,161) (252,620)
CVT S&P MidCap 400 Index Portfolio (b) 11,822 (56,900) (45,078)   12,669 (14,417) (1,748)
DWS Equity 500 Index VIP 126,620 (379,119) (252,499)   43,947 (65,904) (21,957)
DWS Small Cap Index VIP 4,073 (19,844) (15,771)   4,953 (7,858) (2,905)
Federated Hermes Fund for U.S. Government
Securities II 62,362 (271,646) (209,284)   79,548 (472,416) (392,868)
Federated Hermes Government Money Fund II 1,381,814 (985,633) 396,181   319,790 (443,457) (123,667)
Federated Hermes High Income Bond Fund II 9,120 (47,019) (37,899)   10,421 (12,396) (1,975)
Fidelity® VIP Contrafund® Portfolio 5,759 (73,375) (67,616)   16,720 (43,263) (26,543)
Fidelity® VIP Growth Opportunities Portfolio 18,619 (432,607) (413,988)   59,493 (150,105) (90,612)
Fidelity® VIP Growth Portfolio 7,525 (55,990) (48,465)   11,734 (37,118) (25,384)
Fidelity® VIP Investment Grade Bond Portfolio 276,879 (483,738) (206,859)   160,189 (173,905) (13,716)
Franklin Income VIP Fund 47,383 (119,459) (72,076)   75,281 (102,252) (26,971)
Franklin Mutual Shares VIP Fund 44,892 (119,870) (74,978)   54,657 (98,088) (43,431)
Guggenheim VT Long Short Equity Fund 215 (3,057) (2,842)   455 (332) 123
Invesco V.I. American Franchise Fund 14,921 (240,335) (225,414)   22,673 (91,238) (68,565)
Invesco V.I. Capital Appreciation Fund 1,694 (13,637) (11,943)   1,435 (12,491) (11,056)
Invesco V.I. Core Equity Fund 2,311 (12,547) (10,236)   3,002 (21,085) (18,083)
Invesco V.I. Equity and Income Fund 7,355 (9,189) (1,834)   10,110 (32,892) (22,782)
Invesco V.I. Global Fund 39,935 (58,572) (18,637)   10,308 (10,833) (525)
Invesco V.I. Main Street Mid Cap Fund® 1,474 (23,543) (22,069)   2,441 (2,563) (122)
Invesco V.I. Main Street Small Cap Fund® 26,958 (292,326) (265,368)   49,162 (78,520) (29,358)
Lazard Retirement US Small Cap Equity Select
Portfolio 1,296 (22,877) (21,581)   2,149 (2,163) (14)
Lord Abbett Series Fund Bond Debenture Portfolio 8,778 (91,480) (82,702)   11,604 (13,014) (1,410)

 

(b) Name change. See Note 2.

 

35

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 6. Summary of Unit Transactions (continued)
               
2024 2023
Net Net
Units Units Increase Units Units Increase
Subaccount Issued Redeemed (Decrease) Issued Redeemed (Decrease)
               
Lord Abbett Series Fund Growth and Income
Portfolio 29,536 (622,379) (592,843)   57,928 (154,437) (96,509)
Lord Abbett Series Fund Mid Cap Stock Portfolio 5,297 (76,357) (71,060)   8,122 (33,600) (25,478)
Morningstar Aggressive Growth ETF Asset
Allocation Portfolio 38,103 (98,810) (60,707)   68,855 (73,499) (4,644)
Morningstar Balanced ETF Asset Allocation
Portfolio 19,351 (393,365) (374,014)   47,938 (36,708) 11,230
Morningstar Growth ETF Asset Allocation Portfolio 60,988 (511,249) (450,261)   85,023 (279,636) (194,613)
Morningstar Income and Growth ETF Asset
Allocation Portfolio 5,005 (66,321) (61,316)   6,864 (89,490) (82,626)
Neuberger Berman AMT Mid Cap Growth Portfolio 4,423 (49,022) (44,599)   4,402 (14,211) (9,809)
PIMCO CommodityReal Return® Strategy Portfolio 486,169 (864,949) (378,780)   491,044 (254,210) 236,834
PIMCO Real Return Portfolio 14,373 (23,431) (9,058)   13,044 (19,890) (6,846)
PIMCO Total Return Portfolio 13,900 (126,809) (112,909)   18,151 (99,949) (81,798)
Rydex VT Inverse Government Long Bond Strategy
Fund 345 (6,806) (6,461)   341 (1,336) (995)
Rydex VT Nova Fund - (1,303) (1,303)   1,206 (257) 949
Templeton Developing Markets VIP Fund 14,608 (40,927) (26,319)   14,098 (29,024) (14,926)
Templeton Foreign VIP Fund 31,795 (54,101) (22,306)   32,511 (44,649) (12,138)
Templeton Growth VIP Fund 65,097 (120,775) (55,678)   49,890 (133,483) (83,593)
TVST Touchstone Balanced Fund 2,525 (39,937) (37,412)   7,218 (8,072) (854)
TVST Touchstone Bond Fund 133,176 (347,676) (214,500)   104,209 (85,755) 18,454
TVST Touchstone Common Stock Fund 61,332 (660,059) (598,727)   81,128 (322,995) (241,867)
TVST Touchstone Small Company Fund 14,774 (116,513) (101,739)   22,191 (50,503) (28,312)
Virtus Duff & Phelps Real Estate Securities Series 58,358 (272,477) (214,119)   98,876 (71,673) 27,203
Virtus KAR Capital Growth Series 5,389 (38,310) (32,921)   7,594 (12,932) (5,338)
Virtus KAR Enhanced Core Equity Series 6,793 (107,898) (101,105)   11,947 (35,176) (23,229)
Virtus KAR Small-Cap Growth Series 7,222 (50,535) (43,313)   8,881 (22,131) (13,250)
Virtus KAR Small-Cap Value Series 34,742 (331,703) (296,961)   71,733 (97,503) (25,770)
Virtus Newfleet Multi-Sector Intermediate Bond
Series 91,057 (350,160) (259,103)   72,761 (102,100) (29,339)

 

36

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 6. Summary of Unit Transactions (continued)
     
2024 2023
Net Net
Units Units Increase Units Units Increase
Subaccount Issued Redeemed (Decrease) Issued Redeemed (Decrease)
               
Virtus SGA International Growth Series 529,346 (1,473,276) (943,930)   210,046 (706,030) (495,984)
Virtus VIT Tactical Allocation Series  (b) 1,074 (13,683) (12,609)   2,851 (5,397) (2,546)
Wanger Acorn 6,877 (48,522) (41,645)   57,868 (19,744) 38,124
Wanger International 95,476 (281,968) (186,492)   57,098 (97,739) (40,641)

 

(b) Name change. See Note 2.

 

37

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights

 

The Separate Account has a number of products, which have unique combinations of features and fees that are charged against the contract owner’s subaccount balance. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The information presented below identifies the range of lowest to highest expense ratios and the corresponding unit values and total returns. The summary may not reflect the minimum and maximum contract charges offered by the Separate Account as contract owners may not have selected all available and applicable contract options as discussed in Note 5.

 

A summary of units outstanding, unit values, net assets, investment income ratios, expense ratios and total return ratios for each of the five years in the period ended December 31, 2024, were as follows:

 

Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Alger Capital Appreciation Portfolio
2024 9,047 31.44 31.44 284,454 - - - 48.09 48.09
2023 9,995 21.23 21.23 212,153 - - - 43.16 43.16
2022 10,057 14.83 14.83 149,144 - - - (36.52) (36.52)
2021 15,035 23.36 23.36 351,265 - - - 19.13 19.13
2020 18,931 19.61 19.61 371,278 - - - 41.75 41.75
AMT Sustainable Equity Portfolio
2024 2,488,226 2.07 2.09 5,189,566 - - 0.12 25.45 25.90
2023 3,591,828 1.65 1.66 5,968,048 0.08 - 0.12 25.95 26.72
2022 3,844,448 1.31 1.31 5,046,934 0.12 - 0.12 (18.63) (18.63)
2021 4,141,464 1.61 1.61 6,683,584 0.18 - 0.12 23.01 23.16
2020 4,321,470 1.31 1.31 5,662,476 0.38 - 0.12 19.14 19.28
CVT S&P MidCap 400 Index Portfolio (b)
2024 114,837 4.71 4.91 562,184 1.09 - - 13.39 13.49
2023 159,915 4.15 4.33 690,292 1.25 - - 16.09 16.25
2022 161,663 3.56 3.73 600,958 0.92 - 0.12 (13.38) (13.26)
2021 178,244 4.11 4.30 764,417 0.79 - 0.12 24.26 24.41
2020 208,593 3.31 3.46 720,512 1.29 - 0.12 13.19 13.32

 

(b) Name change. See Note 2.

 

38

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
DWS Equity 500 Index VIP
2024 474,138 5.40 17.28 6,365,566 1.33 - 0.12 24.42 24.60
2023 726,637 5.38 13.87 8,376,610 1.37 - 0.12 25.70 26.09
2022 748,594 4.28 11.00 7,073,116 1.27 - 0.12 (18.40) (18.32)
2021 787,737 5.24 13.48 9,211,943 1.43 - 0.12 28.24 28.40
2020 799,107 4.09 10.50 7,293,022 1.67 - 0.12 17.95 18.10
DWS Small Cap Index VIP
2024 61,733 3.76 3.95 243,283 1.22 - 0.12 10.91 11.21
2023 77,504 3.39 3.56 274,972 1.13 - 0.12 16.49 16.72
2022 80,409 2.91 3.05 244,377 0.88 - 0.12 (20.71) (20.57)
2021 72,979 3.67 3.84 279,163 0.77 - 0.12 14.37 14.50
2020 58,922 3.21 3.35 196,642 1.15 - 0.12 19.29 19.43
Federated Hermes Fund for U.S. Government Securities II
2024 845,459 1.35 3.39 2,393,620 3.72 - 0.12 - 0.75
2023 1,054,743 1.41 3.37 2,998,940 2.61 - 0.12 3.68 4.01
2022 1,447,611 1.36 3.24 3,447,203 1.90 - 0.12 (12.43) (12.26)
2021 1,415,244 1.55 3.70 4,074,632 2.01 - 0.12 (2.16) (2.04)
2020 1,385,438 1.59 3.78 4,117,333 2.22 - 0.12 5.09 5.21
Federated Hermes Government Money Fund II
2024 2,501,265 1.10 1.14 2,863,179 4.55 - 0.12 4.59 4.76
2023 2,105,084 1.05 1.09 2,301,898 4.45 - 0.12 3.81 3.96
2022 2,228,751 0.98 1.05 2,331,344 1.03 - 0.48 - 1.94
2021 3,081,701 0.98 1.03 3,172,552 0.00 - 0.48 (0.48) -
2020 2,736,346 0.98 1.03 2,829,663 0.17 - 0.48 (0.28) 0.20
Federated Hermes High Income Bond Fund II
2024 62,144 2.67 8.48 453,328 6.27 - - 6.23 6.37
2023 100,043 2.51 7.98 690,726 5.83 - - 12.56 12.71
2022 102,018 2.23 7.08 629,982 5.55 - - (11.86) (11.83)
2021 105,414 2.53 8.03 743,152 4.80 - - 4.85 4.85
2020 104,415 2.41 7.66 702,779 5.96 - - 5.59 5.59

 

39

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Fidelity® VIP Contrafund® Portfolio
2024 247,804 5.48 22.25 4,465,612 0.09 - 0.12 33.45 33.66
2023 315,420 5.92 16.65 4,174,644 0.39 - 0.12 33.31 33.33
2022 341,963 4.44 12.49 3,348,215 0.40 - 0.12 (26.49) (26.36)
2021 344,793 6.04 16.96 4,729,495 0.05 - 0.12 27.56 27.71
2020 389,403 4.74 13.28 4,306,514 0.15 - 0.12 30.27 30.43
Fidelity® VIP Growth Opportunities Portfolio
2024 878,024 8.35 28.26 13,864,474 - - 0.12 38.57 38.73
2023 1,292,012 8.14 20.37 14,678,262 - - 0.12 45.36 45.50
2022 1,382,624 5.47 14.00 10,711,739 - - 0.48 (38.47) (38.19)
2021 1,311,781 8.89 22.65 17,189,054 - - 0.48 11.29 11.83
2020 1,445,902 7.99 20.26 16,645,988 0.01 - 0.48 67.69 68.49
Fidelity® VIP Growth Portfolio
2024 137,858 6.84 22.53 2,362,608 - - 0.12 30.15 30.40
2023 186,323 7.43 17.30 2,506,130 0.04 - 0.12 35.83 36.11
2022 211,707 5.47 12.71 2,092,478 0.52 - 0.12 (24.55) (24.52)
2021 229,936 7.25 16.84 3,094,659 - - 0.12 22.93 23.08
2020 263,388 5.90 13.68 2,940,293 0.06 - 0.12 43.58 43.75
Fidelity® VIP Investment Grade Bond Portfolio
2024 1,660,513 1.68 1.77 2,900,450 3.26 - 0.12 1.14 1.20
2023 1,867,372 1.66 1.75 3,206,969 2.59 - 0.12 6.06 6.41
2022 1,881,088 1.56 1.65 3,044,740 2.14 - 0.12 (13.33) (12.70)
2021 2,009,288 1.80 1.89 3,743,466 2.23 - 0.12 (0.84) (0.72)
2020 1,377,270 1.81 1.91 2,574,511 2.17 - 0.12 9.12 9.26
Franklin Income VIP Fund
2024 653,873 2.49 2.87 1,727,651 5.36 - 0.12 7.09 7.33
2023 725,949 2.53 2.68 1,793,654 5.20 - 0.12 8.58 8.94
2022 752,920 2.33 2.46 1,713,150 4.86 - 0.12 (5.75) (5.67)
2021 776,051 2.47 2.61 1,871,721 4.68 - 0.12 16.61 16.75
2020 815,201 2.12 2.23 1,690,609 5.80 - 0.12 0.57 0.69

 

40

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Franklin Mutual Shares VIP Fund
2024 483,874 2.41 8.39 2,068,861 1.85 - 0.12 11.06 11.42
2023 558,853 2.79 7.54 2,211,963 1.91 - 0.12 13.38 13.41
2022 602,284 2.46 6.65 2,079,490 1.86 - 0.12 (7.52) (7.38)
2021 603,213 2.66 7.18 2,294,945 2.90 - 0.12 19.02 19.17
2020 625,002 2.24 6.03 2,032,690 2.86 - 0.12 (5.16) (5.04)
Guggenheim VT Long Short Equity Fund
2024 - 2.88 2.88 - 0.23 - - 8.27 8.27
2023 2,842 2.66 2.66 7,574 0.27 - - 12.71 12.71
2022 2,719 2.36 2.36 6,426 0.47 - - (14.49) (14.49)
2021 2,811 2.76 2.76 7,761 0.66 - - 23.80 23.80
2020 2,819 2.23 2.23 6,285 0.85 - - 4.93 4.93
Invesco V.I. American Franchise Fund
2024 606,200 5.46 5.63 3,408,800 - - 0.12 34.81 35.01
2023 831,614 4.05 4.17 3,465,559 - - 0.12 40.63 40.88
2022 900,179 2.88 2.96 2,662,133 - - 0.12 (31.26) (31.16)
2021 947,742 4.19 4.30 4,069,017 - - 0.12 11.79 11.93
2020 1,065,117 3.74 3.84 4,085,969 0.07 - 0.12 42.18 42.35
Invesco V.I. Capital Appreciation Fund
2024 27,887 4.93 5.65 153,021 - - - 33.60 33.90
2023 39,831 3.69 4.22 161,352 - - - 34.82 35.16
2022 50,887 2.73 3.13 154,094 - - - (30.91) (30.89)
2021 51,095 3.95 4.53 225,955 - - - 22.28 22.28
2020 74,892 3.23 3.70 272,701 - - - 36.24 36.24
Invesco V.I. Core Equity Fund
2024 101,031 4.55 4.55 459,968 0.69 - - 25.34 25.34
2023 111,267 3.63 3.63 403,301 0.73 - - 23.47 23.47
2022 129,350 2.94 2.94 380,063 0.92 - - (20.54) (20.54)
2021 137,029 3.70 3.70 506,750 0.65 - - 27.74 27.74
2020 145,811 2.90 2.90 422,135 1.37 - - 13.85 13.85

 

41

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Invesco V.I. Equity and Income Fund
2024 107,392 3.15 3.54 370,753 1.61 - - 11.67 11.90
2023 109,226 2.82 3.17 337,345 1.71 - - 10.45 10.59
2022 132,008 2.55 2.87 371,227 1.43 - - (7.94) (7.72)
2021 137,977 2.77 3.11 421,041 1.83 - - 18.35 18.35
2020 110,867 2.34 2.63 284,427 2.31 - - 9.65 9.65
Invesco V.I. Global Fund
2024 211,116 3.42 4.01 798,198 - - - 15.54 15.98
2023 229,753 2.96 3.47 742,311 - - - 34.50 34.55
2022 230,278 2.20 2.58 554,179 - - - (31.93) (31.89)
2021 221,557 3.23 3.79 784,577 - - - 15.17 15.17
2020 207,621 2.80 3.29 636,838 0.44 - - 27.34 27.34
Invesco V.I. Main Street Mid Cap Fund®
2024 35,448 4.26 4.26 150,900 0.27 - - 17.03 17.03
2023 57,517 3.64 3.64 209,153 0.30 - - 14.47 14.47
2022 57,639 3.18 3.18 183,108 0.36 - - (14.29) (14.29)
2021 58,344 3.71 3.71 216,175 0.46 - - 23.24 23.24
2020 58,120 3.01 3.01 174,729 0.75 - - 9.25 9.25
Invesco V.I. Main Street Small Cap Fund®
2024 710,289 4.07 4.84 3,140,094 - - 0.12 12.12 12.56
2023 975,658 3.63 4.30 3,826,440 0.95 - 0.12 17.81 17.86
2022 1,005,016 3.08 3.65 3,343,574 0.25 - 0.12 (16.30) (16.09)
2021 1,059,683 3.68 4.35 4,196,389 0.18 - 0.12 22.12 22.26
2020 1,172,410 3.01 3.56 3,799,276 0.38 - 0.12 19.49 19.64
Lazard Retirement US Small Cap Equity Select Portfolio
2024 25,066 4.12 4.12 103,186 - - - 11.35 11.35
2023 46,646 3.70 3.70 172,813 - - - 9.79 9.79
2022 46,660 3.37 3.37 157,114 - - - (15.54) (15.54)
2021 47,133 3.99 3.99 187,868 0.05 - - 19.87 19.87
2020 47,125 3.32 3.32 156,686 0.19 - - 6.76 6.76

 

42

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                 
Lord Abbett Series Fund Bond Debenture Portfolio
2024 99,128 2.39 2.85 279,063 3.88 - - 6.55 6.74
2023 181,830 2.24 2.67 477,296 5.26 - - 6.67 6.80
2022 183,240 2.10 2.50 451,338 4.48 - - (12.89) (12.86)
2021 185,318 2.41 2.87 523,437 3.09 - - 3.28 3.28
2020 165,625 2.33 2.78 452,103 3.88 - - 7.30 7.30
Lord Abbett Series Fund Growth and Income Portfolio
2024 1,267,408 3.26 4.17 5,275,747 0.71 - 0.12 20.48 20.81
2023 1,860,251 3.32 3.46 6,420,230 0.96 - 0.12 13.07 13.31
2022 1,956,760 2.93 3.06 5,967,270 1.29 - 0.12 (9.57) (9.47)
2021 2,115,493 3.24 3.38 7,124,134 1.06 - 0.12 28.86 29.02
2020 2,218,327 2.52 2.62 5,790,823 1.74 - 0.12 2.57 2.70
Lord Abbett Series Fund Mid Cap Stock Portfolio
2024 112,913 3.00 3.67 410,864 0.36 - - 14.69 14.94
2023 183,973 2.61 3.20 585,033 0.45 - - 15.49 15.52
2022 209,451 2.26 2.77 577,380 0.78 - - (11.37) (11.22)
2021 234,852 2.55 3.12 729,585 0.51 - - 28.70 28.70
2020 280,423 1.98 2.42 677,768 1.12 - - 2.50 2.50
Morningstar Aggressive Growth ETF Asset Allocation Portfolio
2024 476,825 3.05 3.05 1,452,218 1.24 - - 14.66 14.66
2023 537,531 2.66 2.66 1,428,826 1.75 - - 17.18 17.18
2022 542,175 2.27 2.27 1,233,083 1.42 - - (13.36) (13.36)
2021 598,535 2.62 2.62 1,567,831 1.04 - - 18.33 18.33
2020 709,683 2.21 2.21 1,570,728 1.84 - - 9.96 9.96
Morningstar Balanced ETF Asset Allocation Portfolio
2024 416,270 2.26 2.26 941,361 1.45 - - 10.24 10.24
2023 790,284 2.05 2.05 1,622,170 2.06 - - 12.64 12.64
2022 779,054 1.82 1.82 1,417,392 1.62 - - (12.92) (12.92)
2021 885,956 2.09 2.09 1,850,278 1.44 - - 10.79 10.79
2020‡ 810,092 1.89 1.89 1,526,753 2.10 - - 9.12 9.12

 

43

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                 
Morningstar Growth ETF Asset Allocation Portfolio
2024 1,131,117 2.62 2.72 3,046,742 1.15 - 0.12 12.45 12.86
2023 1,581,377 2.33 2.41 3,790,663 1.80 - 0.12 15.31 15.35
2022 1,775,990 2.02 2.09 3,696,287 1.59 - 0.12 (13.30) (13.28)
2021 1,827,401 2.33 2.41 4,385,609 1.27 - 0.12 14.75 14.88
2020 1,802,658 2.03 2.10 3,765,761 2.08 - 0.12 9.87 10.01
Morningstar Income and Growth ETF Asset Allocation Portfolio
2024 61,202 1.77 1.84 110,036 1.47 - 0.12 7.93 8.24
2023 122,518 1.64 1.70 206,206 1.56 - 0.12 10.07 10.39
2022 205,144 1.49 1.54 309,450 1.70 - 0.12 (12.50) (12.35)
2021 212,549 1.70 1.76 367,022 1.37 - 0.12 6.34 6.47
2020‡ 234,571 1.65 1.65 381,288 2.12 - - 8.43 8.43
Neuberger Berman AMT Mid Cap Growth Portfolio
2024 78,176 2.55 2.55 199,491 - - - 23.79 23.79
2023 122,775 2.06 2.06 253,149 - - - 17.71 17.71
2022 132,584 1.73 1.75 231,747 - - 0.12 (28.86) (28.81)
2021 142,774 2.43 2.46 350,462 - - 0.12 12.59 12.72
2020 127,819 2.16 2.18 278,341 - - 0.12 39.54 39.71
PIMCO CommodityReal Return® Strategy Portfolio
2024 2,908,386 0.65 0.92 2,300,282 2.04 - 0.12 3.17 4.82
2023 3,287,165 0.83 0.88 2,530,629 15.41 - 0.12 (8.79) (8.33)
2022 3,050,331 0.91 0.96 2,554,883 20.96 - 0.12 8.33 9.09
2021 4,069,292 0.84 0.88 3,115,519 4.08 - 0.12 32.95 33.11
2020 4,466,311 0.63 0.66 2,568,665 6.06 - 0.12 1.11 1.23
PIMCO Real Return Portfolio
2024 223,164 1.59 1.86 414,095 2.53 - - 1.92 2.45
2023 232,221 1.56 1.82 423,099 2.91 - - 3.41 4.00
2022 239,067 1.50 1.76 420,628 6.80 - - (12.28) (12.00)
2021 335,496 1.71 2.00 670,322 4.79 - - 5.48 5.48
2020 64,644 1.62 1.90 122,170 1.26 - - 11.60 11.60

 

44

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
PIMCO Total Return Portfolio
2024 81,768 1.70 1.94 156,203 3.91 - 0.12 2.11 2.41
2023 194,676 1.79 1.90 363,008 3.47 - 0.12 5.29 6.15
2022 276,474 1.65 1.79 485,862 2.51 - 0.48 (14.95) (14.35)
2021 284,824 1.94 2.09 584,321 1.72 - 0.48 (1.84) (1.36)
2020 301,091 1.98 2.12 627,137 2.03 - 0.48 8.02 8.54
Rydex VT Inverse Government Long Bond Strategy Fund
2024 5,301 0.42 0.42 2,246 2.85 - - 16.67 16.67
2023 11,761 0.36 0.36 4,264 - - - 2.86 2.86
2022 12,756 0.35 0.35 4,437 - - - 45.83 45.83
2021 13,586 0.24 0.24 3,232 - - - 0.97 0.97
2020 14,067 0.24 0.24 3,315 0.29 - - (21.09) (21.09)
Rydex VT Nova Fund
2024 2,002 11.68 11.68 23,391 - - - 32.73 32.73
2023 3,305 8.80 8.80 29,085 - - - 35.18 35.18
2022 2,356 6.51 6.51 15,348 0.43 - - (30.30) (30.30)
2021 2,543 9.34 9.34 23,754 0.35 - - 42.18 42.18
2020 2,703 6.57 6.57 17,762 0.88 - - 20.03 20.03
Templeton Developing Markets VIP Fund
2024 179,117 1.24 1.70 296,940 3.95 - 0.12 7.38 7.83
2023 205,436 1.49 1.58 314,486 2.10 - 0.12 12.03 12.86
2022 220,362 1.33 1.40 299,883 2.92 - 0.12 (22.22) (21.76)
2021 271,109 1.70 1.80 444,446 0.93 - 0.12 (5.85) (5.74)
2020 310,729 1.81 1.91 545,925 3.93 - 0.12 17.04 17.18
Templeton Foreign VIP Fund
2024 275,204 1.33 5.28 935,252 2.46 - 0.12 (1.04) (0.66)
2023 297,509 1.93 5.33 1,043,614 3.22 - 0.12 20.59 20.63
2022 309,647 1.60 4.42 934,930 3.12 - 0.12 (7.53) (7.51)
2021 299,873 1.73 4.78 1,007,010 1.90 - 0.12 4.03 4.16
2020 308,926 1.67 4.59 1,034,272 3.38 - 0.12 (1.28) (1.16)

 

45

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Templeton Growth VIP Fund
2024 623,346 1.74 6.17 1,800,728 0.96 - 0.12 5.19 5.64
2023 679,024 2.12 5.85 1,890,037 3.33 - 0.12 20.87 21.14
2022 762,617 1.75 4.84 1,709,779 0.16 - 0.12 (11.62) (11.52)
2021 740,552 1.98 5.47 1,943,781 1.09 - 0.12 4.75 4.87
2020 690,962 1.89 5.21 1,793,056 2.96 - 0.12 5.67 5.80
TVST Touchstone Balanced Fund
2024 48,476 3.48 3.66 170,075 1.50 - - 13.59 13.73
2023 85,887 3.06 3.22 265,109 1.42 - - 18.38 18.60
2022 86,741 2.58 2.72 225,758 0.49 - - (15.96) (15.79)
2021 87,769 3.07 3.23 271,817 0.26 - - 17.07 17.07
2020 69,592 2.62 2.76 184,022 1.29 - - 19.16 19.16
TVST Touchstone Bond Fund
2024 965,498 1.64 1.69 1,603,334 4.71 - - 1.84 2.42
2023 1,179,998 1.57 1.65 1,918,680 4.84 - 0.12 5.77 6.08
2022 1,161,544 1.48 1.56 1,779,693 2.05 - 0.12 (13.95) (13.81)
2021 1,177,412 1.72 1.81 2,094,463 2.70 - 0.12 (1.33) (1.21)
2020 948,107 1.75 1.83 1,705,457 1.73 - 0.12 9.58 9.71
TVST Touchstone Common Stock Fund
2024 1,709,032 5.51 5.87 9,613,661 0.56 - - 21.28 21.37
2023 2,307,759 4.36 4.84 10,675,027 0.43 - 0.12 26.38 26.70
2022 2,549,626 3.45 3.82 9,305,623 0.40 - 0.12 (17.67) (17.66)
2021 2,790,369 4.19 4.64 12,361,436 0.54 - 0.12 27.70 27.85
2020 3,045,726 3.28 3.63 10,553,277 0.62 - 0.12 23.53 23.68
TVST Touchstone Small Company Fund
2024 320,393 4.64 5.14 1,527,954 0.38 - - 13.59 13.73
2023 422,133 3.91 4.52 1,766,605 0.23 - 0.12 16.37 16.49
2022 450,445 3.36 3.88 1,615,021 0.03 - 0.12 (14.50) (14.35)
2021 481,146 3.93 4.53 2,014,324 0.07 - 0.12 24.03 24.18
2020 554,053 3.17 3.65 1,868,392 0.17 - 0.12 18.55 18.70

 

46

 

 

PHLVIC Variable Universal Life Account 

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                 
Virtus Duff & Phelps Real Estate Securities Series
2024 759,811 3.05 15.61 4,599,403 1.67 - 0.12 10.70 10.95
2023 973,930 3.83 14.07 5,471,411 2.20 - 0.12 11.01 11.05
2022 946,727 3.45 12.67 4,896,393 0.96 - 0.12 (26.28) (26.12)
2021 1,045,013 4.68 17.15 7,222,790 0.69 - 0.12 46.24 46.41
2020 1,104,673 3.20 11.71 5,449,632 1.20 - 0.12 (1.67) (1.55)
Virtus KAR Capital Growth Series
2024 75,902 4.93 14.27 1,067,754 - - - 26.12 26.41
2023 108,823 3.90 11.31 1,208,818 - - - 34.48 34.64
2022 114,161 2.90 8.40 935,930 - - - (36.12) (36.07)
2021 121,559 4.54 13.14 1,564,501 - - - 12.14 12.14
2020 123,048 4.04 11.72 1,413,830 - - - 50.23 50.23
Virtus KAR Enhanced Core Equity Series
2024 362,474 3.02 9.73 3,363,934 2.73 - 0.12 9.42 9.57
2023 463,579 3.48 8.88 3,909,324 3.03 - 0.12 1.46 1.60
2022 486,808 3.43 8.74 4,059,718 2.45 - 0.12 (2.35) (2.28)
2021 536,148 3.51 8.95 4,551,452 2.27 - 0.12 17.25 17.39
2020 564,622 3.00 7.63 4,080,496 1.73 - 0.12 14.77 14.91
Virtus KAR Small-Cap Growth Series
2024 98,851 5.60 28.46 2,272,271 - - 0.12 9.59 9.86
2023 142,163 8.34 25.94 2,798,825 - - 0.12 19.48 19.70
2022 155,413 6.98 21.67 2,583,397 - - 0.12 (30.34) (30.32)
2021 167,581 10.02 31.10 4,094,241 - - 0.12 4.86 4.98
2020 176,509 9.56 29.62 4,119,335 - - 0.12 44.47 44.64
Virtus KAR Small-Cap Value Series
2024 910,249 3.43 12.67 6,193,790 0.50 - 0.12 9.69 10.23
2023 1,207,210 3.92 11.52 7,523,686 0.55 - 0.12 18.79 19.01
2022 1,232,980 3.30 9.68 6,455,398 0.20 - 0.12 (24.14) (24.14)
2021 1,232,865 4.35 12.76 8,791,116 0.12 - 0.12 19.58 19.72
2020 1,337,920 3.64 10.66 7,869,468 1.11 - 0.12 29.49 29.65

 

47

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                 
Virtus Newfleet Multi-Sector Intermediate Bond Series
2024 951,346 2.25 6.63 2,922,067 4.95 - 0.12 5.53 5.91
2023 1,210,450 2.27 6.26 3,606,296 4.74 - 0.12 8.61 8.68
2022 1,239,789 2.09 5.76 3,415,646 3.34 - 0.12 (9.58) (9.52)
2021 1,292,298 2.31 6.37 3,958,782 2.91 - 0.12 0.95 1.07
2020 1,177,214 2.29 6.30 3,682,639 3.39 - 0.12 6.41 6.53
Virtus SGA International Growth Series
2024 4,703,994 1.39 6.71 11,270,431 0.22 - 0.12 (5.81) (5.44)
2023 5,647,924 2.41 7.11 15,113,228 0.10 - 0.12 17.56 18.11
2022 6,143,908 2.05 6.02 13,681,002 - - 0.12 (18.65) (18.65)
2021 5,970,783 2.52 7.40 16,736,448 - - 0.12 8.19 8.32
2020 5,920,933 2.33 6.83 15,427,641 - - 0.12 23.49 23.64
Virtus VIT Tactical Allocation Series (b)
2024 62,704 2.92 8.65 465,241 1.87 - 0.12 13.67 14.06
2023 75,313 2.97 7.60 487,057 1.15 - 0.12 21.72 22.19
2022 77,859 2.44 6.22 412,932 0.25 - 0.12 (30.58) (30.48)
2021 79,958 3.51 8.96 612,127 0.40 - 0.12 7.44 7.57
2020 106,924 3.27 8.33 791,495 0.69 - 0.12 33.80 33.96
Wanger Acorn
2024 148,189 3.79 14.32 1,850,389 - - 0.12 14.00 14.21
2023 189,834 4.07 12.54 2,002,969 - - 0.12 21.49 21.75
2022 151,710 3.35 10.30 1,373,787 - - 0.12 (33.46) (33.40)
2021 156,468 5.03 15.48 2,116,109 0.75 - 0.12 8.77 8.90
2020 165,111 4.63 14.22 2,051,726 - - 0.12 24.08 24.23

 

(b) Name change. See Note 2.

 

48

 

 

PHLVIC Variable Universal Life Account

Notes to Financial Statements (continued)

 

Note 7. Financial Highlights (continued)
 
Subaccount Units Unit
Values
Lowest
($) (4)		 Unit
Values
Highest
($) (4)		 Net
Assets ($)		 Investment
Income
Ratios
(%) (1)		 Expense
Ratios
Lowest
(%) (2)		 Expense
Ratios
Highest
(%) (2)		 Total
Returns
Lowest
(%) (3)(4)		 Total
Returns
Highest
(%) (3)(4)
                   
Wanger International
2024 869,216 1.65 10.51 2,978,195 1.40 - 0.12 (8.44) (7.94)
2023 1,055,707 3.20 11.46 4,040,905 0.32 - 0.12 16.79 17.06
2022 1,096,348 2.74 9.79 3,591,886 0.91 - 0.12 (33.90) (33.82)
2021 1,039,276 4.14 14.81 5,349,722 0.55 - 0.12 18.67 18.81
2020 1,080,284 3.49 12.46 4,654,456 1.99 - 0.12 14.23 14.36

 

(1) The investment income ratios represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccount invests.

 

(2) The expense ratios represent the annualized contract expenses of the Separate Account for each period indicated. The ratios include only those expenses that result in a direct reduction of unit values. Charges made directly to contract owner contracts through the redemption of units and expenses of the Fund have been excluded.

 

(3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. The total return is calculated for the period indicated or from the inception date through the end of the reporting period.

 

(4) Unit value information is calculated on a daily basis regardless of whether or not the subaccount has contract holders.

 

Note 8. Subsequent Events

 

The Separate Account has performed an evaluation of subsequent events through the date the financial statements were issued and has determined that no items require recognition or disclosure.

 

49

 

 

Report of Independent Registered Public Accounting Firm

 

To Those Charged with Governance of PHL Variable Insurance Company

and Contract Owners of PHLVIC Variable Universal Life Account:

 

Opinion on the Financial Statements

 

We have audited the accompanying statements of net assets of the subaccounts listed in the Appendix that comprise PHLVIC Variable Universal Life Account (the Separate Account) as of December 31, 2024, the related statements of operations and changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights in Note 7 for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each subaccount as of December 31, 2024, the results of their operations and changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

 

Basis for Opinion

 

These financial statements and financial highlights are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of December 31, 2024, by correspondence with the transfer agents of the underlying mutual funds. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ KPMG LLP

 

We have served as the auditor of one or more PHL Variable Insurance Company's separate accounts since 2015.

 

Boston, Massachusetts

April 17, 2025

 

50

 

 

Appendix

 

PHLVIC Variable Universal Life Account

 

Alger Capital Appreciation Portfolio 

AMT Sustainable Equity Portfolio 

CVT S&P MidCap 400 Index Portfolio (1) 

DWS Equity 500 Index VIP 

DWS Small Cap Index VIP 

Federated Hermes Fund for U.S. Government Securities II 

Federated Hermes Government Money Fund II 

Federated Hermes High Income Bond Fund II 

Fidelity® VIP Contrafund® Portfolio 

Fidelity® VIP Growth Opportunities Portfolio 

Fidelity® VIP Growth Portfolio 

Fidelity® VIP Investment Grade Bond Portfolio 

Franklin Income VIP Fund 

Franklin Mutual Shares VIP Fund 

Guggenheim VT Long Short Equity Fund 

Invesco V.I. American Franchise Fund 

Invesco V.I. Capital Appreciation Fund 

Invesco V.I. Core Equity Fund 

Invesco V.I. Equity and Income Fund 

Invesco V.I. Global Fund 

Invesco V.I. Main Street Mid Cap Fund® 

Invesco V.I. Main Street Small Cap Fund® 

Lazard Retirement US Small Cap Equity Select Portfolio 

Lord Abbett Series Fund Bond Debenture Portfolio 

Lord Abbett Series Fund Growth and Income Portfolio 

Lord Abbett Series Fund Mid Cap Stock Portfolio 

Morningstar Aggressive Growth ETF Asset Allocation Portfolio 

Morningstar Balanced ETF Asset Allocation Portfolio 

Morningstar Growth ETF Asset Allocation Portfolio 

Morningstar Income and Growth ETF Asset Allocation Portfolio 

Neuberger Berman AMT Mid Cap Growth Portfolio 

PIMCO CommodityReal Return® Strategy Portfolio 

PIMCO Real Return Portfolio 

PIMCO Total Return Portfolio 

Rydex VT Inverse Government Long Bond Strategy Fund 

Rydex VT Nova Fund 

Templeton Developing Markets VIP Fund 

Templeton Foreign VIP Fund 

Templeton Growth VIP Fund 

TVST Touchstone Balanced Fund 

TVST Touchstone Bond Fund 

TVST Touchstone Common Stock Fund 

TVST Touchstone Small Company Fund 

Virtus Duff & Phelps Real Estate Securities Series 

Virtus KAR Capital Growth Series

 

51

 

 

Virtus KAR Enhanced Core Equity Series 

Virtus KAR Small-Cap Growth Series 

Virtus KAR Small-Cap Value Series 

Virtus Newfleet Multi-Sector Intermediate Bond Series 

Virtus SGA International Growth Series 

Virtus VIT Tactical Allocation Series (1) 

Wanger Acorn 

Wanger International

 

(1) See Note 2 to the financial statements for the former name of the subaccount.

 

52