PRU 10-Q Quarter ended Sept. 30, 2023

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Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement solutions, mutual funds and investment management.

Effective January 1, 2023, the Company made the following segment reporting changes, which do not impact the Company’s consolidated financial statements:

• Based on the write-down of Assurance IQ’s (“AIQ”) goodwill asset, and that its financial results and operations are not considered significant, AIQ no longer represents a separately reportable segment and is now included within the Company’s Corporate and Other operations.

• Since Prudential Advisors, the Company’s proprietary nationwide distribution business, is no longer managed through the Individual Life segment and its financial results and operations are not considered significant, it is now included within the Company’s Corporate and Other operations.

Historical segment results have been updated to conform to the current period presentation.

The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance and Individual Life businesses), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included within Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, as well as the Divested and Run-off Businesses described above.

In September 2023, the Company, through its Corporate and Other operations, invested approximately $ 200 million, and acquired a 20 % equity interest as a limited partner, in Prismic Life Holding Company, LP (“Prismic HoldCo”), a Bermuda exempted limited partnership that owns all of the outstanding capital stock of Prismic Life Reinsurance, Ltd (“Prismic Re”), a licensed Bermuda-based life and annuity reinsurance company. As this investment is accounted for under the equity method, Prismic Re is considered a related party. Beginning with the fourth quarter of 2023, the operating results of Corporate and Other will reflect the Company’s share of earnings in Prismic HoldCo on a quarter lag. For information regarding the Company’s initial reinsurance transaction with Prismic Re, effective September 2023, see Note 12.

Basis of Presentation

On January 1, 2023, the Company adopted Accounting Standard Update (“ASU”) 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, which provided new authoritative guidance impacting the accounting and disclosure requirements for long-duration insurance and investment contracts issued by the Company. See “Adoption of ASU 2018-12” below for additional information regarding this adoption, including the impacts to the Company’s 2022 financial statements from implementing the new accounting standard as well as the transition impacts recorded as of January 1, 2021. See Note 2 for additional details regarding the key policy changes effected by this ASU and updated accounting policies resulting from the adoption of this ASU for all periods presented in the Unaudited Interim Consolidated Financial Statements.

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for additional information regarding the Company’s consolidated variable interest entities. Intercompany balances and transactions have been eliminated.

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In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Adoption of ASU 2018-12

In August 2018, the FASB issued ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts which provides new authoritative guidance impacting the accounting and disclosure requirements for long-duration insurance and investment contracts issued by the Company. The Company adopted this guidance, effective January 1, 2023, using the modified retrospective transition method, where permitted, for changes to the liability for future policy benefits and deferred policy acquisition costs (“DAC”) and related balances, and using the retrospective transition method, as required, for market risk benefits. The Company applied the guidance as of the transition date of January 1, 2021 and retrospectively adjusted prior period amounts shown in the 2023 financial statements to reflect the new guidance.

The following tables present amounts as previously reported in 2022, the effect upon those amounts from the adoption of the new guidance under ASU 2018-12, and the adjusted amounts that are reflected in the Unaudited Interim Consolidated Financial Statements included herein.

Unaudited Interim Consolidated Statements of Financial Position:

			December 31, 2022
IMPACTED LINES ONLY			As Previously Reported						Effect of Change						As Currently Reported
			(in millions)
Deferred policy acquisition costs			$	19,537					$	1,009					$	20,546
Value of business acquired			595						26						621
Income tax assets			4,214						( 4,214 )						0
Market risk benefit assets			0						800						800
Other assets			30,188						1,491						31,679
TOTAL ASSETS			689,917						( 888 )						689,029
Future policy benefits			284,452						( 22,679 )						261,773
Policyholders' account balances			135,602						22						135,624
Market risk benefit liabilities			0						5,864						5,864
Income taxes			0						277						277
Other liabilities			20,536						1,288						21,824
Total liabilities			672,709						( 15,228 )						657,481
Accumulated other comprehensive income (loss)			( 19,827 )						16,021						( 3,806 )
Retained earnings			33,392						( 1,678 )						31,714
Total Prudential Financial, Inc. equity			16,250						14,343						30,593
Noncontrolling interests			958						( 3 )						955
Total equity			17,208						14,340						31,548
TOTAL LIABILITIES AND EQUITY			$	689,917					$	( 888 )					$	689,029

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Unaudited Interim Consolidated Statements of Operations:

			Three Months Ended September 30, 2022
IMPACTED LINES ONLY			As Previously Reported						Effect of Change						As Currently Reported
			(in millions, except per share amounts)
REVENUES
Premiums			$	16,247					$	( 402 )					$	15,845
Policy charges and fee income			1,233						( 90 )						1,143
Other income (loss)			( 1,083 )						187						( 896 )
Realized investment gains (losses), net			( 514 )						84						( 430 )
Change in value of market risk benefits, net of related hedging gain			0						( 58 )						( 58 )
Total revenues			20,480						( 279 )						20,201
BENEFITS AND EXPENSES
Policyholders' benefits			16,581						( 429 )						16,152
Change in estimates of liability for future policy benefits			0						( 35 )						( 35 )
Interest credited to policyholders' account balances			703						( 12 )						691
Amortization of deferred policy acquisition costs			485						( 122 )						363
General and administrative expenses			3,058						8						3,066
Total benefits and expenses			20,917						( 590 )						20,327
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES			( 437 )						311						( 126 )
Total income tax expense (benefit)			( 148 )						137						( 11 )
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES			( 289 )						174						( 115 )
Equity in earnings of operating joint ventures, net of taxes			( 1 )						8						7
NET INCOME (LOSS)			( 290 )						182						( 108 )
Less: Income attributable to noncontrolling interests			( 6 )						( 10 )						( 16 )
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.			$	( 284 )					$	192					$	( 92 )
EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.			$	( 0.78 )					$	0.52					$	( 0.26 )
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.			$	( 0.78 )					$	0.52					$	( 0.26 )

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Unaudited Interim Consolidated Statements of Comprehensive Income:

			Three Months Ended September 30, 2022
IMPACTED LINES ONLY			As Previously Reported						Effect of Change						As Currently Reported
			(in millions)
NET INCOME (LOSS)			$	( 290 )					$	182					$	( 108 )
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period			( 592 )						6						( 586 )
Net unrealized investment gains (losses)			( 13,182 )						( 965 )						( 14,147 )
Interest rate remeasurement of future policy benefits			0						15,469						15,469
Gain (loss) from changes in non-performance risk on market risk benefits			0						( 8 )						( 8 )
Total			( 13,722 )						14,502						780
Less: Income tax expense (benefit) related to other comprehensive income (loss)			( 3,025 )						3,332						307
Other comprehensive income (loss), net of taxes			( 10,697 )						11,170						473
Comprehensive income (loss)			( 10,987 )						11,352						365
Less: Comprehensive income (loss) attributable to noncontrolling interests			( 7 )						( 9 )						( 16 )
Comprehensive income (loss) attributable to Prudential Financial, Inc.			$	( 10,980 )					$	11,361					$	381

			Nine Months Ended September 30, 2022
IMPACTED LINES ONLY			As Previously Reported						Effect of Change						As Currently Reported
			(in millions)
NET INCOME (LOSS)			$	( 906 )					$	( 725 )					$	( 1,631 )
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period			( 1,928 )						41						( 1,887 )
Net unrealized investment gains (losses)			( 52,692 )						( 3,442 )						( 56,134 )
Interest rate remeasurement of future policy benefits			0						64,087						64,087
Gain (loss) from changes in non-performance risk on market risk benefits			0						1,299						1,299
Total			( 54,115 )						61,985						7,870
Less: Income tax expense (benefit) related to other comprehensive income (loss)			( 11,915 )						14,523						2,608
Other comprehensive income (loss), net of taxes			( 42,200 )						47,462						5,262
Comprehensive income (loss)			( 43,106 )						46,737						3,631
Less: Comprehensive income (loss) attributable to noncontrolling interests			( 28 )						( 9 )						( 37 )
Comprehensive income (loss) attributable to Prudential Financial, Inc.			$	( 43,078 )					$	46,746					$	3,668

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Unaudited Interim Consolidated Statements of Cash Flows:

			Nine Months Ended September 30, 2022
IMPACTED LINES ONLY			As Previously Reported						Effect of Change						As Currently Reported
			(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)			$	( 906 )					$	( 725 )					$	( 1,631 )
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net			1,977						1,133						3,110
Change in value of market risk benefits, net of related hedging (gain) loss			0						1,038						1,038
Policy charges and fee income			( 1,915 )						250						( 1,665 )
Interest credited to policyholders' account balances			1,537						( 142 )						1,395
Depreciation and amortization			62						( 4 )						58
Change in:
Deferred policy acquisition costs			277						( 798 )						( 521 )
Future policy benefits and other insurance liabilities			6,403						( 406 )						5,997
Income taxes			( 1,437 )						( 68 )						( 1,505 )
Derivatives, net			( 913 )						441						( 472 )
Other, net			( 405 )						( 719 )						( 1,124 )
Cash flows from (used in) operating activities			$	5,780					$	0					$	5,780

The following tables detail the January 1, 2021 transition adjustments by providing a rollforward of the ending reported balances as of December 31, 2020 to the opening balances as of January 1, 2021 for retained earnings, accumulated other comprehensive income (“AOCI”) and the impacted insurance-related balances.

			January 1, 2021
			Retained Earnings
			(in millions)
Balance after-tax, prior to transition			$	30,749
Reclassification of market risk benefits non-performance risk to AOCI(1)			( 1,588 )
Updates to certain universal life contract liabilities(2)			( 1,025 )
Change in non-participating traditional and limited-payment contract liabilities(3)			( 543 )
Other			( 271 )
Total pre-tax adjustments			( 3,427 )
Tax impacts			815
Balance after-tax, after transition			$	28,137

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(1) Reflects the cumulative impact of changes in the fair value of market risk benefits (“MRB”) non-performance risk (“NPR”) from the date of contract issuance to January 1, 2021. These amounts were previously recorded in retained earnings but are now reflected in AOCI under the new guidance.

(2) Reflects the impact on additional insurance reserves (“AIR”) and other related balances primarily related to the no-lapse guarantee features on certain universal life contracts in the Individual Life segment. For additional information, see Note 2.

(3) Reflects the impact on in-force contract liabilities where expected benefits exceed expected gross premiums and/or exhausts any deferred profit liabilities at any issue-year cohort level as a result of updating to current best estimate cash flow assumptions as of transition date, as well as the impact of flooring the liability for future policy benefits at zero at the issue-year cohort level as of transition date.

At transition, there was a pre-tax charge to retained earnings of $ 402 million for certain issue-year cohorts related to non-participating traditional and limited-payment products where the expected benefits exceeded the expected gross premiums and/or exhausted any deferred profit liabilities. The charge is primarily driven by the loss of the aggregation benefit as sufficiencies in issue-year cohorts cannot offset issue-year cohorts with deficiencies. For additional information regarding the liability for future policy benefits, see Note 2.

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			January 1, 2021
			Accumulated Other Comprehensive Income
			(in millions)
Balance after-tax, prior to transition			$	30,738
Unwinding amounts related to unrealized investment gains and losses(1)			5,534
Reclassification of MRB NPR to AOCI(2)			1,588
Interest rate remeasurement of future policy benefits(3)			( 62,711 )
Change in operating joint ventures			( 12 )
Total pre-tax adjustments			( 55,601 )
Tax impacts			13,205
Balance after-tax, after transition			$	( 11,658 )

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(1) Primarily reflects i) the removal of amounts related to the impact of unrealized investment gains and losses on premium deficiency reserves for non-participating traditional and limited-payment contracts and ii) amounts related to DAC and other balances as unrealized investment gains or losses no longer impact the amortization pattern of such balances under the new guidance. Also includes the impacts from updates to reserves and other related balances for certain universal life contracts. For additional information, see Note 2.

(2) Reflects the cumulative impact of changes in NPR on the fair value of market risk benefits from the date of contract issuance to January 1, 2021. These amounts were previously recorded in retained earnings but are now reflected in AOCI under the new guidance.

(3) Reflects the impact of remeasuring in-force non-participating traditional and limited-payment contract liabilities using current upper-medium grade fixed income instrument yields. This adjustment largely reflects the difference between discount rates locked-in at contract inception versus current discount rates as of January 1, 2021.

			January 1, 2021
			Deferred Policy Acquisition Costs
			Retirement Strategies						Individual Life												International Businesses												Other Businesses						Total
			Individual Variable						Term Life						Variable/ Universal Life						Life Planner						Gibraltar Life and Other
			(in millions)
Balance prior to transition			$	4,643					$	2,417					$	3,779					$	4,278					$	3,390					$	520					$	19,027
Unwinding amounts related to unrealized investment gains and losses and other activity			273						0						450						337						570						106						1,736
Balance after transition			$	4,916					$	2,417					$	4,229					$	4,615					$	3,960					$	626					$	20,763

			January 1, 2021
			Deferred Sales Inducements(1)
			Retirement Strategies						Other Businesses						Total
			Individual Variable
			(in millions)
Balance prior to transition			$	781					$	39					$	820
Unwinding amounts related to unrealized investment gains and losses			85						2						87
Balance after transition			$	866					$	41					$	907

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(1) Deferred sales inducements (“DSI”) are included in “Other assets”.

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			January 1, 2021
			Value of Business Acquired
			International Businesses						Other Businesses(1)						Total
			Gibraltar Life and Other
			(in millions)
Balance prior to transition			$	852					$	251					$	1,103
Unwinding amounts related to unrealized investment gains and losses and other activity			59						1						60
Balance after transition			$	911					$	252					$	1,163

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(1) Primarily represents value of business acquired (“VOBA”) for the Full Service Retirement business.

			January 1, 2021
			Benefit Reserves(1)
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other						Other Businesses(2)						Total
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long- Term Care
			(in millions)
Balance prior to transition			$	65,383					$	7,887					$	51,607					$	69,542					$	7,975					$	6,624					$	209,018
Changes in cash flow assumptions and other activity			( 3,805 )						0						10						( 523 )						( 18 )						1						( 4,335 )
Balance after transition, at original discount rate			61,578						7,887						51,617						69,019						7,957						6,625						204,683
Cumulative changes in discount rate assumptions and other activity			13,548						2,662						22,590						13,784						4,905						5,381						62,870
Balance after transition, at current discount rate			75,126						10,549						74,207						82,803						12,862						12,006						267,553
Less: Reinsurance recoverable			0						799						160						307						0						13						1,279
Balance after transition, net of reinsurance recoverable			$	75,126					$	9,750					$	74,047					$	82,496					$	12,862					$	11,993					$	266,274

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(1) Benefit reserves, excluding amounts for reinsurance recoverable, are included in "Future policy benefits." For additional information regarding the liability for future policy benefits, see Note 9.

(2) Primarily represents benefit reserves related to the Prudential of Taiwan business that was sold in the second quarter of 2021. The Company did not choose to apply ASU 2022-05 to this disposal transaction. See Note 2 for additional information.

			January 1, 2021
			Deferred Profit Liability(1)
			Retirement Strategies						International Businesses												Other Businesses						Total
			Institutional						Life Planner						Gibraltar Life and Other
			(in millions)
Balance prior to transition			$	1,315					$	1,964					$	3,746					$	349					$	7,374
Changes in benefit reserves			3,801						110						730						148						4,789
Balance after transition			5,116						2,074						4,476						497						12,163
Less: Reinsurance recoverable			0						7						15						0						22
Balance after transition, net of reinsurance recoverable			$	5,116					$	2,067					$	4,461					$	497					$	12,141

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(1) Deferred profit liability (“DPL”), excluding amounts for reinsurance recoverable, is included in "Future policy benefits." For additional information regarding the liability for future policy benefits, see Note 9.

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			January 1, 2021
			Additional Insurance Reserves(1)
			Retirement Strategies						Individual Life						Other Businesses						Total
			Individual Variable						Variable/ Universal Life
			(in millions)
Balance prior to transition			$	889					$	9,415					$	483					$	10,787
Unwinding amounts related to unrealized investment gains and losses			( 65 )						( 1,444 )						( 106 )						( 1,615 )
Balance prior to transition, excluding amounts related to unrealized investment gains and losses			824						7,971						377						9,172
Reclassification of future policy benefits AIR to MRB			( 824 )						0						( 92 )						( 916 )
Reclassification of policyholders’ account balances AIR to MRB			0						0						( 48 )						( 48 )
Updates to certain universal life contract liabilities(2)			0						1,772						7						1,779
Change in discount rate for annuitization benefits			0						0						116						116
Balance after transition, excluding amounts related to unrealized investment gains and losses			0						9,743						360						10,103
Amounts related to unrealized investment gains and losses after transition			0						1,186						0						1,186
Balance after transition			0						10,929						360						11,289
Less: Reinsurance recoverable			0						4,387						0						4,387
Balance after transition, net of reinsurance recoverable			$	0					$	6,542					$	360					$	6,902

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(1) Additional insurance reserves (“AIR”), excluding amounts for reinsurance recoverable, are included in “Future policy benefits”. For additional information regarding the liability for future policy benefits, see Note 9.

(2) For additional information regarding updates to reserves and other related balances for certain universal life contracts, see Note 2.

			January 1, 2021
			Universal Life Loss Recognition Reserves/Profit Followed by Losses Liability(1)
			Individual Life						Other Businesses
															Total
			(in millions)
Balance prior to transition			$	1,823					$	6					$	1,829
Unwinding amounts related to unrealized investment gains and losses			( 1,149 )						0						( 1,149 )
Balance prior to transition, excluding amounts related to unrealized investment gains and losses			674						6						680
Derecognizing LRR & PFL			( 674 )						0						( 674 )
Balance after transition, excluding amounts related to unrealized investment gains and losses			0						6						6
Amounts related to unrealized investment gains and losses after transition			1,018						0						1,018
Balance after transition			$	1,018					$	6					$	1,024

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(1) Universal life loss recognition reserves (“LRR”) / profit followed by losses liability (“PFL”) are included in “Future policy benefits”. For additional information regarding the liability for future policy benefits, see Note 9.

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			January 1, 2021
			Non-Participating Traditional and Limited-Payment Loss Recognition Reserves/Profit Followed by Losses Liability(1)
			Retirement Strategies						International Businesses												Corporate and Other						Other Businesses						Total
			Institutional						Life Planner						Gibraltar Life and Other						Long- Term Care
			(in millions)
Balance prior to transition			$	1,985					$	181					$	670					$	734					$	145					$	3,715
Unwinding amounts related to unrealized investment gains and losses			( 1,985 )						( 169 )						( 670 )						( 734 )						( 105 )						( 3,663 )
Balance prior to transition, excluding amounts related to unrealized investment gains and losses			0						12						0						0						40						52
Derecognizing LRR & PFL			0						( 12 )						0						0						( 40 )						( 52 )
Balance after transition			$	0					$	0					$	0					$	0					$	0					$	0

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(1) Prior to the adoption of ASU 2018-12, non-participating traditional and limited-payment loss recognition reserves / profit followed by losses liabilities were included in “Future policy benefits”.

			January 1, 2021
			Terminal Dividend Liability(1)
			Individual Life												Closed Block Division						Total
			Variable/ Universal Life						Term Life
			(in millions)
Balance prior to transition			$	212					$	4					$	375					$	591
Unwinding amounts related to unrealized investment gains and losses and other activity			( 11 )						0						0						( 11 )
Balance after transition			201						4						375						580
Less: Reinsurance recoverable			0						0						0						0
Balance after transition, net of reinsurance recoverable			$	201					$	4					$	375					$	580

__________

(1) Terminal dividend liability is included in “Future policy benefits”.

			January 1, 2021
			Unearned Revenue Reserves(1)
						Individual Life						International Businesses
						Variable/Universal Life						Life Planner						Gibraltar Life and Other						Corporate and Other						Other Businesses						Total
			(in millions)
Balance prior to transition						$	2,204					$	161					$	45					$	152					$	30					$	2,592
Unwinding amounts related to unrealized investment gains and losses and other activity						539						2						5						38						0						584
Balance after transition						2,743						163						50						190						30						3,176
Less: Reinsurance recoverable						0						0						0						0						0						0
Balance after transition, net of reinsurance recoverable						$	2,743					$	163					$	50					$	190					$	30					$	3,176

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(1) Unearned revenue reserves (“URR”) are included in “Policyholders' account balances”.

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			January 1, 2021
			Market Risk Benefits(1)
			Retirement Strategies						Other Businesses						Total
			Individual Variable
			(in millions)
Liability for guaranteed benefits recorded at fair value, prior to transition			$	18,731					$	148					$	18,879
AIR to be reclassified to MRB, prior to transition, excluding amounts related to unrealized investment gains and losses			824						140						964
Total liability prior to transition			19,555						288						19,843
Change in reserve basis to MRB framework			122						98						220
MRB after transition, at current NPR value			19,677						386						20,063
Less: Reinsured MRB			204						7						211
MRB after transition, net of reinsurance			19,473						379						19,852
MRB after transition, at contract inception NPR value			21,259						392						21,651
Cumulative change in NPR			1,582						6						1,588
MRB after transition, at current NPR value			$	19,677					$	386					$	20,063

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(1) For additional information regarding market risk benefits, see Note 11.

			January 1, 2021
			Cost of Reinsurance(1)
			Individual Life
			Variable/Universal Life
			(in millions)
Balance prior to transition			$	3,058
Unwinding amounts related to unrealized investment gains and losses			( 659 )
Balance prior to transition, excluding amounts related to unrealized investment gains and losses			2,399
Impact from updates to certain universal life contract liabilities(2)			860
Balance after transition, excluding amounts related to unrealized investment gains and losses			3,259
Amounts related to unrealized investment gains and losses after transition			580
Balance after transition			$	3,839

_________

(1) Cost of reinsurance is included in “Other liabilities.”

(2) For additional information regarding updates to reserves and other related balances for certain universal life contracts, see Note 2 .

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining future policy benefits; policyholders’ account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits; the measurement of goodwill and any related impairment; the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments (“OTTI”); pension and other postretirement benefits; any provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

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Reclassifications

Certain amounts in prior periods have been reclassified for reasons unrelated to the adoption of ASU 2018-12 to conform to the current period presentation.

Business Dispositions

Prudential Annuities Life Assurance Corporation, Representing a Portion of Individual Annuities’ Traditional Variable Annuity Block of Business

On April 1, 2022, the Company completed the sale of Prudential Annuities Life Assurance Corporation (“PALAC”), a wholly owned subsidiary, representing a portion of its in-force traditional variable annuity block of business, to Fortitude Group Holdings, LLC (“Fortitude”). The PALAC block primarily consisted of non-New York traditional variable annuities with guaranteed living benefits that were issued prior to 2011, which constituted approximately $ 30 billion of Prudential’s total in-force individual annuity account values at the closing of the transaction. The Company, through coinsurance and modified coinsurance agreements, has retained the economics of certain variable annuities, indexed annuities, and fixed annuities with a guaranteed lifetime withdrawal income feature issued by PALAC.

The Company recognized a pre-tax gain on sale of $ 1,448 million within “Other income”, which is included in adjusted operating income within the Retirement Strategies segment.

Full Service Retirement Business

On April 1, 2022, the Company completed the sale of its Full Service Retirement business to Great-West Life & Annuity Insurance Company (“Great-West”), primarily through a combination of (i) the sale of all of the outstanding equity interests of certain legal entities, including Prudential Retirement Insurance and Annuity Company (“PRIAC”); (ii) the ceding of certain insurance policies through reinsurance; and (iii) the sale, transfer and/or novation of certain in-scope contracts and brokerage accounts.

The Company recognized a net pre-tax gain on sale of $ 650 million, composed of (i) an $ 850 million gain recorded in “Other income”; (ii) $ 150 million of realized losses recorded in “Realized investment gains (losses), net”, related to assets transferred as part of the reinsurance of certain retained policies to Great-West; and (iii) $ 50 million of indirect expenses and charges recorded in “General and administrative expenses” on the Consolidated Statements of Operations. These amounts reflect certain post-closing adjustments in accordance with the terms of the transaction agreement. The net gain was excluded from adjusted operating income and reported within Divested Businesses as part of Corporate and Other operations. In addition, the Company recognized a deferred gain of approximately $ 400 million, including a post-closing true-up, for the ceding of certain insurance policies through reinsurance to Great-West. This deferred reinsurance gain will be recognized in income over the term of the ceded policies.

Excluding the gain on sale, the Full Service Retirement business generated pre-tax income/(loss) of $ 0 million and $( 218 ) million for the three and nine months ended September 30, 2022, respectively. This amount excludes the impact of overhead costs retained in the Company’s Corporate and Other operations and not transferred to Great-West.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of September 30, 2023, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

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Adoption of ASU 2018-12

Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . Adoption of this ASU impacted, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company and had a significant financial impact on the Consolidated Financial Statements and disclosures. See Note 1 for additional information.

As of the January 1, 2021 transition date, the adoption of the standard resulted in a decrease to “Retained earnings” of $ 2.6 billion primarily from reclassifying the cumulative effect of changes in non-performance risk on market risk benefits from “Retained earnings” to “Accumulated other comprehensive income” (“AOCI”) as well as from a net increase in additional insurance reserves and other related balances primarily related to the no-lapse guarantee features on certain universal life contracts. AOCI decreased $ 42.4 billion as of the January 1, 2021 transition date largely from remeasuring in-force contract liabilities using upper-medium grade fixed income instrument yields as of the transition date. As of the January 1, 2023 adoption date, the impacts amounted to a decrease to “Retained earnings” of $ 1.7 billion and an increase to AOCI of $ 16.0 billion. The changes in the impacts from January 1, 2021 to January 1, 2023 primarily reflect the increase in interest rates during 2021 and 2022.

Outlined below are: (1) key accounting policy changes effected by the ASU and (2) updated accounting policies for all of the periods presented in the Unaudited Interim Consolidated Financial Statements.

(1) Key Accounting Policy Changes

Area of Change

Description

Method of adoption

Effect on the financial statements or other significant matters

Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-payment insurance products

Requires an entity to review and, if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Consolidated Statements of Operations.

Effective January 1, 2023 using the modified retrospective transition method, which includes a cumulative effect adjustment to the balance sheet as of January 1, 2021 (the “transition date”). Under this method, the amendments to contracts in force were applied as of January 1, 2021 on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI.

The impact upon transition reflects the impact on in-force contract liabilities in instances where expected net premiums exceeded expected gross premiums at an issue-year cohort level as a result of updating to current best estimate cash flow assumptions as of the transition date. As a result of the modified retrospective transition method, the vast majority of the impact of updating cash flow assumptions to best estimates as of the transition date will be reflected in the pattern of earnings in subsequent periods. See Note 1 for additional information regarding the effect on the financial statements. Adoption of the standard also resulted in additional required disclosures. See Note 9 for additional information.

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Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-payment insurance products

Requires discount rate assumptions to be based on upper-medium grade fixed income instrument yields, which will be updated each quarter with the impact recorded through OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the discount rate assumptions.

As noted above, the guidance for the liability for future policy benefits was adopted effective January 1, 2023 using the modified retrospective transition method, which includes a cumulative effect adjustment to the balance sheet as of January 1, 2021. Under this method, for balance sheet remeasurement purposes, the liability for future policy benefits is remeasured using discount rates as of January 1, 2021 with the impact recorded as a cumulative effect adjustment to AOCI.

Adoption of the ASU resulted in a significant impact to AOCI as a result of remeasuring in-force contract liabilities using current upper-medium grade fixed income instrument yields. This adjustment largely reflects the difference between discount rates locked-in at contract inception versus current discount rates. See Note 1 for additional information regarding the effect on the financial statements. Adoption of the standard also resulted in additional required disclosures. See Note 9 for additional information.

Amortization of deferred acquisition costs (“DAC”) and other balances

Requires DAC and other balances, such as unearned revenue reserves and DSI, to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability.

Effective January 1, 2023 using the modified retrospective transition method, which includes a cumulative effect adjustment to the balance sheet as of January 1, 2021. Under this method, the amendments to contracts in force were applied as of January 1, 2021 on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI.

Adoption of the ASU did not have a significant impact on DAC and other balances upon transition, other than the impact of the removal of any related amounts in AOCI. See Note 1 for additional information regarding the effect on the financial statements. Adoption of the standard also resulted in additional required disclosures. See Note 7 for additional information.

Market Risk Benefits (“MRB”)

Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value, and record MRB assets and liabilities separately on the Consolidated Statements of Financial Position. Changes in the fair value of market risk benefits are recorded in net income, except for the portion attributable to changes in an entity’s NPR, which is recognized in OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the balance of the market risk benefits upon adoption.

Effective January 1, 2023 using the retrospective transition method, which includes a cumulative effect adjustment to the balance sheet as of January 1, 2021.

Adoption of the ASU resulted in an adjustment to retained earnings for the difference between the fair value and carrying value of benefits not measured at fair value prior to the adoption of the ASU (e.g., guaranteed minimum death benefits on variable annuities) and a reclass of the cumulative effect of changes in NPR from retained earnings to AOCI. See Note 1 for additional information regarding the effect on the financial statements. Adoption of the standard also resulted in additional required disclosures. See Note 11 for additional information.

In addition to the significant key accounting changes noted above, ASU 2018-12 also clarified the definition of assessments used to accrue additional insurance reserves and other related balances, primarily for no-lapse guarantee features on certain universal life contracts in the Individual Life segment. Application of the new guidance changed the pattern of

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reserve recognition for these guarantees and resulted in an increase to the net contract liabilities related to these products at transition. See Note 1 for additional information regarding the effect on the financial statements.

ASU 2022-05, Financial Services – Insurance (Topic 944) Transition for Sold Contracts was issued on December 15, 2022, to amend the transition guidance in ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . The amendment allows an insurance entity to make an accounting policy election to not apply ASU 2018-12 to contracts or legal entities sold or disposed of before the effective date, and in which the insurance entity has no significant continuing involvement with the derecognized contracts. An insurance entity is permitted to apply the policy election on a transaction by transaction basis to each sale or disposal transaction. An insurance entity is required to disclose whether it has chosen to apply this accounting policy election and provide a qualitative description of the sale or disposal transactions to which the accounting policy election is applied. The Company did not choose to apply this accounting policy election to any of its eligible sale or disposal transactions.

(2) Updated Accounting Policies

This section includes the updated accounting policies resulting from the adoption of ASU 2018-12, which are applicable to all of the periods presented in the Unaudited Interim Consolidated Financial Statements. This section is meant to serve as an update to, and should be read in conjunction with, Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

ASSETS

Deferred policy acquisition costs (“DAC”) represents costs directly related to the successful acquisition of new and renewal insurance and annuity business. Such DAC primarily includes commissions, costs of policy issuance and underwriting, and certain other expenses that are directly related to successfully acquired contracts. In each reporting period, previously capitalized DAC is amortized and included in “Amortization of deferred policy acquisition costs”. Upon the adoption of ASU 2018-02, the carrying amount of DAC for long-duration contracts is no longer subject to recoverability testing.

DAC for most long-duration contracts is amortized on a constant-level basis at a grouped contract level over the expected life of the underlying insurance contracts. Contracts are grouped consistent with the groupings used to estimate the liability for future policy benefits (or other related balances) for the corresponding contracts. Since contracts within a grouping may be of different sizes, contracts within a group are weighted to achieve appropriate amortization and to ensure that DAC is derecognized when a policy is no longer in force. The constant-level basis used to weight contracts within a grouping and amortize DAC is generally defined as follows:

• Life insurance contracts – DAC associated with life insurance contracts is generally amortized in proportion to the initial face amount of life insurance in force. This is applicable to traditional and universal life insurance products in the Individual Life and International Insurance segments and Closed Block division, and group corporate- and bank-owned life insurance contracts in the Group Insurance segment.

• Payout annuity contracts – DAC associated with payout annuity contracts in the Retirement Strategies segment is amortized in proportion to annual benefit payments.

• Deferred annuity contracts – DAC associated with fixed and variable deferred annuity contracts in the Retirement Strategies and International Insurance segments is amortized in proportion to deposits.

• Health contracts – DAC associated with health contracts in the International Insurance segment is generally amortized in proportion to maximum lifetime benefits.

For funding agreement note contracts, single premium structured settlement contracts without life contingencies, and single premium immediate annuities without life contingencies, acquisition expenses are deferred and amortized over the expected life of the contracts using the interest method. For other group life and disability insurance contracts and guaranteed investment contracts (“GICs”), acquisition costs are expensed as incurred.

Current period DAC amortization reflects the impact of changes in actual insurance in force during the period and changes in future assumptions effected as of the end of the quarter, where applicable. The Company typically updates actuarial assumptions annually in the second quarter (see “Annual Assumptions Review” below), unless a material change is observed in

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an interim period that is indicative of a long-term trend. Generally, the Company does not expect trends to change significantly in the short-term and, to the extent these trends may change, the Company expects such changes to be gradual over the long-term.

Assumptions used for DAC are consistent with those used in estimating the liability for future policy benefits (or any other related balance) for the corresponding contract. Determining the level of aggregation and actuarial assumptions used in projecting in-force terminations requires judgment. Internal criteria are developed to determine the level of aggregation by considering both qualitative and quantitative materiality thresholds.

The assumptions used in projecting in-force terminations are mortality, mortality improvement, and lapse assumptions. These assumptions are generally based on the Company’s experience, industry experience and/or other factors, as applicable. For variable deferred annuity contracts, lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefits 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 are also generally assumed to be lower for the period where surrender charges apply.

For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a non-integrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies. See Note 7 for additional information regarding DAC.

Value of business acquired (“VOBA”) represents identifiable intangible assets to which a portion of the purchase price in a business acquisition is attributed under the application of purchase accounting. VOBA represents an adjustment to the stated value of in-force insurance contract liabilities to present them at fair value, determined as of the acquisition date. VOBA balances are subject to recoverability testing in the manner in which they were acquired. The Company has established a VOBA asset primarily for its acquired life insurance products and accident and health products with fixed benefits. As of September 30, 2023, the majority of the VOBA balance relates to the 2011 acquisition of AIG Star Life Insurance Co., Ltd, AIG Edison Life Insurance Company, AIG Financial Assurance Japan K.K. and AIG Edison Service Co., Ltd. (collectively, the “Star and Edison Businesses”). The Company records amortization of VOBA in “General and administrative expenses” and amortizes it over the anticipated life of the acquired contracts using the same methodology, factors, and assumptions used to amortize DAC and deferred sales inducements (“DSI”). See Note 7 for additional information regarding VOBA.

Market risk benefits assets represents market risk benefits (“MRBs”) in an asset position and are presented separately from MRBs in a liability position. See “Market risk benefit liabilities” below. MRB assets also reflect ceded MRBs resulting from reinsurance of the Company’s Prudential Defined Income (“PDI”) traditional variable annuity contracts. See Note 12 for additional information regarding the reinsurance of PDI.

Other assets consists primarily of prepaid pension benefit costs, certain restricted assets (e.g., cash and cash equivalents), trade receivables, goodwill and other intangible assets, “right-of-use” lease assets (see “Other liabilities” below), DSI, the Company’s investments in operating joint ventures, property and equipment, reinsurance recoverables (see “Reinsurance” below), and receivables resulting from sales of securities that had not yet settled at the balance sheet date.

Deferred Sales Inducements are amounts that are credited to a policyholders’ account balance primarily as an inducement to purchase fixed and/or variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the expected life of the policy using the same methodology, factors and assumptions used to amortize DAC. The Company records amortization of DSI in “Interest credited to policyholders’ account balances.” Unlike DAC, DSI are considered contractual cash flows and, as a result, are subject to periodic recoverability testing. See Note 7 for additional information regarding DSI.

Separate account assets represents segregated funds that are invested for certain policyholders, pension funds and other customers. The assets consist primarily of equity securities, fixed maturities, real estate-related investments, real estate mortgage loans, short-term investments and derivative instruments and are reported at fair value. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. Investment risks associated

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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. The investment income and realized investment gains or losses from separate account assets generally accrue to the policyholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income.” Asset management fees charged to the accounts are included in “Asset management and service fees.” Seed money that the Company invests in separate accounts is reported in the appropriate general account asset line. Investment income and realized investment gains or losses from seed money invested in separate accounts accrue to the Company and are included in the Company’s results of operations. See Note 8 for additional information regarding separate account arrangements with contractual guarantees. See also “Separate account liabilities” below.

LIABILITIES

Future policy benefits is primarily comprised of the present value of expected future payments to or on behalf of policyholders, where the timing and amount of such payments depend on policyholder mortality or morbidity, less the present value of expected future net premiums (where net premiums are gross premiums multiplied by the Net-To-Gross (“NTG”) ratio discussed below). The liability for future policy benefits is accrued over time as premium revenue is recognized. See Note 9 for additional information regarding future policy benefits.

The reserving methodology used for non-participating traditional and limited-payment contracts include the following:

• Cash Flow Assumptions . In measuring the liability for future policy benefits, the net premium valuation methodology is utilized. Under this methodology, a liability for future policy benefits is established using current best estimate insurance assumptions and interest rate assumptions locked-in at contract issuance date. The NTG ratio is calculated as the ratio of the present value of expected policy benefits and non-level claim settlement expenses divided by the present value of expected gross premiums. The NTG ratio is applied to gross premiums, as premium revenue is recognized, to determine net premiums. The liability is then determined as the present value of expected future policy benefits and non-level claim settlement expenses less the present value of expected future net premiums. For purposes of liability measurement, contracts are grouped into cohorts based primarily on issue year, reportable segment and major product line.

The NTG ratio is generally updated quarterly for actual experience and annually for future cash flow assumption updates during the Company’s annual assumptions review process in the second quarter of each year unless a material change is observed in an interim period that is indicative of a long-term trend (see “Annual Assumptions Review” below), with the exception of claim settlement expense assumptions which the Company has made an entity-wide election to lock-in as of contract issuance. The NTG ratio is subject to a retrospective unlocking method whereby the Company updates its best estimate of cash flows expected over the life of the cohort using actual historical experience and updated future cash flow assumptions. These updated cash flows are used to calculate the revised NTG ratio, which is used to derive an updated liability for future policy benefits as of the beginning of the current reporting period, discounted at the original contract issuance discount rate. The updated liability for future policy benefit amount as of the beginning of the quarter is then compared to the carrying amount of the liability as of that same date, before the updates for actual experience or future cash flow assumptions, to determine the current period change in liability estimate. This current period change in the liability is the liability remeasurement gain or loss that is recorded through current period earnings in “Change in estimates of liability for future policy benefits.” In subsequent periods, the revised NTG ratio is used to measure the liability for future policy benefits, subject to future revisions.

If a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and non-level claim settlement expenses, the NTG ratio is capped at 100 %. In these instances, all changes in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately. While the liability for future policy benefits cannot be less than zero (i.e., a contra-liability) at the cohort level and thus the balance is floored at zero (i.e., “flooring”), the NTG ratio may be negative. This would be the case whereby conditions have improved such that the present value of future net premiums plus the existing liability for future policy benefits as of the valuation date exceed the present value of expected future policy benefits and non-level claim settlement expenses. In this case, the negative NTG ratio would be applied going forward to gross premiums received, effectively amortizing the gain into income and reducing the liability over time.

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In addition, for limited-payment contracts, the liability for future policy benefits also includes a Deferred Profit Liability (“DPL”) representing gross premiums received in excess of net premiums and is generally recognized in revenue in a constant relationship with insurance in force for life contracts or with the amount of expected future benefit payments for annuity contracts. The DPL is subject to a retrospective unlocking adjustment consistent with the liability for future policy benefits discussed above. The DPL cannot be less than zero (i.e., a contra-liability) at the cohort level and thus the balance is floored at zero (i.e., “flooring”).

For contracts issued prior to January 1, 2021, the modified retrospective transition method was used to transition to ASU 2018-12. Under this method, the transition date of January 1, 2021 serves as the new issue date of the contracts in force for purposes of retrospectively unlocking the NTG ratio and DPL, as described above.

• Discount Rate Assumption. The locked-in discount rate is generally based on expected investment returns at contract inception for contracts issued prior to January 1, 2021 and the upper medium grade fixed income corporate instrument yield (i.e., global single A) at contract inception for contracts issued after January 1, 2021. The discount rate in effect at contract inception is locked-in for the calculation of the NTG ratio and accretion of interest cost on the liability through net income. However, for balance sheet remeasurement purposes, the discount rate is updated using the current single A rate at each reporting period, with the effect on the liability resulting from such update recorded in “Interest rate remeasurement of future policy benefits” in OCI.

The methodology used in constructing the single A discount rate curve for discounting cash flows used to calculate the liability for future policy benefits is intended to be reflective of the characteristics of the applicable insurance liabilities. The single A discount rate curve is developed by reference to upper medium grade (low credit risk) fixed income instrument yields that reflect the duration characteristics of the applicable insurance liabilities. The single A discount curve for the United States and foreign economies, such as Japan, with observable corporate A spreads, is developed using government bond rates, plus globally equivalent public corporate A spreads in the observable periods. The definition of upper medium grade is based on Moody’s definition which includes the spectrum of A (i.e., A- to A+). The rate used in foreign operations (with the exception of certain emerging markets, as discussed below) is based on the equivalent of a single A rate from a global rating agency for corporate bonds issued in the same currency and country in which the insurance contract is written. Liquidity is considered in defining the observable period and linear extrapolation is performed to the Company’s ultimate long-term economic assumptions. See “Annual Assumptions Review” below for further discussion regarding the Company’s long-term economic assumption setting process.

The Company has foreign currency denominated insurance obligations to policyholders in certain emerging markets where there is limited or no observable market data on upper medium grade (low credit risk) fixed income instrument yields. As a proxy for the upper medium grade fixed income instrument yield, the Company estimates an equivalent global single A yield in the currency of the emerging economy by converting a global single A U.S. dollar bond yield curve based on the relationship between market observable U.S. Treasury and foreign sovereign yield curves of similar duration as the insurance liability cash flows. The derived global single A curves in the foreign currency are evaluated against available evidence of observable global single A corporate bond rates in similar emerging economies. The Company uses interpolation and extrapolation techniques to complete the discount rate construction for the duration of the insurance liabilities to calculate the liability for future policy benefits denominated in the local currencies.

The Company’s liability for future policy benefits also includes net liabilities for guaranteed benefits related to certain long-duration life contracts, such as no-lapse guarantee contract features (Additional Insurance Reserves or “AIR” liability), for which a liability is established when associated assessments are recognized (which include investment margin on policyholders’ account balances in the general account and all policy charges including charges for administration, mortality, expense, surrender and other charges). This liability is established using current best estimate assumptions and is based on the ratio of the present value of total expected excess payments (i.e., payments in excess of account value) over the life of the contract divided by the present value of total expected assessments (i.e., benefit ratio).

For universal life type contracts and participating contracts, the Company performs premium deficiency tests using best estimate assumptions as of the testing date. If the liabilities determined based on these best estimate assumptions are greater than the net reserves (i.e., GAAP reserves including URR, net of reinsurance, and any DSI or VOBA asset), the existing net reserves are adjusted by first reducing these assets by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than these asset balances for insurance contracts, the net reserves are increased by the excess through a charge to current period earnings included in “policyholders’ benefits”. Since investment yields are used as the discount rate, the premium deficiency test is also performed using a discount rate based on the market yield (i.e., assuming what

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would be the impact if any unrealized gains (losses) were realized as of the testing date). In the event that by using the market yield a deficiency occurs, an adjustment is established for the deficiency and is included in AOCI.

In certain instances, for universal life type contracts and participating contracts, the policyholder liability for a particular line of business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. In these situations, accounting standards require that an additional liability (Profits Followed by Losses or “PFL” liability) be recognized by an amount necessary to sufficiently offset the losses that would be recognized in later years. Historically, PFL liabilities have been predominately associated with certain universal life contracts that measure GAAP reserves using a dynamic approach, and accordingly, are updated each quarter, using current in-force and market data, and as part of the annual assumption update, such that the liability as of each measurement date represents the Company’s current estimate of the present value of the amount necessary to offset anticipated future losses.

The Company’s liability for future policy benefits also includes a liability for unpaid claims and claim adjustment expenses. The Company does not establish claim liabilities until a loss has been incurred. However, unpaid claims and claim adjustment expenses include estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date.

Policyholders’ account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is primarily associated with the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance, as applicable. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues. The unearned revenue liability represents policy charges for services to be provided in future periods. The charges are deferred as incurred and are generally amortized over the expected life of the contract using the same methodology, factors, and assumption used to amortize DAC. See Note 10 for additional information regarding policyholders’ account balances. Policyholders’ account balances also include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products. For additional information regarding the valuation of these embedded derivatives, see Note 6.

Market risk benefit liabilities represents contracts or contract features that provide protection to the contractholder and exposes the Company to other than nominal capital market risk, primarily related to deferred annuities with guaranteed minimum benefits in the Retirement Strategies segment including guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”). The benefits are accounted for using a fair value measurement framework. If a contract contains multiple market risk benefits, the benefits are bundled together and accounted for as a single compound market risk benefit. Market risk benefits in an asset position are presented separately from those in a liability position as there is no legal right of offset between contracts. The fair value of market risk benefits is calculated as the present value of expected future benefit payments to contractholders less the present value of expected future rider fees attributable to the market risk benefit. The fair value of market risk benefits is based on assumptions a market participant would use in valuing market risk benefits. For additional information regarding the valuation of market risk benefits, see Note 6. On a quarterly basis, changes in the fair value of market risk benefits are recorded in net income, net of related hedges, in “Change in value of market risk benefits, net of related hedging gains (losses)”, except for the portion of the change attributable to changes in the Company’s NPR which is recorded in OCI. See Note 11 for additional information regarding market risk benefits. See “Reinsurance” below for information regarding the reinsurance of MRBs.

Policyholders’ dividends includes dividends payable to policyholders and the policyholder dividend obligation associated with the participating policies included in the Closed Block. The dividends payable for participating policies included in the Closed Block are determined at the end of each year for the following year by the Board of Directors of The Prudential Insurance Company of America (“PICA”) based on its statutory results, capital position, ratings, and the emerging experience of the Closed Block. The policyholder dividend obligation represents amounts expected to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance. Any adjustments to the policyholder dividend obligation related to net unrealized gains (losses) on securities classified as available-for-sale are included in AOCI. For additional information regarding the policyholder dividend obligation, see Note 13. The dividends payable for policies other than the participating policies included in the Closed Block include dividends payable in accordance with certain group and individual insurance policies.

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Separate account liabilities primarily represents the contractholders’ account balances in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See also “Separate account assets” above.

REVENUES, BENEFITS AND EXPENSES

Insurance Revenue and Expense Recognition

Premiums from individual life products, other than universal and variable life contracts, and health insurance and long-term care products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future policy benefits and non-level claim settlement expenses) is generally deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized as described in “Future policy benefits” above.

Premiums from non-participating group annuities with life contingencies, single premium structured settlements with life contingencies and single premium immediate annuities with life contingencies are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium is generally deferred and recognized into revenue based on expected future benefit payments. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized as described in “Future policy benefits” above.

Certain individual annuity contracts provide the contractholder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are generally accounted for as market risk benefits (see “Market risk benefits” above).

Amounts received from policyholders as payment for universal or variable group and individual life contracts, deferred fixed or variable annuities, structured settlements and other contracts without life contingencies, and participating group annuities are reported as deposits to “Policyholders’ account balances” and/or “Separate account liabilities.” Revenues from these contracts are reflected in “Policy charges and fee income” consisting primarily of fees assessed during the period against the policyholders’ account balances for mortality and other benefit charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of deposits in the Company’s general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are generally deferred and amortized into revenue over the life of the related contracts using the same methodology, factors, and assumption used to amortize DAC as described above. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders’ account balances and amortization of DAC, DSI and VOBA.

Policyholders’ account balances also include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products where changes in the value of the embedded derivatives are recorded through “Realized investment gains (losses), net”. For additional information regarding the valuation of these embedded derivatives, see Note 6.

For group life, other than universal and variable group life contracts, and disability insurance, premiums are generally recognized over the period to which the premiums relate in proportion to the amount of insurance protection provided. Claim and claim adjustment expenses are recognized when incurred.

OTHER ACCOUNTING POLICIES

Reinsurance

For each of its reinsurance contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject, or features that delay the timely reimbursement of claims.

---

The Company participates in reinsurance arrangements in various capacities as either the ceding entity or as the reinsurer (i.e., assuming entity). See Note 12 for additional information regarding the Company’s reinsurance arrangements. Reinsurance assumed business is generally accounted for consistent with direct business. Amounts currently recoverable under reinsurance agreements are included in “Other assets” and amounts payable are included in “Other liabilities.” “Other assets” also includes recoverables from assumed modified coinsurance arrangements which generally reflect the fair value of the invested assets retained by the cedant and contain an embedded derivative that is bifurcated and accounted for at fair value separately from the host contract. Under coinsurance with funds withheld ceded arrangements, invested assets are retained by the Company. “Other liabilities” includes amounts payable to the reinsurer, which generally reflect the fair value of the invested assets retained by the Company and contain an embedded derivative that is bifurcated and accounted for at fair value separately from the host contract. Revenues and benefits and expenses include amounts assumed under reinsurance agreements and are reflected net of reinsurance ceded.

Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. Reinsurance recoverables are reported net of the CECL allowance. The CECL allowance considers the credit quality of the reinsurance counterparty and is generally determined based on the probability of default and loss given default assumptions, after considering any applicable collateral arrangements. Additions to or releases of the allowance are reported in “Policyholders’ benefits”. Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts under coinsurance arrangements are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. For reinsurance of in- force blocks of non-participating traditional and limited-payment contracts, the current value of the direct liability as of inception of the reinsurance agreement is used to calculate the reinsurance recoverable and cost of reinsurance such that there is no immediate other comprehensive income or loss from recognition of the reinsurance recoverable at inception. Consistent with the direct liability, the reinsurance recoverable for non-participating traditional and limited-payment contracts is remeasured each period using current single A rates with the effect on the liability resulting from such updates recorded in “Interest rate remeasurement of future policy benefits” in OCI. For reinsurance of limited-payment contracts, the Company establishes a cost of reinsurance asset relating to the direct DPL and amortizes this balance through “Premiums” using the same methodology and assumptions used to amortize the direct DPL.

Consistent with direct contracts, reinsurance arrangements may also include features that meet the definition of an MRB and, if so, are accounted for at fair value. The fair value of direct or assumed MRBs reflects the Company’s NPR, while the fair value of ceded MRBs reflects the counterparty credit risk of the reinsurer. Changes in the fair value of ceded MRBs, including the impact of changes in counterparty credit risk, are recorded in net income in “Change in value of market risk benefits, net of related hedging gains (losses)”.

Coinsurance arrangements contrast with the Company’s yearly renewable term arrangements, where only mortality risk is transferred to the reinsurer and premiums are paid to the reinsurer to reinsure that risk. The mortality risk that is reinsured under yearly renewable term arrangements represents the difference between the stated death benefits in the underlying reinsured contracts and the corresponding reserves or account value carried by the Company on those same contracts. The premiums paid to the reinsurer are based upon negotiated amounts, not on the actual premiums paid by the underlying contractholders to the Company. As yearly renewable term arrangements are usually entered into by the Company with the expectation that the contracts will be in force for the lives of the underlying policies, they are considered to be long-duration reinsurance contracts. The cost of reinsurance for universal life products is generally recognized based on the gross assessments of the underlying direct policies. The cost of reinsurance for term insurance products is generally recognized in proportion to direct premiums over the life of the underlying policies. The cost of reinsurance related to short-duration reinsurance contracts is accounted for over the reinsurance contract period.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in “Other liabilities” and deposits made are included in “Other assets”. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as “Net investment income” or “General and administrative expenses,” as appropriate.

Annual Assumptions Review

Annually, the Company performs a comprehensive review of the assumptions set for purposes of estimating future premiums, benefits, and other cash flows. Assumptions include those that are economic and those that are insurance related.

---

Insurance related assumptions are based on the Company’s best estimates of future rates of mortality, morbidity, lapse, surrender, annuitization, expenses and other items. The Company generally looks to relevant Company experience as the primary basis for these assumptions. If relevant Company experience is not available or does not have sufficient credibility, the Company may look to experience of similar blocks of business, either in the Company or the industry. Mortality rate assumptions are generally based on Company experience, sometimes blending Company experience with an industry table where the Company experience alone is not sufficiently credible. The Company sets mortality and morbidity assumptions that vary by major type of business. Within type of business, rates vary by age and gender. The Company applies an adjustment for future mortality improvement, consistent with observed long-term trends of population mortality over time. Lapse and surrender assumptions are based on Company and industry experience, where available. The Company sets rates that vary by product type, taking into account features specific to the product.

As part of this review, the Company may update these assumptions and make refinements to its models based upon emerging experience, future expectations and other data, including any observable market data it feels is indicative of a long-term trend. These assumptions are generally updated annually, unless a material change is observed in an interim period that the Company feels is also indicative of a long-term trend. Generally, the Company does not expect trends to change significantly in the short-term and, to the extent these trends may change, it expects such changes to be gradual over the long-term.

The Company also performs a comprehensive review of the economic assumptions, including long-term interest rate assumptions and equity return assumptions, that impact reserve calculations. The Company generally utilizes relevant economic outlook information and industry surveys as the primary basis for these assumptions.

Other ASUs adopted during the nine months ended September 30, 2023

The Company adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure, effective January 1, 2023, on a prospective basis. This ASU eliminates the accounting guidance for Troubled Debt Restructurings (“TDR”) for creditors and adds enhanced disclosure requirements. Following adoption of the ASU, all loan refinancings and restructurings are subject to the modification guidance in ASC 310-20. Specific to the accounting policy for commercial mortgage and other loans, adoption of the ASU resulted in the elimination of TDRs such that, on a prospective basis, all modifications are evaluated under the existing modification guidance in ASC 310-20 to determine whether a modification results in a new financial instrument or a continuation of the existing financial instrument. Furthermore, for modifications of loans that have a CECL allowance and result in a continuation of the existing loan, the CECL allowance of the loan is remeasured using the modified terms and the post-modification effective yield. Prior to the adoption of the ASU, if a loan modification was a TDR, the CECL allowance of the loan was remeasured using the modified terms and the loan’s original effective yield. Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

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Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:

			September 30, 2023
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
			(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	25,359					$	747					$	6,157					$	0					$	19,949
Obligations of U.S. states and their political subdivisions			8,905						154						1,062						0						7,997
Foreign government bonds			68,510						3,387						5,324						64						66,509
U.S. public corporate securities			105,698						942						17,276						93						89,271
U.S. private corporate securities(1)			41,659						637						4,078						27						38,191
Foreign public corporate securities			20,618						297						2,207						47						18,661
Foreign private corporate securities			34,563						177						5,421						6						29,313
Asset-backed securities(2)			13,349						216						201						2						13,362
Commercial mortgage-backed securities			10,932						5						1,027						0						9,910
Residential mortgage-backed securities(3)			2,442						17						304						0						2,155
Total fixed maturities, available-for-sale(1)			$	332,035					$	6,579					$	43,057					$	239					$	295,318

			September 30, 2023
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Allowance for Credit Losses						Amortized Cost, Net of Allowance
			(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds			$	0					$	0					$	0					$	0					$	0					$	0
Foreign public corporate securities			0						0						0						0						0						0
Residential mortgage-backed securities			0						0						0						0						0						0
Total fixed maturities, held-to-maturity(4)			$	0					$	0					$	0					$	0					$	0					$	0

__________

(1) Excludes notes with amortized cost of $ 12,290 million (fair value, $ 12,290 million), which have been offset with the associated debt under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, auto loans, education loans, home equity loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) In the third quarter of 2023, the Company changed its intent to hold a portion of its held-to-maturity portfolio, which will be redeemed as part of a recently announced reinsurance transaction. As a result, the entire held-to-maturity portfolio was reclassified to available-for-sale and recorded at fair value.

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			December 31, 2022
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
			(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	29,372					$	1,110					$	4,413					$	0					$	26,069
Obligations of U.S. states and their political subdivisions			10,179						238						728						0						9,689
Foreign government bonds			74,103						4,503						5,379						1						73,226
U.S. public corporate securities			99,854						1,311						13,563						16						87,586
U.S. private corporate securities(1)			39,867						507						3,438						57						36,879
Foreign public corporate securities			22,235						416						1,945						19						20,687
Foreign private corporate securities			32,755						150						5,201						44						27,660
Asset-backed securities(2)			12,972						166						286						1						12,851
Commercial mortgage-backed securities			11,497						19						861						0						10,655
Residential mortgage-backed securities(3)			2,613						29						225						0						2,417
Total fixed maturities, available-for-sale(1)			$	335,447					$	8,449					$	36,039					$	138					$	307,719

			December 31, 2022
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Allowance for Credit Losses						Amortized Cost, Net of Allowance
			(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds			$	725					$	128					$	0					$	853					$	0					$	725
Foreign public corporate securities			430						24						0						454						2						428
Residential mortgage-backed securities(3)			143						5						0						148						0						143
Total fixed maturities, held-to-maturity(4)			$	1,298					$	157					$	0					$	1,455					$	2					$	1,296

__________

(1) Excludes notes with amortized cost of $ 8,040 million (fair value, $ 8,040 million), which have been offset with the associated debt under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans, home equity loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Excludes notes with amortized cost of $ 4,250 million (fair value, $ 4,250 million), which have been offset with the associated debt under a netting agreement.

In the third quarter of 2023, the Company changed its intent to hold a portion of its held-to-maturity portfolio, which will be redeemed as part of a recently announced reinsurance transaction. As a result, the entire held-to-maturity portfolio (amortized cost, net of allowance of $ 1,212 million) was reclassified to fixed maturities available-for-sale and recorded at fair value, while the $ 136 million net unrealized gain on the portfolio was recorded in “Accumulated other comprehensive income” as of September 30, 2023.

The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

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						September 30, 2023
						Less Than Twelve Months												Twelve Months or More												Total
						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
						(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies						$	6,499					$	565					$	11,344					$	5,592					$	17,843					$	6,157
Obligations of U.S. states and their political subdivisions						3,297						215						3,696						847						6,993						1,062
Foreign government bonds						10,240						574						18,507						4,745						28,747						5,319
U.S. public corporate securities						23,484						1,702						57,332						15,566						80,816						17,268
U.S. private corporate securities						7,695						370						25,553						3,708						33,248						4,078
Foreign public corporate securities						4,073						198						10,574						1,987						14,647						2,185
Foreign private corporate securities						6,311						414						20,938						5,005						27,249						5,419
Asset-backed securities						2,114						45						7,564						156						9,678						201
Commercial mortgage-backed securities						1,301						38						8,399						989						9,700						1,027
Residential mortgage-backed securities						350						13						1,500						291						1,850						304
Total fixed maturities, available-for-sale						$	65,364					$	4,134					$	165,407					$	38,886					$	230,771					$	43,020

						December 31, 2022
						Less Than Twelve Months												Twelve Months or More												Total
						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
						(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies						$	18,009					$	3,143					$	2,563					$	1,270					$	20,572					$	4,413
Obligations of U.S. states and their political subdivisions						5,510						526						558						202						6,068						728
Foreign government bonds						16,932						2,384						9,877						2,971						26,809						5,355
U.S. public corporate securities						58,816						7,790						15,780						5,726						74,596						13,516
U.S. private corporate securities						24,610						2,065						6,705						1,373						31,315						3,438
Foreign public corporate securities						10,168						932						4,098						993						14,266						1,925
Foreign private corporate securities						16,909						2,521						8,196						2,678						25,105						5,199
Asset-backed securities						5,385						130						5,059						156						10,444						286
Commercial mortgage-backed securities						9,289						655						1,080						206						10,369						861
Residential mortgage-backed securities						1,322						130						402						93						1,724						223
Total fixed maturities, available-for-sale						$	166,950					$	20,276					$	54,318					$	15,668					$	221,268					$	35,944

As of September 30, 2023 and December 31, 2022, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance of $ 41,394 million and $ 33,778 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $ 1,626 million and $ 2,166 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of September 30, 2023, the $ 38,886 million of gross unrealized losses of twelve months or more were concentrated in the finance, consumer non-cyclical and utility sectors within corporate securities and both U.S. and foreign government securities. As of December 31, 2022, the $ 15,668 million of gross unrealized losses of twelve months or more were concentrated in consumer non-cyclical, finance and utility sectors within corporate securities and foreign government securities.

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In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at September 30, 2023. This conclusion was based on detailed analysis of the underlying credit and cash flows for each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening and foreign currency exchange rate movements. As of September 30, 2023, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:

			September 30, 2023
			Available-for-Sale
			Amortized Cost						Fair Value
			(in millions)
Fixed maturities:
Due in one year or less			$	10,091					$	10,169
Due after one year through five years			51,618						49,759
Due after five years through ten years			61,821						58,437
Due after ten years(1)			181,782						151,526
Asset-backed securities			13,349						13,362
Commercial mortgage-backed securities			10,932						9,910
Residential mortgage-backed securities			2,442						2,155
Total			$	332,035					$	295,318

__________

(1) Excludes available-for-sale notes with amortized cost of $ 12,290 million (fair value, $ 12,290 million), which have been offset with the associated debt under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)			$	6,619					$	4,978					$	20,741					$	24,056
Proceeds from maturities/prepayments			4,051						5,186						12,092						14,792
Gross investment gains from sales and maturities			295						325						724						940
Gross investment losses from sales and maturities			( 734 )						( 376 )						( 1,436 )						( 1,963 )
Write-downs recognized in earnings(2)			( 53 )						( 21 )						( 63 )						( 113 )
(Addition to) release of allowance for credit losses			37						( 42 )						( 101 )						( 37 )
Fixed maturities, held-to-maturity:
Proceeds from maturities/prepayments(3)			$	4					$	7					$	21					$	24
(Addition to) release of allowance for credit losses			2						1						2						3

__________

(1) Excludes activity from non-cash related proceeds due to the timing of trade settlements of $( 90 ) million and $ 3 million for the nine months ended September 30, 2023 and 2022, respectively.

(2) Amounts represent write-downs on credit adverse securities and securities actively marketed for sale.

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The following tables set forth the activity in the allowance for credit losses for fixed maturity securities, as of the dates indicated:

			Three Months Ended September 30, 2023
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period			$	0					$	56					$	219					$	1					$	0					$	0					$	276
Additions to allowance for credit losses not previously recorded			0						0						9						0						0						0						9
Reductions for securities sold during the period			0						0						( 71 )						0						0						0						( 71 )
Additions (reductions) on securities with previous allowance			0						8						16						1						0						0						25
Balance, end of period			$	0					$	64					$	173					$	2					$	0					$	0					$	239

			Three Months Ended September 30, 2022
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period			$	0					$	6					$	102					$	1					$	0					$	0					$	109
Additions to allowance for credit losses not previously recorded			0						0						30						4						0						0						34
Reductions for securities sold during the period			0						( 3 )						( 2 )						0						0						0						( 5 )
Reductions for securities with intent to sell			0						0						0						0						0						0						0
Additions (reductions) on securities with previous allowance			0						( 2 )						15						0						0						0						13
Balance, end of period			$	0					$	1					$	145					$	5					$	0					$	0					$	151

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			Nine Months Ended September 30, 2023
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period			$	0					$	1					$	136					$	1					$	0					$	0					$	138
Additions to allowance for credit losses not previously recorded			0						62						87						0						0						0						149
Reductions for securities sold during the period			0						0						( 116 )						0						0						0						( 116 )
Additions (reductions) on securities with previous allowance			0						1						66						1						0						0						68
Balance, end of period			$	0					$	64					$	173					$	2					$	0					$	0					$	239

			Nine Months Ended September 30, 2022
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period			$	0					$	7					$	107					$	0					$	0					$	0					$	114
Additions to allowance for credit losses not previously recorded			0						11						103						5						0						0						119
Reductions for securities sold during the period			0						( 5 )						( 55 )						0						0						0						( 60 )
Reductions for securities with intent to sell			0						( 13 )						( 67 )						0						0						0						( 80 )
Additions (reductions) on securities with previous allowance			0						1						57						0						0						0						58
Balance, end of period			$	0					$	1					$	145					$	5					$	0					$	0					$	151

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			Three Months Ended September 30, 2023
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, held-to-maturity:
Balance, beginning of period			$	0					$	0					$	2					$	0					$	0					$	0					$	2
Current period provision for expected losses(1)			0						0						( 2 )						0						0						0						( 2 )
Change in foreign exchange			0						0						0						0						0						0						0
Balance, end of period			$	0					$	0					$	0					$	0					$	0					$	0					$	0

__________

(1) In the third quarter of 2023, the Company changed its intent to hold a portion of its held-to-maturity portfolio, which will be redeemed as part of a recently announced reinsurance transaction. As a result, the entire held-to-maturity portfolio was reclassified to available-for-sale and recorded at fair value.

			Three Months Ended September 30, 2022
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, held-to-maturity:
Balance, beginning of period			$	0					$	0					$	3					$	0					$	0					$	0					$	3
Current period provision for expected losses			0						0						( 1 )						0						0						0						( 1 )
Change in foreign exchange			0						0						0						0						0						0						0
Balance, end of period			$	0					$	0					$	2					$	0					$	0					$	0					$	2

			Nine Months Ended September 30, 2023
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, held-to-maturity:
Balance, beginning of period			$	0					$	0					$	2					$	0					$	0					$	0					$	2
Current period provision for expected losses(1)			0						0						( 2 )						0						0						0						( 2 )
Change in foreign exchange			0						0						0						0						0						0						0
Balance, end of period			$	0					$	0					$	0					$	0					$	0					$	0					$	0

__________

(1) In the third quarter of 2023, the Company changed its intent to hold a portion of its held-to-maturity portfolio, which will be redeemed as part of a recently announced reinsurance transaction. As a result, the entire held-to-maturity portfolio was reclassified to available-for-sale and recorded at fair value.

---

			Nine Months Ended September 30, 2022
			U.S. Treasury Securities and Obligations of U.S. States						Foreign Government Bonds						U.S. and Foreign Corporate Securities						Asset-Backed Securities						Commercial Mortgage-Backed Securities						Residential Mortgage-Backed Securities						Total
			(in millions)
Fixed maturities, held-to-maturity:
Balance, beginning of period			$	0					$	0					$	5					$	0					$	0					$	0					$	5
Current period provision for expected losses			0						0						( 2 )						0						0						0						( 2 )
Change in foreign exchange			0						0						( 1 )						0						0						0						( 1 )
Balance, end of period			$	0					$	0					$	2					$	0					$	0					$	0					$	2

For additional information regarding the Company’s methodology for developing its allowance and expected losses, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

For the three months ended September 30, 2023, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to a net release in the capital goods and utilities sectors within corporate securities due to investment restructurings. Partially offsetting the release, was a net addition within foreign government securities due to adverse projected cash flows. For the three months ended September 30, 2022, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the consumer non-cyclical, capital goods and utility sectors within corporate securities, partially offset by a net release within the transportation sector.

For the nine months ended September 30, 2023, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the communications and technology sectors within corporate securities as well as foreign government securities due to adverse projected cash flows. Partially offsetting the additions was a net release within the capital goods and utility sectors within corporate securities. For the nine months ended September 30, 2022, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the capital goods, consumer non-cyclical and utility sectors within corporate securities, partially offset by net releases in the communications and transportation sectors.

The Company did no t have any fixed maturity securities purchased with credit deterioration, as of September 30, 2023 or December 31, 2022.

---

Assets Supporting Experience-Rated Contractholder Liabilities

The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:

						September 30, 2023												December 31, 2022
						Amortized Cost or Cost						Fair Value						Amortized Cost or Cost						Fair Value
						(in millions)
Fixed maturities:
Corporate securities						$	77					$	75					$	91					$	88
Foreign government bonds						625						609						705						668
U.S. government authorities and agencies and obligations of U.S. states						192						204						188						189
Total fixed maturities(1)						894						888						984						945
Equity securities						1,476						2,055						1,628						1,899
Total assets supporting experience-rated contractholder liabilities(2)						$	2,370					$	2,943					$	2,612					$	2,844

__________

(1) As a percentage of amortized cost, 99 % and 98 % of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of September 30, 2023 and December 31, 2022, respectively.

(2) As a percentage of amortized cost, 100 % of the portfolio consisted of public securities, as of both September 30, 2023 and December 31, 2022.

The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $( 27 ) million and $( 52 ) million during the three months ended September 30, 2023 and 2022, respectively and $ 341 million and $( 743 ) million during the nine months ended September 30, 2023 and 2022, respectively.

Fixed Maturities, Trading

The net change in unrealized gains (losses) from fixed maturities, trading still held at period end, recorded within “Other income (loss),” was $( 295 ) million and $( 496 ) million during the three months ended September 30, 2023 and 2022, respectively and $( 190 ) million and $( 1,653 ) million during the nine months ended September 30, 2023 and 2022, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $( 276 ) million and $( 396 ) million during the three months ended September 30, 2023 and 2022, respectively and $ 300 million and $( 1,253 ) million during the nine months ended September 30, 2023 and 2022, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any single issuer.

As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:

---

						September 30, 2023												December 31, 2022
						Amortized Cost						Fair Value						Amortized Cost						Fair Value
						(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale						$	59,682					$	58,439					$	65,198					$	64,959
Fixed maturities, held-to-maturity						0						0						706						831
Fixed maturities, trading						18						17						20						19
Assets supporting experience-rated contractholder liabilities						537						521						613						587
Total						$	60,237					$	58,977					$	66,537					$	66,396

						September 30, 2023												December 31, 2022
						Amortized Cost						Fair Value						Amortized Cost						Fair Value
						(in millions)
Investments in Brazil government and government agency securities:
Fixed maturities, available-for-sale						$	2,838					$	2,673					$	2,264					$	2,010
Short-term investments						1						1						60						61
Cash equivalents						437						437						210						210
Total						$	3,276					$	3,111					$	2,534					$	2,281

---

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:

						September 30, 2023												December 31, 2022
						Amount (in millions)						% of Total						Amount (in millions)						% of Total
Commercial mortgage and agricultural property loans by property type:
Office						$	8,403					14.6		%				$	9,096					16.2		%
Retail						5,869						10.2						6,103						10.8
Apartments/Multi-Family						15,985						27.7						15,381						27.3
Industrial						14,430						25.0						13,079						23.2
Hospitality						2,139						3.7						2,027						3.6
Other						3,939						6.8						3,791						6.7
Total commercial mortgage loans						50,765						88.0						49,477						87.8
Agricultural property loans						6,939						12.0						6,857						12.2
Total commercial mortgage and agricultural property loans						57,704						100.0		%				56,334						100.0		%
Allowance for credit losses						( 331 )												( 201 )
Total net commercial mortgage and agricultural property loans						57,373												56,133
Other loans:
Uncollateralized loans						406												463
Residential property loans						30												43
Other collateralized loans						100												108
Total other loans						536												614
Allowance for credit losses						( 1 )												( 2 )
Total net other loans						535												612
Total net commercial mortgage and other loans(1)						$	57,908											$	56,745

__________

(1) Includes loans which are carried at fair value under the fair value option and are collateralized primarily by apartment complexes. As of September 30, 2023 and December 31, 2022, the net carrying value of these loans were $ 387 million and $ 137 million, respectively.

As of September 30, 2023, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California ( 31 %), Texas ( 8 %) and New York ( 6 %), and included loans secured by properties in Europe ( 6 %), Asia ( 1 %), Mexico ( 1 %) and Australia ( 1 %).

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:

						Three Months Ended September 30, 2023
						Commercial Mortgage Loans						Agricultural Property Loans						Residential Property Loans						Other Collateralized Loans						Uncollateralized Loans						Total
						(in millions)
Allowance, beginning of period						$	224					$	16					$	0					$	0					$	1					$	241
Addition to (release of) allowance for expected losses						90						0						0						0						0						90
Reduction for loans sold during the period						0						0						0						0						0						0
Change in foreign exchange						1						0						0						0						0						1
Allowance, end of period						$	315					$	16					$	0					$	0					$	1					$	332

---

						Three Months Ended September 30, 2022
						Commercial Mortgage Loans						Agricultural Property Loans						Residential Property Loans						Other Collateralized Loans						Uncollateralized Loans						Total
						(in millions)
Allowance, beginning of period						$	156					$	8					$	0					$	0					$	32					$	196
Addition to (release of) allowance for expected losses						22						2						0						0						0						24
Reclassified (to) from “Assets held-for-sale”						( 6 )						0						0						0						0						( 6 )
Other						4						0						0						0						0						4
Allowance, end of period						$	176					$	10					$	0					$	0					$	32					$	218

						Nine Months Ended September 30, 2023
						Commercial Mortgage Loans						Agricultural Property Loans						Residential Property Loans						Other Collateralized Loans						Uncollateralized Loans						Total
						(in millions)
Allowance, beginning of period						$	188					$	13					$	0					$	0					$	2					$	203
Addition to (release of) allowance for expected losses						125						3						0						0						0						128
Reduction for loans sold during the period						0						0						0						0						( 1 )						( 1 )
Change in foreign exchange						2						0						0						0						0						2
Allowance, end of period						$	315					$	16					$	0					$	0					$	1					$	332

						Nine Months Ended September 30, 2022
						Commercial Mortgage Loans						Agricultural Property Loans						Residential Property Loans						Other Collateralized Loans						Uncollateralized Loans						Total
						(in millions)
Allowance, beginning of period						$	111					$	4					$	0					$	0					$	4					$	119
Addition to (release of) allowance for expected losses						62						6						0						0						28						96
Reclassified (to) from “Assets held-for-sale”						0						0						0						0						0						0
Other						3						0						0						0						0						3
Allowance, end of period						$	176					$	10					$	0					$	0					$	32					$	218

For additional information regarding the Company’s methodology for developing its allowance and expected losses, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

For the three months ended September 30, 2023, the net addition to the allowance for credit losses on commercial mortgage and other loans was due to an increase in loan-specific reserves and increases to the portfolio reserve to reflect declining market conditions. For the three months ended September 30, 2022, the net addition to the allowance for credit losses on commercial mortgage and other loans was due to increases in loan-specific reserves as well as increases to the portfolio reserve to reflect declining market conditions.

For the nine months ended September 30, 2023, the net addition to the allowance for credit losses on commercial mortgage and other loans was due to an increase in loan-specific reserves and increases to the portfolio reserve to reflect declining market conditions. For the nine months ended September 30, 2022, the net addition to the allowance for credit losses on commercial mortgage and other loans was due to increases in loan-specific reserves as well as increases to the portfolio reserve to reflect declining market conditions.

---

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:

			September 30, 2023
			Amortized Cost by Origination Year
			2023						2022						2021						2020						2019						Prior						Revolving Loans						Total
			(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%			$	1,340					$	946					$	2,243					$	1,393					$	3,454					$	18,461					$	0					$	27,837
60%-69.99%			1,600						1,636						2,846						1,542						2,113						4,089						0						13,826
70%-79.99%			833						966						1,003						46						939						1,824						0						5,611
80% or greater			85						130						148						282						185						2,661						0						3,491
Total			$	3,858					$	3,678					$	6,240					$	3,263					$	6,691					$	27,035					$	0					$	50,765
Debt Service Coverage Ratio:
Greater or Equal to 1.2x			$	3,494					$	3,161					$	6,078					$	3,169					$	6,063					$	23,697					$	0					$	45,662
1.0 - 1.2x			214						365						84						39						307						1,762						0						2,771
Less than 1.0x			150						152						78						55						321						1,576						0						2,332
Total			$	3,858					$	3,678					$	6,240					$	3,263					$	6,691					$	27,035					$	0					$	50,765
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%			$	194					$	891					$	2,020					$	784					$	460					$	1,593					$	86					$	6,028
60%-69.99%			98						671						40						56						20						4						0						889
70%-79.99%			7						0						0						0						15						0						0						22
80% or greater			0						0						0						0						0						0						0						0
Total			$	299					$	1,562					$	2,060					$	840					$	495					$	1,597					$	86					$	6,939
Debt Service Coverage Ratio:
Greater or Equal to 1.2x			$	294					$	1,549					$	2,017					$	809					$	494					$	1,510					$	86					$	6,759
1.0 - 1.2x			0						5						43						31						0						74						0						153
Less than 1.0x			5						8						0						0						1						13						0						27
Total			$	299					$	1,562					$	2,060					$	840					$	495					$	1,597					$	86					$	6,939

---

			December 31, 2022
			Amortized Cost by Origination Year
			2022						2021						2020						2019						2018						Prior						Revolving Loans						Total
			(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%			$	971					$	1,747					$	1,282					$	2,831					$	4,697					$	15,111					$	0					$	26,639
60%-69.99%			1,997						3,502						1,553						2,804						1,732						3,780						0						15,368
70%-79.99%			865						1,127						519						1,025						645						1,445						0						5,626
80% or greater			2						26						7						119						24						1,666						0						1,844
Total			$	3,835					$	6,402					$	3,361					$	6,779					$	7,098					$	22,002					$	0					$	49,477
Debt Service Coverage Ratio:
Greater or Equal to 1.2x			$	3,249					$	6,135					$	3,013					$	5,749					$	6,505					$	18,318					$	0					$	42,969
1.0 - 1.2x			586						252						164						454						383						2,183						0						4,022
Less than 1.0x			0						15						184						576						210						1,501						0						2,486
Total			$	3,835					$	6,402					$	3,361					$	6,779					$	7,098					$	22,002					$	0					$	49,477
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%			$	931					$	1,994					$	853					$	461					$	326					$	1,348					$	74					$	5,987
60%-69.99%			675						85						8						47						8						0						0						823
70%-79.99%			0						0						0						0						0						0						0						0
80% or greater			0						0						0						0						13						34						0						47
Total			$	1,606					$	2,079					$	861					$	508					$	347					$	1,382					$	74					$	6,857
Debt Service Coverage Ratio:
Greater or Equal to 1.2x			$	1,593					$	2,035					$	781					$	507					$	323					$	1,272					$	74					$	6,585
1.0 - 1.2x			5						44						80						0						6						68						0						203
Less than 1.0x			8						0						0						1						18						42						0						69
Total			$	1,606					$	2,079					$	861					$	508					$	347					$	1,382					$	74					$	6,857

For additional information regarding the Company’s commercial mortgage and other loans credit quality monitoring process, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

---

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:

						September 30, 2023
						Current						30-59 Days Past Due						60-89 Days Past Due						90 Days or More Past Due(1)(2)						Total Past Due						Total Loans						Non-Accrual Status(3)
						(in millions)
Commercial mortgage loans						$	50,707					$	0					$	0					$	58					$	58					$	50,765					$	61
Agricultural property loans						6,935						0						4						0						4						6,939						25
Residential property loans						30						0						0						0						0						30						0
Other collateralized loans						100						0						0						0						0						100						0
Uncollateralized loans						406						0						0						0						0						406						25
Total						$	58,178					$	0					$	4					$	58					$	62					$	58,240					$	111

__________

(1) As of September 30, 2023, there were no loans in this category accruing interest.

(2) Primarily includes loans for which no credit losses are expected due to U.S. agency guarantees.

(3) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

						December 31, 2022
						Current						30-59 Days Past Due						60-89 Days Past Due						90 Days or More Past Due(1)						Total Past Due						Total Loans						Non-Accrual Status(2)
						(in millions)
Commercial mortgage loans						$	49,465					$	0					$	3					$	9					$	12					$	49,477					$	11
Agricultural property loans						6,844						0						11						2						13						6,857						17
Residential property loans						43						0						0						0						0						43						0
Other collateralized loans						108						0						0						0						0						108						0
Uncollateralized loans						463						0						0						0						0						463						0
Total						$	56,923					$	0					$	14					$	11					$	25					$	56,948					$	28

__________

(1) As of December 31, 2022, there were no loans in this category accruing interest.

(2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Loans on non-accrual status recognized interest of less than $ 1 million for both the three months ended September 30, 2023 and 2022 and $ 1 million and less than $ 1 million for the nine months ended September 30, 2023 and 2022. Loans on non-accrual status that did not have a related allowance for credit losses were $ 108 million and $ 27 million as of September 30, 2023 and December 31, 2022, respectively.

The Company did no t have any significant losses on commercial mortgage and other loans purchased with credit deterioration as of both September 30, 2023 and December 31, 2022.

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Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

						September 30, 2023						December 31, 2022
						(in millions)
LPs/LLCs:
Equity method:
Private equity						$	8,556					$	7,215
Hedge funds						3,145						3,220
Real estate-related						2,592						2,793
Subtotal equity method						14,293						13,228
Fair value:
Private equity						1,341						1,476
Hedge funds						2,068						1,908
Real estate-related						276						305
Subtotal fair value						3,685						3,689
Total LPs/LLCs						17,978						16,917
Real estate held through direct ownership(1)						1,821						1,617
Derivative instruments						1,001						1,457
Other(2)						1,068						1,108
Total other invested assets						$	21,868					$	21,099

_________

(1) As of September 30, 2023 and December 31, 2022, real estate held through direct ownership had mortgage debt of $ 181 million and $ 208 million, respectively.

(2) Primarily includes equity investments accounted for under the measurement alternative, strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Bank of New York. For additional information regarding the Company’s holdings in the Federal Home Loan Bank of New York, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:

			September 30, 2023						December 31, 2022
			(in millions)
Fixed maturities			$	2,662					$	2,517
Equity securities			9						6
Commercial mortgage and other loans			203						190
Policy loans			253						253
Other invested assets			16						18
Short-term investments and cash equivalents			48						28
Total accrued investment income			$	3,191					$	3,012

Write-downs on accrued investment income were less than $ 1 million for both the three months ended September 30, 2023 and 2022, and less than $ 1 million for both the nine months ended September 30, 2023 and 2022.

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Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2023						2022						2023						2022
						(in millions)
Fixed maturities, available-for-sale(1)						$	3,390					$	2,836					$	9,921					$	8,666
Fixed maturities, held-to-maturity(1)						48						52						148						160
Fixed maturities, trading						65						56						177						171
Assets supporting experience-rated contractholder liabilities						9						11						34						155
Equity securities						38						27						142						103
Commercial mortgage and other loans						578						533						1,681						1,646
Policy loans						124						125						372						376
Other invested assets(2)						352						70						1,046						1,002
Short-term investments and cash equivalents						260						143						720						218
Gross investment income						4,864						3,853						14,241						12,497
Less: investment expenses(2)						( 293 )						( 222 )						( 874 )						( 570 )
Net investment income						$	4,571					$	3,631					$	13,367					$	11,927

__________

(1) Includes income on credit-linked notes which are reported on the same financial statement line items as related surplus notes, as conditions are met for right to offset.

(2) Prior period amounts reclassified to conform to current period presentation.

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2023						2022						2023						2022
						(in millions)
Fixed maturities(1)						$	( 453 )					$	( 113 )					$	( 874 )					$	( 1,170 )
Commercial mortgage and other loans						( 83 )						( 9 )						( 109 )						( 75 )
Investment real estate						22						( 7 )						49						83
LPs/LLCs						( 4 )						( 13 )						( 21 )						( 19 )
Derivatives						( 1,972 )						( 285 )						( 2,277 )						( 1,928 )
Other						88						( 3 )						109						( 1 )
Realized investment gains (losses), net						$	( 2,402 )					$	( 430 )					$	( 3,123 )					$	( 3,110 )

__________

(1) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

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Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

			September 30, 2023						December 31, 2022
			(in millions)
Fixed maturity securities, available-for-sale with an allowance			$	( 95 )					$	( 45 )
Fixed maturity securities, available-for-sale without an allowance(1)			( 36,383 )						( 27,545 )
Derivatives designated as cash flow hedges(2)			1,947						2,616
Derivatives designated as fair value hedges(2)			( 18 )						( 54 )
Other investments(3)			17						2
Net unrealized gains (losses) on investments			$	( 34,532 )					$	( 25,026 )

__________

(1) Includes $ 136 million of net unrealized gains related to the transfer of held-to-maturity securities to available-for-sale securities.

(2) For additional information regarding cash flow and fair value hedges, see Note 5.

(3) Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of “Securities sold under agreements to repurchase,” as of the dates indicated:

			September 30, 2023																								December 31, 2022
			Remaining Contractual Maturities of the Agreements																								Remaining Contractual Maturities of the Agreements
			Overnight & Continuous						Up to 30 Days						30 to 90 Days						Total						Overnight & Continuous						Up to 30 Days						30 to 90 Days						Total
			(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	5,149					$	0					$	0					$	5,149					$	6,179					$	200					$	200					$	6,579
'U.S. public corporate securities			0						94						0						94						0						0						0						0
Foreign public corporate securities			0						22						0						22						0						0						0						0
Commercial mortgage-backed securities			282						0						0						282						0						0						0						0
Residential mortgage-backed securities			0						0						0						0						10						0						0						10
Total securities sold under agreements to repurchase			$	5,431					$	116					$	0					$	5,547					$	6,189					$	200					$	200					$	6,589

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

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			September 30, 2023																		December 31, 2022
			Remaining Contractual Maturities of the Agreements																		Remaining Contractual Maturities of the Agreements
			Overnight & Continuous						Up to 30 Days						Total						Overnight & Continuous						Up to 30 Days						Total
			(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	1					$	0					$	1					$	1					$	0					$	1
Obligations of U.S. states and their political subdivisions			48						0						48						61						0						61
Foreign government bonds			236						1						237						285						14						299
U.S. public corporate securities			3,823						499						4,322						4,109						395						4,504
Foreign public corporate securities			589						93						682						806						69						875
Equity securities			777						0						777						360						0						360
Total cash collateral for loaned securities(1)			$	5,474					$	593					$	6,067					$	5,622					$	478					$	6,100

__________

(1) The Company did no t have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated.

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). For additional information, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Consolidated Variable Interest Entities

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

			Consolidated VIEs for which the Company is the Investment Manager(1)												Other Consolidated VIEs(1)
			September 30, 2023						December 31, 2022						September 30, 2023						December 31, 2022
			(in millions)
Fixed maturities, available-for-sale			$	440					$	398					$	782					$	90
Fixed maturities, held-to-maturity			0						0						0						689
Fixed maturities, trading			547						164						0						0
Equity securities			119						85						0						0
Commercial mortgage and other loans			669						784						0						0
Other invested assets			4,019						3,397						438						68
Cash and cash equivalents			342						375						0						0
Accrued investment income			3						2						2						3
Other assets			591						352						600						706
Total assets of consolidated VIEs			$	6,730					$	5,557					$	1,822					$	1,556
Other liabilities			$	586					$	389					$	0					$	0
Notes issued by consolidated VIEs(2)			791						374						0						0
Total liabilities of consolidated VIEs			$	1,377					$	763					$	0					$	0

__________

(1) Total assets of consolidated VIEs reflect $ 3,771 million and $ 3,403 million as of September 30, 2023 and December 31, 2022, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

(2) Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of September 30, 2023, the maturities of these obligations were between 0 and 12 years.

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Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it is the investment manager. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs for which it is the investment manager is limited to its investment in the VIEs, which was $ 844 million and $ 950 million as of September 30, 2023 and December 31, 2022, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Fixed maturities, trading,” “Equity securities” and “Other invested assets.” There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In the normal course of its activities, the Company will invest in limited partnerships and limited liability companies (“LPs/LLCs”), which include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company classifies these investments as “Other invested assets” and its maximum exposure to loss associated with these entities was $ 17,978 million and $ 16,917 million as of September 30, 2023 and December 31, 2022, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third-parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 3 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

5. DERIVATIVES AND HEDGING

Types of Derivative and Hedging Instruments

The Company utilizes various derivatives and hedging instruments to manage certain of its risks. Commonly used derivative and non-derivative hedging instruments include, but are not necessarily limited to:

• Interest rate contracts: futures, swaps, forwards, options, caps and floors

• Equity contracts: futures, options and total return swaps

• Foreign exchange contracts: futures, options, forwards, swaps, and foreign currency debt instruments

• Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives are:

• To-be-announced (“TBA”) forward contracts, loan commitments, embedded derivatives and synthetic guaranteed investment contracts (“GICs”).

For detailed information regarding these contracts and the related strategies, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks they are utilized to manage, excluding embedded derivatives. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. These netting impacts resulted in total derivative assets of $ 1,005 million and $ 1,455 million as of September 30, 2023 and December 31, 2022, respectively, and total derivative liabilities of $ 5,421 million and $ 3,055 million as of September 30, 2023 and December 31, 2022, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

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Primary Underlying Risk /Instrument Type			September 30, 2023																		December 31, 2022
									Fair Value																		Fair Value
			Gross Notional						Assets						Liabilities						Gross Notional						Assets						Liabilities
			(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps			$	3,743					$	6					$	( 437 )					$	3,627					$	66					$	( 245 )
Interest Rate Forwards			50						0						( 18 )						398						0						( 85 )
Foreign Currency
Foreign Currency Forwards			4,707						116						( 183 )						4,830						155						( 262 )
Currency/Interest Rate
Foreign Currency Swaps			27,436						2,896						( 390 )						25,636						3,469						( 333 )
Total Derivatives Designated as Hedge Accounting Instruments			$	35,936					$	3,018					$	( 1,028 )					$	34,491					$	3,690					$	( 925 )
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps			$	224,304					$	13,132					$	( 28,286 )					$	212,934					$	9,097					$	( 21,154 )
Interest Rate Futures			13,253						26						( 11 )						18,080						13						( 24 )
Interest Rate Options			32,398						523						( 1,638 )						9,778						224						( 280 )
Interest Rate Forwards			3,084						88						( 188 )						2,354						21						( 42 )
Foreign Currency
Foreign Currency Forwards			28,568						1,405						( 1,357 )						31,317						1,556						( 1,924 )
Foreign Currency Options			0						0						0						0						0						0
Currency/Interest Rate
Foreign Currency Swaps			7,916						704						( 155 )						8,410						813						( 170 )
Credit
Credit Default Swaps			6,407						29						( 39 )						6,351						27						( 57 )
Equity
Equity Futures			1,081						0						( 5 )						1,372						1						( 2 )
Equity Options			48,867						896						( 1,462 )						38,323						708						( 1,590 )
Total Return Swaps			10,701						361						( 135 )						11,806						106						( 184 )
Other
Other(1)			1,250						0						0						1,250						0						0
Synthetic GICs			80,152						1						( 1 )						84,338						1						( 1 )
Total Derivatives Not Qualifying as Hedge Accounting Instruments			$	457,981					$	17,165					$	( 33,277 )					$	426,313					$	12,567					$	( 25,428 )
Total Derivatives(2)(3)			$	493,917					$	20,183					$	( 34,305 )					$	460,804					$	16,257					$	( 26,353 )

__________

(1) “Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.

(2) Excludes embedded derivatives which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $ 5,051 million and $ 2,997 million as of September 30, 2023 and December 31, 2022, respectively, primarily included in "Policyholder account balances" and “Other liabilities”.

(3) Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.

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As of September 30, 2023, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.

			September 30, 2023												December 31, 2022
Balance Sheet Line Item in which Hedged Item is Recorded			Carrying Amount of the Hedged Assets (Liabilities)						Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)						Carrying Amount of the Hedged Assets (Liabilities)						Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)
			(in millions)
Fixed maturities, available-for-sale, at fair value			$	206					$	10					$	297					$	27
Commercial mortgage and other loans			$	0					$	0					$	0					$	0
Policyholders’ account balances			$	( 742 )					$	322					$	( 966 )					$	217
Future policy benefits			$	( 2,238 )					$	502					$	( 2,354 )					$	391

__________

(1) There were no material fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

Most of the Company’s derivatives do not qualify for hedge accounting for various reasons. For example: (i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income; (ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules; and (iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.

Offsetting Assets and Liabilities

The following tables present recognized derivative instruments (excluding embedded derivatives), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

			September 30, 2023
			Gross Amounts of Recognized Financial Instruments						Gross Amounts Offset in the Statements of Financial Position						Net Amounts Presented in the Statements of Financial Position						Financial Instruments/ Collateral(1)						Net Amount
			(in millions)
Offsetting of Financial Assets:
Derivatives			$	20,084					$	( 19,178 )					$	906					$	( 210 )					$	696
Securities purchased under agreement to resell			607						0						607						( 467 )						140
Total assets			$	20,691					$	( 19,178 )					$	1,513					$	( 677 )					$	836
Offsetting of Financial Liabilities:
Derivatives			$	34,305					$	( 28,884 )					$	5,421					$	( 5,175 )					$	246
Securities sold under agreement to repurchase			5,547						0						5,547						( 5,265 )						282
Total liabilities			$	39,852					$	( 28,884 )					$	10,968					$	( 10,440 )					$	528

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			December 31, 2022
			Gross Amounts of Recognized Financial Instruments						Gross Amounts Offset in the Statements of Financial Position						Net Amounts Presented in the Statements of Financial Position						Financial Instruments/ Collateral(1)						Net Amount
			(in millions)
Offsetting of Financial Assets:
Derivatives			$	16,178					$	( 14,802 )					$	1,376					$	( 702 )					$	674
Securities purchased under agreement to resell			385						0						385						( 385 )						0
Total assets			$	16,563					$	( 14,802 )					$	1,761					$	( 1,087 )					$	674
Offsetting of Financial Liabilities:
Derivatives			$	26,352					$	( 23,298 )					$	3,054					$	( 3,054 )					$	0
Securities sold under agreement to repurchase			6,589						0						6,589						( 6,589 )						0
Total liabilities			$	32,941					$	( 23,298 )					$	9,643					$	( 9,643 )					$	0

__________

(1) Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information regarding the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2022.

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative and non-derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps, currency forwards, and foreign currency denominated debts. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, or equity derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

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The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, including the offset of the hedged item in fair value hedge relationships.

			Three Months Ended September 30, 2023
			Realized Investment Gains (Losses)						Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)						Net Investment Income						Other Income (Loss)						Interest Expense						Interest Credited to Policyholders’ Account Balances						Policyholders’ Benefits						Change in AOCI(1)
			(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate			$	10					$	0					$	0					$	0					$	0					$	( 110 )					$	( 141 )					$	0
Currency			0						0						0						0						0						0						( 73 )						0
Total gains (losses) on derivatives designated as hedge instruments			10						0						0						0						0						( 110 )						( 214 )						0
Gains (losses) on the hedged item:
Interest Rate			( 9 )						0						3						0						0						104						189						0
Currency			0						0						0						0						0						0						72						0
Total gains (losses) on hedged item			( 9 )						0						3						0						0						104						261						0
Amortization for gains (losses) excluded from assessment of the effectiveness
Currency			0						0						0						0						0						0						( 2 )						131
Total Amortization for gain (loss) excluded from assessment of the effectiveness			0						0						0						0						0						0						( 2 )						131
Total gains (losses) on fair value hedges net of hedged item			1						0						3						0						0						( 6 )						45						131
Cash flow hedges
Interest Rate			0						0						( 3 )						0						0						0						0						( 40 )
Currency			0						0						0						0						0						0						0						0
Currency/Interest Rate			3						0						75						144						0						0						0						( 109 )
Total gains (losses) on cash flow hedges			3						0						72						144						0						0						0						( 149 )
Net investment hedges
Currency			0						0						0						0						0						0						0						11
Currency/Interest Rate			0						0						0						0						0						0						0						0
Total gains (losses) on net investment hedges			0						0						0						0						0						0						0						11
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate			( 1,918 )						( 2,314 )						0						0						0						0						0						0
Currency			70						0						0						( 1 )						0						0						0						0
Currency/Interest Rate			34						0						0						1						0						0						0						0
Credit			1						0						0						0						0						0						0						0
Equity			( 461 )						314						0						0						0						0						0						0
Other			0						0						0						0						0						0						0						0
Embedded Derivatives			298						0						0						0						0						0						0						0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments			( 1,976 )						( 2,000 )						0						0						0						0						0						0
Total			$	( 1,972 )					$	( 2,000 )					$	75					$	144					$	0					$	( 6 )					$	45					$	( 7 )

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			Nine Months Ended September 30, 2022(2)
			Realized Investment Gains (Losses)						Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)						Net Investment Income						Other Income (Loss)						Interest Expense						Interest Credited to Policyholders’ Account Balances						Policyholders’ Benefits						Change in AOCI(1)
			(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate			$	39					$	0					$	( 4 )					$	0					$	0					$	( 373 )					$	( 432 )					$	0
Currency			( 29 )						0						( 1 )						0						0						0						( 351 )						0
Total gains (losses) on derivatives designated as hedge instruments			10						0						( 5 )						0						0						( 373 )						( 783 )						0
Gains (losses) on the hedged item:
Interest Rate			( 39 )						0						10						0						0						389						441						0
Currency			31						0						8						0						0						0						348						0
Total gains (losses) on hedged item			( 8 )						0						18						0						0						389						789						0
Amortization for gains (losses) excluded from assessment of the effectiveness
Currency			0						0						0						0						0						0						( 3 )						( 11 )
Total amortization for gain (loss) excluded from assessment of the effectiveness			0						0						0						0						0						0						( 3 )						( 11 )
Total gains (losses) on fair value hedges net of hedged item			2						0						13						0						0						16						3						( 11 )
Cash flow hedges
Interest Rate			( 5 )						0						2						0						0						0						0						( 210 )
Currency			10						0						0						0						0						0						0						325
Currency/Interest Rate			76						0						214						750						0						0						0						2,965
Total gains (losses) on cash flow hedges			81						0						216						750						0						0						0						3,080
Net investment hedges
Currency			0						0						0						0						0						0						0						33
Currency/Interest Rate			0						0						0						0						0						0						0						0
Total gains (losses) on net investment hedges			0						0						0						0						0						0						0						33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate			( 3,081 )						( 6,235 )						0						0						0						0						0						0
Currency			( 369 )						0						0						1						0						0						0						0
Currency/Interest Rate			1,287						0						0						8						0						0						0						0
Credit			( 174 )						0						0						0						0						0						0						0
Equity			( 197 )						1,799						0						0						0						0						0						0
Other			2						0						0						0						0						0						0						0
Embedded Derivatives			535						0						0						0						0						0						0						0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments			( 1,997 )						( 4,436 )						0						9						0						0						0						0
Total			$	( 1,914 )					$	( 4,436 )					$	229					$	759					$	0					$	16					$	3					$	3,102

_______

(1) Excluding changes related to net investment hedges using non-derivative instruments of $ 15 million and $ 60 million for the three months ended and nine months ended September 30, 2023 , and $ 2 million and $ 134 million for three months ended and nine months ended September 30, 2022, respectively

(2) Prior period amounts have been updated to conform to current period presentation.

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Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:

			(in millions)
Balance, December 31, 2022			$	2,616
Amount recorded in AOCI:
Interest Rate			( 41 )
Currency			( 29 )
Currency/Interest Rate			( 334 )
Total amount recorded in AOCI			( 404 )
Amount reclassified from AOCI to income:
Interest Rate			32
Currency			( 11 )
Currency/Interest Rate			( 286 )
Total amount reclassified from AOCI to income			( 265 )
Balance, September 30, 2023			$	1,947

The changes in fair value of cash flow hedges are deferred in AOCI and are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income; these amounts are then reclassified to earnings when the hedged item affects earnings. Using September 30, 2023 values, it is estimated that a pre-tax gain of approximately $ 315 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending September 30, 2024.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of future cash flows from forecasted transactions denominated in foreign currencies, the purchases of invested assets, and the receipt or payment of variable interest on existing financial instruments. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 28 years.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

For net investment hedges, in addition to derivatives, the Company uses foreign currency denominated debt to hedge the risk of change in the net investment in a foreign subsidiary due to changes in exchange rates. For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment within AOCI were $ 25 million and $ 86 million for the three and nine months ended September 30, 2023, respectively, and $ 26 million and $ 166 million for the three and nine months ended September 30, 2022, respectively.

Credit Derivatives

The following tables provide a summary of the notional and fair value of written credit protection, presented as assets (liabilities). The Company’s maximum amount at risk under these credit derivatives, assuming the value of the underlying referenced securities become worthless, is equal to the notional amounts. These credit derivatives have maturities of less than 24 years for index reference.

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			September 30, 2023
			NAIC Rating Designation of Underlying Credit Obligation(1)
			NAIC 1						NAIC 2						NAIC 3						NAIC 4						NAIC 5						NAIC 6						Total
			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value
			(in millions)
Single name reference(2)			$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0
Index reference(2)			8			0			0			0			4,619			( 20 )			0			0			0			0			974			15			5,601			( 5 )
Total			$	8		$	0		$	0		$	0		$	4,619		$	( 20 )		$	0		$	0		$	0		$	0		$	974		$	15		$	5,601		$	( 5 )

			December 31, 2022
			NAIC Rating Designation of Underlying Credit Obligation(1)
			NAIC 1						NAIC 2						NAIC 3						NAIC 4						NAIC 5						NAIC 6						Total
			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value			Gross Notional			Fair Value
			(in millions)
Single name reference(2)			$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0
Index reference(2)			48			0			0			0			5,197			( 46 )			0			0			0			0			782			15			6,027			( 31 )
Total			$	48		$	0		$	0		$	0		$	5,197		$	( 46 )		$	0		$	0		$	0		$	0		$	782		$	15		$	6,027		$	( 31 )

_________

(1) The NAIC rating designations are based on availability and the lowest ratings among Moody's Investors Service, Inc. ("Moody's"), Standard & Poor’s Rating Services (“S&P”) and Fitch Ratings Inc. (“Fitch”). If no rating is available from a rating agency, a NAIC 6 rating is used.

(2) Single name credit default swaps may make reference to the credit of corporate debt, sovereign debt, and structured finance. Index references NAIC designations are based on the lowest rated single name reference included in the index.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of September 30, 2023 and December 31, 2022, the Company had $ 806 million and $ 324 million of outstanding notional amounts and reported at fair value as a liability of $ 6 million and an asset of $ 1 million, respectively.

Counterparty Credit Risk

The Company is exposed to losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and over-the-counte r (“OTC” ) parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of September 30, 2023, there were no net liability derivative positions with counterparties with credit risk-related contingent features. All derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

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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.

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 market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

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.

For a discussion of Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

As a result of the adoption of ASU 2018-12 in the first quarter of 2023, the Company is required to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value. 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 guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“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 contractholders less the present value of expected future rider fees attributable to the market risk benefit. 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 are insurance liabilities and are therefore senior to debt.

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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.

			As of September 30, 2023
			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					$	19,949					$	0					$						$	19,949
Obligations of U.S. states and their political subdivisions			0						7,990						7												7,997
Foreign government bonds			0						66,501						8												66,509
U.S. corporate public securities			0						89,206						65												89,271
U.S. corporate private securities(2)			0						35,346						2,845												38,191
Foreign corporate public securities			0						18,600						61												18,661
Foreign corporate private securities			0						27,627						1,686												29,313
Asset-backed securities(3)			0						12,943						419												13,362
Commercial mortgage-backed securities			0						8,989						921												9,910
Residential mortgage-backed securities			0						2,155						0												2,155
Subtotal			0						289,306						6,012												295,318
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies			0						204						0												204
Obligations of U.S. states and their political subdivisions			0						0						0												0
Foreign government bonds			0						609						0												609
Corporate securities			0						75						0												75
Asset-backed securities(3)			0						0						0												0
Commercial mortgage-backed securities			0						0						0												0
Residential mortgage-backed securities			0						0						0												0
Equity securities			873						1,182						0												2,055
All other(4)			0						0						0												0
Subtotal			873						2,070						0												2,943
Market risk benefit assets			0						0						2,200												2,200
Fixed maturities, trading			0						6,832						297												7,129
Equity securities			4,949						1,349						741												7,039
Commercial mortgage and other loans			0						387						0												387
Other invested assets(5)			33						20,148						861						( 19,178 )						1,864
Short-term investments			218						3,452						24												3,694
Cash equivalents			1,494						6,480						0												7,974
Other assets			0						378						281												659
Separate account assets(6)(7)			8,229						153,236						1,160												162,625
Total assets			$	15,796					$	483,638					$	11,576					$	( 19,178 )					$	491,832
Market risk benefit liabilities			$	0					$	0					$	4,660					$						$	4,660
Policyholders’ account balances			0						0						6,108												6,108
Other liabilities			18						33,852						1						( 28,884 )						4,987
Notes issued by consolidated VIEs			0						0						392												392
Total liabilities			$	18					$	33,852					$	11,161					$	( 28,884 )					$	16,147

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			As of December 31, 2022
			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					$	26,069					$	0					$						$	26,069
Obligations of U.S. states and their political subdivisions			0						9,682						7												9,689
Foreign government bonds			0						73,218						8												73,226
U.S. corporate public securities			0						87,521						65												87,586
U.S. corporate private securities(2)			0						34,487						2,392												36,879
Foreign corporate public securities			0						20,621						66												20,687
Foreign corporate private securities			0						26,325						1,335												27,660
Asset-backed securities(3)			0						12,582						269												12,851
Commercial mortgage-backed securities			0						9,644						1,011												10,655
Residential mortgage-backed securities			0						2,408						9												2,417
Subtotal			0						302,557						5,162												307,719
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies			0						189						0												189
Obligations of U.S. states and their political subdivisions			0						0						0												0
Foreign government bonds			0						668						0												668
Corporate securities			0						88						0												88
Asset-backed securities(3)			0						0						0												0
Commercial mortgage-backed securities			0						0						0												0
Residential mortgage-backed securities			0						0						0												0
Equity securities			780						1,119						0												1,899
All other(4)			0						0						0												0
Subtotal			780						2,064						0												2,844
Market risk benefit assets			0						0						800												800
Fixed maturities, trading			0						5,647						304												5,951
Equity securities			4,338						2,185						627												7,150
Commercial mortgage and other loans			0						137						0												137
Other invested assets(5)			15						16,241						539						( 14,802 )						1,993
Short-term investments			341						3,428						18												3,787
Cash equivalents			544						6,930						0												7,474
Other assets			0						0						152												152
Separate account assets(6)(7)			8,310						162,414						1,081												171,805
Total assets			$	14,328					$	501,603					$	8,683					$	( 14,802 )					$	509,812
Market risk benefit liabilities			$	0					$	0					$	5,864					$						$	5,864
Policyholders’ account balances			0						0						3,492												3,492
Other liabilities			26						25,953						1						( 23,298 )						2,682
Notes issued by consolidated VIEs			0						0						0												0
Total liabilities			$	26					$	25,953					$	9,357					$	( 23,298 )					$	12,038

__________

(1) “Netting” amounts represent cash collateral of $( 9,706 ) million and $( 8,496 ) million as of September 30, 2023 and December 31, 2022, respectively.

(2) Excludes notes with fair value of $ 12,290 million (carrying amount of $ 12,290 million) and $ 8,040 million (carrying amount of $ 8,040 million) as of September 30, 2023 and December 31, 2022, respectively, which have been offset with the associated debt under a netting agreement.

(3) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

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(4) All other represents cash equivalents and short-term investments.

(5) 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 September 30, 2023 and December 31, 2022, the fair values of such investments were $ 3,685 million and $ 3,689 million, respectively.

(6) 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 September 30, 2023 and December 31, 2022, the fair value of such investments were $ 28,017 million and $ 25,874 million, respectively.

(7) 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 Unaudited Interim Consolidated Statements of Financial Position.

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.

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			As of September 30, 2023
			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)			$	3,793					Discounted cash flow						Discount rate						0.62 %						21 %						11.59 %						Decrease
									Market comparables						EBITDA multiples(4)						5.5 X						8.8 X						7.4 X						Increase
									Liquidation						Liquidation value						9.59 %						63.62 %						53.43 %						Increase
Commercial mortgage-backed securities			$	921					Discounted cash flow						Liquidity premium						0.60 %						0.75 %						0.70 %						Decrease
Market risk benefit assets(7)			$	2,200					Discounted cash flow						Lapse rate(9)						1 %						20 %												Increase
															Spread over SOFR(10)						0.48 %						2.09 %												Increase
															Utilization rate(11)						38 %						95 %												Decrease
															Withdrawal rate						See table footnote (12) below.
															Mortality rate(13)						0 %						15 %												Increase
															Equity volatility curve						15 %						25 %												Decrease
Equity securities			$	230					Discounted cash flow(5)						Discount rate						0.16 %						20 %												Decrease
									Market comparables						EBITDA multiples(4)						1.0 X						7.5 X						6.7 X						Increase
									Net Asset Value						Share price						$ 3						$ 1,714						$ 708						Increase
Liabilities:
Market risk benefit liabilities(7)			$	4,660					Discounted cash flow						Lapse rate(9)						1 %						20 %												Decrease
															Spread over SOFR(10)						0.48 %						2.09 %												Decrease
															Utilization rate(11)						38 %						95 %												Increase
															Withdrawal rate						See table footnote (12) below.
															Mortality rate(13)						0 %						15 %												Decrease
															Equity volatility curve						15 %						25 %												Increase
Policyholders’ account balances(8)			$	6,108					Discounted cash flow						Lapse rate(9)						1 %						80 %												Decrease
															Spread over SOFR(10)						0.48 %						2.15 %												Decrease
															Mortality rate(13)						0 %						23 %												Decrease
															Equity volatility curve						6 %						28 %												Increase
															Option Budget(14)						( 1 )%						6 %												Increase

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			As of December 31, 2022
			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)			$	3,128					Discounted cash flow						Discount rate						0.61 %						20 %						8.09 %						Decrease
									Market comparables						EBITDA multiples(4)						2.2 X						23.5 X						8.3 X						Increase
									Liquidation						Liquidation value						8.16 %						8.25 %						8.21 %						Increase
Market risk benefit assets(7)			$	800					Discounted cash flow						Lapse rate(9)						1 %						20 %												Increase
															Spread over SOFR(10)						0.50 %						2.20 %												Increase
															Utilization rate(11)						38 %						95 %												Decrease
															Withdrawal rate						See table footnote (12) below.
															Mortality rate(13)						0 %						15 %												Increase
															Equity volatility curve						18 %						26 %												Decrease
Equity securities			$	290					Discounted cash flow(5)						Discount rate						0.16 %						20 %												Decrease
									Market comparables						EBITDA multiples(4)						1.0 X						7.5 X						4.0 X						Increase
									Net Asset Value						Share price						$ 6						$ 1,708						$ 22						Increase
Separate account assets-commercial mortgage loans(6)			$	74					Discounted cash flow						Spread						1.25 %						2.10 %						1.44 %						Decrease
Liabilities:
Market risk benefit liabilities(7)			$	5,864					Discounted cash flow						Lapse rate(9)						1 %						20 %												Decrease
															Spread over SOFR(10)						0.50 %						2.20 %												Decrease
															Utilization rate(11)						38 %						95 %												Increase
															Withdrawal rate						See table footnote (12) below.
															Mortality rate(13)						0 %						15 %												Decrease
															Equity volatility curve						18 %						26 %												Increase
Policyholders’ account balances(8)			$	3,492					Discounted cash flow						Lapse rate(9)						1 %						80 %												Decrease
															Spread over SOFR(10)						0.17 %						1.93 %												Decrease
															Mortality rate(13)						0 %						23 %												Decrease
															Equity volatility curve						6 %						30 %												Increase
															Option Budget(14)						( 2 )%						6 %												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.

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(3) Excludes notes which have been offset with the associated debt under a netting agreement.

(4) Represents multiples 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 ( 10 % to 20 %) and is therefore a more meaningful representation of the unobservable inputs used in the valuation rather than weighted average.

(6) Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Unaudited Interim Consolidated Statements of Operations.

(7) 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 weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(8) 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 weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(9) 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 embedded derivatives.

(10) The spread over the Secured Overnight Financing Rate (“SOFR”) swap curve and the London Inter-Bank Offered Rate (“LIBOR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR or LIBOR, as applicable) 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 September 30, 2023 and December 31, 2022, 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 (“Ohio National”), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $ 10 billion of account values of Prudential Defined Income (“PDI”) traditional variable annuity contracts with guaranteed living benefits. See Note 12 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 Ohio National, which may differ from that of the Company’s; however, the NPR spreads for Ohio National were developed using a methodology similar to that of the Company.

(11) 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.

(12) 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 September 30, 2023 and December 31, 2022, the minimum withdrawal rate assumption is 81 % and 77 % respectively. As of September 30, 2023 and December 31, 2022, 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 %.

(13) 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.

(14) 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 budgets 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 increases, 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 have been 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 11). 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.

			Three Months Ended September 30, 2023(7)(8)
			Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases			Sales			Issuances			Settlements			Other(1)			Transfers into Level 3			Transfers out of Level 3			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		$	0		$	0		$	0		$	7		$	0
Foreign government			8			0			0			0			0			0			0			0			0			8			0
Corporate securities(3)			4,461			( 81 )			393			( 23 )			0			( 247 )			14			289			( 149 )			4,657			( 86 )
Structured securities(4)			1,264			( 45 )			166			( 1 )			0			( 5 )			( 1 )			76			( 114 )			1,340			( 45 )
Other assets:
Fixed maturities, trading			302			( 4 )			32			( 39 )			0			( 5 )			9			0			2			297			( 5 )
Equity securities			773			11			19			( 1 )			0			( 28 )			0			2			( 35 )			741			12
Other invested assets			865			( 7 )			5			( 2 )			0			0			0			0			0			861			( 7 )
Short-term investments			25			1			12			0			0			( 14 )			0			0			0			24			0
Cash equivalents			0			0			0			0			0			0			0			0			0			0			0
Other assets			229			26			33			0			0			( 7 )			0			0			0			281			19
Separate account assets(5)			1,175			0			87			( 82 )			0			( 2 )			0			42			( 60 )			1,160			( 12 )
Liabilities:
Policyholders’ account balances(6)			( 5,629 )			( 97 )			0			0			( 410 )			0			28			0			0			( 6,108 )			( 263 )
Other liabilities			( 1 )			0			0			0			0			0			0			0			0			( 1 )			0
Notes issued by consolidated VIEs			0			0			0			0			0			0			( 392 )			0			0			( 392 )			0

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			Nine Months Ended September 30, 2023(7)(8)
			Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases			Sales			Issuances			Settlements			Other(1)			Transfers into Level 3			Transfers out of Level 3			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		$	0		$	0		$	0		$	7		$	0
Foreign government			8			0			0			0			0			0			0			0			0			8			0
Corporate securities(3)			3,858			( 46 )			1,657			( 198 )			0			( 747 )			( 6 )			307			( 168 )			4,657			( 47 )
Structured securities(4)			1,289			( 74 )			405			( 6 )			0			( 30 )			( 1 )			113			( 356 )			1,340			( 81 )
Other assets:
Fixed maturities, trading			304			( 1 )			98			( 39 )			0			( 18 )			10			0			( 57 )			297			( 5 )
Equity securities			627			5			28			( 68 )			0			( 34 )			216			3			( 36 )			741			( 5 )
Other invested assets			539			( 26 )			359			( 11 )			0			0			0			0			0			861			( 26 )
Short-term investments			18			4			43			0			0			( 41 )			0			0			0			24			0
Cash equivalents			0			0			0			0			0			0			0			0			0			0			0
Other assets			152			34			107			0			0			( 12 )			0			0			0			281			22
Separate account assets(5)			1,081			88			396			( 279 )			0			( 68 )			0			45			( 103 )			1,160			75
Liabilities:
Policyholders’ account balances(6)			( 3,492 )			( 1,368 )			0			0			( 1,249 )			0			1			0			0			( 6,108 )			( 525 )
Other liabilities			( 1 )			0			0			0			0			0			0			0			0			( 1 )			0
Notes issued by consolidated VIEs			0			0			0			0			0			0			( 392 )			0			0			( 392 )			0

			Nine Months Ended September 30, 2023(7)
			Total realized and unrealized gains (losses)																		Unrealized gains (losses) for assets 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 (losses)
			(in millions)
Fixed maturities, available-for-sale			$	( 20 )		$	0		$	0		$	( 111 )		$	11					$	( 3 )		$	0		$	0		$	( 125 )
Other assets:
Fixed maturities, trading			0			( 2 )			0			0			1						0			( 5 )			0			0
Equity securities			( 1 )			6			0			0			0						0			( 5 )			0			0
Other invested assets			( 6 )			( 20 )			0			0			0						( 6 )			( 20 )			0			0
Short-term investments			3			0			0			0			1						0			0			0			0
Cash equivalents			0			0			0			0			0						0			0			0			0
Other assets			34			0			0			0			0						22			0			0			0
Separate account assets(5)			0			0			88			0			0						0			0			75			0
Liabilities:
Policyholders’ account balances			( 1,368 )			0			0			0			0						( 525 )			0			0			0
Other liabilities			0			0			0			0			0						0			0			0			0
Notes issued by consolidated VIEs			0			0			0			0			0						0			0			0			0

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			Three Months Ended September 30, 2022(7)(8)
			Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases			Sales			Issuances			Settlements			Other(1)			Transfers into Level 3			Transfers out of Level 3			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		$	0		$	0		$	0		$	7		$	0
Foreign government			9			0			0			( 1 )			0			0			0			0			0			8			0
Corporate securities(3)			3,539			( 122 )			288			( 57 )			0			( 256 )			92			90			( 75 )			3,499			( 136 )
Structured securities(4)			1,482			( 40 )			424			0			0			( 128 )			( 3 )			0			( 79 )			1,656			( 40 )
Other assets:
Fixed maturities, trading			347			2			8			( 3 )			0			( 29 )			( 3 )			0			0			322			3
Equity securities			766			( 23 )			10			( 94 )			0			0			( 4 )			0			( 2 )			653			( 28 )
Other invested assets			499			( 13 )			20			( 1 )			0			( 2 )			( 1 )			0			0			502			( 7 )
Short-term investments			204			( 5 )			5			0			0			( 205 )			6			0			( 1 )			4			( 5 )
Cash equivalents			0			0			0			0			0			0			0			0			0			0			0
Other assets			202			51			( 16 )			0			0			( 7 )			( 119 )			0			0			111			50
Separate account assets(5)			1,040			( 45 )			137			( 95 )			0			( 36 )			1			93			( 4 )			1,091			( 28 )
Liabilities:
Policyholders’ account balances(6)			( 3,544 )			222			0			0			( 424 )			0			1			0			0			( 3,745 )			845
Other liabilities			( 1 )			0			0			0			0			0			0			0			0			( 1 )			0
Notes issued by consolidated VIEs			0			0			0			0			0			0			0			0			0			0			0

			Three Months Ended September 30, 2022(7)
			Total realized and unrealized gains (losses)																		Unrealized gains (losses) for assets 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 (losses)
			(in millions)
Fixed maturities, available-for-sale			$	( 10 )		$	0		$	0		$	( 159 )		$	7					$	( 15 )		$	0		$	0		$	( 162 )
Other assets:
Fixed maturities, trading			0			4			0			0			( 2 )						0			3			0			0
Equity securities			0			( 23 )			0			0			0						0			( 28 )			0			0
Other invested assets			( 14 )			1			0			0			0						( 8 )			1			0			0
Short-term investments			( 5 )			0			0			0			0						( 5 )			0			0			0
Cash equivalents			0			0			0			0			0						0			0			0			0
Other assets			51			0			0			0			0						50			0			0			0
Separate account assets(5)			0			0			( 45 )			0			0						0			0			( 28 )			0
Liabilities:
Policyholders’ account balances			222			0			0			0			0						845			0			0			0
Other liabilities			0			0			0			0			0						0			0			0			0
Notes issued by consolidated VIEs			0			0			0			0			0						0			0			0			0

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			Nine Months Ended September 30, 2022(7)(8)
			Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases			Sales			Issuances			Settlements			Other(1)			Transfers into Level 3			Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
			(in millions)
Fixed maturities, available-for-sale:
U.S. states			$	8		$	( 1 )		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	7		$	( 1 )
Foreign government			10			( 1 )			0			( 1 )			0			0			0			0			0			8			( 1 )
Corporate securities(3)			5,316			( 588 )			1,088			( 140 )			9			( 721 )			65			106			( 1,636 )			3,499			( 602 )
Structured securities(4)			1,986			( 318 )			625			( 22 )			0			( 349 )			( 12 )			6			( 260 )			1,656			( 319 )
Other assets:
Fixed maturities, trading			421			( 26 )			41			( 33 )			0			( 69 )			3			0			( 15 )			322			( 25 )
Equity securities			799			5			41			( 239 )			0			( 4 )			( 20 )			73			( 2 )			653			( 18 )
Other invested assets			493			( 3 )			57			( 39 )			0			( 4 )			( 2 )			0			0			502			( 3 )
Short-term investments			330			( 5 )			9			0			0			( 335 )			6			0			( 1 )			4			( 5 )
Cash equivalents			70			( 1 )			7			0			0			( 73 )			( 3 )			0			0			0			( 2 )
Other assets			54			125			( 16 )			0			0			( 10 )			( 42 )			0			0			111			61
Separate account assets(5)			1,283			( 237 )			181			( 111 )			0			( 43 )			0			93			( 75 )			1,091			( 234 )
Liabilities:
Policyholders’ account balances(6)			( 1,436 )			502			0			0			( 808 )			0			( 2,003 )			0			0			( 3,745 )			1,601
Other liabilities			0			0			0			0			0			0			0			( 1 )			0			( 1 )			0
Notes issued by consolidated VIEs			0			0			0			0			0			0			0			0			0			0			0

			Nine Months Ended September 30, 2022(7)
			Total realized and unrealized gains (losses)																		Unrealized gains (losses) for assets 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 (losses)
			(in millions)
Fixed maturities, available-for-sale			$	( 78 )		$	0		$	0		$	( 837 )		$	7					$	( 97 )		$	0		$	0		$	( 826 )
Other assets:
Fixed maturities, trading			0			( 26 )			0			0			0						0			( 25 )			0			0
Equity securities			0			5			0			0			0						0			( 18 )			0			0
Other invested assets			( 19 )			16			0			0			0						( 19 )			16			0			0
Short-term investments			( 5 )			0			0			0			0						( 5 )			0			0			0
Cash equivalents			( 1 )			0			0			0			0						( 2 )			0			0			0
Other assets			58			0			0			67			0						61			0			0			0
Separate account assets(5)			0			0			( 237 )			0			0						0			0			( 234 )			0
Liabilities:
Policyholders’ account balances			502			0			0			0			0						1,601			0			0			0
Other liabilities			0			0			0			0			0						0			0			0			0
Notes issued by consolidated VIEs			0			0			0			0			0						0			0			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) 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 Unaudited Interim Consolidated Statements of Financial Position.

(6) Issuances and settlements for Policyholders’ account balances are presented net in the rollforward.

(7) Effective January 1, 2021, Future policy benefits and Reinsurance recoverables previously included in “Changes in Level 3 Assets and Liabilities” are now reported as Market Risk Benefits. See Note 11 for additional information.

(8) Excludes MRB assets of $ 2,200 million and $ 806 million and MRB liabilities of $ 4,660 million and $ 6,488 million for periods ending September 30, 2023 and 2022, respectively. See Note 11 for additional information.

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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 date indicated, by the primary underlying risks they are used to manage. These tables include NPR and exclude embedded derivatives and associated reinsurance recoverables. 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 September 30, 2023
			Level 1						Level 2						Level 3						Netting(1)						Total
			(in millions)
Derivative Assets:
Interest Rate			$	26					$	13,749					$	1					$						$	13,776
Currency			0						1,521						0												1,521
Credit			0						29						0												29
Currency/Interest Rate			0						3,600						0												3,600
Equity			7						1,250						0												1,257
Other			0						0						0												0
Netting(1)																					( 19,178 )						( 19,178 )
Total derivative assets			$	33					$	20,149					$	1					$	( 19,178 )					$	1,005
Derivative Liabilities:
Interest Rate			$	11					$	30,567					$	1					$						$	30,579
Currency			0						1,540						0												1,540
Credit			0						39						0												39
Currency/Interest Rate			0						545						0												545
Equity			6						1,596						0												1,602
Other			0						0						0												0
Netting(1)																					( 28,884 )						( 28,884 )
Total derivative liabilities			$	17					$	34,287					$	1					$	( 28,884 )					$	5,421

			As of December 31, 2022
			Level 1						Level 2						Level 3						Netting(1)						Total
			(in millions)
Derivative Assets:
Interest Rate			$	13					$	9,408					$	1					$						$	9,422
Currency			0						1,711						0												1,711
Credit			0						27						0												27
Currency/Interest Rate			0						4,282						0												4,282
Equity			1						814						0												815
Other			0						0						0												0
Netting(1)																					( 14,802 )						( 14,802 )
Total derivative assets			$	14					$	16,242					$	1					$	( 14,802 )					$	1,455
Derivative Liabilities:
Interest Rate			$	24					$	21,806					$	1					$						$	21,831
Currency			0						2,186						0												2,186
Credit			0						57						0												57
Currency/Interest Rate			0						503						0												503
Equity			2						1,774						0												1,776
Other			0						0						0												0
Netting(1)																					( 23,298 )						( 23,298 )
Total derivative liabilities			$	26					$	26,326					$	1					$	( 23,298 )					$	3,055

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__________

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreement.

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.

			Three Months Ended September 30, 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

			Nine Months Ended September 30, 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

			Three Months Ended September 30, 2022
			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

			Nine Months Ended September 30, 2022
			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			$	1		$	1		$	0		$	( 2 )		$	0		$	0					$	0		$	0		$	0		$	0		$	1
Net Derivative - Interest Rate			1			0			0			0			0			0						0			( 1 )			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.

---

									Three Months Ended September 30,												Nine Months Ended September 30,
															2023						2022						2023						2022
															(in millions)
Gains (Losses):
Mortgage servicing rights(1)															$	0					$	( 1 )					$	0					$	1
Investment real estate															$	0					$	( 6 )					$	( 17 )					$	( 12 )
Investment in JV/LP															$	( 10 )					$	0					$	( 65 )					$	( 75 )

			September 30, 2023						December 31, 2022
			(in millions)
Carrying value after measurement as of period end:
Mortgage servicing rights(1)			$	0					$	77
Investment real estate(2)			$	114					$	112
Investment in JV/LP(2)			$	60					$	64
Goodwill(3)			$	0					$	177

__________

(1) Mortgage servicing rights are valued using a discounted cash flow model. The model incorporates assumptions for servicing revenues, which are adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses. The discount rates incorporated into the model are determined based on the estimated returns a market participant would require for this business including a liquidity and risk premium. This estimate includes available relevant data from any active market sales of mortgage servicing rights.

(2) Reported carrying values for 2023 include values as of the measurement periods of June 30, 2023 for “Investment real estate” and June 30, 2023 and September 30, 2023 for “Investment in JV/LP”. Reported carrying values for 2022 include values as of the measurement periods of June 30, 2022 and September 30, 2022 for “Investment real estate” and June 30, 2022 for “Investment in JV/LP”.

(3) The Company recognized a goodwill impairment charge for Assurance IQ in 2022. The fair value was determined using weighting of an income approach based on discounted cash flow valuation techniques and a market approach based on forward sales multiples of comparable publicly traded companies. The valuation as of December 31, 2022 included unobservable inputs such as forecasted cash flows, discount rate applied, expected synergies and business growth rate assumptions under the income approach and forward market multiples of comparable peer companies and an implied control premium under the market approach. The inputs and assumptions applied are consistent with how a market participant would value Assurance IQ and the related goodwill. See Note 10 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

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. 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.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Commercial mortgage and other loans:
Interest income			$	2					$	5					$	7					$	11

---

			September 30, 2023						December 31, 2022
			(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end			$	387					$	137
Aggregate contractual principal as of period end			$	383					$	136
Other assets:
Fair value as of period end			$	11					$	11
Notes issued by consolidated VIEs:
Fair value as of period end			$	392					$	0
Aggregate contractual principal as of period end			$	392					$	0

__________

(1) As of September 30, 2023, for loans for which the fair value option has been elected, there were no loans in non-accrual status and none of the loans were more than 90 days past due and still accruing.

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 Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.

			September 30, 2023
			Fair Value																								Carrying Amount(1)
			Level 1						Level 2						Level 3						Total						Total
			(in millions)
Assets:
Fixed maturities, held-to-maturity			$	0					$	0					$	0					$	0					$	0
Assets supporting experience-rated contractholder liabilities			0						0						0						0						0
Commercial mortgage and other loans			0						38						52,452						52,490						57,521
Policy loans			7						0						9,952						9,959						9,959
Other invested assets			0						97						0						97						97
Short-term investments			1,362						16						0						1,378						1,378
Cash and cash equivalents			8,301						617						0						8,918						8,918
Accrued investment income			0						3,191						0						3,191						3,191
Other assets			38						2,881						5,104						8,023						8,023
Total assets			$	9,708					$	6,840					$	67,508					$	84,056					$	89,087
Liabilities:
Policyholders’ account balances—investment contracts			$	0					$	30,997					$	33,975					$	64,972					$	70,113
Securities sold under agreements to repurchase			0						5,547						0						5,547						5,547
Cash collateral for loaned securities			0						6,067						0						6,067						6,067
Short-term debt(3)			0						533						82						615						615
Long-term debt(4)			547						15,642						746						16,935						18,877
Notes issued by consolidated VIEs			0						0						399						399						399
Other liabilities			0						8,377						17						8,394						8,394
Separate account liabilities—investment contracts			0						25,252						22,446						47,698						47,698
Total liabilities			$	547					$	92,415					$	57,665					$	150,627					$	157,710

---

			December 31, 2022
			Fair Value																								Carrying Amount(1)
			Level 1						Level 2						Level 3						Total						Total
			(in millions)
Assets:
Fixed maturities, held-to-maturity(2)			$	0					$	1,455					$	0					$	1,455					$	1,296
Assets supporting experience-rated contractholder liabilities			0						0						0						0						0
Commercial mortgage and other loans			0						46						52,296						52,342						56,608
Policy loans			5						0						10,041						10,046						10,046
Other invested assets			0						102						0						102						102
Short-term investments			715						89						0						804						804
Cash and cash equivalents			9,388						389						0						9,777						9,777
Accrued investment income			0						3,012						0						3,012						3,012
Other assets			48						2,929						754						3,731						3,731
Total assets			$	10,156					$	8,022					$	63,091					$	81,269					$	85,376
Liabilities:
Policyholders’ account balances—investment contracts			$	0					$	31,665					$	34,937					$	66,602					$	70,722
Securities sold under agreements to repurchase			0						6,589						0						6,589						6,589
Cash collateral for loaned securities			0						6,100						0						6,100						6,100
Short-term debt(3)			0						613						164						777						775
Long-term debt(4)			550						17,324						790						18,664						19,908
Notes issued by consolidated VIEs			0						0						374						374						374
Other liabilities			0						7,970						11						7,981						7,981
Separate account liabilities—investment contracts			0						27,735						25,270						53,005						53,005
Total liabilities			$	550					$	97,996					$	61,546					$	160,092					$	165,454

__________

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

(2) Excludes notes with fair value of $ 4,250 million (carrying amount of $ 4,250 million) as of December 31, 2022, which have been offset with the associated debt under a netting agreement.

(3) Excludes debt with fair value of $ 500 million (carrying amount of $ 500 million) as of both September 30, 2023 and December 31, 2022, which have been offset with the associated notes under a netting agreement.

(4) Excludes debt with fair value of $ 11,790 million (carrying amount of $ 11,790 million) as of both September 30, 2023 and December 31, 2022, which have been offset with the associated notes under a netting agreement.

---

Deferred Policy Acquisition Costs

The following tables show a rollforward for the lines of business that contain material DAC balances, along with a reconciliation to the Company’s total DAC balance:

			Nine Months Ended September 30, 2023
			Retirement Strategies						Individual Life												International Businesses												Total
			Individual Variable						Term Life						Variable/ Universal Life						Life Planner						Gibraltar Life and Other
			(in millions)
Balance, BOP			$	4,171					$	2,288					$	5,000					$	4,710					$	4,231					$	20,400
Capitalization			195						115						436						443						444						1,633
Amortization expense			( 275 )						( 160 )						( 183 )						( 244 )						( 236 )						( 1,098 )
Other adjustments(1)			( 393 )						2						0						14						0						( 377 )
Foreign currency adjustment			0						0						0						( 199 )						( 158 )						( 357 )
Balance, EOP			$	3,698					$	2,245					$	5,253					$	4,724					$	4,281					20,201
Other businesses																																	193
Total DAC balance																																	$	20,394

_________

(1) Includes the impact of the reinsurance transaction with Ohio National in Individual Retirement Strategies. See Note 12 for additional information.

			Nine Months Ended September 30, 2022
			Retirement Strategies						Individual Life												International Businesses												Total
			Individual Variable						Term Life						Variable/ Universal Life						Life Planner						Gibraltar Life and Other
			(in millions)
Balance, BOP			$	4,872					$	2,372					$	4,679					$	4,685					$	4,135					$	20,743
Capitalization			219						97						413						442						441						1,612
Amortization expense			( 305 )						( 158 )						( 176 )						( 240 )						( 227 )						( 1,106 )
Other adjustments(1)			( 584 )						0						0						12						0						( 572 )
Foreign currency adjustment			0						0						0						( 439 )						( 325 )						( 764 )
Balance, EOP			$	4,202					$	2,311					$	4,916					$	4,460					$	4,024					19,913
Other businesses																																	125
Total DAC balance																																	$	20,038

_________

(1) Includes $ 584 million in Individual Retirement Strategies related to the sale of PALAC. See Note 1 for additional information.

.

---

Deferred Sales Inducements

The following table shows a rollforward of DSI balances for variable annuity products within Individual Retirement Strategies, which is the only line of business that contains a material DSI balance, along with a reconciliation to the Company’s total DSI balance:

			Nine Months Ended September 30,
			2023						2022
			(in millions)
Balance, BOP			$	446					$	799
Capitalization			2						1
Amortization expense			( 28 )						( 37 )
Other adjustments(1)			0						( 308 )
Balance, EOP			420						455
Other businesses			33						36
Total DSI balance			$	453					$	491

_________

(1) The 2022 amount relates to the sale of PALAC. See Note 1 for additional information.

Value of Business Acquired

The following table shows a rollforward of VOBA balances for Gibraltar Life and Other, which is the only line of business that contains a material VOBA balance, along with a reconciliation to the Company’s total VOBA balance:

			Nine Months Ended September 30,
			2023						2022
			(in millions)
Balance, BOP			$	597					$	746
Amortization expense			( 37 )						( 45 )
Foreign currency adjustment			( 64 )						( 143 )
Balance, EOP			496						558
Other businesses			18						2
Total VOBA balance			$	514					$	560

The following table provides VOBA balances for the applicable businesses for the period ended September 30:

			2023
			(in millions)
Gibraltar Life			$	496
Aoba Life			18
Total			$	514

The following table provides estimated future amortization for the periods indicated:

			2023 (October-December)						2024						2025						2026						2027						Thereafter						Total
			(in millions)
Estimated future VOBA amortization			$	12					$	45					$	41					$	37					$	34					$	345					$	514

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The Company issues variable annuity and variable life insurance contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. Most variable annuity and variable life insurance contracts are offered with both separate and general account options. See Note 10 for additional information.

The assets supporting the variable portion of variable annuity and variable life insurance contracts are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” The liabilities related to the net amount at risk are reflected within future policy benefits or market risk benefits. Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits” or “Realized investment gains (losses), net.”

Separate Account Assets

The aggregate fair value of assets, by major investment asset category, supporting separate accounts is as follows:

			September 30, 2023						December 31, 2022
			(in millions)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	4,409					$	5,208
Obligations of U.S. states and their political subdivisions			1,956						2,006
Foreign government bonds			97						120
U.S. corporate securities			12,411						13,135
Foreign corporate securities			3,086						3,261
Asset-backed securities			1,335						1,131
Mortgage-backed securities			14,697						14,653
Mutual funds:
Equity			79,215						82,781
Fixed Income			38,484						38,109
Other			5,187						3,797
Equity securities			4,986						5,177
Commercial mortgage and other loans			66						74
Other invested assets			21,968						24,590
Short-term investments			1,021						1,306
Cash and cash equivalents			1,724						2,331
Total			$	190,642					$	197,679

For the periods ended September 30, 2023 and December 31, 2022, there were no transfers of assets, other than cash, from the general account to a separate account; therefore, no gains or losses were recorded.

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Separate Account Liabilities

The balances of and changes in separate account liabilities as of and for the periods ended are as follows:

			Nine Months Ended September 30, 2023
									Retirement Strategies
			PGIM						Institutional						Individual						Group Insurance						Individual Life						Total
			(in millions)
Balance, BOP			$	40,056					$	11,428					$	93,395					$	23,513					$	32,930					$	201,322
Deposits			4,301						209						332						44						2,183						7,069
Investment performance			( 965 )						79						4,278						3						3,228						6,623
Policy charges			( 62 )						( 10 )						( 1,755 )						( 238 )						( 800 )						( 2,865 )
Surrenders and withdrawals			( 4,064 )						( 338 )						( 7,142 )						( 29 )						( 569 )						( 12,142 )
Benefit payments			( 2,604 )						( 415 )						( 75 )						( 219 )						( 244 )						( 3,557 )
Net transfers (to) from general account			( 459 )						( 60 )						( 6 )						( 2 )						( 1,244 )						( 1,771 )
Other			( 949 )						( 29 )						9						( 208 )						73						( 1,104 )
Balance, EOP			$	35,254					$	10,864					$	89,036					$	22,864					$	35,557					193,575
Other businesses(1)																																	( 2,933 )
Total separate account liabilities																																	$	190,642
Cash surrender value(2)			$	35,254					$	10,864					$	87,767					$	22,750					$	32,388					$	189,023

__________

(1) Includes activity from the Company’s Divested and Run-off Businesses as well as the impact of intercompany eliminations. There are no associated cash surrender charges.

(2) “Cash surrender value” represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. There are no cash surrender charges for the PGIM and Institutional Retirement Strategies segments.

			Nine Months Ended September 30, 2022
									Retirement Strategies
			PGIM						Institutional						Individual						Group Insurance						Individual Life						Total
			(in millions)
Balance, BOP			$	42,020					$	14,064					$	158,546					$	27,097					$	39,789					$	281,516
Deposits			5,903						559						603						95						1,889						9,049
Investment performance			1,186						( 2,505 )						( 28,724 )						( 4,632 )						( 8,608 )						( 43,283 )
Policy charges			( 66 )						( 14 )						( 2,094 )						( 237 )						( 756 )						( 3,167 )
Surrenders and withdrawals			( 5,093 )						( 3,084 )						( 7,376 )						( 13 )						( 562 )						( 16,128 )
Benefit payments			( 2,474 )						( 395 )						( 77 )						( 202 )						( 350 )						( 3,498 )
Net transfers (to) from general account			( 405 )						2,798						( 276 )						21						( 313 )						1,825
Other(1)			466						( 78 )						( 29,419 )						660						67						( 28,304 )
Balance, EOP			$	41,537					$	11,345					$	91,183					$	22,789					$	31,156					198,010
Other businesses(2)																																	( 3,485 )
Total separate account liabilities																																	$	194,525
Cash surrender value(3)			$	41,537					$	11,345					$	89,512					$	22,664					$	28,355					$	193,413

__________

(1) Activity for Individual Retirement Strategies primarily represents the sale of PALAC. See Note 1 for additional information.

(2) Includes activity from the Company’s Divested and Run-off Businesses as well as the impact of intercompany eliminations. There are no associated cash surrender charges.

(3) “Cash surrender value” represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. There are no cash surrender charges for the PGIM and Institutional Retirement Strategies segments.

---

Liability for Future Policy Benefits primarily consists of the following sub-components, which are discussed in greater detail below:

• Benefit Reserves;

• Deferred Profit Liability; and

• Additional Insurance Reserves

In 2023, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed Benefit Reserves and Deferred Profit Liability, net of the impact of flooring these liabilities at zero for each issue year cohort. This net impact was primarily due to updates to lapse and claim incidence assumptions on Long-Term Care policies. Additionally, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update and other refinements for direct and assumed Additional Insurance Reserves, primarily due to unfavorable model refinements, partially offset by favorable updates to economic assumptions, including expected future rates of returns on investments on universal life policies with secondary guarantees.

In 2022, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed Benefit Reserves and Deferred Profit Liability, net of the impact of flooring these liabilities at zero for each issue year cohort. This net impact was primarily due to updates to mortality assumptions on individual term life policies. Additionally, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update and other refinements for direct and assumed Additional Insurance Reserves, primarily due to updates to policyholder behavior assumptions on universal life policies with secondary guarantees.

Benefit Reserves

The balances of and changes in Benefit Reserves as of and for the periods indicated consist of the three tables presented below: Present Value of Expected Net Premiums rollforward, Present Value of Expected Future Policy Benefits rollforward, and Net Liability for Future Policy Benefits.

			Nine Months Ended September 30, 2023
			Present Value of Expected Net Premiums
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, BOP			$	52,620					$	11,282					$	30,689					$	28,951					$	2,932					$	126,474
Effect of cumulative changes in discount rate assumptions, BOP			14,349						572						1,354						1,326						103						17,704
Balance at original discount rate, BOP			66,969						11,854						32,043						30,277						3,035						144,178
Effect of assumption update			( 1,117 )						( 1 )						78						( 175 )						266						( 949 )
Effect of actual variances from expected experience and other activity			384						( 159 )						( 814 )						( 516 )						145						( 960 )
Adjusted balance, BOP			66,236						11,694						31,307						29,586						3,446						142,269
Issuances			8,453						539						1,793						1,258						0						12,043
Net premiums / considerations collected			( 8,682 )						( 1,060 )						( 3,055 )						( 2,873 )						( 242 )						( 15,912 )
Interest accrual			1,588						404						680						594						117						3,383
Foreign currency adjustment			950						0						( 1,583 )						( 1,608 )						0						( 2,241 )
Other adjustments			0						( 2 )						104						0						0						102
Balance at original discount rate, EOP			68,545						11,575						29,246						26,957						3,321						139,644
Effect of cumulative changes in discount rate assumptions, EOP			( 16,742 )						( 965 )						( 1,571 )						( 1,495 )						( 249 )						( 21,022 )
Balance, EOP			$	51,803					$	10,610					$	27,675					$	25,462					$	3,072					$	118,622
Other businesses, EOP																																	83
Total balance, EOP																																	$	118,705

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			Nine Months Ended September 30, 2023
			Present Value of Expected Future Policy Benefits
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, BOP			$	117,754					$	19,288					$	78,639					$	80,331					$	10,685					$	306,697
Effect of cumulative changes in discount rate assumptions, BOP			20,170						1,012						3,719						11,266						1,216						37,383
Balance at original discount rate, BOP			137,924						20,300						82,358						91,597						11,901						344,080
Effect of assumption update			( 1,289 )						( 1 )						145						44						357						( 744 )
Effect of actual variances from expected experience and other activity			377						( 194 )						( 845 )						( 503 )						171						( 994 )
Adjusted balance, BOP			137,012						20,105						81,658						91,138						12,429						342,342
Issuances			8,453						539						1,793						1,258						0						12,043
Interest accrual			3,720						707						1,977						1,729						443						8,576
Benefit payments			( 8,550 )						( 1,121 )						( 2,729 )						( 3,496 )						( 196 )						( 16,092 )
Foreign currency adjustment			981						0						( 4,630 )						( 5,780 )						0						( 9,429 )
Other adjustments			( 138 )						( 14 )						206						( 18 )						0						36
Balance at original discount rate, EOP			141,478						20,216						78,275						84,831						12,676						337,476
Effect of cumulative changes in discount rate assumptions, EOP			( 24,887 )						( 1,856 )						( 5,296 )						( 11,846 )						( 2,305 )						( 46,190 )
Balance, EOP			$	116,591					$	18,360					$	72,979					$	72,985					$	10,371					$	291,286
Other businesses, EOP																																	1,635
Total balance, EOP																																	$	292,921

			Nine Months Ended September 30, 2023
			Net Liability for Future Policy Benefits - Benefit Reserves
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, EOP, pre-flooring			$	64,789					$	7,750					$	45,304					$	47,523					$	7,299					$	172,665
Flooring impact, EOP			0						2						27						31						0						60
Balance, EOP, post-flooring			64,789						7,752						45,331						47,554						7,299						172,725
Less: Reinsurance recoverable			4,810						696						96						189						0						5,791
Balance after reinsurance recoverable, EOP, post-flooring			$	59,979					$	7,056					$	45,235					$	47,365					$	7,299					$	166,934
Other businesses, EOP(1)																																	1,482
Total balance after reinsurance recoverable, EOP																																	$	168,416

---

			Nine Months Ended September 30, 2022
			Present Value of Expected Net Premiums
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, BOP			$	68,791					$	12,971					$	39,517					$	37,815					$	3,585					$	162,679
Effect of cumulative changes in discount rate assumptions, BOP			( 4,414 )						( 1,892 )						( 3,516 )						( 3,239 )						( 644 )						( 13,705 )
Balance at original discount rate, BOP			64,377						11,079						36,001						34,576						2,941						148,974
Effect of assumption update			249						1,313						( 76 )						( 176 )						49						1,359
Effect of actual variances from expected experience and other activity			347						31						( 1,181 )						( 575 )						163						( 1,215 )
Adjusted balance, BOP			64,973						12,423						34,744						33,825						3,153						149,118
Issuances			12,912						344						2,456						1,933						0						17,645
Net premiums / considerations collected			( 13,540 )						( 1,049 )						( 3,259 )						( 3,284 )						( 218 )						( 21,350 )
Interest accrual			1,174						406						717						656						109						3,062
Foreign currency adjustment			( 11,386 )						0						( 3,622 )						( 3,402 )						0						( 18,410 )
Other adjustments			0						( 10 )						156						24						0						170
Balance at original discount rate, EOP			54,133						12,114						31,192						29,752						3,044						130,235
Effect of cumulative changes in discount rate assumptions, EOP			( 15,179 )						( 777 )						( 1,151 )						( 1,157 )						( 164 )						( 18,428 )
Balance, EOP			$	38,954					$	11,337					$	30,041					$	28,595					$	2,880					$	111,807
Other businesses, EOP																																	104
Total balance, EOP																																	$	111,911

			Nine Months Ended September 30, 2022
			Present Value of Expected Future Policy Benefits
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, BOP			$	142,593					$	22,768					$	109,562					$	114,846					$	15,810					$	405,579
Effect of cumulative changes in discount rate assumptions, BOP			( 13,706 )						( 3,876 )						( 21,554 )						( 13,476 )						( 4,482 )						( 57,094 )
Balance at original discount rate, BOP			128,887						18,892						88,008						101,370						11,328						348,485
Effect of assumption update			( 187 )						1,777						( 115 )						( 164 )						49						1,360
Effect of actual variances from expected experience and other activity			256						45						( 1,290 )						( 495 )						188						( 1,296 )
Adjusted balance, BOP			128,956						20,714						86,603						100,711						11,565						348,549
Issuances			12,912						344						2,456						1,933						0						17,645
Interest accrual			3,066						701						2,006						1,823						413						8,009
Benefit payments			( 7,253 )						( 1,150 )						( 2,609 )						( 4,090 )						( 179 )						( 15,281 )
Foreign currency adjustment			( 11,711 )						0						( 9,915 )						( 11,950 )						0						( 33,576 )
Other adjustments			( 528 )						( 14 )						247						( 12 )						0						( 307 )
Balance at original discount rate, EOP			125,442						20,595						78,788						88,415						11,799						325,039
Effect of cumulative changes in discount rate assumptions, EOP			( 22,629 )						( 1,450 )						( 2,790 )						( 10,296 )						( 1,755 )						( 38,920 )
Balance, EOP			$	102,813					$	19,145					$	75,998					$	78,119					$	10,044					$	286,119
Other businesses, EOP																																	1,905
Total balance, EOP																																	$	288,024

---

			Nine Months Ended September 30, 2022
			Net Liability for Future Policy Benefits - Benefit Reserves
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care						Total
			(in millions)
Balance, EOP, pre-flooring			$	63,859					$	7,808					$	45,957					$	49,524					$	7,163					$	174,311
Flooring impact, EOP			1						0						236						370						0						607
Balance, EOP, post-flooring			63,860						7,808						46,193						49,894						7,163						174,918
Less: Reinsurance recoverable			0						772						116						200						0						1,088
Balance after reinsurance recoverable, EOP, post-flooring			$	63,860					$	7,036					$	46,077					$	49,694					$	7,163					$	173,830
Other businesses, EOP(1)																																	1,723
Total balance after reinsurance recoverable, EOP																																	$	175,553

__________

(1) Reflects balance after reinsurance recoverable of $ 69 million and $ 80 million at September 30, 2023 and 2022, respectively.

The following tables provide supplemental information related to the balances of and changes in Benefit Reserves included in the disaggregated tables above, on a gross (direct and assumed) basis, as of and for the period indicated:

			Nine Months Ended September 30, 2023
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care
			($ in millions)
Undiscounted expected future gross premiums			$	108,863					$	23,147					$	68,665					$	56,169					$	6,854
Discounted expected future gross premiums (at original discount rate)			$	75,372					$	15,381					$	53,078					$	45,102					$	4,496
Discounted expected future gross premiums (at current discount rate)			$	56,962					$	14,120					$	50,753					$	42,804					$	4,167
Undiscounted expected future benefits and expenses			$	217,931					$	31,164					$	137,378					$	139,536					$	30,897
Interest accrual			$	2,132					$	303					$	1,297					$	1,135					$	326
Gross premiums			$	9,310					$	1,384					$	4,849					$	4,741					$	342
Weighted-average duration of the liability in years (at original discount rate)			9						10						20						19						18
Weighted-average duration of the liability in years (at current discount rate)			8						9						19						17						17
Weighted-average interest rate (at original discount rate)			4.57		%				5.17		%				3.46		%				2.59		%				4.91		%
Weighted-average interest rate (at current discount rate)			6.02		%				6.01		%				3.37		%				3.26		%				6.30		%

			Nine Months Ended September 30, 2022
			Retirement Strategies						Individual Life						International Businesses												Corporate and Other
			Institutional						Term Life						Life Planner						Gibraltar Life and Other						Long-Term Care
			($ in millions)
Undiscounted expected future gross premiums			$	81,807					$	23,879					$	72,431					$	62,850					$	7,035
Discounted expected future gross premiums (at original discount rate)			$	59,074					$	15,863					$	56,206					$	49,935					$	4,561
Discounted expected future gross premiums (at current discount rate)			$	42,578					$	14,853					$	54,613					$	48,237					$	4,325
Undiscounted expected future benefits and expenses			$	189,976					$	31,873					$	143,840					$	151,940					$	29,625
Interest accrual			$	1,892					$	295					$	1,289					$	1,167					$	304
Gross premiums			$	14,102					$	1,412					$	5,274					$	5,414					$	336
Weighted-average duration of the liability in years (at original discount rate)			8						10						21						20						19
Weighted-average duration of the liability in years (at current discount rate)			7						10						19						18						18
Weighted-average interest rate (at original discount rate)			4.29		%				5.23		%				3.45		%				2.55		%				4.91		%
Weighted-average interest rate (at current discount rate)			5.68		%				5.66		%				2.96		%				2.80		%				5.98		%

---

For additional information regarding observable market information and the techniques used to determine the interest rate assumptions seen above, see Note 2.

For non-participating traditional and limited-payment products, if a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for the present value of expected future policy benefits and non-level claim settlement expenses, then the liability for future policy benefits is adjusted at that time, and thereafter, such that all changes, both favorable and unfavorable, in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately as a gain or loss respectively.

In the first nine months of 2023, there was an immaterial impact to net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts.

In the first nine months of 2022, there was a $ 209 million charge to net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, partially offset by an $ 89 million gain reflecting the impact of ceded reinsurance on the affected cohorts. The unfavorable impact in the first nine months of 2022 is primarily due to unfavorable assumption updates related to the term life business in Individual Life.

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Deferred Profit Liability

The balances of and changes in Deferred Profit Liability as of and for the period indicated are as follows:

			Nine Months Ended September 30, 2023
			Deferred Profit Liability
			Retirement Strategies						International Businesses
			Institutional						Life Planner						Gibraltar Life and Other						Total
			(in millions)
Balance, BOP			$	5,532					$	3,379					$	5,261					$	14,172
Flooring impact, BOP			0						0						1						1
Balance, BOP, pre-flooring			5,532						3,379						5,260						14,171
Effect of assumption update			35						( 67 )						( 228 )						( 260 )
Effect of actual variances from expected experience and other activity			4						( 4 )						( 32 )						( 32 )
Adjusted balance, BOP			5,571						3,308						5,000						13,879
Profits deferred			294						1,271						1,017						2,582
Interest accrual			170						109						114						393
Amortization			( 424 )						( 869 )						( 765 )						( 2,058 )
Foreign currency adjustment			2						( 128 )						( 251 )						( 377 )
Other adjustments			0						24						0						24
Balance, EOP, pre-flooring			5,613						3,715						5,115						14,443
Flooring impact, EOP			0						0						1						1
Balance, EOP			5,613						3,715						5,116						14,444
Less: Reinsurance recoverable			383						8						10						401
Balance after reinsurance recoverable			$	5,230					$	3,707					$	5,106					14,043
Other businesses(1)																					145
Total balance after reinsurance recoverable																					$	14,188

			Nine Months Ended September 30, 2022
			Deferred Profit Liability
			Retirement Strategies						International Businesses
			Institutional						Life Planner						Gibraltar Life and Other						Total
			(in millions)
Balance, BOP			$	5,183					$	2,741					$	5,014					$	12,938
Flooring impact, BOP			0						0						1						1
Balance, BOP, pre-flooring			5,183						2,741						5,013						12,937
Effect of assumption update			382						28						( 5 )						405
Effect of actual variances from expected experience and other activity			101						3						( 82 )						22
Adjusted balance, BOP			5,666						2,772						4,926						13,364
Profits deferred			212						1,308						1,184						2,704
Interest accrual			160						91						107						358
Amortization			( 410 )						( 852 )						( 782 )						( 2,044 )
Foreign currency adjustment			( 48 )						( 246 )						( 487 )						( 781 )
Other adjustments			( 1 )						19						( 1 )						17
Balance, EOP, pre-flooring			5,579						3,092						4,947						13,618
Flooring impact, EOP			0						0						1						1
Balance, EOP			5,579						3,092						4,948						13,619
Less: Reinsurance recoverable			0						7						10						17
Balance after reinsurance recoverable			$	5,579					$	3,085					$	4,938					13,602
Other businesses(1)																					182
Total balance after reinsurance recoverable																					$	13,784

__________

(1) Reflects balance after reinsurance recoverable of $ 0 million and $ 1 million at September 30, 2023 and 2022, respectively.

---

The following tables provide supplemental information related to the balances of and changes in Deferred Profit Liability, included in the disaggregated tables above, on a gross (direct and assumed) basis, as of and for the period indicated:

			Nine Months Ended September 30, 2023
			Retirement Strategies						International Businesses
			Institutional						Life Planner						Gibraltar Life and Other
			(in millions)
Revenue(1)			$	( 79 )					$	( 464 )					$	( 105 )
Interest accrual			$	170					$	109					$	114

			Nine Months Ended September 30, 2022
			Retirement Strategies						International Businesses
			Institutional						Life Planner						Gibraltar Life and Other
			(in millions)
Revenue(1)			$	( 443 )					$	( 600 )					$	( 420 )
Interest accrual			$	160					$	91					$	107

__________

(1) Represents the gross premiums collected in changes in Deferred Profit Liability excluding impact of foreign currency adjustments.

Additional Insurance Reserves

AIR represents the additional liability for annuitization, death, or other insurance benefits, including GMDB and GMIB contract features, that are above and beyond the contractholder's account balance.

The following table shows a rollforward of AIR balances for variable and universal life products within Individual Life, which is the only line of business that contains a material AIR balance, for the period indicated, along with a reconciliation to the Company’s total AIR balance:

			Nine Months Ended September 30,
			2023						2022
			(in millions)
Balance, including amounts in AOCI, BOP, post-flooring			$	12,684					$	11,708
Flooring impact and amounts in AOCI			1,285						( 909 )
Balance, excluding amounts in AOCI, BOP, pre-flooring			13,969						10,799
Effect of assumption update			23						2,200
Effect of actual variances from expected experience and other activity			( 13 )						( 215 )
Adjusted balance, BOP			13,979						12,784
Assessments collected(1)			836						750
Interest accrual			362						319
Benefits paid			( 223 )						( 148 )
Balance, excluding amounts in AOCI, EOP, pre-flooring			14,954						13,705
Flooring impact and amounts in AOCI			( 1,737 )						( 1,595 )
Balance, including amounts in AOCI, EOP, post-flooring			13,217						12,110
Less: Reinsurance recoverable			5,286						4,790
Balance after reinsurance recoverable, including amounts in AOCI, EOP			7,931						7,320
Other businesses			123						144
Total balance after reinsurance recoverable			$	8,054					$	7,464

__________

(1) Represents the portion of gross assessments required to fund the future policy benefits.

---

Future Policy Benefits Reconciliation

The following table presents the reconciliation of the ending balances from above rollforwards, Benefit Reserves, Additional Insurance Reserves, and Deferred Profit Liability including other liabilities, gross of related reinsurance recoverable, to the total liability for Future Policy Benefits on the Company's Consolidated Statement of Financial Position as of the periods indicated:

			Nine Months Ended September 30,
			2023						2022
			(in millions)
Benefit reserves, EOP, post-flooring			$	174,276					$	176,720
Deferred Profit Liability EOP, post-flooring			14,589						13,802
Additional insurance reserves, including amounts in AOCI, EOP, post-flooring			13,340						12,254
Subtotal of amounts disclosed above			202,205						202,776
Other Future Policy Benefits reserves(1)			51,346						52,359
Total Future Policy Benefits			$	253,551					$	255,135

__________

(1) Represents balances for which disaggregated rollforward disclosures are not required, including Closed Block liabilities, unpaid claims and claims expenses, and incurred but not reported and in course of settlement claim liabilities.

Revenue and Interest Expense

The following tables present revenue and interest expense related to Benefit Reserves, Additional Insurance Reserves, and Deferred Profit Liability, as well as related revenue and interest expense not presented in the above supplemental tables, in the Company's Consolidated Statement of Operations as of the periods indicated:

			Nine Months Ended September 30, 2023
			Revenues(1)
			Retirement Strategies						Individual Life												International Businesses
			Institutional						Term Life						Variable/Universal Life						Life Planner						Gibraltar Life and Other						Other Businesses(2)						Total
			(in millions)
Benefit reserves			$	9,310					$	1,384					$	0					$	4,849					$	4,741					$	415					$	20,699
Deferred profit liability			( 79 )						0						0						( 464 )						( 105 )						37						( 611 )
Additional insurance reserves			0						0						2,357						0						0						0						2,357
Total			$	9,231					$	1,384					$	2,357					$	4,385					$	4,636					$	452					$	22,445

---

			Nine Months Ended September 30, 2022
			Revenues(1)
			Retirement Strategies						Individual Life												International Businesses
			Institutional						Term Life						Variable/Universal Life						Life Planner						Gibraltar Life and Other						Other Businesses(2)						Total
			(in millions)
Benefit reserves			$	14,102					$	1,412					$	0					$	5,274					$	5,414					$	398					$	26,600
Deferred profit liability			( 443 )						0						0						( 600 )						( 420 )						41						( 1,422 )
Additional insurance reserves			0						0						1,995						0						0						1						1,996
Total			$	13,659					$	1,412					$	1,995					$	4,674					$	4,994					$	440					$	27,174

			Nine Months Ended September 30, 2023
			Interest Expense
			Retirement Strategies						Individual Life												International Businesses
			Institutional						Term Life						Variable/Universal Life						Life Planner						Gibraltar Life and Other						Other Businesses(2)						Total
			(in millions)
Benefit reserves			$	2,132					$	303					$	0					$	1,297					$	1,135					$	366					$	5,233
Deferred profit liability			170						0						0						109						114						3						396
Additional insurance reserves			0						0						362						1						0						0						363
Total			$	2,302					$	303					$	362					$	1,407					$	1,249					$	369					$	5,992

			Nine Months Ended September 30, 2022
			Interest Expense
			Retirement Strategies						Individual Life												International Businesses
			Institutional						Term Life						Variable/Universal Life						Life Planner						Gibraltar Life and Other						Other Businesses(2)						Total
			(in millions)
Benefit reserves			$	1,892					$	295					$	0					$	1,289					$	1,167					$	346					$	4,989
Deferred profit liability			160						0						0						91						107						3						361
Additional insurance reserves			0						0						319						2						1						0						322
Total			$	2,052					$	295					$	319					$	1,382					$	1,275					$	349					$	5,672

__________

(1) Represents "Gross Premiums" for benefit reserves, "Revenue" for deferred profit liability and "Gross Assessments" for additional insurance reserves.

(2) Includes remaining balances disclosed above and balances for which disaggregated rollforward disclosures may not be presented above.

---

The balances of and changes in policyholders' account balances as of and for the periods ended are as follows:

						Nine Months Ended September 30, 2023
						Group Insurance						Retirement Strategies																		Individual Life						International Businesses												Total
						Life/Disability						Institutional						Individual Variable						Individual Fixed						Variable/Universal Life						Life Planner						Gibraltar Life and Other
						($ in millions)
Balance, beginning of period						$	5,839					$	17,376					$	17,524					$	4,643					$	26,502					$	11,168					$	35,325					$	118,377
Deposits						811						4,407						3,444						1,839						1,773						1,640						4,274						18,188
Interest credited						124						509						219						96						583						577						531						2,639
Acquisitions and dispositions						0						0						0						0						0						0						0						0
Policy charges						( 247 )						( 16 )						( 17 )						( 6 )						( 1,536 )						( 222 )						( 146 )						( 2,190 )
Surrenders and withdrawals						( 1,217 )						( 4,332 )						( 492 )						( 298 )						( 1,267 )						( 153 )						( 1,015 )						( 8,774 )
Benefit payments						0						0						( 58 )						( 58 )						( 119 )						( 203 )						( 1,462 )						( 1,900 )
Net transfers (to) from separate account						2						0						22						0						1,282						0						0						1,306
Change in market value and other adjustments(1)						0						0						1,192						82						75						21						( 7 )						1,363
Foreign currency adjustment						0						0						0						0						0						( 1,071 )						( 1,291 )						( 2,362 )
Balance, end of period						5,312						17,944						21,834						6,298						27,293						11,757						36,209						126,647
Less: Reinsurance and other recoverable(2)						0						0						0						0						0						1						19						20
Policyholders' account balance net of reinsurance and other recoverable						$	5,312					$	17,944					$	21,834					$	6,298					$	27,293					$	11,756					$	36,190					$	126,627
Closed Block Division																																																4,528
Unearned revenue reserve, unearned expense credit, and additional interest reserve																																																5,109
Other(3)																																																4,504
Total Policyholders' account balance																																																$	140,788
Weighted-average crediting rate						2.97		%				3.85		%				1.48		%				2.33		%				2.89		%				6.72		%				1.98		%				2.87		%
Net amount at risk(4)						$	73,260					$	0					$	0					$	0					$	378,191					$	17,400					$	6,274					$	475,125
Cash surrender value(5)						$	3,966					$	17,944					$	19,184					$	5,038					$	23,101					$	10,063					$	31,144					$	110,440

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						Nine Months Ended September 30, 2022
						Group Insurance						Retirement Strategies																		Individual Life						International Businesses												Total
						Life/Disability						Institutional						Individual Variable						Individual Fixed						Variable/Universal Life						Life Planner						Gibraltar Life and Other
						($ in millions)
Balance, beginning of period						$	6,273					$	16,391					$	14,125					$	4,652					$	26,859					$	11,555					$	37,615					$	117,470
Deposits						950						4,691						3,757						341						1,912						985						2,423						15,059
Interest credited						112						401						153						62						610						19						363						1,720
Dispositions(6)						0						0						( 1,405 )						( 440 )						0						0						0						( 1,845 )
Policy charges						( 243 )						( 17 )						( 3 )						( 3 )						( 1,528 )						( 149 )						( 89 )						( 2,032 )
Surrenders and withdrawals						( 1,098 )						( 3,866 )						( 237 )						( 110 )						( 1,188 )						( 143 )						( 2,194 )						( 8,836 )
Benefit payments						0						( 439 )						( 79 )						( 132 )						( 152 )						( 192 )						( 1,566 )						( 2,560 )
Net transfers (to) from separate account						( 21 )						0						238						0						352						0						0						569
Change in market value and other adjustments(1)						0						0						217						( 88 )						( 336 )						23						( 8 )						( 192 )
Foreign currency adjustment						0						0						0						0						0						( 2,051 )						( 2,929 )						( 4,980 )
Balance, end of period						5,973						17,161						16,766						4,282						26,529						10,047						33,615						114,373
Less: Reinsurance and other recoverable(2)						0						0						0						0						12						1						21						34
Policyholders' account balance net of reinsurance and other recoverable						$	5,973					$	17,161					$	16,766					$	4,282					$	26,517					$	10,046					$	33,594					$	114,339
Closed Block Division																																																4,634
Unearned revenue reserve, unearned expense credit, and additional interest reserve																																																4,374
Other(3)																																																8,152
Total Policyholders' account balance																																																$	131,533
Weighted-average crediting rate						2.43		%				3.18		%				1.32		%				1.85		%				3.05		%				0.23		%				1.36		%				1.98		%
Net amount at risk(4)						$	70,905					$	0					$	0					$	0					$	364,060					$	14,586					$	6,852					$	456,403
Cash surrender value(5)						$	4,177					$	17,161					$	13,780					$	3,250					$	21,717					$	8,511					$	29,892					$	98,488

____________

(1) Primarily relates to changes in the value of embedded derivative instruments associated with the indexed options of certain products.

(2) The amount of recoverable related to reinsurance agreements that reduce the risk of the policyholders' account balance gross liability.

(3) Includes $ 5,621 million and $ 8,220 million of Full Service account balances reinsured to Great-West as of September 30, 2023 and 2022, respectively. See Note 1 for additional information.

(4) The net amount at risk calculation includes both general account and separate account balances.

(5) Cash surrender value represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. There are no cash surrender charges for the Institutional Retirement Strategies segment.

(6) Represents the sale of PALAC in Individual Retirement Strategies.

The Company issues variable life and universal life insurance contracts which may also include a “no-lapse guarantee” where the Company contractually guarantees to the contractholder a death benefit even when the account value drops to zero, as long as the “no-lapse guarantee” premium is paid.

The net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including contractholder mortality, contract lapses, and premium pattern, as well as interest rate and equity market returns.

The Company also issues annuity contracts that provide certain death benefit and/or living benefit guarantees and are accounted for as MRBs. See Note 11 for additional information, including the net amount at risk associated with these guarantees.

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The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums are as follows:

						September 30, 2023
Range of Guaranteed Minimum Crediting Rate (1)						At guaranteed minimum						1 - 50 bps above guaranteed minimum						51 - 150 bps above guaranteed minimum						Greater than 150 bps above guaranteed minimum						Total
						($ in millions)
Group Insurance
Less than 1.00 %						$	0					$	0					$	0					$	1,221					$	1,221
1.00 % - 1.99 %						0						0						0						0						0
2.00 % - 2.99 %						29						0						0						0						29
3.00 % - 4.00 %						1,565						0						0						0						1,565
Greater than 4.00 %						73						0						0						0						73
Total						$	1,667					$	0					$	0					$	1,221					$	2,888
Institutional
Less than 1.00 %						$	400					$	0					$	0					$	0					$	400
1.00 % - 1.99 %						1,551						0						0						0						1,551
2.00 % - 2.99 %						551						0						0						0						551
3.00 % - 4.00 %						5,312						0						0						0						5,312
Greater than 4.00 %						2,150						0						0						0						2,150
Total						$	9,964					$	0					$	0					$	0					$	9,964
Individual Variable
Less than 1.00 %						$	944					$	821					$	18					$	0					$	1,783
1.00 % - 1.99 %						224						2						1						0						227
2.00 % - 2.99 %						32						5						3						0						40
3.00 % - 4.00 %						2,046						8						10						0						2,064
Greater than 4.00 %						97						0						0						0						97
Total						$	3,343					$	836					$	32					$	0					$	4,211
Individual Fixed
Less than 1.00 %						$	0					$	0					$	0					$	20					$	20
1.00 % - 1.99 %						544						129						246						82						1,001
2.00 % - 2.99 %						535						469						320						12						1,336
3.00 % - 4.00 %						343						9						0						0						352
Greater than 4.00 %						97						0						0						0						97
Total						$	1,519					$	607					$	566					$	114					$	2,806
Variable & Universal Life
Less than 1.00 %						$	0					$	0					$	0					$	408					$	408
1.00 % - 1.99 %						185						0						2,528						884						3,597
2.00 % - 2.99 %						29						1,418						2,940						349						4,736
3.00 % - 4.00 %						4,478						4,189						1,315						14						9,996
Greater than 4.00 %						5,533						0						0						0						5,533
Total						$	10,225					$	5,607					$	6,783					$	1,655					$	24,270
Life Planner
Less than 1.00 %						$	320					$	42					$	90					$	1,440					$	1,892
1.00 % - 1.99 %						2,815						25						0						0						2,840
2.00 % - 2.99 %						2,013						0						0						0						2,013
3.00 % - 4.00 %						335						0						0						0						335
Greater than 4.00 %						380						0						0						0						380
Total						$	5,863					$	67					$	90					$	1,440					$	7,460
Gibraltar
Less than 1.00 %						$	15,671					$	0					$	0					$	0					$	15,671
1.00 % - 1.99 %						8,864						0						0						0						8,864
2.00 % - 2.99 %						3,153						310						38						0						3,501
3.00 % - 4.00 %						4,145						0						0						0						4,145
Greater than 4.00 %						3,873						0						0						0						3,873
Total						$	35,706					$	310					$	38					$	0					$	36,054

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						September 30, 2022
Range of Guaranteed Minimum Crediting Rate (1)						At guaranteed minimum						1 - 50 bps above guaranteed minimum						51 - 150 bps above guaranteed minimum						Greater than 150 bps above guaranteed minimum						Total
						($ in millions)
Group Insurance
Less than 1.00 %						$	0					$	0					$	0					$	1,668					$	1,668
1.00 % - 1.99 %						7						0						0						0						7
2.00 % - 2.99 %						54						0						0						0						54
3.00 % - 4.00 %						1,677						0						0						0						1,677
Greater than 4.00 %						3						0						0						0						3
Total						$	1,741					$	0					$	0					$	1,668					$	3,409
Institutional
Less than 1.00 %						$	400					$	0					$	0					$	0					$	400
1.00 % - 1.99 %						1,572						0						0						0						1,572
2.00 % - 2.99 %						720						0						0						0						720
3.00 % - 4.00 %						5,980						0						0						0						5,980
Greater than 4.00 %						734						0						0						0						734
Total						$	9,406					$	0					$	0					$	0					$	9,406
Individual Variable
Less than 1.00 %						$	1,034					$	870					$	19					$	0					$	1,923
1.00 % - 1.99 %						250						2						0						0						252
2.00 % - 2.99 %						36						0						1						0						37
3.00 % - 4.00 %						2,365						6						10						0						2,381
Greater than 4.00 %						113						0						0						0						113
Total						$	3,798					$	878					$	30					$	0					$	4,706
Individual Fixed
Less than 1.00 %						$	0					$	0					$	0					$	0					$	0
1.00 % - 1.99 %						629						97						128						48						902
2.00 % - 2.99 %						485						0						0						0						485
3.00 % - 4.00 %						403						1						0						0						404
Greater than 4.00 %						107						0						0						0						107
Total						$	1,624					$	98					$	128					$	48					$	1,898
Variable & Universal Life
Less than 1.00 %						$	15					$	0					$	0					$	0					$	15
1.00 % - 1.99 %						325						0						733						2,014						3,072
2.00 % - 2.99 %						389						4						2,406						2,023						4,822
3.00 % - 4.00 %						7,661						43						2,498						158						10,360
Greater than 4.00 %						5,536						0						0						0						5,536
Total						$	13,926					$	47					$	5,637					$	4,195					$	23,805
Life Planner
Less than 1.00 %						$	348					$	27					$	95					$	78					$	548
1.00 % - 1.99 %						2,900						20						0						0						2,920
2.00 % - 2.99 %						2,088						0						0						0						2,088
3.00 % - 4.00 %						309						0						0						0						309
Greater than 4.00 %						376						0						0						0						376
Total						$	6,021					$	47					$	95					$	78					$	6,241
Gibraltar
Less than 1.00 %						$	17,761					$	0					$	0					$	0					$	17,761
1.00 % - 1.99 %						9,627						0						0						0						9,627
2.00 % - 2.99 %						3,333						302						46						0						3,681
3.00 % - 4.00 %						2,074						0						0						0						2,074
Greater than 4.00 %						226						0						0						0						226
Total						$	33,021					$	302					$	46					$	0					$	33,369

____________

(1) Excludes contracts without minimum guaranteed crediting rates, such as funds with indexed-linked crediting options and Japan variable products.

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The following table shows a rollforward of MRB balances for variable annuity products within Individual Retirement Strategies, which is the only line of business that contains a material MRB balance, along with a reconciliation to the Company’s total net MRB positions as of the following dates:

			Nine Months Ended September 30,
			2023						2022
			(in millions)
Balance, BOP			$	4,987					$	13,392
Effect of cumulative changes in NPR			1,828						898
Balance, BOP, before effect of changes in NPR			6,815						14,290
Attributed fees collected			899						1,040
Claims paid			( 83 )						( 62 )
Interest accrual			255						79
Actual in force different from expected			54						96
Effect of changes in interest rates			( 2,986 )						( 7,956 )
Effect of changes in equity markets			( 995 )						4,437
Effect of assumption update			342						( 152 )
Issuances			15						0
Other adjustments(1)			( 24 )						( 3,993 )
Balance, EOP, before effect of changes in NPR			4,292						7,779
Effect of cumulative changes in NPR			( 1,301 )						( 2,188 )
Balance, EOP			2,991						5,591
Less: Reinsured MRB			610						29
Balance, EOP, net of reinsurance			2,381						5,562
Other businesses			79						120
Total net MRB balance			$	2,460					$	5,682

_________

(1) 2022 includes $( 4,061 ) million related to the sale of PALAC. See Note 1 for additional information.

.

In 2023, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to policyholder behavior assumptions on certain variable annuities. In 2022, the Company recognized a favorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to mortality and policyholder behavior assumptions on certain variable annuities.

The Company issues certain variable annuity insurance contracts where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, and/or (2) the highest anniversary contract value on a specified date adjusted for any withdrawals. These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues indexed variable annuity contracts for which the return is tied to the return of specific indices where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals upon death. In certain of these indexed variable annuity contracts, the Company also contractually guarantees to the contractholder withdrawal benefits payable during specific periods.

For guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

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For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.

For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility and contractholder behavior.

The following table presents accompanying information to the rollforward table above.

			September 30, 2023						September 30, 2022
			($ in millions)
Net amount at risk(1)			$	13,417					$	15,299
Weighted-average attained age of contractholders			70						69

___________

(1) For contracts with multiple benefit features, the highest net amount at risk for each contract is included.

The tables below reconcile MRB asset and liability positions as of the following dates:

			September 30, 2023
			Retirement Strategies
			Individual Variable						Other Businesses						Total
			(in millions)
MRB Assets			$	2,187					$	13					$	2,200
MRB Liabilities			4,568						92						4,660
Net Liability			$	2,381					$	79					$	2,460

			September 30, 2022
			Retirement Strategies
			Individual Variable						Other Businesses						Total
			(in millions)
MRB Assets			$	794					$	12					$	806
MRB Liabilities			6,356						132						6,488
Net Liability			$	5,562					$	120					$	5,682

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The Company participates in reinsurance with third parties primarily to provide additional capacity for future growth, limit the maximum net loss potential arising from large risks and acquire or dispose of businesses.

Effective September 2023, the Company entered into an agreement with Prismic Life Reinsurance, Ltd (“Prismic Re”), to reinsure approximately $ 9 billion of reserves, representing approximately 70 % of the in-force structured settlement annuities business previously issued by PICA, 90 % of which is on a coinsurance with funds withheld basis and 10 % of which is on a coinsurance basis. As a result of the transaction, the Company recognized a $ 393 million deferred reinsurance loss that will be amortized into income over the estimated remaining life of the reinsured contracts.

Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $ 10 billion of account values of Prudential Defined Income (“PDI”) traditional variable annuity contracts with guaranteed living benefits issued by Pruco Life Insurance Company (“Pruco Life”), a wholly-owned subsidiary of Prudential Financial. This block represents approximately 10 % of the Company’s remaining legacy in-force traditional variable annuity block by account value. The Company ceded 100 % of separate account liabilities under modified coinsurance and 100 % of general account liabilities under coinsurance of its Pruco Life issued PDI traditional variable annuity contracts. The general account liabilities associated with PDI’s guaranteed living and death benefits and the corresponding reinsurance of those liabilities are accounted for as market risk benefits. As a result of the transaction, the Company recognized a $ 309 million deferred reinsurance gain that will be amortized into income over the estimated remaining life of the reinsured policies.

Effective April 2022, in connection with the sale of the Full Service Retirement business, the Company entered into separate agreements with external counterparties, Empower Annuity Insurance Company of America & Empower Life & Annuity Insurance Company of New York, to reinsure a portion of its Full Service Retirement business. The Company ceded 100 % of separate account liabilities under modified coinsurance and 100 % of general account liabilities under coinsurance of its Full Service Retirement business. The Company’s Full Service Retirement business consists of market value and stable value separate accounts as well as general account products, including stable value accumulation funds and a stable value wrap product known as a synthetic guaranteed investment contract. The majority of these products are considered investment contracts as they do not contain significant insurance risk; therefore, the reinsurance of such products are accounted for under deposit accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from the Company to Empower and any such novated contracts shall cease to be reinsured under this agreement.

Effective April 2022, in connection with the sale of the PALAC legal entity, now known as Fortitude Life Insurance and Annuity Company (“FLIAC”), the Company entered into a reinsurance agreement with FLIAC under which the Company assumed all of FLIAC’s indexed variable annuities under modified coinsurance. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts. As a result of the agreement, reinsurance recoverables includes the assumed modified coinsurance receivable, which reflects the value of the invested assets retained by FLIAC and the associated asset returns. The Company also assumed via coinsurance all of FLIAC’s fixed indexed annuities with a guaranteed lifetime withdrawal income feature, which are accounted for under deposit accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from FLIAC to the Company and any such novated contracts shall cease to be reinsured under this agreement.

Effective April 2015, the Company entered into an agreement with Union Hamilton Reinsurance, Ltd. (“Union Hamilton”) an external counterparty, to reinsure approximately 50 % of the Prudential Premier® Retirement Variable Annuity with Highest Daily Lifetime Income (“HDI”) v.3.0 business, a guaranteed benefit feature. This reinsurance agreement covered most new HDI v.3.0 variable annuity business issued between April 1, 2015 and December 31, 2016 on a quota share basis, with Union Hamilton’s cumulative quota share amounting to $ 2.9 billion of new rider premiums as of December 31, 2016. Reinsurance on business subject to this agreement remains in force for the duration of the underlying annuity contracts. New sales subsequent to December 31, 2016 are not covered by this external reinsurance agreement. This reinsurance agreement is accounted for as an embedded derivative.

In January 2013, the Company acquired the Hartford Life Business through reinsurance transactions with three subsidiaries of Hartford Financial Services Group, Inc. (“Hartford Financial”). Under the related agreements, the Company provided reinsurance for approximately 700,000 life insurance policies with net retained face amount in force of approximately $ 141 billion. The Company acquired the general account business through a coinsurance arrangement and, for certain types of general account policies, a modified coinsurance arrangement. The Company acquired the separate account business through a

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modified coinsurance arrangement. In May 2018, Hartford Financial sold a group of operating subsidiaries, which included two of the Company’s counterparties to these reinsurance arrangements, to Talcott Resolution Life Insurance Company (“Talcott Resolution”). Talcott Resolution was acquired by Sixth Street in July 2021. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of these changes in control of such counterparties.

Since 2011, the Company has entered into a number of reinsurance agreements to assume pension liabilities in the United Kingdom. Under these arrangements, the Company assumes the longevity risk, and in some arrangements, also the investment risk associated with the pension benefits of certain specified beneficiaries.

In 2006, the Company acquired the variable annuity business of The Allstate Corporation (“Allstate”) through a reinsurance transaction. The reinsurance arrangements with Allstate include a coinsurance arrangement associated with the general account liabilities assumed and a modified coinsurance arrangement associated with the separate account liabilities assumed. The reinsurance payable, which represents the Company’s obligation under the modified coinsurance arrangement, is netted with the reinsurance receivable in the Consolidated Statements of Financial Position. During the fourth quarter of 2021, Allstate sold the two counterparties to the aforementioned variable annuity reinsurance transaction to third parties. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties.

For the domestic business, life and disability reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term, per person excess, excess of loss, and coinsurance. On policies sold since 2000, the Company has reinsured a significant portion of the individual life mortality risk. Placement of reinsurance is accomplished primarily on an automatic basis with some specific risks reinsured on a facultative basis. The Company is authorized and has historically retained up to $ 30 million per life, but reduced its operating retention limit to $ 20 million per life in 2013 and then down to $ 10 million per life for new business starting in 2020. Retention in excess of the operating limit is on an exception basis.

The international business primarily uses reinsurance to obtain experience with respect to certain new product offerings and to a lesser extent, to mitigate mortality risk for certain protection products and for capital management purposes.

Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fee income, change in value of market risk benefits, net of related hedging gains (losses), policyholders’ benefits and change in estimates of liability for future policy benefits, are as follows:

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			Nine Months Ended September 30,
			2023						2022
			(in millions)
Direct premiums			$	23,424					$	28,705
Reinsurance assumed			3,567						3,072
Reinsurance ceded			( 6,546 )						( 1,766 )
Premiums			$	20,445					$	30,011
Direct policy charges and fee income			$	2,862					$	2,903
Reinsurance assumed			923						919
Reinsurance ceded			( 466 )						( 405 )
Policy charges and fee income			$	3,319					$	3,417
Direct change in value of market risk benefits, net of related hedging gains (losses)			$	( 157 )					$	( 903 )
Reinsurance assumed			148						( 27 )
Reinsurance ceded			( 151 )						( 108 )
Change in value of market risk benefits, net of related hedging gains (losses)			$	( 160 )					$	( 1,038 )
Direct policyholders’ benefits			$	25,161					$	31,298
Reinsurance assumed			5,383						4,719
Reinsurance ceded			( 7,416 )						( 3,132 )
Policyholders’ benefits			$	23,128					$	32,885
Direct change in estimates of liability for future policy benefits			$	326					$	1,435
Reinsurance assumed			( 147 )						464
Reinsurance ceded			52						( 1,302 )
Change in estimates of liability for future policy benefits			$	231					$	597

Reinsurance recoverables, are as follows:

			September 30, 2023						December 31, 2022
			(in millions)
Individual and group annuities(1)			$	6,750					$	2,078
Life insurance(2)			8,044						7,981
Other reinsurance			393						358
Total reinsurance recoverables(3)			$	15,187					$	10,417

__________

(1) Primarily represents $ 5,194 million of reinsurance recoverables as of September 30, 2023 established under the reinsurance agreement with Prismic Re under which the Company reinsured a portion of its in-force structured settlement annuities business. The Company has also recorded a funds withheld payable related to the reinsurance agreement with Prismic Re of $ 7,750 million as of September 30, 2023. Also includes reinsurance recoverables established under the reinsurance agreement with FLIAC in which the Company assumed all of FLIAC’s indexed variable annuities of $ 1,504 million and $ 1,986 million as of September 30, 2023 and December 31, 2022, respectively.

(2) Includes reinsurance recoverables established under the reinsurance arrangements associated with the acquisition of the Hartford Life Business of $ 2,010 million and $ 2,041 million as of September 30, 2023 and December 31, 2022, respectively. The Company has also recorded reinsurance payables related to the Hartford Life Business acquisition of $ 1,337 million and $ 1,327 million as of September 30, 2023 and December 31, 2022, respectively.

(3) Net of $( 11 ) million and $( 15 ) million of loss allowance as of September 30, 2023 and December 31, 2022, respectively.

Excluding the reinsurance recoverables associated with the acquisition of the Hartford Life Business, four major reinsurance companies account for approximately 69 % of the Company’s reinsurance recoverables as of September 30, 2023. The Company periodically reviews the financial condition of its reinsurers, amounts recoverable therefrom, and unearned reinsurance premium, in order to reduce its exposure to loss from reinsurer insolvencies. Any expected credit losses are reflected in the CECL allowance, after considering any collateral the Company obtained in the form of a trust, letter of credit, or funds withheld arrangement. See Note 2 for additional details regarding CECL. Under the Company’s international longevity reinsurance transactions, the Company obtains collateral from its counterparties to mitigate counterparty default risk.

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On December 18, 2001, the date of demutualization, The Prudential Insurance Company of America (“PICA”) established a closed block for certain in-force participating insurance policies and annuity products, along with corresponding assets used for the payment of benefits and policyholders’ dividends on these products, (collectively the “Closed Block”), and ceased offering these participating products. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division. For additional information regarding the Closed Block, see Note 15 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2022.

As of September 30, 2023 and December 31, 2022, the Company recognized a policyholder dividend obligation of $ 2,811 million and $ 3,207 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over expected cumulative earnings; however, due to accumulated net unrealized investment losses in excess of these amounts, the policyholder dividend obligation balances as of September 30, 2023 and December 31, 2022 were both reduced to zero .

As of September 30, 2023, the Closed Block has sufficient funds to make guaranteed policy benefit payments and there is no expectation that assets outside of the Closed Block will be needed to fund future payments. The excess of Closed Block liabilities over Closed Block assets as of the end of the reporting period shown in the table below is a reasonable measure of the margin in the reported liabilities compared to best estimate liabilities assuming the current dividend scale. Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:

						September 30, 2023						December 31, 2022
						(in millions)
Closed Block liabilities
Future policy benefits						$	43,731					$	44,414
Policyholders’ dividends payable						632						617
Policyholders’ dividend obligation						0						0
Policyholders’ account balances						4,528						4,607
Other Closed Block liabilities						3,092						3,499
Total Closed Block liabilities						51,983						53,137
Closed Block assets
Fixed maturities, available-for-sale, at fair value						28,583						29,898
Fixed maturities, trading, at fair value						816						900
Equity securities, at fair value						1,778						1,733
Commercial mortgage and other loans						7,836						7,926
Policy loans						3,520						3,637
Other invested assets						4,679						4,254
Short-term investments						303						337
Total investments						47,515						48,685
Cash and cash equivalents						307						1,307
Accrued investment income						438						402
Other Closed Block assets						105						162
Total Closed Block assets						48,365						50,556
Excess of reported Closed Block liabilities over Closed Block assets						3,618						2,581
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)						( 4,153 )						( 3,458 )
Allocated to policyholder dividend obligation						2,811						3,207
Future earnings to be recognized from Closed Block assets and Closed Block liabilities						$	2,276					$	2,330

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Information regarding the policyholder dividend obligation is as follows:

						Nine Months Ended September 30, 2023
						(in millions)
Balance, December 31, 2022						$	0
Impact from earnings allocable to policyholder dividend obligation						( 396 )
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation						396
Balance, September 30, 2023						$	0

Closed Block revenues and benefits and expenses are as follows for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Revenues
Premiums			$	392					$	397					$	1,228					$	1,247
Net investment income			508						435						1,485						1,514
Realized investment gains (losses), net			( 231 )						29						( 361 )						69
Other income (loss)			( 58 )						( 150 )						182						( 621 )
Total Closed Block revenues			611						711						2,534						2,209
Benefits and Expenses
Policyholders’ benefits			534						549						1,716						1,810
Interest credited to policyholders’ account balances			30						31						89						91
Dividends to policyholders			( 20 )						72						574						55
General and administrative expenses			68						76						212						224
Total Closed Block benefits and expenses			612						728						2,591						2,180
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes			( 1 )						( 17 )						( 57 )						29
Income tax expense (benefit)			( 23 )						( 40 )						( 109 )						( 49 )
Closed Block revenues, net of Closed Block benefits and expenses and income taxes			$	22					$	23					$	52					$	78

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In determining the full year projected tax rate, the Company considers the realizability of deferred tax assets, including those associated with unrealized investment losses, and has determined based upon the weight of available evidence that no valuation allowance is necessary related to unrealized investment losses. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Total income tax expense” divided by projected “Income before income taxes and equity in earnings of operating joint ventures.” Taxes attributable to operating joint ventures are recorded within “Equity in earnings of operating joint ventures, net of taxes.” The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company’s income tax provision, on a consolidated basis, amounted to an income tax expense of $ 254 million, or 18.0 % of income (loss) before income taxes and equity in earnings of operating joint ventures, in the first nine months of 2023, compared to an income tax benefit of $( 274 ) million, or 14.8 %, in the first nine months of 2022. The Company’s current and

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prior effective tax rates differ from the U.S. statutory rate of 21 % primarily due to non-taxable investment income, tax credits, foreign earnings taxed at higher rates than the U.S. statutory rate, and the items discussed below.

Foreign Tax Credit Regulations. The Treasury Department and the IRS published Final Regulations in the Federal Register on January 4, 2022, which affect the creditability of certain foreign taxes for U.S. federal income tax purposes. The Final Regulations created uncertainty as to whether a U.S. foreign tax credit could be claimed for taxes paid to Brazil. The ability to claim a foreign tax credit for taxes paid to Brazil impacted the benefit of the election made pursuant to Internal Revenue Code Section 952 to subject earnings from the Company’s insurance operations in Brazil to tax in the U.S. in the tax year earned, net of related foreign tax credits. As a result, a $ 20 million tax expense was reflected as part of the Company’s results for the first nine months of 2022.

On July 21, 2023, the IRS issued Notice 2023-55 which provides temporary relief to taxpayers in determining whether a foreign tax is eligible for a U.S. foreign tax credit for tax years 2022 and 2023, specifically delaying until 2024 the provisions of the Final Regulations that impacted the ability to claim a U.S. foreign tax credit for taxes paid to Brazil. As a result of this new guidance, the Company was able to claim a U.S. foreign tax credit for taxes paid to Brazil for its 2022 tax year, which resulted in a $ 7 million tax benefit, and will be able to claim a U.S. foreign tax credit for taxes paid to Brazil in 2023.

GILTI High Tax Exclusion. On July 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations which allows an annual election to exclude from the U.S. tax return certain GILTI amounts when the taxes paid by a foreign affiliate exceed 18.9 % ( 90 % of U.S. statutory rate of 21 %) of the GILTI amount for that foreign affiliate (the “high-tax exception”). These regulations are effective for the 2021 taxable year with an election to apply to any taxable year beginning after 2017. In many of the countries in which the Company operates, including Japan and Brazil, there are differences between local tax rules used to determine the tax base and the U.S. tax principles used to determine GILTI. Also, the Company’s Japan affiliates have a different tax year than the U.S. calendar tax year used to determine GILTI; therefore, while many of the countries, including Japan, have a statutory tax rate above the 18.9 % threshold, separate affiliates may not meet the 18.9 % threshold each year and, as such, may not qualify for this annual exclusion. The Company made the high-tax exception election for the 2022 tax year and recorded a lower GILTI cost included in “Total income tax expense” for 2022 as a result of such election. The Company anticipates making the high-tax exception election for the 2023 tax year and reflected the impact of the election in its full year projected effective tax rate used to calculate year-to-date taxes for the first nine months of 2023.

Inflation Reduction Act. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”). One of the most significant provisions of the Inflation Reduction Act is a 15 % alternative minimum tax based on the Company’s GAAP income, with certain adjustments. This provision, which is applicable only to companies with average applicable financial statement income over $1 billion for any three-year period ending in 2022 or later, is effective in taxable years beginning after December 31, 2022. The impact of the book-income alternative minimum tax, if any, will vary from year to year based on the relationship of the Company’s GAAP income to the Company’s taxable income. Any tax paid pursuant to this provision is available as a tax credit in future years when the Company’s tax rate exceeds the 15% minimum tax threshold.

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Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

			September 30, 2023						December 31, 2022
			($ in millions)
Commercial paper:
Prudential Financial			$	25					$	25
Prudential Funding, LLC			508						413
Subtotal commercial paper			533						438
Current portion of long-term debt:
Senior Notes			0						173
Mortgage debt			82						155
Surplus notes subject to set-off arrangements(1)			500						500
Subtotal current portion of long-term debt			582						828
Other(2)			0						9
Subtotal			1,115						1,275
Less: assets under set-off arrangements(1)			500						500
Total short-term debt(3)			$	615					$	775
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight			$	100					$	130
Daily average commercial paper outstanding for the quarter ended			$	1,378					$	1,312
Weighted average maturity of outstanding commercial paper, in days			80						98
Weighted average interest rate on outstanding commercial paper			5.51		%				4.69		%

_________

(1) The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in short-term debt.

(2) Includes $ 0 million and $ 9 million drawn on a revolving line of credit held by a subsidiary at September 30, 2023 and December 31, 2022, respectively.

(3) Includes Prudential Financial debt of $ 25 million at both September 30, 2023 and December 31, 2022.

Prudential Financial and certain subsidiaries have access to external sources of liquidity, including membership in the Federal Home Loan Bank of New York (“FHLBNY”), commercial paper programs and contingent financing facilities in the f orm of a put option agreement and facility agreement. The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of l iquidity. Beginning in September 2023, as an additional source of liquidity, the Company has entered into an agreement with the Federal Agricultural Mortgage Corporation (“Farmer Mac”), under which the Company can borrow up to $ 750 million by issuing funding agreements to a subsidiary of Farmer Mac, with borrowings secured by a pledge of certain eligible agricultural mortgage loans. At September 30, 2023, no amounts were drawn on these syndicated, unsecured committed credit facilities. For additional information regarding these sources of liquidity, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Long-term Debt

The table below presents the Company’s long-term debt as of the dates indicated:

			September 30, 2023						December 31, 2022
			(in millions)
Fixed-rate obligations:
Surplus notes			$	346					$	345
Surplus notes subject to set-off arrangements(1)			9,460						9,460
Senior notes			10,113						10,115
Mortgage debt			25						25
Floating-rate obligations:
Line of credit			230						300
Surplus notes subject to set-off arrangements(1)			2,330						2,330
Mortgage debt(2)			73						29
Junior subordinated notes(3)			8,090						9,094
Subtotal			30,667						31,698
Less: assets under set-off arrangements(1)			11,790						11,790
Total long-term debt(4)			$	18,877					$	19,908

__________

(1) The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.

(2) Includes $ 26 million and $ 29 million of debt denominated in foreign currency at September 30, 2023 and December 31, 2022, respectively.

(3) Includes Prudential Financial debt of $ 8,048 million and $ 9,047 million at September 30, 2023 and December 31, 2022, respectively. Also includes subsidiary debt of $ 42 million and $ 47 million denominated in foreign currency at September 30, 2023 and December 31, 2022, respectively.

(4) Includes Prudential Financial debt of $ 18,161 million and $ 19,162 million at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Facility Agreements for Senior Debt Issuances

In March 2023, Prudential Financial entered into ten-year and thirty-year facility agreements with two Delaware trusts upon the completion of the sale of $ 1.5 billion of trust securities by the trusts in a Rule 144A private placement. The trusts invested the proceeds from the sale of the trust securities in portfolios of principal and/or interest strips of U.S. Treasury securities. The facility agreements provide Prudential Financial the right to issue and sell to the trusts from time to time up to $ 800 million of 5.791 % senior notes due February 15, 2033, and $ 700 million of 5.997 % senior notes due February 15, 2053, and receive in exchange a corresponding amount of the U.S. Treasury securities held by the trusts. In return, the Company agreed to pay semi-annual facility fees to the trusts at rates of 1.815 % and 2.066 % per annum for the ten-year and thirty-year facility, respectively, applied to the maximum amount of senior notes that the Company could issue and sell to the trusts.

The right to issue senior notes described above will be exercised automatically in full upon the Company’s failure to make certain payments to the trusts, such as paying the facility fee or reimbursing the trusts for their expenses, if the Company’s failure to pay is not cured within 30 days, and upon an event involving its bankruptcy. The Company is also required to exercise this issuance right if its consolidated stockholders’ equity, calculated in accordance with U.S. GAAP but excluding AOCI, falls below $ 9.0 billion, subject to adjustment in certain cases. Prior to any involuntary exercise of the issuance right, the Company has the right to repurchase any of its senior notes then held by the trusts in exchange for U.S. Treasury securities. Finally, Prudential Financial may redeem any outstanding senior notes, in whole or in part, prior to February 15, 2033 and February 15, 2053 for the ten-year and thirty-year facility, respectively, at a redemption price equal to the greater of par or a make-whole price, or thereafter, redeem the senior notes, in whole or in part, at par.

Junior Subordinated Notes

In February 2023, the Company issued $ 500 million in aggregate principal amount of 6.750 % fixed-to-fixed reset rate junior subordinated notes due in March 2053. In June 2023, the Company redeemed $ 1.5 billion in aggregate principal amount of 5.625 % fixed to floating rate junior subordinated notes due in 2043.

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Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans (“Pension Benefits”), which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service (the “traditional formula”), while benefits for other employees are based on an account balance that takes into consideration age, length of service and earnings during their career (the “cash balance formula”).

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“Other Postretirement Benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive certain other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

			Three Months Ended September 30,
			Pension Benefits												Other Postretirement Benefits
			2023						2022						2023						2022
			(in millions)
Components of net periodic (benefit) cost:
Service cost			$	51					$	65					$	2					$	3
Interest cost			138						111						17						14
Expected return on plan assets			( 231 )						( 218 )						( 21 )						( 25 )
Amortization of prior service cost			( 1 )						( 1 )						( 2 )						( 2 )
Amortization of actuarial (gain) loss, net			17						37						3						2
Settlements			1						2						0						0
Curtailments(1)			0						0						0						0
Special termination benefits(2)			0						0						0						0
Net periodic (benefit) cost			$	( 25 )					$	( 4 )					$	( 1 )					$	( 8 )
			Nine Months Ended September 30,
			Pension Benefits												Other Postretirement Benefits
			2023						2022						2023						2022
			(in millions)
Components of net periodic (benefit) cost:
Service cost			$	154					$	211					$	7					$	10
Interest cost			414						320						53						41
Expected return on plan assets			( 694 )						( 649 )						( 64 )						( 77 )
Amortization of prior service cost			( 1 )						( 1 )						( 6 )						( 6 )
Amortization of actuarial (gain) loss, net			51						124						8						5
Settlements			2						3						0						0
Curtailments(1)			0						0						0						( 8 )
Special termination benefits(2)			0						4						0						4
Net periodic (benefit) cost			$	( 74 )					$	12					$	( 2 )					$	( 31 )

__________

(1) For 2022, curtailments were recognized for other postretirement benefit plans as a result of the sale of the Full Service Retirement business.

(2) For 2022, certain employees were provided special termination benefits under non-qualified plans in the form of unreduced early retirement benefits as a result of their involuntary termination while others were provided enhanced benefits due to the sale of the Full Service Retirement business.

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The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

			Common Stock
			Issued						Held In Treasury						Outstanding
			(in millions)
Balance, December 31, 2022			666.3						300.3						366.0
Common Stock issued			0.0						0.0						0.0
Common Stock acquired			0.0						8.3						( 8.3 )
Stock-based compensation programs(1)			0.0						( 3.6 )						3.6
Balance, September 30, 2023			666.3						305.0						361.3

__________

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.

In February 2023, Prudential Financial’s Board of Directors (the “Board”) authorized the Company to repurchase at management’s discretion up to $ 1.0 billion of its outstanding Common Stock during the period from January 1, 2023 through December 31, 2023. As of September 30, 2023, 8.3 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $ 750 million.

The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be executed in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including, but not limited to: compliance with laws, increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions.

Dividends declared per share of Common Stock are as follows for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Dividends declared per share of Common Stock			$	1.25					$	1.20					$	3.75					$	3.60

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the nine months ended September 30, 2023 and 2022, are as follows:

			Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
			Foreign Currency Translation Adjustment						Net Unrealized Investment Gains (Losses)(1)						Interest rate remeasurement of Liability for Future Policy Benefits						Gains (losses) from Changes in Non-performance Risk on Market Risk Benefits						Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)						Total Accumulated Other Comprehensive Income (Loss)
			(in millions)
Balance, December 31, 2022			$	( 2,274 )					$	( 16,195 )					$	15,242					$	1,448					$	( 2,027 )					$	( 3,806 )
Change in OCI before reclassifications			( 650 )						( 10,094 )						5,529						( 528 )						15						( 5,728 )
Amounts reclassified from AOCI			1						615						0						0						52						668
Income tax benefit (expense)			( 93 )						2,213						( 1,177 )						111						( 19 )						1,035
Balance, September 30, 2023			$	( 3,016 )					$	( 23,461 )					$	19,594					$	1,031					$	( 1,979 )					$	( 7,831 )

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			Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
			Foreign Currency Translation Adjustment						Net Unrealized Investment Gains (Losses)(1)						Interest rate remeasurement of Liability for Future Policy Benefits						Gains (losses) from Changes in Non-performance Risk on Market Risk Benefits						Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)						Total Accumulated Other Comprehensive Income (Loss)
			(in millions)
Balance, December 31, 2021			$	( 1,107 )					$	26,640					$	( 33,220 )					$	707					$	( 2,513 )					$	( 9,493 )
Change in OCI before reclassifications			( 1,907 )						( 56,260 )						64,087						1,299						383						7,602
Amounts reclassified from AOCI			21						126						0						0						122						269
Income tax benefit (expense)			( 43 )						12,906						( 15,082 )						( 273 )						( 116 )						( 2,608 )
Balance, September 30, 2022			$	( 3,036 )					$	( 16,588 )					$	15,785					$	1,733					$	( 2,124 )					$	( 4,230 )

__________

(1) Includes cash flow hedges of $ 1,947 million and $ 2,616 million as of September 30, 2023 and December 31, 2022, respectively, and $ 4,099 million and $ 1,019 million as of September 30, 2022 and December 31, 2021, respectively, and fair value hedges of $( 18 ) million and $( 54 ) million as of September 30, 2023 and December 31, 2022, respectively, and $( 47 ) million and $( 35 ) million as of September 30, 2022 and December 31, 2021, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

			Three Months Ended September 30,												Nine Months Ended September 30,												Affected line item in Consolidated Statements of Operations
			2023						2022						2023						2022
			(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments			$	0					$	( 12 )					$	( 1 )					$	( 21 )					Realized investment gains (losses), net
Net unrealized investment gains (losses):
Cash flow hedges—Interest rate			( 3 )						2						( 32 )						( 3 )						(3)
Cash flow hedges—Currency			3						6						11						10						(3)
Cash flow hedges—Currency/Interest rate			221						383						286						1,040						(3)
Fair value hedges—Currency			( 2 )						( 1 )						( 6 )						( 3 )						(3)
Net unrealized investment gains (losses) on available-for-sale securities			( 453 )						( 113 )						( 874 )						( 1,170 )						Realized investment gains (losses), net
Total net unrealized investment gains (losses)			( 234 )						277						( 615 )						( 126 )						(4)
Amortization of defined benefit items:
Prior service cost			3						3						7						7						(5)
Actuarial gain (loss)			( 20 )						( 39 )						( 59 )						( 129 )						(5)
Total amortization of defined benefit items			( 17 )						( 36 )						( 52 )						( 122 )
Total reclassifications for the period			$	( 251 )					$	229					$	( 668 )					$	( 269 )

__________

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 5 for additional information regarding cash flow and fair value hedges.

(4) See table below for additional information regarding unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 16 for additional information regarding employee benefit plans.

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Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income (loss)” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to available-for-sale fixed maturity securities on which an allowance for credit losses has been recorded, and all other net unrealized investment gains (losses), are as follows:

			Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on Which an Allowance for Credit Losses has been Recorded						Net Unrealized Gains (Losses) on All Other Investments(1)						Reinsurance Recoverables						Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables						Policyholders’ Dividends						Income Tax Benefit (Expense)						Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
			(in millions)
Balance, December 31, 2022			$	( 45 )					$	( 24,959 )					$	( 703 )					$	1,946					$	3,194					$	4,372					$	( 16,195 )
Net investment gains (losses) on investments arising during the period			11						( 10,154 )																								2,368						( 7,775 )
Reclassification adjustment for (gains) losses included in net income			( 10 )						625																								( 144 )						471
Reclassification due to allowance for credit losses recorded during the period			( 51 )						51																								0						0
Impact of net unrealized investment (gains) losses															( 270 )						703						( 384 )						( 11 )						38
Balance, September 30, 2023			$	( 95 )					$	( 34,437 )					$	( 973 )					$	2,649					$	2,810					$	6,585					$	( 23,461 )

__________

(1) Includes cash flow and fair value hedges. See Note 5 for additional information.

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A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated is as follows:

			Three Months Ended September 30,
			2023																		2022
			Income						Weighted Average Shares						Per Share Amount						Income						Weighted Average Shares						Per Share Amount
			(in millions, except per share amounts)
Basic earnings per share
Net income (loss)			$	( 791 )																	$	( 108 )
Less: Income (loss) attributable to noncontrolling interests			11																		( 16 )
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards			5																		6
Net income (loss) attributable to Prudential Financial available to holders of Common Stock			$	( 807 )					362.6						$	( 2.23 )					$	( 98 )					371.0						$	( 0.26 )
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic			$	5																	$	6
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted			5																		6
Stock options									0.0																		0.0
Deferred and long-term compensation programs									0.0																		0.0
Diluted earnings per share(1)
Net income (loss) attributable to Prudential Financial available to holders of Common Stock			$	( 807 )					362.6						$	( 2.23 )					$	( 98 )					371.0						$	( 0.26 )

__________

(1) For the three months ended September 30, 2023 and 2022, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because dilutive shares and dilutive earnings per share are not applicable when a net loss is reported. As a result of the net loss attributable to Prudential Financial available to holders of Common Stock for the three months ended September 30, 2023 and 2022, all potential stock options and compensation programs were considered antidilutive.

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			Nine Months Ended September 30,
			2023																		2022
			Income						Weighted Average Shares						Per Share Amount						Income						Weighted Average Shares						Per Share Amount
			(in millions, except per share amounts)
Basic earnings per share
Net income (loss)			$	1,182																	$	( 1,631 )
Less: Income (loss) attributable to noncontrolling interests			11																		( 36 )
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards			17																		19
Net income (loss) attributable to Prudential Financial available to holders of Common Stock			$	1,154					364.6						$	3.17					$	( 1,614 )					373.8						$	( 4.32 )
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic			$	17																	$	19
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted			17																		19
Stock options									0.2																		0.0
Deferred and long-term compensation programs									1.0																		0.0
Diluted earnings per share(1)
Net income (loss) attributable to Prudential Financial available to holders of Common Stock			$	1,154					365.8						$	3.15					$	( 1,614 )					373.8						$	( 4.32 )

__________

(1) For the nine months ended September 30, 2022, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because dilutive shares and dilutive earnings per share are not applicable when a net loss is reported. As a result of the net loss attributable to Prudential Financial available to holders of Common Stock for the nine months ended September 30, 2022, all potential stock options and compensation programs were considered antidilutive.

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of net income available to holders of Common Stock, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss available to holders of Common Stock, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended September 30, 2023 and 2022, as applicable, were based on 4.1 million and 4.9 million of such awards, respectively, and for the nine months ended September 30, 2023 and 2022, as applicable, were based on 4.1 million and 5.0 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of diluted earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of a net loss available to holders of Common Stock. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of a net loss available to holders of Common Stock. For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

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			Three Months Ended September 30,
			2023												2022
			Shares						Exercise Price Per Share						Shares						Exercise Price Per Share
			(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method			1.1						$	103.19					$	0.7					$	107.30
Antidilutive stock options due to net loss available to holders of Common Stock			0.1												0.3
Antidilutive shares based on application of the treasury stock method			0.0												0.0
Antidilutive shares due to net loss available to holders of Common Stock			1.1												1.8
Total antidilutive stock options and shares			2.3												2.8

			Nine Months Ended September 30,
			2023												2022
			Shares						Exercise Price Per Share						Shares						Exercise Price Per Share
			(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method			1.3						$	101.72					$	0.5					$	107.95
Antidilutive stock options due to net loss available to holders of Common Stock			0.0												0.5
Antidilutive shares based on application of the treasury stock method			0.1												0.1
Antidilutive shares due to net loss available to holders of Common Stock			0.0												2.1
Total antidilutive stock options and shares			1.4												3.2

Segments

The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance and Individual Life businesses), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP.

As discussed in Note 1, effective January 1, 2023, AIQ is now included within Corporate and Other operations. Also effective January 1, 2023, Prudential Advisors, which was previously part of the Individual Life segment, is now included within Corporate and Other operations. There are no impacts to the Company's consolidated financial statements from these reporting changes and historical segment results have been updated to conform to the current period presentation.

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) before income taxes and equity in earnings of operating joint ventures” for the following items:

• Realized investment gains (losses), net, and related adjustments;

• Charges related to realized investment gains (losses), net;

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• Change in value of market risk benefits, net of related hedging gains (losses);

• Market experience updates;

• Divested and Run-off Businesses;

• Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests; and

• Other adjustments.

These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. The Company, however, believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses. For additional information regarding these reconciling items, see Note 22 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

As a result of the adoption of ASU 2018-12 in the first quarter of 2023, the Company is required to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value. In order to enhance the understanding of our underlying performance trends, the Company excludes from adjusted operating income “Change in value of market risk benefits, net of related hedging gains (losses)”, which reflects the impact from changes in current market conditions. In addition, “Charges related to realized investment gains (losses)”, no longer includes the current period impact of net realized investment gains (losses) on the amortization of DAC and related balances, and “Market experience updates” no longer includes the immediate impact on DAC and related balances from changes in current market conditions on estimates of profitability. In both cases, the amortization of DAC and related balances is independent of these factors under ASU 2018-12. See Note 2 regarding additional information about the adoption of ASU 2018-12, including market risk benefits and the amortization of DAC and other balances.

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Reconciliation of adjusted operating income to net income (loss)

The table below reconciles “Adjusted operating income before income taxes” to “Income (loss) before income taxes and equity in earnings of operating joint ventures”:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Adjusted operating income before income taxes by segment:
PGIM			$	211					$	219					$	541					$	613
U.S. Businesses:
Institutional Retirement Strategies			439						268						1,263						1,215
Individual Retirement Strategies			502						387						1,391						2,567
Retirement Strategies(1)			941						655						2,654						3,782
Group Insurance			89						30						253						( 31 )
Individual Life(1)			58						( 70 )						( 103 )						( 1,750 )
Total U.S. Businesses			1,088						615						2,804						2,001
International Businesses			811						748						2,435						2,391
Corporate and Other			( 504 )						( 415 )						( 1,516 )						( 1,152 )
Total segment adjusted operating income before income taxes			1,606						1,167						4,264						3,853
Reconciling items:
Realized investment gains (losses), net, and related adjustments			( 2,430 )						( 1,128 )						( 2,965 )						( 4,981 )
Charges related to realized investment gains (losses), net			( 61 )						( 115 )						78						( 421 )
Change in value of market risk benefits, net of related hedging gains (losses)			( 251 )						( 58 )						( 160 )						( 1,072 )
Market experience updates			143						125						188						617
Divested and Run-off Businesses:
Closed Block division			2						( 21 )						( 50 )						22
Other Divested and Run-off Businesses			( 46 )						( 53 )						125						175
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			( 11 )						( 33 )						( 42 )						( 18 )
Other adjustments(2)			( 10 )						( 10 )						( 28 )						( 27 )
Income (loss) before income taxes and equity in earnings of operating joint ventures per Unaudited Interim Consolidated Financial Statements			$	( 1,058 )					$	( 126 )					$	1,410					$	( 1,852 )

________

(1) The Retirement Strategies and Individual Life segments’ results reflect DAC as if the business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

(2) Includes components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service period.

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Reconciliation of select financial information

The tables below present certain financial information for the Company’s segments and its Corporate and Other operations, including assets by segment and revenues by segment on an adjusted operating income basis, and the reconciliation of the segment totals to amounts reported in the Unaudited Interim Consolidated Financial Statements.

			September 30, 2023						December 31, 2022
			(in millions)
Assets by segment:
PGIM			$	44,250					$	48,364
U.S. Businesses:
Institutional Retirement Strategies			107,935						108,565
Individual Retirement Strategies			131,231						130,173
Retirement Strategies			239,166						238,738
Group Insurance			36,451						38,201
Individual Life			108,077						102,445
Total U.S. Businesses			383,694						379,384
International Businesses			177,597						186,791
Corporate and Other			26,985						23,556
Closed Block division			48,728						50,934
Total assets per Unaudited Interim Consolidated Financial Statements			$	681,254					$	689,029

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						Nine Months Ended September 30, 2022
Revenues, and benefits and expenses on an adjusted operating income basis by segment						Total Revenues						Net Investment Income						Total Benefits and Expenses						Policyholders’ Benefits						Interest Credited to Policyholders’ Account Balances						Dividends to Policyholders						Interest Expense						Amortization of DAC
						(in millions)
PGIM						$	2,662					$	38					$	2,049					$	0					$	0					$	0					$	30					$	3
U.S. Businesses:
Institutional Retirement Strategies						16,637						2,684						15,422						15,516						255						0						8						8
Individual Retirement Strategies						4,493						644						1,926						105						221						0						5						284
Retirement Strategies						21,130						3,328						17,348						15,621						476						0						13						292
Group Insurance						4,560						362						4,591						3,693						112						0						3						1
Individual Life						4,301						1,838						6,051						2,503						691						25						593						333
Total U.S. Businesses						29,991						5,528						27,990						21,817						1,279						25						609						626
International Businesses						14,551						3,695						12,160						9,148						545						37						19						455
Corporate and Other(1)						135						440						1,287						( 4 )						103						0						514						( 31 )
Total revenues, and benefits and expenses on an adjusted operating income basis						47,339						9,701						43,486						30,961						1,927						62						1,172						1,053
Reconciling items:
Realized investment gains (losses), net, and related adjustments						( 5,077 )						( 18 )						( 96 )						74						( 170 )						0						0						0
Charges related to realized investment gains (losses), net						43						0						464						261						34						0						0						28
Change in value of market risk benefits, net of related hedging gains (losses)						( 1,072 )						0						0						0						0						0						0						0
Market experience updates						139						0						( 478 )						( 11 )						0						0						0						1
Divested and Run-off Businesses:
Closed Block division						2,204						1,508						2,182						1,810						91						55						4						10
Other Divested and Run-off Businesses						( 149 )						736						( 324 )						( 210 )						( 487 )						1						0						0
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests						21						0						39						0						0						0						0						0
Other adjustments						0						0						27						0						0						0						0						0
Total revenue, and benefits and expenses per Consolidated Statements of Operations						$	43,448					$	11,927					$	45,300					$	32,885					$	1,395					$	118					$	1,176					$	1,092

________

(1) Corporate and Other operations, through AIQ and Prudential Advisors, generates fee revenues from the sale and distribution of certain insurance, annuity and investment products offered by Prudential and third-parties.

Intersegment revenues

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other operations. The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
PGIM segment intersegment revenues			$	201					$	199					$	604					$	631

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Segments may also enter into internal derivative contracts with other segments. For adjusted operating income, each segment accounts for the internal derivative results consistent with the manner in which that segment accounts for other similar external derivatives.

Asset management and service fees

The table below presents asset management and service fees, predominantly related to investment management activities, for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Asset-based management fees			$	799					$	820					$	2,377					$	2,642
Performance-based incentive fees			26						15						33						25
Other fees			127						131						377						419
Total asset management and service fees			$	952					$	966					$	2,787					$	3,086

Commitments and Guarantees

Commercial Mortgage Loan Commitments

			September 30, 2023						December 31, 2022
			(in millions)
Total outstanding mortgage loan commitments			$	2,570					$	1,995
Portion of commitment where prearrangement to sell to investor exists			$	297					$	582

In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company prearranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan. The above amount includes unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was an allowance for credit losses of $ 1 million as of both September 30, 2023 and December 31, 2022. The change in allowance is $ 0 million for both the three months and nine months ended September 30, 2023 and 2022.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

			September 30, 2023						December 31, 2022
			(in millions)
Expected to be funded from the general account and other operations outside the separate accounts			$	13,507					$	8,376
Expected to be funded from separate accounts			$	36					$	183

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts. The above amount includes unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for either the three months or nine months end ed September 30, 2023 or 2022.

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Indemnification of Securities Lending and Securities Repurchase Transactions

			September 30, 2023						December 31, 2022
			(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)			$	5,734					$	5,834
Fair value of related collateral associated with above indemnifications(1)			$	5,858					$	5,985
Accrued liability associated with guarantee			$	0					$	0

__________

(1) There were no securities repurchase transactions as of September 30, 2023 and December 31, 2022.

In the normal course of business, the Company may facilitate securities lending or securities repurchase transactions on behalf of certain client accounts (collectively, “the accounts”). In certain of these arrangements, the Company has provided an indemnification to the accounts to hold them harmless against losses caused by counterparty (i.e., borrower) defaults associated with such transactions facilitated by the Company. In securities lending transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 102 % of the fair value of the loaned securities and the collateral is maintained daily to equal at least 102 % of the fair value of the loaned securities. In securities repurchase transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 95 % of the fair value of the securities subject to repurchase and the collateral is maintained daily to equal at least 95 % of the fair value of the securities subject to repurchase. The Company is only at risk if the counterparty to the transaction defaults and the value of the collateral held is less than the value of the securities loaned to, or subject to repurchase from, such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 5, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

			September 30, 2023						December 31, 2022
			(in millions)
Guaranteed value of third-parties’ assets			$	80,152					$	84,338
Fair value of collateral supporting these assets			$	73,603					$	77,693
Asset (liability) associated with guarantee, carried at fair value			$	0					$	1

Certain contracts underwritten by the Retirement Strategies segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Indemnification of Serviced Mortgage Loans

			September 30, 2023						December 31, 2022
			(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company			$	3,041					$	2,972
First-loss exposure portion of above			$	880					$	862
Accrued liability associated with guarantees(1)			$	29					$	33

__________

(1) The accrued liability associated with guarantees includes an allowance for credit losses of $ 14 million and $ 17 million as of September 30, 2023 and December 31, 2022, respectively. The change in allowance is a reduction of $ 1 million for both three months ended September 30, 2023, and 2022, respectively, and a reduction for both nine months ended September 30, 2023, and 2022 of $ 2 million and $ 4 million , respectively.

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As part of the commercial mortgage activities of the Company’s PGIM segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 4 % to 20 % of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company determines the liability related to this exposure using historical loss experience, and the size and remaining life of the asset. The Company serviced $ 24,502 million and $ 23,937 million of mortgages subject to these loss-sharing arrangements as of September 30, 2023 and December 31, 2022, respectively, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of September 30, 2023, these mortgages had a weighted-average debt service coverage ratio of 1.99 times and a weighted-average loan-to-value ratio of 60 %. As of December 31, 2022, these mortgages had a weighted-average debt service coverage ratio of 1.92 times and a weighted-average loan-to-value ratio of 61 %. The Company had no losses related to indemnifications that were settled for either the nine months ended September 30, 2023 or 2022.

Other Guarantees

			September 30, 2023						December 31, 2022
			(in millions)
Other guarantees where amount can be determined			$	36					$	57
Accrued liability for other guarantees and indemnifications			$	32					$	33

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liability identified above relates to the sale of The Prudential Life Insurance Company of Taiwan Inc. (“POT”) and represents a financial guarantee of certain insurance obligations of POT.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

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Litigation and Regulatory Matters

The Company is subject to leg al and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind-down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed, including matters discussed below. The Company estimates that as of September 30, 2023, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $ 250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 23 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

Moreland, Socorro v. PICA, et al.

In September 2023, the court issued an Order denying plaintiff’s class certification motion.

Escheatment Litigation

Total Asset Recovery Services, LLC v. MetLife, Inc., et al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC

In March 2023, defendants filed a motion to dismiss the Fourth Amended Complaint.

Securities Litigation

City of Warren v. PFI, et al.

In June 2023, the Court of Appeals for the Third Circuit affirmed in part and reversed in part the trial court’s December 2020 decision dismissing the amended complaint with prejudice and remanded the case to the District Court to consider alternative grounds for dismissal not reached by the District Court’s 2020 decision.

Assurance IQ, LLC

William James Griffin, et al. v. Benefytt Technologies, Inc., et al. and Assurance IQ, LLC

In February 2023, the Company filed its answer to the third amended complaint.

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Other Matters

Cho v. PICA, et al.

In May 2023, plaintiff filed a motion for class certification. In August 2023, the court issued an Order granting plaintiff’s class certification motion.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial statements. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial statements.

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