What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-24 · 194 added, 182 removed, 753 unchanged (33% of the section changed)

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however, NELICO does not currently write new business.

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%.

At December 31, 2022, our insurance subsidiaries had a combined statutory total adjusted capital (“TAC”) of approximately $8.1 billion, resulting in a combined risk-based capital (“RBC”) ratio of approximately 440%.

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.

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

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

Assets under management (“AUM”) for each of our segments, as well as Corporate & Other, was as follows at:

December 31, 2022 December 31, 2021

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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.

We believe these capabilities will enhance our ability to maintain market presence and relevance over the long-term.

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 objectives and that such capabilities will enhance our ability to maintain market presence and relevance over the long-term.

We intend to meet our risk management objectives by continuing to hedge significant market risks associated with our existing annuity products, as well as new business.

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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.

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

Shield Annuities are 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.

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

A new addition to our suite of Shield Annuities is an individual single premium deferred annuity contract, which provides for the potential accumulation of retirement savings as well as an opportunity for lifetime income through a guaranteed lifetime withdrawal benefit rider.

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.

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Income Annuities

Income annuities are annuity contracts under which the contract holder contributes a portion of their retirement assets in exchange for a steady stream of retirement income, lasting either for a specified period of time or as long as the life of the annuitant.

We offer two types of income annuities:

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Investment Management Fees.

We charge investment management fees for managing the proprietary mutual funds managed by our subsidiary, Brighthouse Investment Advisers, LLC (“Brighthouse Advisers”), that are offered as investments under our variable annuities.

We charge investment management fees for managing the proprietary funds managed by our subsidiary, Brighthouse Investment Advisers, LLC (“Brighthouse Advisers”), that are offered as investments under our variable annuities.

Investment management fees are also paid on the non-proprietary funds managed by investment advisors unaffiliated with us, to the unaffiliated investment advisors.

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12b-1 Fees and Other Revenue.

12b-1 fees are paid by the mutual funds which our contract holders chose to invest in and are calculated based on the net assets of the funds allocated to our subaccounts.

These fees reduce the returns contract holders earn from these funds.

We earn monthly or quarterly fees for providing certain services to customers and distributors (“12b-1 fees”).

12b-1 fees are paid by the mutual funds selected by our contract holders and are calculated based on the net assets of the funds allocated to our subaccounts.

These fees reduce the returns contract holders earn from such funds.

Additionally, mutual fund companies with funds which are available to contract holders through the variable annuity subaccounts pay us fees consistent with the terms of administrative service agreements.

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For some death benefits, the fees are calculated based on account value, but for enhanced death benefits (“EDB”), the fees are normally calculated based on the Benefit Base.

In general, these fees were 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 general, these fees were set at a level intended to be sufficient to cover anticipated expenses related to claim payments and hedge costs associated with these benefits.

These fees are deducted from the account value.

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We earn these fees for promising to pay guaranteed benefits while the contract holder is alive, such as for any type of GMLB (including GMIBs, GMWBs and GMABs).

The fees earned vary by generation and rider type and are typically calculated based on the Benefit Base and deducted from account value.

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.

The fees earned vary by generation and rider type and are typically calculated based on the Benefit Base.

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

These fees are deducted from the account value.

Pricing and Risk Selection

Product pricing reflects our pricing standards and guidelines.

Annuities are priced based on various factors, which may include investment returns, expenses, persistency, longevity, policyholder behavior and equity market and interest rate scenarios.

Rates for annuity products are highly regulated and must generally be approved by the regulators of the jurisdictions in which the product is sold.

The offer and sale of variable annuity products are regulated by the SEC.

Generally, these products include pricing terms that are guaranteed for a certain period of time.

Annuity pricing is based on the expected payout of account value or guarantees, which is calculated using our assumptions for mortality, sales mix, expenses, policyholder behavior and investment returns, as well as certain macroeconomic factors (e.g., inflation, volatility and interest rates).

Our product pricing models consider additional factors, such as hedging costs, reinsurance premiums and capital requirements.

Rates for annuity products generally include pricing terms that are guaranteed for a certain period of time.

Such products generally include surrender charges for early withdrawals and fees for guaranteed benefits.

We periodically reevaluate the costs associated with such guarantees and may adjust pricing levels accordingly.

Further, from time to time, we may also reevaluate the type and level of guarantee features being offered.

We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain competitive and supportive of our marketing strategies and profitability goals.

We may also reevaluate the type and level of guarantee features being offered from time to time.

We continually review our pricing guidelines, models and assumptions in light of applicable regulations and experience to ensure that our policies remain competitive and aligned with our marketing strategies and profitability goals.

Evolution of our Variable Annuity Business

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We introduced our first variable annuity product over 50 years ago and began offering GMIBs, which were our first living benefit riders, in 2001.

The design of our more recent generations of GMIBs have been modified to reduce payouts in certain circumstances.

Beginning in 2009, we reduced the minimum payments we guaranteed if the contract holder were to annuitize;

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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.

At December 31, 2022, we had $25.5 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:

• Shield Annuities;

• our suite of Shield Annuities;

• variable annuities with GMWBs;

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Contract holders may elect, for an additional fee, the option to step-up their guaranteed death benefit on any contract anniversary through age 80.

The Annual Step-Up Death Benefit allows for the contract holder to lock in the high-water mark on their death benefit adjusted proportionally for any withdrawals.

The Annual Step-Up Death Benefit allows the contract holder to lock in the high-water mark on their death benefit, adjusted proportionally for any withdrawals.

This death benefit may only be elected at issue through age 79.

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

We ceased offering this rider in 2013.

We no longer offer this benefit.

• 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 no longer offer the Enhanced Death Benefit.

We no longer offer this 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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(1) Many of our annuity contracts offer more than one type of guarantee such that certain death benefit guarantee amounts included in this table may also be included in the GMLBs table below.

(1) Many of our annuity contracts offer more than one type of guarantee and therefore certain death benefit guarantee amounts included in this table may also be included in the GMLBs table below.

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

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Contract holders must wait for a defined period, usually 10 years, before they can elect to receive income through guaranteed annuity payments.

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 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).

This action does not trigger surrender charges, but the Benefit Base is adjusted downward depending on the contract terms;

• Full surrender or lapse of the contract, with the net proceeds paid to the contract holder being the then prevailing account value less surrender charges defined in the contract;

• Limited “Dollar-for-Dollar Withdrawal” from the account value as described below.

This initial phase 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.

accumulation phase, the contract holder still has access to their account value, although their Benefit Base may be adjusted downward.

The second phase of the contract starts upon annuitization.

The occurrence and timing of annuitization depends on how contract holders choose to utilize the multiple benefit options available to them in their annuity contract.

Below are examples of contract holder benefit utilization choices that can affect benefit payment patterns and reserves:

The contract holder may lapse or exit the contract, at which time all GMxB guarantees are canceled.

If he or she partially exits, the GMxB Benefit Base may be reduced in accordance with the contract terms.

• Use of Guaranteed Principal Option after Waiting Period .

For certain GMIB contracts issued since 2005, the contract holder has the option to receive a lump-sum return of initial premium less withdrawals (the Benefit Base does not apply) in exchange for cancellation of the GMIB optional benefit.

• Dollar-for-Dollar Withdrawal .

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 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 .

The contract holder may elect to annuitize the account value or exercise the guaranteed annuitization under the GMIB.

The guaranteed annuitization entitles the contract holder to receive a stream of lifetime (with period certain) annuity payments based on the same factors that would be used as if the contract holder elected to annuitize.

• Do Nothing .

If the contract holder elects to continue to remain in the accumulation phase past the maximum age for electing annuitization under the GMIB and the account value has not depleted to zero, then the contract will continue as a variable annuity with a death benefit.

The Benefit Base for the death benefit may be the same as the Benefit Base for the GMIB.

The occurrence and timing of annuitization depends on how the contract holder chooses to utilize the multiple benefit options available to them in their annuity contract.

Contract holder behavior around choosing a particular option cannot be predicted with certainty at the time of contract issuance or thereafter.

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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” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates.”

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.

We 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.

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

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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.

(1) Many of our annuity contracts offer more than one type of guarantee and therefore 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 at December 31, 2022 and 2021, respectively.

Net Amount at Risk

The NAR for the GMIB 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 minimum amount provided under the guaranteed benefit.

The net amount at risk (“NAR”) for the GMIB 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 minimum amount provided under the guaranteed benefit.

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.

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We aim to maximize our profits by focusing on efficiency in order to continue to reduce the cost basis and underwriting expenses.

Our life insurance in-force book provides natural diversification to our Annuities segment and is a source of future profits.

Our life insurance in-force book provides natural diversification to our Annuities segment.

Insurance liabilities of our life insurance products were as follows at:

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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 level premium term products and, in June 2020, we launched a new term product with 10-, 20- or 30-year level premium term options.

In 2019, we suspended sales of our 10- to 30-year level premium term products and, in 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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Consequently, universal life policies can be used in a variety of different ways.

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.

Brighthouse SmartCare ® , our indexed universal life product launched in 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.

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Whole life products also have guaranteed minimum cash surrender values.

Our in-force whole life products provide for participation in the returns generated by the business, delivered to the policyholder in the form of non-guaranteed dividend payments.

Our in-force whole life products provide for participation in the

returns generated by the business, delivered to the policyholder in the form of non-guaranteed dividend payments.

The policyholder can elect to receive the dividends in cash or to use them to increase the paid-up policy death benefit or pay the required premium.

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

In some instances, third-party asset management firms manage these investment options.

In some instances, these investment options are managed by third-party asset management firms.

The policyholder’s cash value reflects the investment return of the selected investment options, net of management fees and insurance-related charges.

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Our product pricing reflects our pricing standards and guidelines.

We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain competitive and supportive of our marketing strategies and profitability goals.

We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain competitive and aligned with our marketing strategies and profitability goals.

We have established important controls around management of underwriting and pricing processes, including regular experience studies to monitor assumptions against expectations, formal new product approval processes, periodic updates to product profitability studies and the use of reinsurance to manage our exposures, as appropriate.

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We employ detailed underwriting policies, guidelines and procedures designed to assist the underwriters to properly assess and quantify such risks before issuing policies to qualified applicants or groups.

Insurance underwriting may consider not only an insured’s medical history, but also other factors such as the insured’s foreign travel, vocations, alcohol, drug and tobacco use, and the policyholder’s financial profile.

Insurance underwriting may consider not only an insured’s medical history, but also other factors such as the insured’s foreign travel, vocation, alcohol, drug and tobacco use, and the policyholder’s financial profile.

We generally perform our own underwriting;

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This is accomplished by determining and establishing underwriting policies, guidelines, philosophies and strategies that are competitive and suitable for the customer, the agent and us.

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.

We continually review our underwriting guidelines (i) in light of applicable regulations and (ii) to ensure that our practices remain competitive and aligned with 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 ULSG, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements.

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In the event the reinsurers do not meet their obligations under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible.

We have historically reinsured the mortality risk on our life insurance policies primarily on an excess of retention basis or on a quota share basis.

When we cede risks to a reinsurer on an excess of retention basis we retain the liability up to a contractually specified amount and the reinsurer is responsible for indemnifying us for amounts in excess of the liability we retain, subject sometimes to a cap.

When we cede risks on a quota share basis, we share a portion of the risk within a contractually specified layer of reinsurance coverage.

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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.

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.

We routinely evaluate our reinsurance program and may increase or decrease our retention at any time.

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MetLife, Inc.

The Travelers Co (2) 529 A++

Munich Re 410 A+

Swiss Re 317 A+

Venerable Holdings, Inc.

Munich American Reassurance Company 501 A+

The Travelers Indemnity Company (2) 498 A++

RGA Reinsurance Company 474 A+

Swiss Re Life & Health America Inc.

Corporate Solutions Life Reinsurance Company 126 NR

Aegon NV 126 A

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(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.

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

(“Citigroup”).

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In February 2021, we received a demand for arbitration from the Genworth reinsurers seeking authorization to withdraw certain amounts from the trust accounts.

See “Risk Factors — Risks Related to Our Business — If the counterparties to our reinsurance or indemnification arrangements or to the derivatives we use to hedge our business risks default or fail to perform, we may be exposed to risks we had sought to mitigate, which could materially adversely affect our financial condition and results of operations.” Further, as disclosed in Genworth’s filings with the SEC, UFLIC has established trust accounts for the Genworth reinsurers’ benefit to secure UFLIC’s obligations under its arrangements with them concerning this block of long-term care insurance business, and GE has also agreed, under a capital maintenance agreement, to maintain sufficient capital in UFLIC to maintain UFLIC’s RBC above a specified minimum level.

In August 2022, we participated in an arbitration hearing with the Genworth reinsurers, and a decision has not yet been issued by the arbitration panel.

we had sought to mitigate, which could materially adversely affect our financial condition and results of operations.” Further, as disclosed in Genworth’s filings with the SEC, UFLIC has established trust accounts for the Genworth reinsurers’ benefit to secure UFLIC’s obligations under its arrangements with them concerning this block of long-term care insurance business, and GE has also agreed, under a capital maintenance agreement, to maintain sufficient capital in UFLIC to maintain UFLIC’s RBC above a specified minimum level.

Affiliated Reinsurance

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.

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.

BRCD utilizes reserve financing to cover the difference between the sum of the fully required statutory assets (i.e., NAIC Valuation of Life Insurance Policies Model Regulation (“Regulation XXX”) and NAIC Actuarial Guideline 38 (“Guideline AXXX”) reserves) and the target risk margin less cash, invested assets and funds withheld, on BRCD’s statutory statements.

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

BRCD utilizes reserve financing to cover the difference between the sum of the fully required statutory assets (i.e., NAIC Valuation of Life Insurance Policies Model Regulation (“Regulation XXX”) and NAIC Actuarial Guideline 38 (“Guideline AXXX”) reserves) and the target margins less cash, invested assets and funds withheld, on BRCD’s statutory statements.

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

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

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We use excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks.

See “Risk Factors — Risks Related to Our Business — Extreme mortality events may adversely impact liabilities for policyholder claims.”

See “Risk Factors — Risks Related to Our Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.”

Sales Distribution

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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.

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.

They are also responsible for proactively addressing relationship issues with our distributors.

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Insurance Regulation

Cybersecurity Regulation

Privacy and Cybersecurity Regulation

Securities, Broker-Dealer and Investment Advisor Regulation

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Standard of Conduct Regulation

Federal Tax Reform

Transition from LIBOR

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In addition, BRCD, which provides reinsurance to our insurance subsidiaries, is domiciled in Delaware and regulated by the Delaware Department of Insurance.

The extent of such regulation varies, but most jurisdictions have laws and regulations governing the financial aspects and business conduct of insurers.

The extent of such regulation varies, but most jurisdictions have laws and regulations governing certain financial aspects of insurers and the administration and design of their respective products, as well as the business conduct of insurers and distributors.

State laws in the U.S.

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• fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts;

• adopting and enforcing suitability standards with respect to the sale of annuities and other insurance products;

• adopting and enforcing replacement, best interest, or suitability standards with respect to the sale of annuities and other insurance products;

• approving changes in control of insurance companies;

• restricting the payment of dividends and other transactions between affiliates;

• restricting the payment of dividends to affiliates, as well as certain other transactions between affiliates;

• regulating the types, amounts and valuation of investments.

Each of our insurance subsidiaries and BRCD are required to file reports, generally including detailed annual financial statements, with insurance regulatory authorities in each of the jurisdictions in which it does business, and its operations and

accounts are subject to periodic examination by such authorities.

Our insurance subsidiaries must also file, and in many jurisdictions and for some lines of insurance obtain regulatory approval for, rules, rates and forms relating to the insurance written in the jurisdictions in which they operate.

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See Note 15 of the Notes to the Consolidated Financial Statements.

State Insurance Regulatory Actions Related to the COVID-19 Pandemic

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, 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.

Surplus and Capital;

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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, 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.

See “Risk Factors — Regulatory and Legal Risks — A decrease in the RBC ratio of our insurance subsidiaries (as a result of a reduction in statutory capital and surplus or an increase in the required RBC capital charges), 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,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and Note 10 of the Notes to the Consolidated Financial Statements.

In August 2022, the NAIC adopted changes to the RBC factors for life insurance contracts.

These changes became effective on December 31, 2022, and they have not had a material impact on our combined RBC ratio.

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.

These changes became effective on December 31, 2021, and they have not had a material impact on our combined RBC ratio.

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.

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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.

The revisions, which have resulted in substantial changes in reserves, statutory surplus and capital requirements, were 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 became effective as of January 1, 2020, with early adoption permitted as of December 31, 2019.

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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.

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.”

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

Holding Company Regulation

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The Delaware Insurance Commissioner (the “Delaware Commissioner”), the Massachusetts Commissioner of Insurance and the New York Superintendent of Financial Services (the “NY Superintendent”) have broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders.

For a discussion of dividend restrictions pursuant to the Delaware Insurance Code and the insurance provisions of the Massachusetts General Law, see Note 10 of the Notes to the Consolidated Financial Statements.

Under New York insurance laws, BHNY is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to its parent in any calendar year based on one of two standards.

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.

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:

(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).

In addition, BHNY will be permitted to pay a dividend to its parent in excess of the amounts allowed under both standards only if it files notice of its intention to declare such a dividend and the amount thereof with the NY Superintendent and the NY Superintendent either approves the distribution of the dividend or does not disapprove the dividend within 30 days of its filing.

To the extent BHNY pays a stockholder dividend, such dividend will be paid to Brighthouse Life Insurance Company, its direct parent and sole stockholder.

Under BRCD’s plan of operations, no dividend or distribution may be made by BRCD without the prior approval of the Delaware Commissioner.

For a discussion of dividend restrictions pursuant to the Delaware Insurance Code, the New York insurance laws, and the insurance provisions of the Massachusetts General Law, as well as the dividend restrictions under BRCD’s plan of operations, see Note 10 of the Notes to the Consolidated Financial Statements.

See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the ability of its subsidiaries to pay dividends.” See also “Dividend Restrictions” in Note 10 of the Notes to the Consolidated Financial Statements for further information regarding such limitations and dividends paid.

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In 2012, the NAIC adopted the Risk Management and Own Risk and Solvency Assessment Model Act (“ORSA”), which has been enacted by our insurance subsidiaries’ domiciliary states.

ORSA requires that insurers maintain a risk management framework and conduct an internal own risk and solvency assessment of the insurer’s material risks in normal and stressed environments.

ORSA requires that insurers maintain a risk management framework and conduct an internal own risk and solvency assessment of the insurer’s material risks in normal

and stressed environments.

The assessment must be documented in a confidential annual summary report, a copy of which must be made available to regulators as required or upon request.

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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.

In 2014, the NAIC implemented the framework through an actuarial guideline (“AG 48”), which requires the ceding insurer’s actuary to opine on the insurer’s reserves to issue a qualified opinion if the framework is not followed.

In 2014, the NAIC implemented the framework through an actuarial guideline (“AG 48”), which requires the ceding insurer’s actuary to opine on the insurer’s reserves and to issue a qualified opinion if the framework is not followed.

The requirements of AG 48 are effective in all U.S.

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In each case, a qualified actuary must submit an opinion which states that the statutory reserves make adequate provision, according to accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurance company.

The adequacy of the statutory reserves is considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets, and the consideration anticipated to be received and retained under the related policies and contracts.

The adequacy of the statutory reserves is considered in light of the assets held by the insurer with respect to such reserves and related actuarial items, including, but not limited to, the investment earnings on such assets, and the consideration anticipated to be received and retained under the related policies

and contracts.

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

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Regulation of Investments

Each of our insurance subsidiaries is subject to state laws and regulations that require diversification of investment portfolios and limit the amount of investments that an insurer may have in certain asset categories, such as below investment grade fixed income securities, real estate equity, other equity investments, and derivatives, and we have internal procedures designed to ensure that the investments made by each of our insurance subsidiaries comply with such laws and regulations.

Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring surplus and, in some instances, would require divestiture of such non-qualifying investments.

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 47

In August 2022, the NYDFS amended Insurance Regulation 47 (as amended, “Regulation 47”), which implemented new requirements for certain annuity products.

Certain sections of Regulation 47 became effective as of January 1, 2023, and the remainder will become effective January 1, 2024.

The regulation is likely to open the New York market to new competitors and has impacted some components of our current product designs.

We continue to assess the impact of these new factors on our sales in New York.

See “Risk Factors — Risks Related to our Business — Factors affecting our competitiveness may adversely affect our market share or profitability” and “Risk Factors — Risks Related to our Business — We may experience difficulty in marketing and distributing products through our distribution channels.”

NYDFS Insurance Regulation 210

In March 2018, NYDFS Insurance Regulation 210:

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

Cybersecurity Regulation

Privacy and Cybersecurity Regulation

In the course of our business, we and our distributors collect and maintain customer data, including personally identifiable nonpublic financial and health information.

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As a result, we and the third parties who distribute our products are subject to U.S.

federal and state privacy laws and regulations, including the Health Insurance Portability and Accountability Act as well as additional regulation, including the state laws described below.

federal and state privacy laws and regulations, including the Health Insurance Portability and Accountability Act as well as additional regulation, including the laws described below.

These laws require that we institute and maintain certain policies and procedures to safeguard this information from improper use or disclosure and that we provide notice of our practices related to the collection and disclosure of such information.

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

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.

The CPRA becomes fully operative January 1, 2023 and amends the CCPA, expanding consumer privacy rights and establishing a new privacy enforcement agency.

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

Congress and many states have enacted privacy and information security laws and regulations that impose compliance obligations applicable to our business, including obligations to protect sensitive personal and creditworthiness information, as well as limitations on the use and sharing of such information.

For example, the NYDFS cybersecurity regulation, which became effective in March 2017, requires companies to establish a cybersecurity program.

The NYDFS cybersecurity regulation includes specific technical safeguards as well as requirements regarding governance, incident planning, training, data management, system testing and regulator notification in the event of certain cybersecurity events.

In addition, the California Consumer Privacy Act of 2018 (the “CCPA”), which became effective in January 2020, affords California residents expanded privacy protections and control over the collection, use and sharing of their personal information.

The CCPA requires companies to make certain disclosures to California consumers regarding personal information, among other privacy protective measures.

The CCPA’s definition of “personal information” is more expansive than those found in other privacy laws in the United States applicable to us.

Failure to comply with the CCPA risks regulatory fines, and the CCPA grants a private right of action and statutory damages for an unauthorized access and exfiltration, theft, or disclosure of certain types of personal information resulting from the Company’s violation of a duty to maintain reasonable security procedures and practices.

The CCPA, amended by the California Privacy Rights Act (the “CPRA”), effective as of January 1, 2023, requires additional investment in compliance programs and potential modifications to business processes.

Further, the amended CCPA creates a California data protection agency to enforce the statute and will impose new

requirements relating to additional consumer rights, data minimization, and other obligations.

The California legislature did not extend certain exemptions under the amended CCPA, specifically information collected in employment or business-to-business contexts, and such information therefore is now covered by the CCPA.

Enforcement of the CCPA, as amended by the CPRA, will begin on July 1, 2023.

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.

states, the District of Columbia, and U.S.

territories also require entities to provide notification to affected residents and, in certain instances, state regulators, such as state attorneys general or state insurance commissions, in the event of certain security breaches affecting personal information.

Also, as noted above, state governments, Congress, and agencies may consider and enact additional legislation or promulgate regulations governing privacy, cybersecurity, and data breach reporting requirements.

We cannot predict whether such legislation will be enacted, or what impact, if any, such legislation may have on our business practices, results of operations or financial condition.

Securities, Broker-Dealer and Investment Advisor Regulation

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These registered broker-dealers are also FINRA members;

therefore, sales of these registered products also are subject to the requirements of FINRA rules.

therefore, sales of these registered products are also subject to the requirements of FINRA rules.

Our subsidiary, Brighthouse Securities, LLC (“Brighthouse Securities”) is registered with the SEC as a broker-dealer and is approved as a member of, and subject to regulation by, FINRA.

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 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 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”).

Each registered separate account is generally divided into subaccounts, each of which invests in an underlying mutual fund which is itself a registered investment company under the Investment Company Act.

Our subsidiary, Brighthouse Advisers is registered as an investment advisor with the SEC under the Investment Advisers Act of 1940, and its primary business is to serve as investment advisor to the registered mutual funds that underlie our variable annuity contracts and variable life insurance policies.

Each registered separate account is generally divided into subaccounts, each of which invests in an underlying fund which is itself a registered investment company under the Investment Company Act.

Our subsidiary, Brighthouse Advisers is registered as an investment advisor with the SEC under the Investment Advisers Act of 1940, and its primary business is to serve as investment advisor to certain of the registered funds that underlie our variable annuity contracts and variable life insurance policies.

Certain variable contract separate accounts sponsored by our insurance subsidiaries are exempt from registration under the Securities Act and the Investment Company Act but may be subject to other provisions of the federal securities laws.

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Also, a portion of our in-force life insurance products and annuity products are held by tax-qualified pension and retirement plans that are subject to ERISA or the Tax Code.

While we currently believe manufacturers do not have as much exposure to ERISA and the Tax Code as distributors, certain activities are subject to the restrictions imposed by ERISA and the Tax Code, including restrictions on the provision of investment advice to ERISA qualified plans, plan participants and individual retirement annuity and individual retirement account (collectively, “IRAs”) owners if the investment recommendation results in fees paid to an individual advisor, the firm that employs the advisor or their affiliates.

employs the advisor or their affiliates.

In June 2020, the Department of Labor (“DOL”) issued guidance that expands the definition of “investment advice.” See “— Standard of Conduct Regulation — Department of Labor Fiduciary Advice Rule.”

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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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.

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 and product offerings as well as increase our litigation risk, any of which could adversely affect our financial condition and results of operations.

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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.

NYDFS Insurance Regulation 187

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

Regulation 187 generally requires that an insurance producer or insurer consider only a consumer’s best interest, and not the financial interests of the producer or insurer, in making a 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.

In April 2021, the Appellate Division of the New York State Supreme Court overturned the amendment to Regulation 187 for being unconstitutionally vague, and the NYDFS filed an appeal to the New York Court of Appeals in May 2021.

On October 20, 2022, the New York Court of Appeals held that the amendment to Regulation 187 is constitutional, which leaves Regulation 187 in effect.

SEC Rules Addressing Standards of Conduct for Broker-Dealers

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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.

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.

Federal Tax Reform

On August 16, 2022, the Inflation Reduction Act was signed into law by President Biden.

The Inflation Reduction Act establishes a 15% corporate alternative minimum tax (the “CAMT”) for corporations whose average annual adjusted financial statement income for any consecutive three–tax year period ending after December 31, 2021 and preceding the tax year exceeds $1 billion.

The Inflation Reduction Act also establishes a one percent excise tax on stock repurchases made by publicly traded U.S.

corporations.

Both provisions are effective for tax years beginning after December 31, 2022.

To date, the Internal Revenue Service has issued only limited guidance on the CAMT and has signaled that additional future guidance with respect to the insurance industry is forthcoming;

uncertainty remains regarding the application of and potential adjustments to the CAMT.

Accordingly, the company is currently unable to assess the applicability of the CAMT or the potential impact it may have on our financial statements.

It is possible that the CAMT could, therefore, result in a materially higher income tax in a given year.

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.

As a result of concerns about the accuracy of the calculation of the London Inter-Bank Offered Rate (“LIBOR”), in 2017, the United Kingdom Financial Conduct Authority, the current administrator of LIBOR, announced that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021.

In March 2021, the ICE Benchmark Administration and the United Kingdom Financial Conduct Authority 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 or, if adopted, at such later dates set forth in the FCA Proposal.

In connection with the cessation of LIBOR, the Federal Reserve Board (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.”

On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law, which provides a statutory mechanism and safe harbor that applies on a nationwide basis to replace LIBOR with a benchmark rate, selected by the Federal Reserve based on a secured overnight funding rate, for certain contracts that reference LIBOR and contain no or insufficient fallback provisions.

Substantially all of our agreements referencing LIBOR expiring after June 30, 2023 have been amended to include alternative reference rates.

As of December 31, 2022, our remaining exposure to LIBOR was not material.

Regulation of Over-the-Counter Derivatives

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Human Capital Resources

At Brighthouse Financial, our employees are one of our most valuable assets.

Our ability to successfully execute our business strategy and deliver on our mission to help people achieve financial security starts with our culture and values, which are brought to life every day by our employees.

At December 31, 2022, we had approximately 1,500 employees.

The Company’s Board of Directors and its Compensation and Human Capital Committee oversee our human capital management matters, including pay equity;

talent and leadership development;

the Company’s efforts to attract, engage and retain talent;

and the development and execution of the Company’s strategy to achieve its diversity, equity and inclusion (“DEI”) objectives.

Such objectives include increasing representation of underrepresented populations across the Company, strengthening our inclusive culture, engaging diverse suppliers and vendors, supporting the communities we serve and working with educational institutions and other organizations to help create more opportunities for individuals from underrepresented groups.

Our Culture, Values and Ethics

Our culture is rooted in three core values, which guide how we work together and deliver on our mission.

We are collaborative, adaptable and passionate.

Our culture is rooted in three core values — collaboration, adaptability and passion.

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 are committed to continually enhancing our culture through a variety of programs, policies and initiatives.

We place a high value on employee feedback, which we believe is critical to our efforts to continue to strengthen our culture.

We collect employee feedback on an ongoing basis in multiple ways, including through periodic surveys, coaching and feedback discussions, exit surveys and interviews, employee network groups (discussed below), listening and learning sessions and leader-led office hours.

Our culture is also built on our deep commitment to ethics and integrity, and we recognize that the continued success of the Company is dependent upon 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, 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.

To help maintain a safe and productive workplace, we establish and oversee programs to build awareness and train employees on important standards, policies and procedures, as required by applicable regulations, Company policy or best practices.

As part of our commitment to ethics and integrity, we require all employees to review and certify compliance with our code of conduct for employees on an annual basis, as well as complete more extensive training on the code of conduct on a biennial basis.

In addition, we help to ensure that employees are well informed of the Company’s clearly defined reporting and escalation process, including options for anonymous whistleblower reporting, through regular communications.

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.

We believe that our success depends, in large part, on our ability to attract and retain highly skilled employees.

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

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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.

labor environment and 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 and equitable pay and benefits and to provide our employees with training and other learning and development opportunities.

We offer all of our employees benefits programs that are designed to help meet their financial, physical and mental needs.

All employees are eligible to participate in our 401(k) savings plan, to which we make matching and annual nondiscretionary contributions, and in our Employee Stock Purchase Plan, through which employees can purchase BHF stock at a discounted price.

We offer competitive health care benefits options for medical, dental and vision coverage, as well as health care and dependent care flexible spending accounts.

We offer all employees paid time off, holidays and volunteer and study time off to help promote healthier work-life balance and other well-being benefits, including paid parental and family leave for new parents.

In addition, we conduct annual pay equity reviews to help ensure that individual compensation is determined exclusively based on performance, experience, job level and other neutral factors.

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

We provide employees with many opportunities and resources to learn and develop, including a curated set of courses designed to help employees achieve their personal and professional goals.

In addition, we offer all employees access to optional monthly learning sessions designed to further enhance their understanding of our corporate strategy and culture as well as to provide the opportunity to build and enhance skills.

We also offer high-performing talent a mentorship program that puts our core values and DEI at the forefront of mentor-mentee relationships and is designed to provide professional development opportunities through engagement with leaders across the Company.

As noted above, we collect employee feedback on an ongoing basis, which facilitates our efforts to understand and optimize our employees’ experiences at the Company and assists us in attracting, engaging, developing and retaining talent.

To further help our employees remain engaged and well connected to the Company and each other, we hold a variety of events and issue a wide range of communications throughout the year, including town hall meetings, podcasts from our CEO, companywide discussions with members of our leadership team, intranet articles and a weekly newsletter highlighting events and news from around the Company.

In March 2020, in response to the COVID-19 pandemic and to protect the health and safety of our employees and their families, we shifted all of our employees to a remote-work environment.

Since 2022, we have been operating under a flexible, hybrid work model.

Diversity, Equity and Inclusion

We are committed to providing an inclusive workplace where employees can trust that their unique backgrounds and perspectives will be recognized, respected and celebrated.

We believe that by building such a workplace, we are better able to

attract and retain talent and provide valuable products that meet the needs of our distribution partners and the financial professionals who sell our products, as well as their clients.

We seek to attract and retain talent that reflects the diversity of our communities, and we remain focused on increasing representation of underrepresented groups across the Company, including by seeking diverse candidates for open positions.

Our varied approach to attracting and recruiting talent includes ensuring diversification of candidate slates for open positions, diversifying interview teams to reduce bias and building partnerships with diverse professional organizations and universities.

In recognition of the importance of DEI to Brighthouse Financial, in 2021, the Compensation and Human Capital Committee began to incorporate into its assessment of our senior leaders’ individual performance, in connection with the approval of their short-term incentive awards, their achievements with respect to advancing the Company’s DEI strategy.

We employ a multifaceted approach to advancing DEI across the Company that includes various programs and initiatives.

One such initiative is our Diversity, Equity and Inclusion Council (the “DEI Council”), composed of representatives from across Brighthouse Financial, which creates and sponsors programs and development opportunities with the aim of further embedding DEI within the Company.

In 2022, the DEI Council’s key initiatives included the launch of the Company’s employee network groups, which are open to all employees and provide a forum for employees across various dimensions of diversity to discuss relevant professional and personal topics, learn from one another, find support and allyship, expand their networks and deepen their level of compassion and understanding.

In addition, to continue fostering our inclusive workplace, the Company requires all employees to complete annual DEI training.

In 2022, our DEI training focused on creating psychological safety in the workplace.

The Company also has developed a supplier diversity program designed to continue enhancing its engagement with diverse suppliers and vendors.

The Company further seeks to deliver on its commitment to DEI through its own charitable organizations and through strategic partnerships with community organizations, educational institutions and industry peers.

The Brighthouse Financial Foundation (the “Foundation”), a non-profit organization, was established in 2017 with the mission to improve the financial security, culture and opportunities afforded to communities in which the Company’s employees live and work by providing resources and support to other tax-exempt organizations which further that mission.

In addition, through Brighthouse Scholar Connections, Inc., a non-profit organization established in 2022, scholarships are provided to expand educational opportunities for students who are members of historically underrepresented or disadvantaged populations due to race, ethnicity, socioeconomic status or similar factors.

Brighthouse Financial employees have the opportunity to serve as mentors for students who have been awarded scholarships by this organization.

Information About Our Executive Officers

12 unchanged sentences

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);

Executive Vice President, General Counsel and Corporate Secretary (August 2017 - February 2018);

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

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

(August 2016 - August 2017);

Senior Vice President and Associate General Counsel, U.S.

Retail (August 2014 - August 2017)

Huss 56 Brighthouse Financial:

8 unchanged sentences

Retail Distribution and Marketing (April 2016 - August 2017)

Murphy 53 Brighthouse Financial:

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

Executive Vice President, Interim Chief Financial Officer and Chief Operating Officer (March 2019 - August 2019);

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

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

Allie Lin 45 Brighthouse Financial:

Executive Vice President and General Counsel (December 2022 – present);

Head of Litigation and Employment Law (February 2021 – December 2022);

Lead Litigation and Employment Attorney (September 2019 – February 2021);

Corporate Counsel, Litigation Attorney (March 2018 – September 2019)

AXA Equitable Life Insurance Company:

Senior Director and Counsel (October 2013 – March 2018)

Rosenthal 62 Brighthouse Financial:

21 unchanged sentences

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