What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-24 · 241 added, 365 removed, 694 unchanged (47% of the section changed)

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Sales Distribution

Company Ratings

Human Capital Resources

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Available Information and the Brighthouse Financial Website

We are one of the largest providers of annuity and life insurance products in the United States through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners.

Our in-force book of products consists of approximately 2.8 million insurance policies and annuity contracts at December 31, 2020, which are organized into three reporting segments:

• Annuities, which includes variable, fixed, index-linked and income annuities;

• Life, which includes term, universal, whole and variable life policies;

• Run-off, which consists of products that are no longer actively sold and are separately managed.

In addition, we report certain of our results of operations in Corporate & Other.

We transact business through our insurance subsidiaries, Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY (“BHNY”) and New England Life Insurance Company (“NELICO”);

We are one of the largest providers of annuity and life insurance products in the U.S.

with over 2.7 million annuity contracts and insurance policies in force at December 31, 2021.

We deliver our products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners.

We primarily transact business through our insurance subsidiaries, Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY (“BHNY”) and New England Life Insurance Company (“NELICO”);

however, NELICO does not currently write new business.

At December 31, 2020, we had $247.9 billion of total assets with total stockholders’ equity of $18.0 billion, including accumulated other comprehensive income;

$163.1 billion of annuity assets under management (“AUM”), which we define as our general account investments and our separate account assets, and approximately $541.5 billion of life insurance face amount in-force ($385.0 billion, net of reinsurance).

Additionally, our insurance subsidiaries had combined statutory total adjusted capital (“TAC”) of $8.6 billion, resulting in a combined company action level risk-based capital (“RBC”) ratio of approximately 485% at December 31, 2020.

For the year ended December 31, 2020, normalized statutory earnings were a loss of approximately $0.4 billion.

Normalized statutory earnings is used by management to measure our insurance subsidiaries’ generation of statutory distributable cash flows (sometimes referred to as distributable earnings) and is reflective of whether our hedging program functions as intended.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Parent Company — Normalized Statutory Earnings” for further discussion of normalized statutory earnings and its components.

At December 31, 2021, our insurance subsidiaries had combined statutory total adjusted capital (“TAC”) of $9.5 billion, resulting in a combined company action level risk-based capital (“RBC”) ratio of approximately 500%.

We believe we are a financially disciplined company with an emphasis on independent distribution and that our strategy of offering a targeted set of products to serve our customers and distribution partners will enhance our ability to invest in our business and distribute cash to our shareholders over time.

We also believe that our product strategy of offering a more tailored set of new products and our decision to leverage third parties to deliver certain services important to our business, including administrative, operational, technology, financial, investment and actuarial services, is consistent with our focus on effectively managing our expenses.

We also believe that general demographic trends in the U.S.

population, the increase in under-insured individuals, the potential risk to governmental social safety net programs and the shifting of responsibility for retirement planning and financial security from employers and other institutions to individuals will create opportunities to generate significant demand for our products.

Risk management of both our in-force book and our new business to enhance sustained, long-term shareholder value is fundamental to our strategy.

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See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies,” “Risk Factors — Risks Related to Our Business — Our variable annuity exposure risk management strategy may not be effective, may result in significant volatility in our profitability measures and may negatively affect our statutory capital” and “— Segments and Corporate & Other — Annuities.”

We believe that general demographic trends in the U.S.

We also believe that our independent distribution system enhances our ability to operate most effectively within the emerging requirements of new and proposed regulations establishing standards of conduct for the sale of insurance and annuity products.

See “— Regulation — Standard of Conduct Regulation” for a discussion of these final and proposed regulations.

Segments and Corporate & Other

The relevant contributions of each of our segments and Corporate & Other to our net income (loss) available to shareholders and adjusted earnings, for our ongoing business and for the total Company, were as follows:

Years Ended December 31,

2020 2019 2018

(In millions)

Annuities $ 1,167 $ 1,028 $ 1,023

Life 148 231 228

Total ongoing business 1,315 1,259 1,251

Run-off (1,299) (454) (43)

Corporate & Other (245) (180) (311)

Net income (loss) attributable to noncontrolling interests 5 5 5

Preferred stock dividends 44 21 —

Total adjusted earnings (278) 599 892

Net investment gains (losses) 278 112 (207)

Net derivative gains (losses) (18) (1,988) 702

Other adjustments (1,307) 154 (536)

Provision for income tax (expense) benefit 220 362 14

Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ (1,105) $ (761) $ 865

Revenues derived from any individual customer did not exceed 10% of premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2020, 2019 and 2018.

We are organized into three segments:

In addition, we report certain of our results of operations in Corporate & Other.

In addition to the discussion that follows, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Segments and Corporate & Other Results for the Years Ended December 31, 2021 and 2020 - Adjusted Earnings” and Note 2 of the Notes to the Consolidated Financial Statements for additional information regarding each of our segments and Corporate & Other.

Substantially all of our premiums, universal life and investment-type product policy fees and other revenues originated in the U.S.

Financial information by segment, including revenues, adjusted earnings and total assets, as well as premiums, universal life and investment-type product policy fees and other revenues by major product group, is provided in Note 2 of the Notes to the Consolidated Financial Statements.

Adjusted earnings is a performance measure that is not based on accounting principles generally accepted in the United States of America (“GAAP”).

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures” for a definition of such measure.

Total assets for each of our segments and Corporate & Other were as follows at:

December 31, 2020 December 31, 2019

(In millions)

Annuities $ 172,233 $ 156,965

Life $ 23,809 $ 21,876

Run-off $ 38,366 $ 35,112

Corporate & Other $ 13,461 $ 13,306

AUM for each of our segments and Corporate & Other were as follows at:

AUM for each of our segments, as well as Corporate & Other, was as follows at:

December 31, 2021 December 31, 2020

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Our Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security.

The “variable” and “fixed” classifications describe generally whether we or the contract holder bears the investment risk of the assets supporting the contract and determine the manner in which we earn profits from these products, as asset-based fees charged for variable products or generally as investment spreads for fixed products.

Index-linked annuities allow the contract holder to participate in returns from specified equity indices and, in the case of our Shield Annuities product suite (“Shield” and “Shield Annuities”), provide a specified level of market downside protection.

See “— Current Products — Structured Annuities” for more information on Shield Annuities.

Income annuities provide a guaranteed monthly income for a specified period of years or for the life of the annuitant.

In 2013, we began a shift in our business mix towards fixed products with lower guaranteed minimum crediting rates and variable products with less risky living benefits while simultaneously increasing our emphasis on index-linked annuity products.

Since 2014, our new sales have primarily consisted of Shield Level Annuities (“Shield” and “Shield Annuities”) and variable annuities with simplified living benefits.

We have launched new products and refined existing products as we continue to strive to innovate in response to customer and distributor needs and market conditions.

Insurance liabilities of our annuity products were as follows at:

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Variable $ 4,743 $ 105,023 $ 109,766 $ 4,895 $ 103,316 $ 108,211

Fixed deferred 15,777 — 15,777 13,460 — 13,460

Shield Annuities 21,632 — 21,632 16,047 — 16,047

Fixed deferred 16,136 — 16,136 15,777 — 15,777

Income 4,471 174 4,645 4,688 134 4,822

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(1) Excludes reserve liabilities for guaranteed minimum benefits (“GMxB”) and Shield embedded derivatives.

We seek to meet our risk-adjusted return objectives in our Annuities segment through a disciplined risk-selection approach and innovative product design, balancing bottom line profitability with top line growth.

We seek to meet our risk-adjusted return objectives in our Annuities segment through a disciplined risk selection approach and innovative product design, balancing overall profitability with sales growth.

We believe we have the underwriting approach, product design capabilities and distribution relationships to permit us to offer new products that meet our risk-adjusted return requirements.

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See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies — Variable Annuity Exposure Risk Management.”

Current Products

Our Annuities segment product offerings include fixed deferred, structured, income and variable annuities (each as described below).

Our annuities are designed to address customer needs for tax-deferred asset accumulation and retirement income and their wealth-protection concerns.

Since 2014, our new sales have primarily been Shield Annuities and variable annuities with simplified living benefits.

We believe we can continue to innovate in response to customer and distributor needs and market conditions.

Shield Annuities

Our flagship suite of Shield Annuities provide for accumulation of retirement savings or other long-term investments and combine certain features found in both variable and fixed annuities.

Shield Annuities are single premium deferred annuity contracts that provide the contract holder with the ability to participate in the appreciation of certain financial markets up to a stated level, while offering protection from a portion of declines.

Rather than allocating purchase payments directly into the equity market, the contract holder has an opportunity to participate in the returns of a specified market index.

Shield Annuities offer account value and return of premium death benefits.

To protect us from premature withdrawals, we impose surrender charges, which are typically applicable during the early years of the annuity contract and decline over time.

Surrender charges allow us to recoup amounts we expended to initially market and sell such annuities.

Fixed Deferred Annuities

Fixed deferred annuities address asset accumulation needs.

Purchase payments under fixed deferred annuity contracts are allocated to our general account and are credited with interest at rates we determine, subject to specified guaranteed minimums.

Fixed deferred annuities are single premium deferred annuity contracts that are designed for growth and to address asset accumulation needs.

Purchase payments under fixed deferred annuity contracts are allocated to our general account and interest is credited based on rates we determine for fixed rate annuities or the performance of an index or indices for fixed index annuities (“FIA”), subject to specified guaranteed minimums.

Credited interest rates are guaranteed for at least one year.

To protect us from premature withdrawals, we impose surrender charges, which are typically applicable during the early years of the annuity contract and decline over time.

Surrender charges allow us to recoup amounts we expended to initially market and sell such annuities.

Approximately 70% of our fixed deferred annuities had a remaining surrender charge of 2% or less at December 31, 2020.

Fixed index annuities (“FIA”) are single premium deferred annuity contracts designed for growth that credit interest based on the performance of an index or indices.

Similar to fixed deferred annuities, to protect us from premature withdrawals, we impose surrender charges, which are typically applicable during the early years of the annuity contract and decline over time.

We participate in the FIA market through our white-label FIA product launched in 2017 with Massachusetts Mutual Life Insurance Company (“MassMutual”) and, more recently, a new six-year FIA launched in 2020.

This six-year FIA is available exclusively through the Independent Marketing Organization (“IMO”) channel, providing a specialized product through a unique set of financial professionals.

Structured Annuities

Our suite of Shield Annuities are structured annuities that combine certain features similar to variable and fixed annuities.

They are single premium deferred annuity contracts that provide for accumulation of retirement savings or other long-term investments.

Shield Annuities provide the contract holder with the ability to participate in the appreciation of certain financial markets up to a stated level, while offering protection from a portion of declines.

Rather than allocating purchase payments directly into the equity market, the contract holder has an opportunity to participate in the returns of a specified market index.

The reserve assets are held in a separate account, but the issuing insurance company is obligated to pay distributions and benefits irrespective of the value of the separate account assets.

Shield Annuities offer account value and return of premium death benefits.

Income Annuities

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We offer two types of income annuities:

immediate income annuities, referred to as “single premium immediate annuities” (“SPIAs”) and deferred income annuities (“DIAs”).

immediate income annuities, referred to as “single premium immediate annuities” (“SPIA”) and deferred income annuities (“DIA”).

Both products provide guaranteed lifetime income that can be used to supplement other retirement income sources.

SPIAs are single premium annuity products that provide a guaranteed level of income, beginning no more than 13 months after purchase, to the contract holder for a specified number of years or the duration of the life of the annuitant(s).

DIAs differ from SPIAs in that they require the contract holder to wait at least 15 months before income payments commence.

SPIAs are single premium annuity products that provide a guaranteed level of income, beginning within 12 months from the contract issuance date, to the contract holder for a specified number of years or the duration of the life of the annuitant(s).

DIAs differ from SPIAs in that DIAs require the contract holder to wait at least 15 months before income payments commence.

SPIAs and DIAs are priced based on considerations consistent with the annuitant’s age, gender and, in the case of DIAs, the deferral period.

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Unless the contract holder has elected to pay for guaranteed minimum living or death benefits, as discussed below, the contract holder bears the entire risk and receives all of the net returns resulting from the investment option(s) chosen.

For the general account options, Brighthouse credits the contract’s account value with the net purchase payment and credits interest to the contract holder at rates declared periodically, subject to a guaranteed minimum crediting rate.

For the general account options, we credit the contract’s account value with the net purchase payment and credit interest to the contract holder at rates declared periodically, subject to a guaranteed minimum crediting rate.

The account value of most types of general account options is guaranteed and is not exposed to market risk, because the issuing insurance company rather than the contract holder directly bears the risk that the value of the underlying general account investments of the insurance companies may decline.

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guaranteed minimum income benefits (“GMIB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum accumulation benefits (“GMAB”).

We ceased issuing GMIBs for new purchases in 2016.

The guaranteed benefit received by a contract holder pursuant to the GMxBs is calculated based on the benefit base (“Benefit Base”).

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Variable Annuity Fees

Fees and charges we earned on our variable annuity contracts invested in separate accounts by type of fee were as follows:

Years Ended December 31,

(In millions)

Mortality & expense fees and administrative fees $ 1,348 $ 1,388

Surrender charges 16 21

Investment management fees (1) 216 225

12b-1 fees and other revenue (1) 244 246

Death benefit rider fees 204 207

Living benefit rider fees 888 903

Total $ 2,916 $ 2,990

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(1) These fees are net of pass-through amounts.

For the account value on contracts that invest through a separate account, we earn various types of fee revenue based on account value, fund assets and the Benefit Base.

We earn various types of fee revenue based on account value, fund assets and the Benefit Base for contracts that invest through a separate account.

In general, GMxB fees calculated based on the Benefit Base are more stable in market downturns compared to fees based on the account value.

We earned fees and charges on our variable annuity contracts that

invest through a separate account of $3.1 billion and $2.9 billion, net of pass-through amounts, for the years ended December 31, 2021 and 2020, respectively.

In addition to fee revenue, we also earn a spread on the portion of the account value allocated to the general account.

Mortality & Expense Fees and Administrative Fees.

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A surrender charge is a deduction of a percentage of the contract holder’s account value prior to distribution to him or her.

Surrender charges generally decline gradually over

the surrender charge period, which can range from zero to 10 years.

Surrender charges generally decline gradually over the surrender charge period, which can range from zero to 10 years.

Our variable annuity contracts typically permit contract holders to withdraw up to 10% of their account value each year without any surrender charge, however, their guarantees may be significantly impacted by such withdrawals.

Contracts may also specify circumstances when no surrender charges apply, for example, upon payment of a death benefit.

Our variable annuity account values by remaining surrender charge, including Shield Annuities, were as follows at:

December 31, 2020 December 31, 2019

(In millions)

0% $ 88,514 $ 79,054

>0 to 2% 12,020 16,235

>2% to 4% 4,477 5,045

>4% to 6% 11,562 6,427

>6% 10,979 11,551

Total $ 127,552 $ 118,312

Investment Management Fees.

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These fees are funded from the fund companies’ net revenues.

See Note 11 of the Notes to the Consolidated Financial Statements for additional information on 12b-1 fees.

Death Benefit Rider Fees.

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These fees are set at a level intended to be sufficient to cover the anticipated expenses of covering claim payments and hedge costs associated with these benefits.

In addition to fees, we also earn a spread on the portion of the account value allocated to the general account.

Pricing and Risk Selection

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in 2012 we began to reduce the guaranteed portion of account value up to a percentage of the Benefit Base (“roll-up rates”);

and, after first reducing the maximum equity allocation in separate accounts, in 2011 we introduced managed volatility funds for all our GMIBs.

We ceased offering GMIBs for new purchases in 2016 and to the extent permitted, we suspended subsequent premium payments on all but our final generation of GMIBs.

and, after first reducing the maximum equity allocation in separate accounts, in 2011 we introduced managed volatility funds for all of our GMIBs.

We ceased offering GMABs and GMIBs for new purchases in 2016 and, to the extent permitted, we suspended subsequent premium payments on all but our final generation of GMIBs.

While we added GMWBs to our variable annuity product suite in 2003, we shifted our marketing focus from GMIBs to GMWBs in 2015 with the release of FlexChoice SM , a GMWB with lifetime payments (“GMWB4L”).

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We introduced Shield Annuities in 2013 and expect to continue to increase sales of Shield Annuities due to growing consumer demand.

For the years ended December 31, 2020, 2019 and 2018, Shield Annuities represented 72%, 77% and 71%, respectively, of our total variable annuity and Shield Annuity deposits.

In addition, we believe that Shield Annuities provide us with risk offset to the GMxBs offered in our traditional variable annuity products.

As of December 31, 2020, there was $16.0 billion of policyholder account balances for Shield Annuities.

In addition, we believe Shield Annuities provide us with risk offset to the GMxBs offered in our traditional variable annuity products.

At December 31, 2021, there was $21.6 billion of policyholder account balances for Shield Annuities.

We intend to focus on selling the following products with the goal of continuing to diversify and better manage our in-force block:

• variable annuities with GMWBs;

• variable annuities without GMLBs;

• Shield Annuities;

Variable annuity and Shield Annuity deposits were as follows:

• variable annuities with GMWBs;

• variable annuities with GMDB only.

Deposits for our Shield Annuities and variable annuities were as follows:

Years Ended December 31,

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(In millions)

GMIB $ 83 $ 84 $ 107

Shield Annuities $ 6,201 $ 4,338 $ 4,459

GMWB 1,548 1,281 912

GMDB only 376 337 310

Shield Annuities 4,338 4,459 3,243

GMIB 76 83 84

Total $ 8,201 $ 6,039 $ 5,765

Product features and relative account values, Benefit Base and net amount at risk (“NAR”) for our death benefit and living benefit guarantees are described in more detail below.

Guaranteed Death Benefits

Guaranteed Minimum Death Benefits

Since 2001, we have offered a variety of GMDBs to our contract holders, which include the following (with no additional charge unless noted):

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• Interval Reset Death Benefit .

The Interval Reset Death Benefit enables the contract holder to lock in their guaranteed death benefit on the interval anniversary date with this level of death benefit being reset (either up or

down) on the next interval anniversary date.

The Interval Reset Death Benefit enables the contract holder to lock in their guaranteed death benefit on the interval anniversary date with this level of death benefit being reset (either up or down) on the next interval anniversary date.

This may only be available through a maximum age.

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Fees for this benefit are calculated and charged against the account value.

We stopped offering this rider in 2013.

We ceased offering this rider in 2013.

• Enhanced Death Benefit .

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Fees charged for this benefit are calculated based on the Benefit Base and charged annually against the account value.

We stopped offering this rider on a standalone basis in 2011.

We no longer offer the Enhanced Death Benefit.

In addition, we currently also offer an optional death benefit for an additional fee with our FlexChoice SM GMWB4L riders, available at issue through age 65, which has a similar level of death benefit protection as the Benefit Base for the living benefit rider.

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(2) Includes Compounded-Plus Death Benefit, Enhanced Death Benefit, and FlexChoice SM death benefit.

Guaranteed Living Benefits

Guaranteed Minimum Living Benefits

Our in-force block of variable annuities consists of three varieties of GMLBs, including variable annuities with GMIBs, GMWBs and GMABs.

We offer a variety of guaranteed living benefit riders to our contract holders.

Based on total account value, approximately 79% of our variable annuity block included living benefit guarantees at both December 31, 2020 and 2019.

Based on total account value, approximately 78% and 79% of our variable annuity block included living benefit guarantees at December 31, 2021 and 2020, respectively.

GMIBs are our largest block of living benefit guarantees based on in-force account value.

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This initial period when the contract holder invests their account value in the separate or general account to grow on a tax-deferred basis is often referred to as the accumulation phase.

The contract holder may elect to continue the accumulation phase beyond the waiting period in order to maintain access to their account value or continue to participate in the potential growth of both the account value and Benefit Base pursuant to the contract terms.

During the accumulation phase, the contract holder still has access to his or her account value through the following choices, although their Benefit Base may be adjusted downward consistent with these choices:

The contract holder may elect to continue the accumulation phase beyond the waiting period in order to maintain access to their account value or continue to

participate in the potential growth of both the account value and Benefit Base pursuant to the contract terms.

During the accumulation phase, the contract holder still has access to their account value through the following choices, although their Benefit Base may be adjusted downward consistent with these choices:

• Partial surrender or withdrawal to a maximum specified amount each year (typically 10% of account value).

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• Dollar-for-Dollar Withdrawal .

The contract holder may, in any year, withdraw, without penalty and regardless of the underlying account value, a portion of his or her account value up to the roll-up rate.

The contract holder may, in any year, withdraw, without penalty and regardless of the underlying account value, a portion of their account value up to the roll-up rate.

The withdrawal reduces the contract holder’s Benefit Base “dollar-for-dollar.” If making such withdrawals in combination with market movements reduces the account value to zero, the contract may have an automatic annuitization feature, which entitles the contract holder to receive a stream of lifetime (with period certain) annuity payments based on a variety of factors, including the Benefit Base, the age and gender of the annuitant, and predetermined annuity interest rates and mortality rates.

The Benefit Base depends on the contract terms, but the majority of our in-force annuities have a greater of roll-up or step-up combination Benefit Base similar to the roll-up and step-up Benefit Base described above in “— Guaranteed Death Benefits.” Any withdrawal greater than the roll-up rate would result in a penalty which may be a proportional reduction in the Benefit Base.

The Benefit Base depends on the contract terms, but the majority of our in-force annuities have a greater of roll-up or step-up combination Benefit Base similar to the roll-up and step-up Benefit Base described above in “— Guaranteed Minimum Death Benefits.” Any withdrawal greater than the roll-up rate would result in a penalty which may be a proportional reduction in the Benefit Base.

• Elective Annuitization .

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We have employed several risk exposure reduction strategies at the product level.

These include reducing the interest rates used to determine annuity payout rates on GMIBs from 2.5% to 0.5% over time, partially in response to

sustained low interest rates.

These include reducing the interest rates used to determine annuity payout rates on GMIBs from 2.5% to 0.5% over time, partially in response to sustained low interest rates.

In addition, we increased the setback period used to determine the annuity payout rates for contract holders from seven years to 10 years.

For example, a 10-year age setback would determine actual annuitization monthly payout rates for a contract holder assuming they were 10 years younger than their actual age at the time of annuitization, thereby reducing the monthly guaranteed annuity claim payments.

We have also reduced the guarantee roll-up rates from 6% to 4%.

Additionally, we introduced limitations on fund selections inside variable annuity contracts.

We have also reduced the guaranteed roll-up rates from 6% to 4%.

Additionally, we introduced limitations on fund selections inside certain legacy variable annuity contracts.

In 2005, we reduced the maximum equity allocation in the separate accounts.

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Therefore, the roll-up period for the Benefit Base on GMWBs is typically less uncertain and is shorter than those on GMIBs.

Additionally, the contract holder may receive income only through withdrawal of his or her Benefit Base.

Additionally, the contract holder may receive income only through withdrawal of their Benefit Base.

These withdrawal percentages are defined in the contract and differ by the age when contract holders start to take withdrawals.

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GMWBs primarily come in two versions depending on if they are period certain or if they are lifetime payments, GMWB4L.

GMABs guarantee a minimum amount of account value to the contract holder after a set period of time, which can also include locking in capital market gains.

GMABs guarantee a minimum amount of account value to the contract holder after a set period of time, which can also include locking in capital markets gains.

This protects the value of the annuity from market fluctuations.

Our variable annuity account values and Benefit Base by type of GMLB were as follows at:

Our variable annuity account value and Benefit Base by type of GMLB were as follows at:

December 31, 2021 (1)

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GMWB 25,322 23,319 23,791 21,036

GMWB4L 20,988 19,193 19,035 18,723

GMAB 750 534 723 546

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(1) Many of our annuity contracts offer more than one type of guarantee such that certain living benefit guarantee amounts included in this table may also be included in the GMDBs table above.

(2) Total account value includes investments in the general account totaling $4.9 billion and $4.7 billion as of December 31, 2020 and 2019, respectively.

(2) Total account value includes investments in the general account totaling $4.7 billion and $4.9 billion at December 31, 2021 and 2020, respectively.

Net Amount at Risk

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This amount represents our potential economic exposure to such guarantees in the event all contract holders were to annuitize on the balance sheet date, even though the guaranteed amount under the contract may not be annuitized until after the waiting period of the contract.

The NAR for the GMAB and GMWB is the amount of guaranteed benefits in excess of the account values (if any) as of the balance sheet date.

The NAR assumes utilization of benefits by all contract holders as of the balance sheet date.

For the GMAB, the NAR would not be available until the GMAB maturity date.

For the GMWB, only a small portion of the Benefit Base is available for withdrawal on an annual basis.

The NAR for the GMWB4L is the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the lifetime amount provided under the guaranteed benefit.

For contracts where the GMWB4L provides for a guaranteed cumulative dollar amount of payments,

the NAR is based on the purchase of a lifetime with period certain income stream where the period certain ensures payment of this cumulative dollar amount.

The NAR represents our potential economic exposure to such guarantees in the event all contract holders were to begin lifetime withdrawals on the balance sheet date regardless of age.

The NAR for the GMWB is the amount of guaranteed benefits in excess of the account values (if any) as of the balance sheet date and assumes utilization of benefits by all contract holders as of the balance sheet date.

Only a small portion of the Benefit Base is available for withdrawal on an annual basis.

The NAR for the GMAB is the amount of guaranteed benefits in excess of the account values (if any) as of the balance sheet date and assumes utilization of benefits by all contract holders as of the balance sheet.

The NAR for the GMAB is not available until the GMAB maturity date.

The NAR for the GMDB is the amount of death benefit in excess of the account value (if any) as of the balance sheet date.

It represents the amount of the claim we would incur if death claims were made on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.

The variable annuity account values and NAR by type of GMxB were as follows at:

Our variable annuity account value and NAR by type of GMxB were as follows at:

December 31, 2021 December 31, 2020

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GMIB Max without EDB 6,289 3 29 4.8 % 6,524 2 37 7.2 %

GMAB 723 1 1 0.2 % 672 1 1 0.6 %

GMWB 25,322 139 680 23.2 % 23,791 121 869 25.0 %

GMWB4L 15,165 80 718 27.5 % 14,904 71 509 23.7 %

GMWB4L (FlexChoice SM )

5,823 3 145 30.0 % 4,130 3 25 13.4 %

EDB only 3,908 556 — N/A 3,740 609 — N/A

GMAB 750 1 1 0.6 % 723 1 1 0.2 %

GMDB only (other than EDB) 20,233 935 — N/A 19,328 959 — N/A

EDB only 3,928 548 — N/A 3,908 556 — N/A

Total $ 109,968 $ 6,361 $ 5,921 $ 108,424 $ 6,438 $ 7,562

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(2) In-the-money is defined as any contract with a living benefit NAR in excess of zero.

The in-the-money and out-of-the-money account values for GMIBs and GMWBs were as follows at:

December 31, 2020

GMIB I & II GMIB Plus GMIB Max GMWB Total

(In millions)

30% + $ 2,414 $ 4,566 $ 94 $ 692 $ 7,766

20% to 30% 1,175 1,851 143 626 3,795

10% to 20% 1,632 2,993 472 1,549 6,646

0% to 10% 2,061 4,226 1,674 3,084 11,045

-10% to 0% 2,212 5,053 4,701 5,333 17,299

-20% to -10% 1,509 6,788 5,404 6,075 19,776

-20%+ 592 5,621 5,493 6,432 18,138

Total $ 11,595 $ 31,098 $ 17,981 $ 23,791 $ 84,465

The in-the-money death benefit NAR by type of GMDB were as follows at:

December 31, 2020

Account Value Return of Premium Interval Reset Annual Step-Up Combination Total

(In millions)

30% + $ 28 $ 351 $ 204 $ 118 $ 2,859 $ 3,560

20% to 30% — 20 — 140 1,316 1,476

10% to 20% — 20 — 89 957 1,066

0% to 10% — 6 1 23 306 336

Total $ 28 $ 397 $ 205 $ 370 $ 5,438 $ 6,438

Under GAAP, certain of our variable annuity guarantee features are accounted for as insurance liabilities and reported on the balance sheet in future policy benefits with changes reported in policyholder benefits and claims.

Under accounting principles generally accepted in the United States of America (“GAAP”), certain of our variable annuity guarantee features are accounted for as insurance liabilities and reported in future policy benefits on the consolidated balance sheets with changes reported in policyholder benefits and claims on the consolidated statements of operations.

These liabilities are accounted for using long-term assumptions of equity and bond market returns and the level of interest rates.

Therefore, these liabilities, valued at $6.2 billion at December 31, 2021, are less sensitive than derivative instruments to periodic changes to equity and fixed income market returns and the level of interest rates.

Guarantees accounted for as insurance liabilities in future policy benefits include GMDBs, the life contingent portion of GMWBs and the portion of the GMIBs that require annuitization, as well as the life contingent portion of the expected annuitization when the policyholder is forced into an annuitization upon depletion of their account value.

All other variable annuity guarantee features are accounted for as embedded derivatives and reported on the balance sheet in policyholder account balances with changes reported in net derivative gains (losses).

These liabilities, valued at $2.9 billion as of December 31, 2020, are accounted for at estimated fair value.

Guarantees accounted for as insurance liabilities in future policy benefits include GMDBs, the life contingent portion of GMWBs and the portion of GMIBs that require annuitization, as well as the life contingent portion of the expected annuitization when the policyholder is required to annuitize upon depletion of their account value.

All other variable annuity guarantee features are accounted for as embedded derivatives and reported in policyholder account balances on the consolidated balance sheets with changes reported in net derivative gains (losses) on the consolidated statements of operations.

These liabilities, valued at $1.8 billion at December 31, 2021, are accounted for at estimated fair value.

In some cases, a guarantee will have multiple features or options that require separate accounting such that the guarantee is not fully accounted for under only one of the accounting models (known as “split accounting”).

Additionally, the index protection and accumulation features of Shield Annuities are accounted for as embedded derivatives (“Shield liabilities”) and reported on the balance sheet in policyholder account balances with changes reported in net derivative gains (losses).

Additionally, the index protection and accumulation features of Shield Annuities are accounted for as embedded derivatives (“Shield liabilities”) and reported in policyholder account balances on the consolidated balance sheets with changes reported in net derivative gains (losses) on the consolidated statements of operations.

These liabilities, valued at $6.1 billion at December 31, 2021, are accounted for at estimated fair value.

The variable annuity reserve balances by guarantee type were as follows at:

Our variable annuity reserves by type of GMxB were as follows at:

December 31, 2021 December 31, 2020

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(In millions)

GMDB $ 1,355 $ — $ 1,355 $ 1,362 $ — $ 1,362

GMIB $ 3,374 $ 1,787 $ 5,161 $ 3,499 $ 2,496 $ 5,995

GMIB Max 967 (36) 931 871 153 1,024

GMAB — 1 1 — (17) (17)

GMWB 327 97 424 291 270 561

GMWB4L 291 218 509 258 (93) 165

GMWB4L (FlexChoice SM )

GMAB — — — — 1 1

GMDB 1,535 — 1,535 1,355 — 1,355

Total $ 6,203 $ 1,848 $ 8,051 $ 6,016 $ 2,920 $ 8,936

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See “Risk Factors — Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” Furthermore, changes in policyholder behavior assumptions can result in additional changes in accounting estimates.

Our Life segment manufactures products to serve our target segments through a broad independent distribution network.

While our in-force book reflects a broad range of life products, we have focused on term life and universal life products, consistent with our financial objectives, with a concentration on design and profitability over volume.

Our Life segment consists of insurance products and services, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis.

While our in-force book reflects a broad range of life products, we are currently focused on term life products and an indexed universal life product with long-term care benefits, consistent with our financial objectives, with a concentration on design and profitability over volume.

By managing our in-force book of business, we expect to generate future revenue and profits from premiums, investment margins, expense margins, mortality margins, morbidity margins and surrender fees.

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Total $ 8,860 $ 6,862 $ 15,722 $ 8,770 $ 6,229 $ 14,999

The in-force face amount and direct premiums received for our life insurance products were as follows at:

The in-force face amount and direct premiums received for our life insurance products were as follows:

In-Force Face Amount Premiums

December 31, December 31,

December 31, Years Ended December 31,

2021 2020 2021 2020 2019

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Variable $ 37,532 $ 38,899 $ 187 $ 205 $ 240

We currently offer a term life product and an indexed universal life product with long-term care riders.

Term life products are designed to provide a fixed death benefit in exchange for a guaranteed level premium to be paid over a specified period of time.

In September 2019, we suspended sales of our 10 to 30-year term products.

In June 2020, we launched a new term product with 10, 20 or 30-year terms, which is available through an online insurance marketplace.

In September 2019, we suspended sales of our 10- to 30-year level premium term products and, in June 2020, we launched a new term product with 10-, 20- or 30-year level premium term options.

We also offer a one-year term option.

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Universal Life

Although we have a significant in-force book of universal life policies, in September 2019, we suspended new sales of universal life products.

Universal life products provide a death benefit in return for payment of specified annual policy charges that are generally related to specific costs, which may change over time.

We have a significant in-force book of universal life policies and currently offer an indexed universal life product with long-term care benefits.

Universal life products typically provide a death benefit in return for payment of specified annual policy charges that are generally related to specific costs, which may change over time.

To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be added to the cash value of the policy and credited with a stated interest rate.

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Consequently, universal life policies can be used in a variety of different ways.

Our universal life policies may feature limited surrender charges and relatively low initial compensation related to policy expenses, compared to our competitors.

In February 2019, we launched an indexed universal life product, which we market as hybrid indexed universal life with long-term care riders intended to provide protection should a policyholder have a need for long-term care in the future.

The product allows policyholders to pay for qualified long-term care expenses by accelerating a significant portion of the face amount of the policy over a period of time.

Our indexed universal life product launched in early 2019, which we market as a hybrid life insurance and long-term care policy, allows policyholders to pay for qualified long-term care expenses by accelerating a significant portion of the face amount of the policy over a period of time.

After that period of time, the policyholder may continue to receive benefits up to their maximum monthly amount for up to four additional years.

Although we have a significant in-force book of whole life policies, in early 2017, we suspended new sales of participating whole life and conversions into participating whole life.

In late 2017, we launched a non-participating conversion whole life product that is available for term and group conversions and to satisfy other contractual obligations.

We currently offer a non-participating conversion whole life product that is available for term and group conversions and to satisfy other contractual obligations.

We have a significant in-force book of both participating and non-participating whole life policies.

Whole life products provide a guaranteed death benefit in exchange for a guaranteed level premium for a specified period of time in order to maintain coverage for the life of the insured.

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Variable Life

Although we have a significant in-force book of variable life policies, in early 2017, we suspended new sales of certain variable life policies and conversions into certain variable life policies.

We have a significant in-force book of variable life policies, but do not currently offer variable life policies.

We may choose to issue additional variable life products in the future.

Variable life products operate similarly to universal life products, with the additional feature that the excess amount paid over policy charges can be directed by the policyholder into a variety of separate account investment options.

In the separate account investment options, the policyholder bears the entire risk of the investment results.

In certain separate account investment options, the policyholder bears the entire risk of the investment results.

We collect specified fees for the management of the investment options in addition to the base policy charges.

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We continually review our underwriting guidelines (i) in light of applicable regulations and (ii) to ensure that our practices remain competitive and supportive of our marketing strategies, emerging industry trends and profitability goals.

Our Run-off segment consists of products that are no longer actively sold and are separately managed, including structured settlements, pension risk transfer contracts, certain company-owned life insurance policies, funding agreements and ULSG.

Our Run-off segment consists of products that are no longer actively sold and are separately managed, including ULSG, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements.

Insurance liabilities of our annuity contracts and life insurance policies reported in our Run-off segment were as follows at:

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Corporate & Other contains the excess capital not allocated to the segments and interest expense related to our outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues.

Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements and term life insurance sold direct to consumers, which is no longer being offered for new sales.

Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements, activities related to funding agreements associated with our institutional spread margin business, as well as direct-to-consumer life insurance that is no longer actively sold.

Reinsurance Activity

In connection with our risk management efforts and in order to provide opportunities for growth and capital management, we enter into reinsurance arrangements pursuant to which we cede certain insurance risks to unaffiliated reinsurers (“Unaffiliated Third-Party Reinsurance”).

We discuss below our use of Unaffiliated Third-Party Reinsurance, as well as the cession of a block of legacy insurance liabilities to a third-party and related indemnification and assignment arrangements.

Unaffiliated Third-Party Reinsurance

We cede risks to third parties in order to limit losses, minimize exposure to significant risks and provide capacity for future growth.

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We reinsure on a facultative basis for risks with specified characteristics.

On a case-by-case basis, we may retain up to $20 million per life and reinsure 100% of the risk in excess of $20 million.

On a case-by-case basis, we may retain up to $20 million per life and reinsure 100% of the risk in excess of the amount we retain.

We also reinsure portions of the risk associated with certain whole life policies to a former affiliate and we assume certain term life policies and universal life policies with secondary death benefit guarantees issued by a former affiliate.

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We analyze recent trends in arbitration and litigation outcomes in disputes, if any, with our reinsurers and monitor ratings and the financial strength of our reinsurers.

In addition, the reinsurance recoverable balance due from each reinsurer and the recoverability of each such balance are evaluated as part of this overall monitoring process.

In addition, the reinsurance recoverable balance due from each reinsurer and the recoverability of such balance is evaluated as part of this overall monitoring process.

We generally secure large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit.

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For products in our Run-off segment other than ULSG, we have periodically engaged in reinsurance activities on an opportunistic basis.

Our ordinary course net reinsurance recoverables from unaffiliated third-party reinsurers as of December 31, 2020, were as follows:

Our ordinary course net reinsurance recoverables from unaffiliated third-party reinsurers at December 31, 2021 were as follows:

Recoverables A.M.

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Swiss Re 317 A+

Equitable Holdings, Inc.

Venerable Holdings, Inc.

Aegon NV 115 A

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_______________

(1) These financial strength ratings are the most currently available for our reinsurance counterparties, while the companies listed are the parent companies to such counterparties, as there may be numerous subsidiary counterparties to each listed parent.

(1) These financial strength ratings are the most currently available for our reinsurance counterparties and reflect the ratings of the ultimate parent companies of such counterparties, as there may be numerous subsidiary counterparties to each listed parent.

(2) Relates to a block of workers’ compensation insurance policies reinsured in connection with MetLife’s acquisition of The Travelers Insurance Company (“Travelers”) from Citigroup, Inc.

(“Citigroup”).

NR = Not rated

In addition, a block of long-term care insurance business with reserves of $6.6 billion at December 31, 2021 is reinsured to Genworth Life Insurance Company and Genworth Life Insurance Company of New York (collectively, the “Genworth reinsurers”) who further retroceded this business to Union Fidelity Life Insurance Company (“UFLIC”), an indirect subsidiary of General Electric Company (“GE”).

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Prior to the acquisition, Travelers agreed to reinsure a 90% quota share of its long-term care business to certain affiliates of GE, which following a spin-off became part of Genworth, and subsequently agreed to reinsure the remaining 10% quota share of such long-term care insurance business.

The Genworth reinsurers established trust accounts for our benefit to secure their obligations under such arrangements requiring that they

maintain qualifying collateral with an aggregate fair market value equal to at least 102% of the statutory reserves attributable to the long-term care business.

The Genworth reinsurers established trust accounts for our benefit to secure their obligations under such arrangements requiring that they maintain qualifying collateral with an aggregate fair market value equal to at least 102% of the statutory reserves attributable to the long-term care business.

Additionally, Citigroup agreed to indemnify us for losses and certain other payment obligations we might incur with respect to this block of reinsured long-term care insurance business.

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Affiliated reinsurance companies are affiliated insurance companies licensed under specific provisions of insurance law of their respective jurisdictions, such as the Special Purpose Financial Captive law adopted by several states including Delaware.

Brighthouse Reinsurance Company of Delaware (“BRCD”), our reinsurance subsidiary, was formed to manage our capital and risk exposures and to support our term life insurance and ULSG businesses through the use of affiliated reinsurance arrangements and related reserve financing.

reinsurance arrangements and related reserve financing.

BRCD is capitalized with cash and invested assets, including funds withheld, at a level we believe to be sufficient to satisfy its future cash obligations under a variety of scenarios, including a permanent level yield curve and interest rates at lower levels, consistent with National Association of Insurance Commissioners (“NAIC”) cash flow testing scenarios.

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An admitted deferred tax asset could also serve to reduce the amount of funding required on a statutory basis under BRCD’s reserve financing.

See Note 9 of the Notes to the Consolidated Financial Statements for additional information regarding BRCD’s reserve financing.

BRCD provides certain benefits to Brighthouse, including (i) enhancing our ability to hedge the interest rate risk of our reinsurance liabilities, (ii) allowing increased allocation flexibility in managing our investment portfolio, and (iii) improving operating flexibility and administrative cost efficiency, however there can be no assurance that such benefits will continue to materialize.

See Notes 9 and 10 of the Notes to the Consolidated Financial Statements for additional information regarding BRCD’s reserve financing.

BRCD provides certain benefits to Brighthouse Financial, including (i) enhancing our ability to hedge the interest rate risk of our reinsurance liabilities, (ii) allowing increased allocation flexibility in managing our investment portfolio, and (iii) improving operating flexibility and administrative cost efficiency, however there can be no assurance that such benefits will continue to materialize.

See “Risk Factors — Risks Related to Our Business — We may not be able to take credit for reinsurance, our statutory life insurance reserve financings may be subject to cost increases and new financings may be subject to limited market capacity” and “— Regulation — Insurance Regulation.”

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Sales Distribution

We distribute our annuity and life insurance products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners.

Our partners include over 400 national and regional brokerage firms, banks, independent financial planners, independent marketing organizations and other financial institutions and financial planners, in connection with the sale of our annuity products, and general agencies, financial advisors, brokerage general agencies, banks, financial intermediaries and online marketplaces, in connection with the sale of our life insurance products.

We distribute our annuity and life insurance products through multiple independent distribution channels and marketing arrangements with a geographically diverse network of over 400 distribution partners.

We have successfully built independent distribution relationships since 2001.

Our annuity products are distributed through national and regional broker-dealers, banks, independent financial planners, independent marketing organizations and other financial institutions and financial planners.

Our life insurance products are distributed through national and regional broker-dealers, general agencies, financial advisors, brokerage general agencies, banks, financial intermediaries and online marketplaces.

We believe this strategy permits us to maximize penetration of our target markets and distribution partners without incurring the fixed costs of maintaining a proprietary distribution channel and will facilitate our ability to quickly comply with evolving regulatory requirements applicable to the sale of our products.

We discuss below the execution of our strategy, certain key strategic distribution relationships and data with respect to the relative importance of our distribution channels.

Execution of our Strategy - Increasing Penetration

Our objective is to be one of the top annuity and life insurance product manufacturers for our strategic and focus distribution partners.

In furtherance of our strategy, we provide our most productive distributors with focused product, sales and technology support through our approximately 20 strategic relationship managers (“SRMs”) and approximately 250 internal and external wholesalers.

In furtherance of our strategy, we provide certain key distributors with focused product, sales and technology support through our strategic relationship managers (“SRM”) and internal and external wholesalers.

Strategic Relationship Managers

Our SRMs serve as the principal contact for our largest annuity and life insurance distributors and coordinate the relationship between Brighthouse and the distributor.

Our SRMs serve as the principal contact for our largest annuity and life insurance distributors and coordinate the relationship between Brighthouse Financial and the distributor.

SRMs provide an enhanced level of service to partners that require more resources to support their larger distribution network.

SRMs are responsible for tracking and providing our key distributors with sales and activity data.

SRMs are responsible for tracking and providing certain key distributors with sales and activity data.

They participate in business planning sessions with our distributors and are critical to providing us with insights into the product design, education and other support requirements of our principal distributors.

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Our wholesalers are organized into internal wholesalers and external wholesalers.

Approximately 100 of our wholesalers, whom we refer to as internal wholesalers, support our distributors from our Charlotte, North Carolina corporate center and Phoenix, Arizona distribution hub, where they are responsible for providing telephonic and online sales support functions.

Our approximately 150 field sales representatives, whom we refer to as external wholesalers, are responsible for providing on site face-to-face product and sales support to our distributors.

Our internal wholesalers support our distributors by providing telephonic and online sales support functions.

Our field sales representatives, whom we refer to as external wholesalers, are responsible for providing on site face-to-face product and sales support to our distributors.

The external wholesalers generally have responsibility for a specific geographic region.

In addition, we also have wholesalers dedicated to Primerica, Inc.

and MassMutual.

Strategic Distribution Relationships

We distribute our annuity products through a broad geographic network of over 400 independent distribution partners, including wire houses, which we group into distribution channels, including national brokerage firms, regional brokerage firms, banks, independent financial planners, independent marketing organizations and other financial institutions and independent financial planners.

Our annuity distribution relationships have an average tenure in excess of 10 years.

Relative Channel Importance and Related Data

Our annuity and life insurance products are distributed through a diverse network of distribution relationships.

In the tables below, we show the relative percentage of new premium production by our principal distribution channels for our annuity and life insurance products.

Principal Distribution Channels and Related Data

The relative percentage of our annuity sales by our principal distribution channels were as follows:

Year Ended December 31, 2021

Channel Variable Fixed Shield Annuities Fixed Index Annuity Total

Banks/financial institutions 2 % 12 % 13 % — % 27 %

National brokerage firms 1 % 1 % 1 % — % 3 %

Regional brokerage firms 1 % 8 % 2 % — % 11 %

Distribution Channel Variable Fixed Shield Annuities Fixed Index Annuity Total

Independent financial planners 17 % 1 % 41 % 7 % 66 %

Banks/financial institutions 2 % — % 18 % — % 20 %

Regional broker-dealers 1 % — % 5 % — % 6 %

National broker-dealers 1 % — % 2 % — % 3 %

Other 1 % — % 2 % 2 % 5 %

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The relative percentage of our life insurance sales by our principal distribution channels were as follows:

Channel Year Ended December 31, 2020

Brokerage general agencies 12 %

Distribution Channel Year Ended December 31, 2021

Financial intermediaries 88 %

General agencies — %

Brokerage general agencies 12 %

Our top five distributors of life insurance policies produced 28%, 23%, 16%, 15% and 9% of our life insurance sales for the year ended December 31, 2021.

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Standard of Conduct Regulation

Transition from LIBOR

Regulation of Over-the-Counter Derivatives

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states have declared states of emergency, many state insurance regulators have mandated or recommended that insurers implement policies to provide relief to consumers who have been adversely impacted by the COVID-19 pandemic.

Accordingly, we have taken actions to provide relief to our life insurance policyholders, annuitants and other contract holders who have claimed hardship as a result of the COVID-19 pandemic.

Accordingly, we have taken actions to provide relief to our life insurance policyholders, annuity contract holders and other contract holders who have claimed hardship as a result of the COVID-19 pandemic.

Such relief may include extending the grace period for payment of insurance premiums, offering additional time to exercise contractual rights or options or extending maturity dates on annuities.

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RBC is based on a formula calculated by applying factors to various asset, premium, claim, expense and statutory reserve items.

The formula takes into account the risk characteristics of the insurer and is calculated on an annual basis.

The formula takes into account the risk characteristics of the insurer and is calculated for NAIC reporting purposes on an annual basis.

The major categories of risk involved are asset risk, insurance risk, interest rate risk, market risk and business risk, including equity, interest rate and expense recovery risks associated with variable annuities that contain guaranteed minimum death and living benefits.

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State insurance laws provide insurance regulators the authority to require various actions by, or take various actions against, insurers whose TAC does not meet or exceed certain RBC levels.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and “Risk Factors — Regulatory and Legal Risks — A decrease in the RBC ratio (as a result of a reduction in statutory surplus or increase in RBC requirements) of our insurance subsidiaries could result in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on our financial condition and results of operations” and Note 10 of the Notes to the Consolidated Financial Statements.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and “Risk Factors — Regulatory and Legal Risks — A decrease in the RBC ratio (as a result of a reduction in statutory surplus or increase in RBC requirements) of our insurance subsidiaries, or a change in the rating agency proprietary capital models for our insurance subsidiaries, could result in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on our financial condition and results of operations” and Note 10 of the Notes to the Consolidated Financial Statements.

In June 2021, the NAIC adopted changes to the RBC factors for bonds and real estate and created a new set of RBC charges for longevity risk.

These changes became effective on December 31, 2021 and had a minimal impact on our RBC ratios.

In December 2020, the NAIC adopted a group capital calculation tool that uses an RBC aggregation methodology for all entities within an insurance holding company system.

The NAIC has stated that the calculation will be a tool to assist regulators in assessing group risks and capital adequacy and does not constitute a minimum capital requirement or standard, however, there is no guarantee that will be the case in the future.

It is unclear how the group capital calculation will interact with existing capital requirements for insurance companies in the United States.

It is unclear how the group capital calculation will interact with existing capital requirements for insurance companies in the U.S.

In August 2018, the NAIC adopted the framework for variable annuity reserve and capital reform (“VA Reform”).

The revisions, which have resulted in substantial changes in reserves, statutory surplus and capital requirements, are designed to mitigate the incentive for insurers to engage in captive reinsurance transactions by making improvements to Actuarial Guideline 43 and the Life Risk Based Capital C3 Phase II (“RBC C3 Phase II”) capital requirements.

VA Reform is intended to (i) mitigate the asset-liability accounting mismatch between hedge instruments and statutory instruments and statutory liabilities, (ii) remove the non-economic volatility in statutory capital charges and the resulting solvency ratios

and (iii) facilitate greater harmonization across insurers and their products for greater comparability.

VA Reform is intended to (i) mitigate the asset liability accounting mismatch between hedge instruments and statutory instruments and statutory liabilities, (ii) remove the non-economic volatility in statutory capital charges and the resulting solvency ratios and (iii) facilitate greater harmonization across insurers and their products for greater comparability.

VA Reform became effective as of January 1, 2020, with early adoption permitted as of December 31, 2019.

Brighthouse elected to early adopt the changes effective December 31, 2019.

Brighthouse Financial elected to early adopt the changes effective December 31, 2019.

Further changes to this framework, including changes resulting from work currently underway by the NAIC to find a suitable replacement for the Economic Scenario Generators developed by the American Academy of Actuaries, could negatively impact our statutory surplus and required capital.

The NAIC is considering revisions to RBC factors for bonds and real estate, as well as developing RBC charges for longevity risk.

We cannot predict the impact of any potential proposals that may result from these efforts.

See “Risk Factors — Regulatory and Legal Risks — Our insurance business is highly regulated, and changes in regulation and in supervisory and enforcement policies may materially impact our capitalization or cash flows, reduce our profitability and limit our growth.”

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insurer file an annual enterprise risk report with the lead state of the insurance holding company system identifying risks likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.

To date, all of the states where Brighthouse has domestic insurers have enacted this enterprise risk reporting requirement.

To date, all of the states where Brighthouse Financial has domestic insurers have enacted this enterprise risk reporting requirement.

State insurance statutes also typically place restrictions and limitations on the amount of dividends or other distributions payable by insurance subsidiaries to their parent companies, as well as on transactions between an insurer and its affiliates.

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Under one standard, BHNY is permitted, without prior insurance regulatory clearance, to pay dividends out of earned surplus (defined as positive “unassigned funds (surplus)”), excluding 85% of the change in net unrealized capital gains or losses (less capital gains tax), for the immediately preceding calendar year), in an amount up to the greater of:

(i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year.

In addition, under this standard, BHNY may not, without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain from

operations, excluding realized capital gains, was negative.

(i) 10% of its surplus to policyholders as of the

end of the immediately preceding calendar year or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year.

In addition, under this standard, BHNY may not, without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain from operations, excluding realized capital gains, was negative.

Under the second standard, if dividends are paid out of other than earned surplus, BHNY may, without prior insurance regulatory clearance, pay an amount up to the lesser of:

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Captive Reinsurer Regulation

During 2014, the NAIC approved a new regulatory framework applicable to the use of captive insurers in connection with Regulation XXX and Guideline AXXX transactions.

During 2014, the NAIC approved a regulatory framework applicable to the use of captive insurers in connection with Regulation XXX and Guideline AXXX transactions.

Among other things, the framework called for more disclosure of an insurer’s use of captives in its statutory financial statements and narrows the types of assets permitted to back statutory reserves that are required to support the insurer’s future obligations.

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states, and such requirements apply to policies issued and new reinsurance transactions entered into on or after January 1, 2015.

In 2016, the NAIC adopted a new model regulation containing similar substantive requirements to AG 48.

In 2016, the NAIC adopted a model regulation containing similar substantive requirements to AG 48.

Federal Initiatives

Although the insurance business in the United States is primarily regulated by the states, federal initiatives often have an impact on our business in a variety of ways.

Although the insurance business in the U.S.

is primarily regulated by the states, federal initiatives often have an impact on our business in a variety of ways.

Federal regulation of financial services, securities, derivatives and pensions, as well as legislation affecting privacy, tort reform and taxation, may significantly and adversely affect the insurance business.

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Guaranty Associations and Similar Arrangements

Most of the jurisdictions in which we are admitted to transact business require life insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers, or those that may become impaired, insolvent or fail, for example, following the occurrence of one or more catastrophic events.

All of the jurisdictions in which we are admitted to transact business require life insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers, or those that may become impaired, insolvent or fail, for example, following the occurrence of one or more catastrophic events.

These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer is engaged.

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As part of their regulatory oversight process, state insurance departments conduct periodic detailed examinations of the books, records, accounts, and business practices of insurers domiciled in their states, including periodic financial examinations and market conduct examinations, some of which are currently in process.

State insurance departments also have the authority to conduct examinations of non-domiciliary insurers that are licensed in their states, and such states

routinely conduct examinations of us.

State insurance departments also have the authority to conduct examinations of non-domiciliary insurers that are licensed in their states, and such states routinely conduct examinations of us.

Over the past several years, there have been no material adverse findings in connection with any examinations of us conducted by state insurance departments, although there can be no assurance that there will not be any material adverse findings in the future.

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We may continue to receive, and may resolve, further investigations and actions on these matters in a similar manner.

In addition, claims payment practices by insurance companies have received increased scrutiny from regulators.

In addition, insurance companies’ claims payment, abandoned property and escheatment practices have received increased scrutiny from regulators.

Policy and Contract Reserve Adequacy Analysis

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An insurance company may increase reserves in order to submit an opinion without qualification.

Since the inception of this requirement, our insurance subsidiaries and BRCD, which are required by their respective states of domicile to provide these opinions, have provided such opinions without qualifications.

Our insurance subsidiaries and BRCD, which are required by their respective states of domicile to provide these opinions, have provided such opinions without qualifications.

Regulation of Investments

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We believe that the investments made by each of our insurance subsidiaries complied, in all material respects, with such regulations at December 31, 2021.

NYDFS Insurance Regulation 210

In March 2018, NYDFS Insurance Regulation 210:

Life Insurance and Annuity Non-Guaranteed Elements took effect.

The regulation establishes standards for the determination and readjustment of non-guaranteed elements (“NGE”) that may vary at the insurer’s discretion for life insurance policies and annuity contracts delivered or issued for delivery in New York.

In addition, the regulation establishes guidelines for related disclosure to NYDFS and policy owners prior to any adverse change in NGEs.

The regulation applies to all individual life insurance policies, individual annuity contracts and certain group life insurance and group annuity certificates that contain NGEs.

NGEs include premiums, expense charges, cost of insurance rates and interest credits.

Cybersecurity Regulation

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Other laws and regulations require us to notify affected individuals and regulators of security breaches.

For example, in 2017, the NAIC adopted the Insurance Data Security Model Law, which established standards for data security and for the investigation and notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.

A number of states have enacted the Insurance Data Security Model Law or similar laws, and we expect more states to follow.

The California Consumer Privacy Act of 2018 (the “CCPA”) went into effect on January 1, 2020, granting California residents new privacy rights and requiring disclosures regarding personal information, among other privacy protective measures.

For example, the California Consumer Privacy Act of 2018 (the “CCPA”) went into effect on January 1, 2020, granting California residents new privacy rights and requiring disclosures regarding personal information, among other privacy protective measures.

The California Privacy Rights Act (the “CPRA”) ballot measure passed in the November 2020 election.

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Additional states are considering enacting, or have enacted, consumer information privacy laws.

In 2017, the NAIC adopted the Insurance Data Security Model Law, which established standards for data security and for the investigation and notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.

A number of states have enacted the Insurance Data Security Model Law or similar laws, and we expect more states to follow.

Securities, Broker-Dealer and Investment Advisor Regulation

Some of our activities in offering and selling variable insurance products, as well as certain fixed interest rate or index-linked contracts, are subject to extensive regulation under the federal securities laws administered by the SEC or state

securities laws.

Federal and state securities laws and regulations treat variable insurance products and certain fixed interest rate or index-linked contracts as securities that must be registered with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), and distributed through broker-dealers registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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Brighthouse Securities is also registered as a broker-dealer in all applicable U.S.

Its business is to serve as the principal underwriter and exclusive distributor of the registered products issued by its affiliates, and as the principal underwriter for the registered mutual funds advised by its affiliated investment advisor, Brighthouse Investment Advisers, LLC (“Brighthouse Advisers”), and used to fund variable insurance products.

Its business is to serve as the principal underwriter and exclusive distributor of the registered products issued by its affiliates, and as the principal underwriter for the registered mutual funds advised by its affiliated investment advisor, Brighthouse Advisers, and used to fund variable insurance products.

We issue variable insurance products through separate accounts that are registered with the SEC as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

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The DOL has issued a number of regulations that increase the level of disclosure that must be provided to plan sponsors and participants.

The participant disclosure regulations and the regulations which require service providers to disclose fee and other information to plan sponsors took effect in 2012.

The participant disclosure regulations and the regulations which require service providers to disclose fee and

other information to plan sponsors took effect in 2012.

Our insurance subsidiaries have taken and continue to take steps designed to ensure compliance with these regulations as they apply to service providers.

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DOL regulations issued thereafter provide that, if an insurer satisfies certain requirements, assets supporting a policy backed by the insurer’s general account and issued before 1999 will not constitute “plan assets.” We have taken and continue to take steps designed to ensure compliance with these regulations.

We have taken and continue to take steps designed to ensure that policies issued to ERISA plans after 1998 qualify as guaranteed benefit policies.

An insurer issuing a new policy that is backed by its general account and is issued to or for an employee benefit plan after December 31, 1998 is generally subject to fiduciary obligations under ERISA, unless the policy is an insurance policy or contract that provides for benefits the amount of which is guaranteed by the insurer (a “guaranteed benefit policy”), in which case, the assets would not be considered “plan assets.” We have taken and continue to take steps designed to ensure that policies issued to ERISA Plans after 1998 qualify as guaranteed benefit policies.

Standard of Conduct Regulation

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Department of Labor Fiduciary Advice Rule

A new regulatory action by the DOL (the “Fiduciary Advice Rule”), which became effective on February 16, 2021, reinstates the text of the DOL’s 1975 investment advice regulation defining what constitutes fiduciary “investment advice” to ERISA Plans and IRAs and provides guidance interpreting such regulation.

A regulatory action by the DOL (the “Fiduciary Advice Rule”), which became effective on February 16, 2021, reinstates the text of the DOL’s 1975 investment advice regulation defining what constitutes fiduciary “investment advice” to ERISA Plans and IRAs and provides guidance interpreting such regulation.

The guidance provided by the DOL broadens the circumstances under which financial institutions, including insurance companies, could be considered fiduciaries under ERISA or the Tax Code.

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In order to be eligible for the exemption, among other conditions, the investment advice fiduciary is required to acknowledge its fiduciary status, refrain from putting its own interests ahead of the plan beneficiaries’ interests or making material misleading statements, act in accordance with ERISA’s “prudent person” standard of care, and receive no more than reasonable compensation for the advice.

Because we do not engage in direct distribution of retail products, including IRA products and retail annuities sold to ERISA plan participants and to IRA owners, we believe that we will have limited exposure to the new Fiduciary Advice Rule.

Because we do not engage in direct distribution of retail products, including IRA products and retail annuities sold to ERISA Plan participants and to IRA owners, we believe that we will have limited exposure to the Fiduciary Advice Rule.

However, while we cannot predict the rule’s impact, the DOL’s interpretation of the ERISA fiduciary investment advice regulation could have an adverse effect on sales of annuity products through our independent distribution partners, as a significant portion of our annuity sales are as IRAs.

The Fiduciary Advice Rule may also lead to changes to our compensation practices, product offerings and increased litigation risk, which could adversely affect our financial condition and results of operations.

The Fiduciary Advice Rule may also lead to changes to our compensation practices and product offerings as well as increase our litigation risk, any of which could adversely affect our financial condition and results of operations.

We may also need to take certain additional actions in order to comply with, or assist our distributors in their compliance with, the Fiduciary Advice Rule.

In 2021, the DOL announced that it intends to make further changes to its fiduciary investment advice framework, which may include amending the regulations defining fiduciary investment advice and evaluating the current exemptions relied upon by financial institutions in providing services to ERISA Plans and IRAs or proposing new exemptions.

We will continue to monitor developments regarding any proposed framework updates.

State Law Standard of Conduct Rules and Regulations

The NAIC adopted a new Suitability in Annuity Transactions Regulation (the “NAIC SAT”) that includes a best interest standard on February 13, 2020 in an effort to promote harmonization across various regulators, including the recently adopted SEC Regulation Best Interest.

The NAIC adopted a Suitability in Annuity Transactions Regulation (the “NAIC SAT”) that includes a best interest standard on February 13, 2020 in an effort to promote harmonization across various regulators, including the SEC Regulation Best Interest.

The NAIC SAT model standard requires producers to act in the best interest of the consumer when recommending annuities.

Several states have adopted the new NAIC SAT model, effective in 2021, and we expect that other states will also consider adopting the new NAIC SAT model.

Several states have adopted the NAIC SAT model, effective in 2021, and we expect that other states will also consider adopting the NAIC SAT model.

Additionally, certain regulators have issued proposals to impose a fiduciary duty on some investment professionals, and other states may be considering similar regulations.

We continue to assess the impact of these new and proposed standards on our business, and we expect that we and our third-party distributors will need to implement additional compliance measures that could ultimately impact sales of our products.

We continue to assess the impact of these issued and proposed standards on our business, and we expect that we and our third-party distributors will need to implement additional compliance measures that could ultimately impact sales of our products.

New York Regulation 187

In July 2018, the NYDFS issued Regulation 187 (“Regulation 187”), which adopted a “best interest” standard for the sale of annuities and life insurance products in New York.

The regulation generally requires a consumer’s best interest, and not the financial interests of a producer or insurer, in making a producer’s recommendation as to which life insurance or annuity product a consumer should purchase.

In addition, Regulation 187 imposes a best interest standard on consumer in-force transactions.

We have assessed the impact to our annuity and life insurance businesses and have adopted certain changes to promote compliance with the provisions by their respective effective dates.

On April 29, 2021, the Appellate Division of the New York State Supreme Court overturned Regulation 187 for being unconstitutionally vague.

The NYDFS filed an appeal to the New York Court of Appeals on May 27, 2021, and the filing of the appeal automatically stayed the Appellate Division’s order, which leaves Regulation 187 in effect until the appeal is decided by New York’s highest court.

SEC Rules Addressing Standards of Conduct for Broker-Dealers

On June 5, 2019, the SEC adopted a comprehensive set of rules and interpretations for broker-dealers and investment advisers, including new Regulation Best Interest.

On June 5, 2019, the SEC adopted a comprehensive set of rules and interpretations for broker-dealers and investment advisers, including Regulation Best Interest.

Among other things, this regulatory package:

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Moreover, it may impact broker-dealer sales of other annuity products that are not securities because it could be difficult for broker-dealers to differentiate their sales practices by product.

Broker-dealers are required to comply with the requirements of Regulation Best Interest beginning June 30, 2020.

Given the novelty and complexity of this package of regulations, its likely impact on the distribution of our products is uncertain.

Broker-dealers were required to comply with the requirements of Regulation Best Interest beginning June 30, 2020.

In addition, individual states and their securities regulators may adopt their own enhanced conduct standards for broker-dealers that may further impact their practices, and it is uncertain to what extent they would be preempted by Regulation Best Interest.

Transition from LIBOR

As a result of concerns about the accuracy of the calculation of the London Inter-Bank Offered Rate (“LIBOR”), actions by regulators, law enforcement agencies or the ICE Benchmark Administration, the current administrator of LIBOR enacted changes to the manner in which LIBOR is determined.

In July 2017, the UK Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021, which was expected to result in these widely used reference rates no longer being available.

As a result, the Federal Reserve began publishing a secured overnight funding rate, which is intended to replace U.S.

dollar (“USD”) LIBOR.

Plans for alternative reference rates for other currencies were also announced.

On November 30, 2020, the administrator of LIBOR announced that only the one week and the two-month USD LIBOR settings would cease publication on December 31, 2020, while the remaining tenors will continue to be published through June 30, 2023.

Regulators in the U.S.

and globally have continued to advocate for market participants to transition away from the use of LIBOR and have urged market participants to not enter into new contracts that reference USD LIBOR after December 31, 2021.

On March 5, 2021, the ICE Benchmark Administration and the United Kingdom Financial Conduct Authority, which supervises the ICE Benchmark Administration, announced that all LIBOR settings either will cease to be provided by any administrator or will no longer be representative (i) immediately after December 31, 2021, for all non-USD LIBOR settings and one-week and two-month USD LIBOR settings and (ii) immediately after June 30, 2023 for the remaining USD LIBOR settings (the “LIBOR Announcement”).

The Alternative Reference Rate Committee of the New York office of the Board of Governors of the Federal Reserve and the International Swaps and Derivatives Association (“ISDA”) have taken significant steps toward the development of consensus-based fallbacks and alternatives to LIBOR.

The fallback proposals are intended to minimize disruptions if LIBOR is no longer usable.

In addition, the ISDA has amended and/or provided a means for amendment through protocol of its applicable standard documentation to implement fallbacks for certain key interbank offered rates (“IBOR”).

The fallbacks apply if enumerated temporary, permanent and pre-cessation triggers relating to the relevant IBOR occur.

There can be no assurance, however, that the alternative rates and fallbacks will be effective at preventing or mitigating disruption as a result of the transition.

Should such disruption occur, it may adversely affect, among other things, (i) the trading market for LIBOR-based securities, including those held in the Company’s investment portfolio, (ii) the market for derivative instruments, including those that the Company uses to achieve its hedging objectives and (iii) the Company’s ability to issue debt bearing a floating rate of interest, including floating rate funding agreements.

We continue to prepare for and monitor developments regarding these changes in order to reduce potential disruptions.

See “Risk Factors — Economic Environment and Capital Markets-Related Risks — We are exposed to significant financial and capital markets risks which may adversely affect our financial condition, results of operations and liquidity, and may cause our net investment income and our profitability measures to vary from period to period — Changes to LIBOR.”

Regulation of Over-the-Counter Derivatives

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Our costs of risk mitigation have increased under Dodd-Frank.

For example, Dodd-Frank imposes requirements for (i) the mandatory clearing of certain OTC derivatives transactions that must be cleared and settled through central clearing counterparties (“OTC-cleared”), and (ii) mandatory exchange of margin for OTC derivatives transactions that are bilateral contracts between two counterparties (“OTC-bilateral”) entered into after the applicable phase-in period.

The initial margin requirements for OTC-bilateral derivatives transactions will be applicable to us in September 2021.

For example, Dodd-Frank imposes requirements for (i) the mandatory clearing of certain OTC derivatives transactions that must be cleared and settled through central clearing counterparties (“OTC-cleared”), and (ii) the mandatory exchange of margin for OTC in-scope derivatives transactions that are bilateral contracts between two counterparties (“OTC-bilateral” or “uncleared”) entered into after the applicable phase-in period.

The initial margin requirements for OTC-bilateral derivatives transactions, which requires the collecting and posting of collateral to reduce future exposure to a given counterparty, became applicable to us in September 2021.

The increased margin requirements, combined with increased capital charges for our counterparties and central clearinghouses with respect to non-cash collateral, will likely require increased holdings of cash and highly liquid securities with lower yields causing a reduction in income and less favorable pricing for cleared and OTC-bilateral derivatives transactions.

Centralized clearing of certain derivatives exposes us to the risk of a default by a clearing member or clearinghouse with respect to our cleared derivatives transactions.

Centralized clearing of certain derivatives also exposes us to the risk of a default by a clearing member or clearinghouse with respect to our cleared derivatives transactions.

We could be subject to higher costs of entering into derivatives transactions (including customized derivatives) and the reduced availability of customized derivatives that might result from the implementation of Dodd-Frank and comparable international derivatives regulations.

Federal banking regulators adopted rules that apply to certain qualified financial contracts, including many derivatives contracts, securities lending agreements and repurchase agreements, with certain banking institutions and certain of their affiliates.

These rules, which became effective on January 1, 2019, generally require the banking institutions and their applicable affiliates to include contractual provisions in their qualified financial contracts that limit or delay certain rights of their counterparties arising in connection with the banking institution or an applicable affiliate becoming subject to a bankruptcy, insolvency, resolution or similar proceeding.

bankruptcy, insolvency, resolution or similar proceeding.

Certain of our derivatives, securities lending agreements and repurchase agreements are subject to these rules, and as a result, we are subject to greater risk and more limited recovery in the event of a default by such banking institutions or their applicable affiliates.

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The claimant or claimants also may allege entitlement to other damages or penalties, including for alleged false claims.

Company Ratings

Financial strength ratings represent the opinion of rating agencies regarding the ability of an insurance company to pay obligations under insurance policies and contracts in accordance with their terms.

Credit ratings indicate the rating agency’s opinion regarding a debt issuer’s ability to meet the terms of debt obligations in a timely manner.

They are important factors in our overall funding profile and ability to access certain types of liquidity and capital.

The level and composition of regulatory capital at the subsidiary level and our equity capital are among the many factors considered in determining our financial strength ratings and credit ratings.

Each agency has its own capital adequacy evaluation methodology, and assessments are generally based on a combination of factors.

Rating agencies may increase the frequency and scope of their credit reviews, may request additional information from the companies that they rate and may adjust upward the capital and other requirements employed in the rating agency models for maintenance of certain ratings levels.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” and “Risk Factors — Risks Related to Our Business — A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and materially adversely affect our financial condition and results of operations.”

Both the annuities and the life insurance markets are very competitive, with many participants and no one company dominating the market for all products.

According to the American Council of Life Insurers (Life Insurers Fact Book 2021), the U.S.

life insurance industry is made up of approximately 760 companies with sales and operations across the country.

We compete with major, well-established stock and mutual life insurance companies in all of our product offerings.

life insurance industry is made up of 747 companies with sales and operations across the country and U.S.

We compete with major, well-established stock and mutual life insurance companies and non-insurance financial services companies (e.g., banks, broker-dealers and asset managers) in all of our product offerings, including certain of our distributors that currently manufacture competing products or may manufacture competing products in the future.

Our Annuities segment also faces competition from other financial service providers that focus on retirement products and advice.

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We are collaborative, adaptable and passionate.

We believe these values help us build an organization where talented people from all backgrounds can make meaningful contributions to our success and grow their careers.

We bring our values to life with programs and policies that are intended to foster and enhance our culture, including recognition programs, such as an annual Values Award, which recognizes employees who embody our values and make strong contributions to our culture.

As part of our efforts to continually enhance our culture and ensure that we are able to recruit and retain high-quality talent, we measure employee engagement on an ongoing basis, including through engagement surveys.

Our strength also depends on the trust of our employees, distribution partners, customers and stockholders.

We believe these values help us build an organization where talented people from all backgrounds can make meaningful contributions to our success while growing their careers.

We have developed, and continue to develop, various programs and policies that are intended to foster and enhance our culture.

We also present an annual award that recognizes employees who exemplify our core values in an extraordinary way.

Our success also depends on the trust of our employees, distribution partners, customers and stockholders.

We strive to adhere to the highest standards of business conduct at all times, and put honesty, fairness and trustworthiness at the center of all that we do.

Diversity and Inclusion

We seek to foster a culture where diverse backgrounds and experiences are celebrated, and different ideas are heard and respected.

We believe that by creating an inclusive workplace, we are better able to attract and retain talent and provide valuable solutions that meet the needs of our distribution partners, financial professionals that sell our products and their clients.

We have established a Diversity and Inclusion Council, which includes representatives from across Brighthouse who collaborate to create programs and development opportunities that impact the diverse makeup of the Company and further enhance our inclusive culture.

Compensation and Benefits

We seek to support and reward our employees with competitive pay and benefits, and to provide our employees with training and other learning and development opportunities.

We offer all of our employees a 401(k) savings plan, to which the Company makes matching contributions and an annual non-discretionary contribution, and also offer employees an opportunity to participate in our Employee Stock Purchase Plan, in addition to offering a number of programs focused on their physical, mental and financial well-being.

Our talent management and development strategies focus on regular coaching and feedback, collaboration and inclusivity to foster strong relationships.

The health and safety of our employees is our highest priority.

In response to the COVID-19 pandemic, we shifted all of our employees to a remote-work environment, where they currently remain, enabling us to preserve business continuity while protecting the health and safety of our employees and their families.

While the pandemic is ongoing, we are allowing for more flexible work schedules to help our employees manage personal responsibilities while at home.

We have also taken a number of other actions to help support the well-being of our employees during the pandemic, including increasing and enhancing our communications with employees to ensure that they continue to feel connected and informed.

Diversity, Equity and Inclusion

We have an ongoing commitment to advancing diversity, equity and inclusion at Brighthouse Financial and seek to foster a culture where diverse backgrounds and experiences are celebrated and different ideas are heard and respected.

We believe that by creating an inclusive workplace, we are better able to attract and retain talent and provide valuable solutions that meet the needs of our distribution partners and the financial professionals who sell our products as well as their clients.

We are focused on increasing representation of underrepresented groups across the Company, including by seeking diverse candidates for open positions.

In addition, we offer our employees a mentoring program that aims to encourage talent development within Brighthouse Financial and enhance diversity across leadership levels.

Our Diversity, Equity and Inclusion Council, which is composed of representatives from across Brighthouse Financial, creates and sponsors programs and development opportunities with the aim of further advancing diversity, equity and inclusion at Brighthouse Financial.

As part of our ongoing efforts to foster diversity, equity and inclusion, in January 2022 we launched a variety of employee network groups, which are open to all employees and designed to offer opportunities for networking, development, learning and allyship as well as drive additional employee engagement.

In addition, Brighthouse Financial Foundation grants, as well as volunteering opportunities offered to our employees, seek to enhance the quality of life in the communities where we live and work.

These initiatives are focused on breaking the cycle of generational poverty, advancing racial equity and supporting women, children, underrepresented populations and low-income families.

Attracting, Engaging, Developing and Retaining Talent

Our success depends, in large part, on our ability to attract and retain key employees and highly skilled people.

Competition for talent in our industry is intense, and current U.S.

labor market dynamics may further increase the challenge of attracting and retaining employees.

We continue to monitor the current U.S.

labor environment to adapt, as needed, our activities, policies and practices to attract, engage, develop and retain employees and to ensure that Brighthouse Financial remains a great place to work.

These efforts include, among other things, seeking to support our employees with competitive pay and benefits and to provide our employees with training and other learning and development opportunities.

For example, as part of our efforts to support our employees with competitive pay and benefits, all of our employees are eligible to participate in our 401(k) savings plan, to which the Company makes matching contributions as well as an annual non-discretionary contribution, and in our Employee Stock Purchase Plan.

Our talent management and development strategies are built on continuous coaching and feedback, collaboration and inclusivity.

In addition, we offer a number of programs focused on employees’ physical, mental and financial well-being.

We also measure employee engagement on an ongoing basis, including through engagement surveys, which facilitate our efforts to understand our employees’ experiences at the Company and ensure that we are able to recruit and retain talent.

In response to the COVID-19 pandemic, we shifted all of our employees to a remote-work environment, where they currently remain, and we continue to allow for more flexible work schedules to help our employees manage personal responsibilities while working from home.

Since the onset of the pandemic, we have taken, and continue to take, a number of other actions to help support the well-being of our employees, including increasing and enhancing our communications with employees to ensure that they continue to feel connected and informed.

As the pandemic continues to evolve, we remain focused on ways to help our employees maintain wellness and avoid burnout.

Once our offices reopen, we plan to transition to a flexible, hybrid work model that allows our employees the option to work fully remote or occasionally in the office.

Information About Our Executive Officers

The following table presents certain information regarding our executive officers.

Name Age Position

Steigerwalt 59 President and Chief Executive Officer

DeBiase 52 Executive Vice President, Chief Administrative Officer and General Counsel

Huss 54 Executive Vice President, Chief Human Resources Officer

Lambert 46 Executive Vice President and Chief Distribution and Marketing Officer

Murphy 52 Executive Vice President and Chief Operating Officer

Rosenthal 60 Executive Vice President and Chief Investment Officer

Spehar 55 Executive Vice President and Chief Financial Officer

Set forth below is the business experience of each of the executive officers named in the table above.

• Brighthouse Financial, Inc.

(August 2017 - present)

The following table presents certain information regarding our executive officers as of February 24, 2022.

Name Age Position with Brighthouse Financial and Certain Other Business Experience

Steigerwalt 60

Brighthouse Financial:

President and Chief Executive Officer (August 2017 - present)

• MetLife (May 1998 - August 2017)

President and Chief Executive Officer, Brighthouse Financial, Inc.

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Retail (September 2012 - August 2017)

◦ Executive Vice President and interim Chief Financial Officer (November 2011 - September 2012)

◦ Executive Vice President, Chief Financial Officer of U.S.

Business (January 2010 - November 2011)

◦ Senior Vice President and Chief Financial Officer of U.S.

Business (September 2009 - January 2010)

◦ Senior Vice President and Treasurer (May 2007 - September 2009)

◦ Senior Vice President and Chief Financial Officer of Individual Business (July 2003 - May 2007)

• Brighthouse Financial, Inc.

(August 2017 - present)

Spehar 56 Brighthouse Financial:

Executive Vice President and Chief Financial Officer (August 2019 - present)

Executive Vice President and Treasurer (August 2018 - July 2019);

Chief Financial Officer of Europe, Middle East and Africa Region (July 2016 - February 2019)

DeBiase 53 Brighthouse Financial:

Executive Vice President, Chief Administrative Officer and General Counsel (February 2018 - present);

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Executive Vice President, General Counsel, Corporate Secretary and Interim Head of Human Resources (May 2017 - November 2017)

• MetLife (December 1996 - August 2017)

Executive Vice President, General Counsel and Corporate Secretary, Brighthouse Financial, Inc.

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Retail (August 2014 - August 2017)

◦ Associate General Counsel, Retail (October 2013 - August 2014)

◦ Vice President and Secretary (November 2010 - September 2013)

◦ Associate General Counsel, Regulatory Affairs (November 2009 - November 2010)

◦ Vice President, Compliance (May 2006 - November 2009)

• Brighthouse Financial, Inc.

(November 2017 - present)

Huss 55 Brighthouse Financial:

Executive Vice President and Chief Human Resources Officer (November 2017 - present)

• Wells Fargo Bank, N.A.

(May 1988 - November 2017)

Wells Fargo, a financial services company:

Executive Vice President, Co-Head of Human Resources (September 2015 - November 2017)

◦ Human Resources Director, Wealth & Investment Management Division (October 2010 - August 2015)

• Brighthouse Financial, Inc.

(August 2017 - present)

Lambert 47 Brighthouse Financial:

Executive Vice President and Chief Marketing and Distribution Officer (August 2017 - present)

• MetLife (July 2012 - August 2017)

Executive Vice President and Chief Marketing and Distribution Officer, Brighthouse Financial, Inc.

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Retail Distribution and Marketing (April 2016 - August 2017)

◦ Senior Vice President, Head of MetLife Premier Client Group (“MPCG”) Northeast Region (August 2014 - April 2016)

◦ Vice President, MPCG Northeast Region (July 2012 - August 2014)

• Brighthouse Financial, Inc.

(September 2017 - present)

Murphy 53 Brighthouse Financial:

Executive Vice President and Chief Operating Officer (June 2018 - present);

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Executive Vice President and Head of Client Solutions and Strategy (September 2017 - June 2018)

• MetLife (September 2000 - August 2017)

Chief Financial Officer, Latin America Region (January 2012 - August 2017)

◦ Head of International Strategy and Mergers and Acquisitions (January 2011 - December 2011)

◦ Chief Financial Officer, Europe, Middle East and Africa (EMEA) region (January 2011 - June 2011)

◦ Head of Investor Relations (January 2008 - December 2010)

◦ Chief Financial Officer, MetLife Investments (June 2002 - December 2007)

◦ Vice President - Investments Audit (September 2000 - June 2002)

• Brighthouse Financial, Inc.

(August 2017 - present)

Rosenthal 61 Brighthouse Financial:

Executive Vice President and Chief Investment Officer (August 2017 - present)

• MetLife (1984 - August 2017)

Executive Vice President and Chief Investment Officer, Brighthouse Financial, Inc.

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Senior Managing Director, Head of Global Portfolio Management (2011 - August 2017)

◦ Senior Managing Director, Head of Core Securities (2004 - 2011)

◦ Managing Director, Co-head of Fixed Income and Equity Investments (2000 - 2004)

• Brighthouse Financial, Inc.

(July 2019 - present)

◦ Executive Vice President and Chief Financial Officer (August 2019 - present)

• MetLife (November 2012 - July 2019)

◦ Executive Vice President and Treasurer (August 2018 - July 2019)

◦ Chief Financial Officer of EMEA (July 2016 - February 2019)

◦ Senior Vice President, Head of Investor Relations (November 2012 - June 2016)

Intellectual Property

We rely on a combination of contractual rights with third parties and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property.

We have established a portfolio of trademarks in the United States that we consider important in the marketing of our products and services, including for our name, “Brighthouse Financial,” our logo design and taglines.

We have established a portfolio of trademarks in the U.S.

that we consider important in the marketing of our products and services, including for our name, “Brighthouse Financial,” our logo design and taglines.

Available Information and the Brighthouse Financial Website

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These disclosures are included on our website in the “Investor Relations” or “Newsroom” sections.

Accordingly, investors should monitor these portions of our website, in addition to following Brighthouse’s news releases, SEC filings, public conference calls and webcasts.

Accordingly, investors should monitor these portions of our website, in addition to following Brighthouse Financial’s news releases, SEC filings, public conference calls and webcasts.

Information contained on or connected to any website referenced in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any website references are intended to be inactive textual references only, unless expressly noted.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business