PRUDENTIAL FINANCIAL INCPRU
PRUDENTIAL FINANCIAL INC Fair Value Disclosure
FAIR VALUE OF ASSETS AND LIABILITIES
Fair Value Measurement—Fair value represents 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. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:
Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short-term investments, equity securities and derivative contracts that trade on an active exchange market.
Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not trade in active markets because they are not publicly available), certain commercial mortgage loans, short-term investments, certain cash equivalents (primarily commercial paper), and certain OTC derivatives.
Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured OTC derivative contracts, certain consolidated real estate funds for which the Company is the general partner, contracts or contract features pertaining to living benefit features (market risk benefits) of the Company’s variable annuity contracts and embedded derivatives associated with the index-linked features of certain universal life and annuity products.
Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 0 | $ | 22,179 | $ | 0 | $ | $ | 22,179 | ||||||||||||||||||||
| Obligations of U.S. states and their political subdivisions | 0 | 5,460 | 5 | 5,465 | |||||||||||||||||||||||||
| Foreign government securities | 0 | 50,609 | 5 | 50,614 | |||||||||||||||||||||||||
| U.S. corporate public securities | 0 | 107,718 | 63 | 107,781 | |||||||||||||||||||||||||
U.S. corporate private securities(2) | 0 | 42,007 | 5,094 | 47,101 | |||||||||||||||||||||||||
| Foreign corporate public securities | 0 | 23,661 | 42 | 23,703 | |||||||||||||||||||||||||
| Foreign corporate private securities | 0 | 38,425 | 1,734 | 40,159 | |||||||||||||||||||||||||
Asset-backed securities(3) | 0 | 15,227 | 4,102 | 19,329 | |||||||||||||||||||||||||
| Commercial mortgage-backed securities | 0 | 8,890 | 853 | 9,743 | |||||||||||||||||||||||||
| Residential mortgage-backed securities | 0 | 5,281 | 100 | 5,381 | |||||||||||||||||||||||||
| Subtotal | 0 | 319,457 | 11,998 | 331,455 | |||||||||||||||||||||||||
| Assets supporting experience-rated contractholder liabilities: | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | 0 | 245 | 0 | 245 | |||||||||||||||||||||||||
Foreign government securities | 0 | 596 | 0 | 596 | |||||||||||||||||||||||||
| Corporate securities | 0 | 55 | 0 | 55 | |||||||||||||||||||||||||
Equity securities | 2,225 | 1,721 | 0 | 3,946 | |||||||||||||||||||||||||
| Subtotal | 2,225 | 2,617 | 0 | 4,842 | |||||||||||||||||||||||||
| Market risk benefit assets | 0 | 0 | 2,330 | 2,330 | |||||||||||||||||||||||||
| Fixed maturities, trading | 0 | 12,556 | 2,313 | 14,869 | |||||||||||||||||||||||||
Equity securities | 8,052 | 2,294 | 626 | 10,972 | |||||||||||||||||||||||||
| Commercial mortgage and other loans | 0 | 793 | 263 | 1,056 | |||||||||||||||||||||||||
Other invested assets(4) | 301 | 25,816 | 1,088 | (24,445) | 2,760 | ||||||||||||||||||||||||
| Short-term investments | 116 | 5,664 | 1 | 5,781 | |||||||||||||||||||||||||
| Cash equivalents | 1,466 | 11,372 | 0 | 12,838 | |||||||||||||||||||||||||
Reinsurance recoverables and deposit receivables | 0 | 206 | 367 | 573 | |||||||||||||||||||||||||
Separate account assets(5)(6) | 9,419 | 159,115 | 211 | 168,745 | |||||||||||||||||||||||||
| Total assets | $ | 21,579 | $ | 539,890 | $ | 19,197 | $ | (24,445) | $ | 556,221 | |||||||||||||||||||
| Market risk benefit liabilities | $ | 0 | $ | 0 | $ | 4,623 | $ | $ | 4,623 | ||||||||||||||||||||
| Policyholders’ account balances | 0 | 0 | 18,799 | 18,799 | |||||||||||||||||||||||||
Reinsurance and funds withheld payables | 0 | 174 | 0 | 174 | |||||||||||||||||||||||||
| Other liabilities | 280 | 38,877 | 0 | (32,942) | 6,215 | ||||||||||||||||||||||||
| Notes issued by consolidated VIEs | 0 | 0 | 767 | 767 | |||||||||||||||||||||||||
| Total liabilities | $ | 280 | $ | 39,051 | $ | 24,189 | $ | (32,942) | $ | 30,578 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 0 | $ | 20,348 | $ | 0 | $ | $ | 20,348 | ||||||||||||||||||||
| Obligations of U.S. states and their political subdivisions | 0 | 6,098 | 6 | 6,104 | |||||||||||||||||||||||||
| Foreign government securities | 0 | 57,472 | 7 | 57,479 | |||||||||||||||||||||||||
| U.S. corporate public securities | 0 | 98,442 | 66 | 98,508 | |||||||||||||||||||||||||
U.S. corporate private securities(2) | 0 | 39,848 | 3,941 | 43,789 | |||||||||||||||||||||||||
| Foreign corporate public securities | 0 | 21,946 | 36 | 21,982 | |||||||||||||||||||||||||
| Foreign corporate private securities | 0 | 32,675 | 1,788 | 34,463 | |||||||||||||||||||||||||
Asset-backed securities(3) | 0 | 15,654 | 1,480 | 17,134 | |||||||||||||||||||||||||
| Commercial mortgage-backed securities | 0 | 8,420 | 853 | 9,273 | |||||||||||||||||||||||||
| Residential mortgage-backed securities | 0 | 2,490 | 0 | 2,490 | |||||||||||||||||||||||||
| Subtotal | 0 | 303,393 | 8,177 | 311,570 | |||||||||||||||||||||||||
| Assets supporting experience-rated contractholder liabilities: | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | 0 | 220 | 0 | 220 | |||||||||||||||||||||||||
Foreign government securities | 0 | 539 | 0 | 539 | |||||||||||||||||||||||||
| Corporate securities | 0 | 67 | 0 | 67 | |||||||||||||||||||||||||
| Equity securities | 1,522 | 1,359 | 0 | 2,881 | |||||||||||||||||||||||||
| Subtotal | 1,522 | 2,185 | 0 | 3,707 | |||||||||||||||||||||||||
| Market risk benefit assets | 0 | 0 | 2,331 | 2,331 | |||||||||||||||||||||||||
| Fixed maturities, trading | 0 | 10,544 | 1,986 | 12,530 | |||||||||||||||||||||||||
Equity securities | 7,154 | 1,745 | 518 | 9,417 | |||||||||||||||||||||||||
| Commercial mortgage and other loans | 0 | 469 | 233 | 702 | |||||||||||||||||||||||||
Other invested assets(4) | 10 | 21,683 | 953 | (20,093) | 2,553 | ||||||||||||||||||||||||
| Short-term investments | 1,896 | 6,238 | 461 | 8,595 | |||||||||||||||||||||||||
| Cash equivalents | 326 | 10,365 | 0 | 10,691 | |||||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | 0 | 236 | 613 | 849 | |||||||||||||||||||||||||
Separate account assets(5)(6) | 8,441 | 157,999 | 232 | 166,672 | |||||||||||||||||||||||||
| Total assets | $ | 19,349 | $ | 514,857 | $ | 15,504 | $ | (20,093) | $ | 529,617 | |||||||||||||||||||
| Market risk benefit liabilities | $ | 0 | $ | 0 | $ | 4,455 | $ | $ | 4,455 | ||||||||||||||||||||
| Policyholders’ account balances | 0 | 0 | 12,746 | 12,746 | |||||||||||||||||||||||||
Reinsurance and funds withheld payables | 0 | (118) | 0 | (118) | |||||||||||||||||||||||||
Other liabilities | 28 | 32,863 | 1 | (28,141) | 4,751 | ||||||||||||||||||||||||
| Notes issued by consolidated VIEs | 0 | 0 | 60 | 60 | |||||||||||||||||||||||||
| Total liabilities | $ | 28 | $ | 32,745 | $ | 17,262 | $ | (28,141) | $ | 21,894 | |||||||||||||||||||
__________
(1)“Netting” amounts represent cash collateral of $(8,496) million and $(8,049) million as of December 31, 2025 and 2024, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.
(2)Excludes notes with fair value of $15,744 million (carrying amount of $15,744 million) and $14,748 million (carrying amount of $14,748 million) as of December 31, 2025 and 2024, respectively, which have been offset with the associated debt under a netting agreement.
(3)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.
(4)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of December 31, 2025 and 2024, the fair value of such investments was $5,526 million and $5,021 million, respectively.
(5)Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of December 31, 2025 and 2024, the fair value of such investments was $27,506 million and $26,700 million, respectively.
(6)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position.
The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.
Fixed Maturity Securities—The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience with various vendors. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Typical inputs used by these pricing services include but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, and/or estimated cash flow, prepayment speeds and default rates. If the pricing information received from third-party pricing services is deemed not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service or classify the securities as Level 3. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.
Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing services is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may override the information with an internally-developed valuation. As of December 31, 2025 and 2024, overrides on a net basis were not material. Pricing service overrides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.
The Company conducts several specific price monitoring activities. Daily analyses identify price changes over predetermined thresholds defined at the financial instrument level. Various pricing integrity reports are reviewed on a daily and monthly basis to determine if pricing is reflective of market activity or if it would warrant any adjustments. Other procedures performed include, but are not limited to, reviews of third-party pricing services methodologies, reviews of pricing trends and back testing.
The fair values of private fixed maturities, which are originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and the reduced liquidity associated with private placements. Internal adjustments are made to reflect variation in observed sector spreads. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including, but not limited to observed prices and spreads for similar publicly-traded issues, they have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the price of a security, a Level 3 classification is made.
Assets Supporting Experience-Rated Contractholder Liabilities—Assets supporting experience-rated contractholder liabilities consist primarily of fixed maturity securities, equity securities and derivatives whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and below under “Equity Securities” and “Derivative Instruments.”
Equity Securities—Equity securities consist principally of investments in common and preferred stock of publicly-traded companies, perpetual preferred stock, privately-traded securities, as well as mutual fund shares. The fair values of most publicly-traded equity securities are based on quoted prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets
because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.
Commercial Mortgage and Other Loans—The fair value of loans held and accounted for using the fair value option is determined utilizing pricing indicators from the whole loan market, where investors are committed to purchase these loans at a predetermined price, which is considered the principal exit market for these loans. The Company evaluates the valuation inputs used for these assets, including the existence of predetermined exit prices, the terms of the loans, prevailing interest rates and credit risk, and deems the primary pricing inputs are Level 2 inputs in the fair value hierarchy.
Other Invested Assets—Other invested assets primarily include investments in LPs/LLCs, derivatives and certain limited partnerships which are consolidated because the Company is either deemed to exercise control or considered the primary beneficiary of a variable interest entity. These entities are primarily investment companies and follow specialized industry accounting whereby their assets are carried at fair value. The investments held by these entities include various feeder fund investments in underlying master funds (whose underlying holdings generally include public fixed maturities, equity securities and mutual funds), as well as wholly-owned real estate held within other investment funds. For the unconsolidated fund investments, the fair value is primarily determined by the fund managers and is measured at NAV as a practical expedient.
Reinsurance Recoverables and Deposit Receivables—Reinsurance recoverables and deposit receivables primarily include (1) an embedded derivative on deposit receivables where the Company has ceded fixed indexed annuities; and (2) embedded derivatives associated with receivables from modified coinsurance arrangements where the Company is the reinsurer, and net receivables from modified coinsurance arrangements where the Company is the cedant, and generally reflect the fair value of the invested assets retained by the cedant.
Other Assets—Other assets reflected in Level 3 includes the fair value of strategic investments held and accounted for using the fair value option.
Derivative Instruments—Derivatives are recorded at fair value either as assets, within “Other invested assets” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, commodity prices, credit spreads, market volatility, expected returns, NPR, liquidity and other factors. For derivative positions included within Level 3 of the fair value hierarchy, liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity and other specific attributes of the underlying derivative position.
The Company’s exchange-traded futures and options include Treasury futures, Eurodollar futures, commodity futures, Eurodollar options and commodity options. Exchange-traded futures and options are valued using quoted prices in active markets and are classified within Level 1 in the fair value hierarchy.
The majority of the Company’s derivative positions are traded in the OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market inputs from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross-currency swaps, currency forward contracts, commodity forward contracts, credit default swaps, loan commitments held for sale and to be announced (“TBA”) forward contracts on highly rated mortgage-backed securities issued by U.S. government sponsored entities are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility and other factors.
The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including SOFR, obtained from external market data providers, third-party pricing vendors and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.
The majority of the Company’s derivative agreements are with highly rated major international financial institutions. To reflect the market’s perception of its own and the counterparty’s NPR, the Company incorporates additional spreads over SOFR
into the discount rate used in determining the fair value of OTC derivative liabilities after netting of collateral. Rates used to discount expected cash flows to value OTC derivative assets reflect the terms of the Credit Support Annex (“CSA”).
Derivatives classified as Level 3 include look-back equity options and other structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values.
Cash Equivalents and Short-Term Investments—Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in this category are generally fair valued based on market observable inputs and these investments have primarily been classified within Level 2.
Separate Account Assets—Separate account assets include mutual funds, fixed maturity securities, treasuries, equity securities, real estate and commercial mortgage loans for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities,” “Equity Securities” and “Commercial Mortgage and Other Loans.”
Market Risk Benefits—Market risk benefit liabilities (or assets) represent contracts or contract features that provide protection to the contractholder and expose the insurance entity to other than nominal capital market risk, primarily related to deferred annuities with guaranteed minimum benefits in the Retirement Strategies segment including GMDB, GMIB, GMAB, GMWB and GMIWB. The benefits are bundled together and accounted for as single compound market risk benefits using a fair value measurement framework.
The fair value of these market risk benefits is calculated as the present value of expected future benefit payments to contract holders less the present value of expected future rider fees attributable to the market risk benefits. The fair value of these benefit features is based on assumptions a market participant would use in valuing market risk benefits. This methodology could result in either a liability or asset balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally-developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management’s judgment.
The significant inputs to the valuation models for these market risk benefits include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the valuations, the assets and liabilities included in market risk benefits have been reflected within Level 3 in the fair value hierarchy.
Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the SOFR swap curve adjusted for an additional spread relative to SOFR to reflect the Company’s market-perceived NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with the Company issued funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt.
Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon Company emerging experience and industry studies, future expectations and other data, including any observable market data. These assumptions are generally updated annually unless a material change that the Company feels is indicative of a long-term trend is observed in an interim period.
Policyholders’ Account Balances—The liability for policyholders’ account balances is related to certain embedded derivative instruments associated with certain universal life and annuity products that provide policyholders with index-linked interest credited over contract specified term periods. The fair values of these liabilities are determined using discounted cash
flow models which include capital market assumptions such as interest rates and equity index volatility assumptions, the Company’s market-perceived NPR and actuarially determined assumptions for mortality, lapses and projected hedge costs.
As there is no observable active market for these liabilities, the fair value is determined as the present value of account balances paid to policyholders in excess of contractually guaranteed minimums using option pricing techniques for index term periods that contain deposits as of the valuation date, and the expected option cost for future index term periods, where the terms of index crediting rates have not yet been declared by the Company. Premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows are also incorporated in the fair value of these liabilities. Since the valuation of these liabilities require the use of management’s judgement to determine these risk premiums and the use of unobservable inputs, these liabilities are reflected within Level 3 in the fair value hierarchy.
Capital market inputs, including interest rates and equity market volatility, and actual policyholders’ account values are updated each quarter. Actuarial assumptions are reviewed at least annually and updated based upon emerging experience, future expectations and other data, including any observable market data. Aside from these annual updates, assumptions are generally updated only if a material change is observed in an interim period that the Company believes is indicative of a long-term trend.
Reinsurance and Funds Withheld Payables—Reinsurance and funds withheld payables primarily includes an embedded derivative associated with certain funds withheld reinsurance arrangements that are described in Note 15 which represents a total return swap associated with the assets supporting the liability to the reinsurer. The fair value is determined based on the valuation of the underlying funds withheld assets identified to support the payable due to the applicable reinsurance counterparties.
Other Liabilities—Other liabilities include certain derivative instruments. The fair values of derivative instruments are determined consistent with those described above under “Derivative Instruments.”
Notes issued by Consolidated VIEs—These notes are based on the fair values of corresponding bank loan collateral. Since the notes are valued based on reference collateral, they are classified as Level 3. See Note 4 and “Fair Value Option” below for additional information.
Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information regarding significant internally-priced Level 3 assets and liabilities:
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Fair Value | Valuation Techniques | Unobservable Inputs | Minimum | Maximum | Weighted Average | Impact of Increase in Input on Fair Value(1) | |||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Corporate securities(2)(3) | $ | 7,702 | Discounted cash flow | Discount rate | 1.10% | 25.50% | 8.47% | Decrease | |||||||||||||||||||||||||||||||||
| Market comparables | EBITDA multiple(4) | 5.5X | 8.5X | 7.5X | Increase | ||||||||||||||||||||||||||||||||||||
| Liquidation | Liquidation value | 12.01% | 39.00% | 30.18% | Increase | ||||||||||||||||||||||||||||||||||||
Asset backed securities | $ | 1,767 | Discounted cash flow | Discount rate | 2.10% | 10.05% | 6.10% | Decrease | |||||||||||||||||||||||||||||||||
| Liquidity premium | 1.50% | 2.60% | 1.89% | Decrease | |||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | $ | 853 | Discounted cash flow | Liquidity premium | 0.90% | 0.90% | 0.90% | Decrease | |||||||||||||||||||||||||||||||||
Market risk benefit assets(6) | $ | 2,330 | Discounted cash flow | Lapse rate(8) | 1% | 20% | Increase | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.38% | 1.61% | Increase | ||||||||||||||||||||||||||||||||||||||
Utilization rate(10) | 37% | 94% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Withdrawal rate | See table footnote (11) below. | ||||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 16% | Increase | ||||||||||||||||||||||||||||||||||||||
| Equity volatility curve | 15% | 25% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | 214 | Discounted cash flow(5) | Discount rate(5) | 40% | 40% | Decrease | ||||||||||||||||||||||||||||||||||
| Market comparables | EBITDA multiple(4) | 7.0X | 7.0X | 7.0X | Increase | ||||||||||||||||||||||||||||||||||||
| Net Asset Value | Share price | $3 | $1,809 | $778 | Increase | ||||||||||||||||||||||||||||||||||||
| Commercial mortgage and other loans | $ | 263 | Discounted cash flow | Spread | 2.15% | 3.10% | 2.63% | Decrease | |||||||||||||||||||||||||||||||||
Reinsurance recoverables and deposit receivables | $ | 367 | Discounted cash flow | Lapse rate(8) | 1% | 50% | Increase | ||||||||||||||||||||||||||||||||||
| Spread over SOFR(9) | 0.38% | 1.61% | Increase | ||||||||||||||||||||||||||||||||||||||
Option Budget(13) | 0% | 6% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
Market risk benefit liabilities(6) | $ | 4,623 | Discounted cash flow | Lapse rate(8) | 1% | 20% | Decrease | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.38% | 1.61% | Decrease | ||||||||||||||||||||||||||||||||||||||
Utilization rate(10) | 37% | 94% | Increase | ||||||||||||||||||||||||||||||||||||||
| Withdrawal rate | See table footnote (11) below. | ||||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 16% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Equity volatility curve | 15% | 25% | Increase | ||||||||||||||||||||||||||||||||||||||
Policyholders’ account balances(7) | $ | 18,716 | Discounted cash flow | Lapse rate(8) | 0% | 80% | Decrease | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.38% | 1.61% | Decrease | ||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 23% | Decrease | ||||||||||||||||||||||||||||||||||||||
Option Budget(13) | (2)% | 9% | Increase | ||||||||||||||||||||||||||||||||||||||
| Notes issued by consolidated VIEs | $ | 382 | Liquidation | Liquidation value | 100.00% | 100.00% | 100.00% | Increase | |||||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Fair Value | Valuation Techniques | Unobservable Inputs | Minimum | Maximum | Weighted Average | Impact of Increase in Input on Fair Value(1) | |||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Corporate securities(2)(3) | $ | 6,763 | Discounted cash flow | Discount rate | 0.95% | 20.00% | 10.36% | Decrease | |||||||||||||||||||||||||||||||||
| Market comparables | EBITDA multiple(4) | 3.0X | 8.8X | 7.6X | Increase | ||||||||||||||||||||||||||||||||||||
| Liquidation | Liquidation value | 75.00% | 75.00% | 75.00% | Increase | ||||||||||||||||||||||||||||||||||||
| Asset backed securities | $ | 529 | Discounted cash flow | Discount rate | 2.30% | 10.70% | 6.08% | Decrease | |||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | $ | 853 | Discounted cash flow | Liquidity premium | 1.00% | 1.00% | 1.00% | Decrease | |||||||||||||||||||||||||||||||||
Market risk benefit assets(6) | $ | 2,331 | Discounted cash flow | Lapse rate(8) | 1% | 20% | Increase | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.29% | 1.71% | Increase | ||||||||||||||||||||||||||||||||||||||
Utilization rate(10) | 37% | 94% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Withdrawal rate | See table footnote (11) below. | ||||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 16% | Increase | ||||||||||||||||||||||||||||||||||||||
| Equity volatility curve | 16% | 25% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | 209 | Discounted cash flow | Discount rate(5) | 0.16% | 40% | Decrease | ||||||||||||||||||||||||||||||||||
| Market comparables | EBITDA multiple(4) | 5.5X | 12.2X | 6.0X | Increase | ||||||||||||||||||||||||||||||||||||
| Net Asset Value | Share price | $3 | $1,810 | $779 | Increase | ||||||||||||||||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | $ | 613 | Discounted cash flow | Lapse rate(8) | 1% | 50% | Increase | ||||||||||||||||||||||||||||||||||
| Spread over SOFR(9) | 0.29% | 1.71% | Increase | ||||||||||||||||||||||||||||||||||||||
| Option Budget(13) | 0% | 6% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
Market risk benefit liabilities(6) | $ | 4,455 | Discounted cash flow | Lapse rate(8) | 1% | 20% | Decrease | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.29% | 1.71% | Decrease | ||||||||||||||||||||||||||||||||||||||
Utilization rate(10) | 37% | 94% | Increase | ||||||||||||||||||||||||||||||||||||||
| Withdrawal rate | See table footnote (11) below. | ||||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 16% | Decrease | ||||||||||||||||||||||||||||||||||||||
| Equity volatility curve | 16% | 25% | Increase | ||||||||||||||||||||||||||||||||||||||
Policyholders’ account balances(7) | $ | 12,741 | Discounted cash flow | Lapse rate(8) | 0% | 80% | Decrease | ||||||||||||||||||||||||||||||||||
Spread over SOFR(9) | 0.29% | 1.73% | Decrease | ||||||||||||||||||||||||||||||||||||||
Mortality rate(12) | 0% | 23% | Decrease | ||||||||||||||||||||||||||||||||||||||
Option Budget(13) | (1)% | 7% | Increase | ||||||||||||||||||||||||||||||||||||||
__________
(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.
(2)Includes assets classified as fixed maturities available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities, trading.
(3)Excludes notes which have been offset with the associated debt under a netting agreement.
(4)Represents multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.
(5)For these investments, a range of discount rates is typically used and is therefore a more meaningful representation of the unobservable inputs used in the valuation rather than a weighted average.
(6)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(7)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(8)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.
(9)The spread over the SOFR swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of December 31, 2025 and 2024, respectively. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements are insurance liabilities and are therefore senior to debt. Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar Life Insurance Company (“AuguStar”), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits. See Note 15 for additional information regarding this transaction. As a result of this transaction, a ceded MRB asset balance was established to fair value the reinsurance reimbursements to the Company. The establishment of the fair value also required an estimate of NPR for AuguStar, which may differ from the Company’s; however, the NPR spreads for AuguStar were developed using a methodology similar to that of the Company.
(10)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.
(11)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of both December 31, 2025 and 2024, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.
(12)The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table.
(13)Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price and interest rate changes. The level of option budget determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives.
Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:
Corporate Securities—The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increase, credit spreads widen, which results in a decrease in fair value.
Commercial Mortgage-backed Securities—Interrelationships may exist between the prepayment rate, the default rate and/or loss severity, depending on specific market conditions. In stronger economic cycles, prepayment rates are generally driven by underlying property appreciation and subsequent cash-out refinances, while default rates and loss severity may be lower. During weaker economic cycles, prepayment rates may decline, while default rates and loss severity increase. Generally, a change in the assumption used for the probability of default would be accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The impact of these factors on average life and economics varies with the deal structure and tranche subordination.
Market Risk Benefits—The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.
Changes in Level 3 Assets and Liabilities––The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods (excluding MRBs disclosed in Note 14). When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.
Year Ended December 31, 2025(6) | |||||||||||||||||||||||||||||||||||
| Fair Value, beginning of period | Total realized and unrealized gains (losses) | Purchases | Sales | Issuances | Settlements | Other(1) | Transfers into Level 3(7) | Transfers out of Level 3(7) | Fair Value, end of period | Unrealized gains (losses) for assets still held(2) | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||||||||
| U.S. states | $ | 6 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 5 | $ | 0 | |||||||||||||
| Foreign government | 7 | 0 | 0 | 0 | 0 | (2) | 0 | 0 | 0 | 5 | 0 | ||||||||||||||||||||||||
| Corporate securities(3) | 5,831 | (131) | 2,682 | (547) | 0 | (1,210) | (42) | 413 | (63) | 6,933 | (165) | ||||||||||||||||||||||||
| Structured securities(4) | 2,333 | 44 | 2,902 | (169) | 0 | (513) | (174) | 1,220 | (588) | 5,055 | 50 | ||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||||||||
| Fixed maturities, trading | 1,986 | (54) | 1,725 | (324) | 0 | (542) | 181 | 30 | (689) | 2,313 | (86) | ||||||||||||||||||||||||
| Equity securities | 518 | 5 | 246 | (82) | 0 | (3) | (8) | 131 | (181) | 626 | (7) | ||||||||||||||||||||||||
Commercial mortgage and other loans | 233 | (1) | 0 | 0 | 31 | 0 | 0 | 0 | 0 | 263 | 0 | ||||||||||||||||||||||||
| Other invested assets | 953 | (14) | 196 | (46) | 0 | (2) | 1 | 0 | 0 | 1,088 | (15) | ||||||||||||||||||||||||
| Short-term investments | 461 | (1) | 39 | (453) | 0 | (62) | (5) | 22 | 0 | 1 | 0 | ||||||||||||||||||||||||
| Cash equivalents | 0 | 0 | 12 | 0 | 0 | (10) | (2) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | 613 | (29) | 94 | 0 | 0 | (75) | (236) | 0 | 0 | 367 | (104) | ||||||||||||||||||||||||
| Other assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Separate account assets | 232 | 20 | 99 | (51) | 0 | (68) | 0 | 4 | (25) | 211 | 13 | ||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
Policyholders’ account balances(5) | (12,746) | (4,475) | 0 | 0 | (1,570) | 0 | (8) | 0 | 0 | (18,799) | 616 | ||||||||||||||||||||||||
| Other liabilities | (1) | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||||||||||||||||||||
| Notes issued by consolidated VIEs | (60) | 5 | 0 | 0 | (507) | 193 | (398) | 0 | 0 | (767) | 2 | ||||||||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| Total realized and unrealized gains (losses) | Unrealized gains (losses) for assets and liabilities still held(2) | |||||||||||||||||||||||||||||||
| Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | Net investment income | Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | ||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale | $ | (162) | $ | 0 | $ | 0 | $ | 80 | $ | (5) | $ | (190) | $ | 0 | $ | 0 | $ | 75 | ||||||||||||||
| Other assets: | ||||||||||||||||||||||||||||||||
| Fixed maturities, trading | 0 | (54) | 0 | 0 | 0 | 0 | (86) | 0 | 0 | |||||||||||||||||||||||
| Equity securities | 0 | 5 | 0 | 0 | 0 | 0 | (7) | 0 | 0 | |||||||||||||||||||||||
Commercial mortgage and other loans | (1) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Other invested assets | (1) | (14) | 0 | 0 | 1 | (1) | (14) | 0 | 0 | |||||||||||||||||||||||
| Short-term investments | 0 | 0 | 0 | (1) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | (29) | 0 | 0 | 0 | 0 | (104) | 0 | 0 | 0 | |||||||||||||||||||||||
| Other assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Separate account assets | 0 | 0 | 20 | 0 | 0 | 0 | 0 | 13 | 0 | |||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Policyholders’ account balances | (4,475) | 0 | 0 | 0 | 0 | 616 | 0 | 0 | 0 | |||||||||||||||||||||||
| Other liabilities | 1 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | |||||||||||||||||||||||
| Notes issued by consolidated VIEs | 0 | 5 | 0 | 0 | 0 | 0 | 2 | 0 | 0 | |||||||||||||||||||||||
Year Ended December 31, 2024(6) | |||||||||||||||||||||||||||||||||||
| Fair Value, beginning of period | Total realized and unrealized gains (losses) | Purchases | Sales | Issuances | Settlements | Other(1) | Transfers into Level 3(7) | Transfers out of Level 3(7) | Fair Value, end of period | Unrealized gains (losses) for assets still held(2) | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||||||||
| U.S. states | $ | 7 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (1) | $ | 0 | $ | 0 | $ | 6 | $ | (1) | |||||||||||||
| Foreign government | 8 | 0 | 0 | 0 | 0 | (1) | 0 | 0 | 0 | 7 | 0 | ||||||||||||||||||||||||
| Corporate securities(3) | 4,806 | (253) | 2,181 | (145) | 0 | (806) | (144) | 250 | (58) | 5,831 | (227) | ||||||||||||||||||||||||
| Structured securities(4) | 1,297 | 5 | 2,764 | (244) | 0 | (125) | (494) | 67 | (937) | 2,333 | (2) | ||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||||||||
| Fixed maturities, trading | 429 | (67) | 1,826 | (56) | 0 | (218) | 1 | 466 | (395) | 1,986 | (64) | ||||||||||||||||||||||||
| Equity securities | 512 | (22) | 153 | (55) | 0 | (67) | 5 | 2 | (10) | 518 | (6) | ||||||||||||||||||||||||
Commercial mortgage and other loans | 0 | 0 | 0 | 0 | 210 | 0 | 23 | 0 | 0 | 233 | 0 | ||||||||||||||||||||||||
| Other invested assets | 846 | (85) | 175 | (2) | 0 | 0 | 19 | 0 | 0 | 953 | (85) | ||||||||||||||||||||||||
| Short-term investments | 29 | 0 | 488 | (25) | 0 | (6) | (25) | 0 | 0 | 461 | 1 | ||||||||||||||||||||||||
| Cash equivalents | 4 | 0 | 5 | 0 | 0 | 0 | (9) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | 224 | 144 | 223 | 0 | 0 | (66) | 88 | 0 | 0 | 613 | 78 | ||||||||||||||||||||||||
Other assets | 11 | 0 | 8 | 0 | 0 | 0 | (19) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Separate account assets | 1,094 | (61) | 322 | (1,061) | 0 | (14) | 0 | 12 | (60) | 232 | (24) | ||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Policyholders’ account balances(5) | (7,752) | (2,785) | 0 | 0 | (2,254) | 0 | 45 | 0 | 0 | (12,746) | 1,165 | ||||||||||||||||||||||||
| Other liabilities | (1) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1) | 0 | ||||||||||||||||||||||||
| Notes issued by consolidated VIEs | (778) | (5) | 0 | 0 | (60) | 0 | 783 | 0 | 0 | (60) | 0 | ||||||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||
| Total realized and unrealized gains (losses) | Unrealized gains (losses) for assets and liabilities still held(2) | |||||||||||||||||||||||||||||||
| Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | Net investment income | Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | ||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale | $ | (269) | $ | 0 | $ | 0 | $ | 22 | $ | (1) | $ | (240) | $ | 0 | $ | 0 | $ | 10 | ||||||||||||||
| Other assets: | ||||||||||||||||||||||||||||||||
| Fixed maturities, trading | 0 | (69) | 0 | 0 | 2 | 0 | (64) | 0 | 0 | |||||||||||||||||||||||
| Equity securities | 0 | (22) | 0 | 0 | 0 | 0 | (6) | 0 | 0 | |||||||||||||||||||||||
Commercial mortgage and other loans | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Other invested assets | (1) | (84) | 0 | 0 | 0 | (1) | (84) | 0 | 0 | |||||||||||||||||||||||
| Short-term investments | (1) | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 1 | |||||||||||||||||||||||
| Cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | 144 | 0 | 0 | 0 | 0 | 78 | 0 | 0 | 0 | |||||||||||||||||||||||
Other assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Separate account assets | 0 | 0 | (61) | 0 | 0 | 0 | 0 | (24) | 0 | |||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Policyholders’ account balances | (2,785) | 0 | 0 | 0 | 0 | 1,165 | 0 | 0 | 0 | |||||||||||||||||||||||
| Other liabilities | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Notes issued by consolidated VIEs | 0 | (5) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||
| Total realized and unrealized gains (losses) | Unrealized gains (losses) for assets and liabilities still held(2) | |||||||||||||||||||||||||||||||
| Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | Net investment income | Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (loss) | ||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Fixed maturities, available-for-sale | $ | (25) | $ | 0 | $ | 0 | $ | (5) | $ | 9 | $ | (7) | $ | 0 | $ | 0 | $ | (30) | ||||||||||||||
| Other assets: | ||||||||||||||||||||||||||||||||
| Fixed maturities, trading | 0 | 9 | 0 | 0 | 2 | 0 | 5 | 0 | 0 | |||||||||||||||||||||||
| Equity securities | (1) | 27 | 0 | 0 | 0 | 0 | 12 | 0 | 0 | |||||||||||||||||||||||
Commercial mortgage and other loans | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Other invested assets | (4) | (34) | 0 | 0 | 0 | (4) | (34) | 0 | 0 | |||||||||||||||||||||||
| Short-term investments | 3 | 0 | 0 | 0 | 2 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Reinsurance recoverables and deposit receivables | (40) | 0 | 0 | 0 | 0 | (63) | 0 | 0 | 0 | |||||||||||||||||||||||
Other assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Separate account assets | 0 | 0 | 55 | 0 | 0 | 0 | 0 | 42 | 0 | |||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Policyholders’ account balances | (2,601) | 0 | 0 | 0 | 0 | (322) | 0 | 0 | 0 | |||||||||||||||||||||||
Other liabilities | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Notes issued by consolidated VIEs | 0 | 9 | 0 | 0 | 0 | 0 | 9 | 0 | 0 | |||||||||||||||||||||||
__________
(1)“Other” includes additional activity not allocated to the specific categories within the rollforward of Level 3 Assets and Liabilities.
(2)Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.
(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.
(4)Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.
(5)Issuances and settlements for Policyholders’ account balances are presented net in the rollforward.
(6)Excludes MRB assets of $2,330 million and $2,331 million and MRB liabilities of $4,623 million and $4,455 million as of December 31, 2025 and 2024, respectively. See Note 14 for additional information.
(7)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.
Derivative Fair Value Information
The following tables present the balances of certain derivative assets and liabilities measured at fair value on a recurring basis, as of the dates indicated, by the primary underlying risks they are used to manage. These tables include NPR and exclude embedded derivatives. The derivative assets and liabilities shown below are included in “Other invested assets” or “Other liabilities” in the tables contained within the sections “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities,” above.
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting(1) | Total | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Derivative Assets: | ||||||||||||||||||||||||||||||||
| Interest Rate | $ | 7 | $ | 11,210 | $ | 0 | $ | $ | 11,217 | |||||||||||||||||||||||
| Currency | 0 | 1,384 | 0 | 1,384 | ||||||||||||||||||||||||||||
| Credit | 0 | 112 | 0 | 112 | ||||||||||||||||||||||||||||
| Currency/Interest Rate | 0 | 1,656 | 0 | 1,656 | ||||||||||||||||||||||||||||
| Equity | 293 | 11,454 | 0 | 11,747 | ||||||||||||||||||||||||||||
| Netting(1) | (24,445) | (24,445) | ||||||||||||||||||||||||||||||
| $ | 300 | $ | 25,816 | $ | 0 | $ | (24,445) | $ | 1,671 | |||||||||||||||||||||||
| Derivative Liabilities: | ||||||||||||||||||||||||||||||||
| Interest Rate | $ | 22 | $ | 25,571 | $ | 0 | $ | $ | 25,593 | |||||||||||||||||||||||
| Currency | 0 | 1,591 | 0 | 1,591 | ||||||||||||||||||||||||||||
| Credit | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
| Currency/Interest Rate | 0 | 1,619 | 0 | 1,619 | ||||||||||||||||||||||||||||
| Equity | 258 | 10,096 | 0 | 10,354 | ||||||||||||||||||||||||||||
| Netting(1) | (32,942) | (32,942) | ||||||||||||||||||||||||||||||
| $ | 280 | $ | 38,877 | $ | 0 | $ | (32,942) | $ | 6,215 | |||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting(1) | Total | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Derivative Assets: | ||||||||||||||||||||||||||||||||
| Interest Rate | $ | 7 | $ | 11,725 | $ | 1 | $ | $ | 11,733 | |||||||||||||||||||||||
| Currency | 0 | 1,717 | 0 | 1,717 | ||||||||||||||||||||||||||||
| Credit | 0 | 90 | 0 | 90 | ||||||||||||||||||||||||||||
| Currency/Interest Rate | 0 | 3,310 | 0 | 3,310 | ||||||||||||||||||||||||||||
| Equity | 3 | 4,841 | 0 | 4,844 | ||||||||||||||||||||||||||||
| Netting(1) | (20,093) | (20,093) | ||||||||||||||||||||||||||||||
| $ | 10 | $ | 21,683 | $ | 1 | $ | (20,093) | $ | 1,601 | |||||||||||||||||||||||
| Derivative Liabilities: | ||||||||||||||||||||||||||||||||
| Interest Rate | $ | 21 | $ | 26,871 | $ | 1 | $ | $ | 26,893 | |||||||||||||||||||||||
| Currency | 0 | 1,378 | 0 | 1,378 | ||||||||||||||||||||||||||||
| Credit | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
| Currency/Interest Rate | 0 | 497 | 0 | 497 | ||||||||||||||||||||||||||||
| Equity | 7 | 4,117 | 0 | 4,124 | ||||||||||||||||||||||||||||
| Netting(1) | (28,141) | (28,141) | ||||||||||||||||||||||||||||||
| $ | 28 | $ | 32,863 | $ | 1 | $ | (28,141) | $ | 4,751 | |||||||||||||||||||||||
__________
(1)“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.
Changes in Level 3 Derivative Assets and Liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods:
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Fair Value, beginning of period | Total realized and unrealized gains (losses) (1) | Purchases | Sales | Issuances | Settlements | Other | Transfers into Level 3 (2) | Transfers out of Level 3 (2) | Fair Value, end of period | Unrealized gains (losses) for assets still held (1) | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Net Derivative - Equity | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
| Net Derivative - Interest Rate | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Fair Value, beginning of period | Total realized and unrealized gains (losses) (1) | Purchases | Sales | Issuances | Settlements | Other | Transfers into Level 3 (2) | Transfers out of Level 3 (2) | Fair Value, end of period | Unrealized gains (losses) for assets still held (1) | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Net Derivative - Equity | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
| Net Derivative - Interest Rate | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Fair Value, beginning of period | Total realized and unrealized gains (losses) (1) | Purchases | Sales | Issuances | Settlements | Other | Transfers into Level 3 (2) | Transfers out of Level 3 (2) | Fair Value, end of period | Unrealized gains (losses) for assets still held (1) | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Net Derivative - Equity | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
| Net Derivative - Interest Rate | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
__________
(1)Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”
(2)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.
Nonrecurring Fair Value Measurements—The following tables represent information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is a triggering event (e.g., an evidence of impairment). Assets included in the table are those that were adjusted to fair value during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Gains (Losses): | |||||||||||||||||
| Commercial mortgage loans(1) | $ | 0 | $ | 0 | $ | (29) | |||||||||||
Investment real estate(2) | $ | (12) | $ | (12) | $ | (17) | |||||||||||
Investment in JV/LP and Other(2) | $ | (70) | $ | (7) | $ | (76) | |||||||||||
Equity securities(2) | $ | 56 | $ | 0 | $ | 0 | |||||||||||
Goodwill(3) | $ | 0 | $ | 0 | $ | (177) | |||||||||||
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Carrying value after measurement as of period end: | |||||||||||
Commercial mortgage loans(1) | $ | 0 | $ | 0 | |||||||
Investment real estate(2) | $ | 45 | $ | 73 | |||||||
Investment in JV/LP and Other2) | $ | 61 | $ | 128 | |||||||
Equity securities(2) | $ | 92 | $ | 0 | |||||||
Goodwill | $ | 0 | $ | 0 | |||||||
__________
(1)Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.
(2)Reported carrying values for 2025 include values as of the measurement periods of March 31, 2025 for “Investment real estate,” December 31, 2025 for “Investment in JV/LP and Other” and September 30, 2025 and December 31, 2025 for “Equity securities.” Reported carrying values for 2024 include values as of the measurement periods of March 31, 2024 for “Investment in JV/LP and Other” and June 30, 2024 and September 30, 2024 for “Investment real estate.”
(3)The Company recognized a goodwill impairment charge for Assurance IQ (“AIQ”) in 2023. The fair value was determined using weighting of an income approach, based on discounted cash flow valuation techniques and a market valuation approach based on a forward sales multiple.
Fair Value Option
The fair value option allows the Company to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that result from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities. Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income (loss)” for other assets and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated using changes in credit spreads and quality ratings for the period reported. Interest income on commercial mortgage and other loans is included in “Net investment income.” Interest income on these loans is recorded based on the effective interest rate as determined at the closing of the loan.
The following tables present information regarding assets and liabilities where the fair value option has been elected:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Liabilities: | |||||||||||||||||
| Notes issued by consolidated VIEs: | |||||||||||||||||
| Changes in fair value | $ | (5) | $ | 5 | $ | (9) | |||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Commercial mortgage and other loans: | |||||||||||||||||
| Interest income | $ | 46 | $ | 26 | $ | 9 | |||||||||||
| Changes in fair value | $ | (1) | $ | 0 | $ | 0 | |||||||||||
| Notes issued by consolidated VIEs: | |||||||||||||||||
| Interest expense | $ | 13 | $ | 14 | $ | 11 | |||||||||||
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Commercial mortgage and other loans(1): | |||||||||||
| Fair value as of period end | $ | 1,056 | $ | 702 | |||||||
| Aggregate contractual principal as of period end | $ | 1,048 | $ | 697 | |||||||
| Other invested assets: | |||||||||||
| Fair value as of period end | $ | 26 | $ | 19 | |||||||
| Notes issued by consolidated VIEs: | |||||||||||
| Fair value as of period end | $ | 767 | $ | 60 | |||||||
| Aggregate contractual principal as of period end | $ | 767 | $ | 60 | |||||||
__________
(1)As of December 31, 2025, for loans for which the fair value option has been elected, none of the loans were 90 days or more past due.
Fair Value of Financial Instruments
The tables below present the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.
| December 31, 2025 | |||||||||||||||||||||||||||||
| Fair Value | Carrying Amount(1) | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Commercial mortgage and other loans | $ | 0 | $ | 14 | $ | 63,164 | $ | 63,178 | $ | 63,659 | |||||||||||||||||||
| Policy loans | 12 | 0 | 9,946 | 9,958 | 9,958 | ||||||||||||||||||||||||
| Other invested assets | 0 | 93 | 0 | 93 | 93 | ||||||||||||||||||||||||
| Short-term investments | 632 | 1 | 0 | 633 | 633 | ||||||||||||||||||||||||
| Cash and cash equivalents | 6,652 | 222 | 0 | 6,874 | 6,874 | ||||||||||||||||||||||||
| Accrued investment income | 0 | 3,636 | 0 | 3,636 | 3,636 | ||||||||||||||||||||||||
Reinsurance recoverables and deposit receivables | 0 | 8 | 6,710 | 6,718 | 6,718 | ||||||||||||||||||||||||
| Other assets | 37 | 3,142 | 2 | 3,181 | 3,181 | ||||||||||||||||||||||||
| Total assets | $ | 7,333 | $ | 7,116 | $ | 79,822 | $ | 94,271 | $ | 94,752 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Policyholders’ account balances—investment contracts | $ | 0 | $ | 35,175 | $ | 49,931 | $ | 85,106 | $ | 89,970 | |||||||||||||||||||
| Securities sold under agreements to repurchase | 0 | 9,598 | 0 | 9,598 | 9,598 | ||||||||||||||||||||||||
| Cash collateral for loaned securities | 0 | 8,700 | 0 | 8,700 | 8,700 | ||||||||||||||||||||||||
Reinsurance and funds withheld payables(2) | 0 | 10,639 | (32) | 10,607 | 10,607 | ||||||||||||||||||||||||
Short-term debt | 0 | 1,408 | 33 | 1,441 | 1,443 | ||||||||||||||||||||||||
Long-term debt(3) | 7,507 | 10,324 | 522 | 18,353 | 18,856 | ||||||||||||||||||||||||
Notes issued by consolidated VIEs | 0 | 0 | 1,892 | 1,892 | 1,892 | ||||||||||||||||||||||||
| Other liabilities | 0 | 6,993 | 31 | 7,024 | 7,024 | ||||||||||||||||||||||||
| Separate account liabilities—investment contracts | 0 | 22,548 | 17,663 | 40,211 | 40,211 | ||||||||||||||||||||||||
| Total liabilities | $ | 7,507 | $ | 105,385 | $ | 70,040 | $ | 182,932 | $ | 188,301 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Fair Value | Carrying Amount(1) | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Commercial mortgage and other loans | $ | 0 | $ | 17 | $ | 58,446 | $ | 58,463 | $ | 61,639 | |||||||||||||||||||
| Policy loans | 8 | 0 | 9,787 | 9,795 | 9,795 | ||||||||||||||||||||||||
| Other invested assets | 0 | 95 | 0 | 95 | 95 | ||||||||||||||||||||||||
| Short-term investments | 453 | 21 | 0 | 474 | 474 | ||||||||||||||||||||||||
| Cash and cash equivalents | 7,352 | 454 | 0 | 7,806 | 7,806 | ||||||||||||||||||||||||
| Accrued investment income | 0 | 3,441 | 0 | 3,441 | 3,441 | ||||||||||||||||||||||||
Reinsurance recoverables and deposit receivables | 0 | 8 | 5,782 | 5,790 | 5,790 | ||||||||||||||||||||||||
Other assets | 23 | 3,062 | 1 | 3,086 | 3,086 | ||||||||||||||||||||||||
| Total assets | $ | 7,836 | $ | 7,098 | $ | 74,016 | $ | 88,950 | $ | 92,126 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Policyholders’ account balances—investment contracts | $ | 0 | $ | 31,405 | $ | 43,466 | $ | 74,871 | $ | 79,571 | |||||||||||||||||||
| Securities sold under agreements to repurchase | 0 | 6,796 | 0 | 6,796 | 6,796 | ||||||||||||||||||||||||
| Cash collateral for loaned securities | 0 | 9,621 | 0 | 9,621 | 9,621 | ||||||||||||||||||||||||
Reinsurance and funds withheld payables(2) | 0 | 10,489 | (35) | 10,454 | 10,454 | ||||||||||||||||||||||||
Short-term debt | 0 | 521 | 439 | 960 | 953 | ||||||||||||||||||||||||
Long-term debt(3) | 524 | 17,185 | 423 | 18,132 | 19,187 | ||||||||||||||||||||||||
Notes issued by consolidated VIEs | 0 | 0 | 1,370 | 1,370 | 1,370 | ||||||||||||||||||||||||
Other liabilities | 0 | 6,886 | 32 | 6,918 | 6,918 | ||||||||||||||||||||||||
| Separate account liabilities—investment contracts | 0 | 21,144 | 18,677 | 39,821 | 39,821 | ||||||||||||||||||||||||
| Total liabilities | $ | 524 | $ | 104,047 | $ | 64,372 | $ | 168,943 | $ | 174,691 | |||||||||||||||||||
__________
(1)Carrying values presented herein differ from those in the Company’s Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.
(2)Includes contracts reinsured through coinsurance with funds withheld agreement with Prismic Re with a fair value of $7,513 million (carrying amount of $7,513 million) and $7,887 million (carrying amount of $7,887 million), a portion of which relates to insurance contracts as of December 31, 2025 and December 31, 2024, respectively. See Note 15 for additional information regarding the reinsurance arrangement with Prismic Re.
(3)Excludes debt with fair value of $15,744 million (carrying amount of $15,744 million) and $14,748 million (carrying amount of $14,748 million) as of December 31, 2025 and December 31, 2024, respectively, which have been offset with the associated notes under a netting agreement.
The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.
Commercial Mortgage and Other Loans
The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for loans of similar quality, average life and currency. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology. Certain commercial mortgage loans are valued incorporating other factors, including the terms of the loans, the relative strength of the underlying collateral, the principal exit strategies for the loans, prevailing interest rates and credit risk.
Policy Loans
The Company’s valuation technique for policy loans is to discount cash flows at the current policy loan coupon rate. Policy loans are fully collateralized by the cash surrender value of underlying insurance policies. As a result, the carrying value of the policy loans approximates the fair value.
Short-Term Investments, Cash and Cash Equivalents, Accrued Investment Income and Other Assets
The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: certain short-term investments, which are not securities, recorded at amortized cost; cash and cash equivalent instruments; accrued investment income; and other assets that meet the definition of financial instruments, including receivables, such as unsettled trades, accounts receivable and restricted cash.
Reinsurance Recoverables and Deposit Receivables
Reinsurance recoverables and deposit receivables includes receivables from modified coinsurance arrangements where the Company is the reinsurer and generally reflect the fair value of the invested assets retained by the cedant. Deposits made are included in “Reinsurance recoverables and deposit receivables.” The deposit assets are adjusted as amounts are paid, consistent with the underlying contracts.
Policyholders’ Account Balances—Investment Contracts
Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, single premium endowments, payout annuities and other similar contracts without life contingencies, fair values are generally derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s NPR. For GICs, funding agreements, structured settlements without life contingencies and other similar products, fair values are generally derived using discounted projected cash flows based on interest rates being offered for similar contracts with maturities consistent with those of the contracts being valued. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. For defined contribution and defined benefit contracts and certain other products, the fair value is the market value of the assets supporting the liabilities.
Securities Sold Under Agreements to Repurchase
The Company receives collateral for selling securities under agreements to repurchase, or pledges collateral under agreements to resell. Repurchase and resale agreements are also generally short-term in nature and, therefore, the carrying amounts of these instruments approximate fair value.
Cash Collateral for Loaned Securities
Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities, similar to the securities sold under agreement to repurchase above. Due to the short-term nature of these transactions, the carrying value approximates fair value.
Reinsurance and Funds Withheld Payables
Reinsurance and funds withheld payables includes amounts payable to the reinsurer under coinsurance with funds withheld arrangements where the Company is the cedant. Deposits received are included in “Reinsurance and funds withheld payables.” The deposit liabilities are adjusted as amounts are received, consistent with the underlying contracts.
Debt
The fair value of short-term and long-term debt, as well as notes issued by consolidated VIEs, is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. With the exception of the notes issued by consolidated VIEs for which recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company, the fair values of these instruments consider the Company’s NPR. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.
Other Liabilities
Other liabilities are primarily payables, such as unsettled trades, drafts and accrued expense payables. Due to the short-term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.
Separate Account Liabilities—Investment Contracts
Only the portion of separate account liabilities related to products that are investment contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees; therefore, carrying value approximates fair value.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 19, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.