What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-02-27 · 479 added, 239 removed, 551 unchanged (57% of the section changed)

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Through our insurance subsidiaries, including Fidelity & Guaranty Life Insurance Company (“FGL Insurance”) and Fidelity & Guaranty Life Insurance Company of New York (“FGL NY Insurance”), we market a broad portfolio of annuities, including fixed indexed annuities (“FIAs”) and multi-year guarantee annuities (“MYGAs”), pension risk transfer (“PRT”) solutions, as well as indexed universal life (“IUL”) insurance and institutional funding agreements.

In February 2024, we entered one of the fastest growing segments of the annuity space by marketing registered index-linked annuities (“RILAs”).

We were acquired on June 1, 2020, by Fidelity National Financial, Inc.

We benefited from immediate financial strength ratings upgrades following the acquisition;

S&P and Fitch upgraded us to A-, A.M.

Best affirmed at A-, and Moody’s upgraded to Baa1.

We have benefited from financial strength ratings upgrades since the acquisition;

S&P and Fitch upgraded us to A- in June 2020, Moody’s upgraded to A3 in July 2023, and A.M.

Best upgraded us to A in January 2024.

These upgrades, valued by our distribution partners, positioned us to quickly expand our business in our existing channels and gain access to new markets.

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With our success in expanding distribution under FNF’s ownership, we have grown assets under management (“AUM”) from $26.5 billion at the time of acquisition to $49.5 billion as of December 31, 2023.

We now operate in and source significant premiums from five distinct channels, versus a single channel prior to the acquisition by FNF in June of 2020.

For a discussion of the five distinct channels, see “ We Play in Large and Growing Markets” and “ Our Retail Distribution Channels” within this section of the Annual Report.

We now operate in and source significant premiums from three distinct retail channels and two institutional markets versus a single channel prior to the acquisition by FNF in June 2020.

For a discussion of the five distinct channels, see “ We Play in Large and Growing Markets” and “ Our Retail Distribution Channels” within this section of the Annual Report on Form 10-K.

We believe the strength of our balance sheet provides confidence to our policyholders and business partners and positions us for continued growth.

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These assets are managed against what we believe to be prudently underwritten liabilities.

We have in-force liabilities of $41.6 billion at December 31, 2022, with a liability duration of 5 years , well matched to our assets.

For the year ended December 31, 2022 , Net earnings attributable to common shareholders was $481 million, we produced adjusted net earnings (“ANE”) of $345 million, and we had an adjusted return on assets (“ ROA”) of 86 basis points.

We are focused on growing our in-force liabilities and AUM, driven by sales of attractively priced liabilities, including fixed inde xed annuities, fixed rate annuities, indexed universal life, funding agreements, and pension risk transfer .

As of December 31, 2022 , we had $1.8 billion of total F&G equity and $4.6 billion of total F&G shareholders’ equity excluding accumulated other comprehensive earnings (“AOCI”).

We have in-force liabilities of $47.3 billion at December 31, 2023, with a liability duration of approximately 5 years , well matched to our assets.

For the year ended December 31, 2023 , Net losses totaled $58 million, we produced adjusted net earnings (“ANE”) of $335 million, and we had an adjusted return on assets (“ROA”) of 72 basis points.

Adjusted net earnings included $405 million of investment income from alternative investments and $51 million of significant expense items.

Alternative investments investment income based on management’s long-term expected return of approximately 10% was $558 million.

We are focused on growing our inforce liabilities and AUM, driven by sales of attractively priced liabilities, including fixed indexed annuities, fixed rate annuities, registered indexed-linked annuities, indexed universal life, funding agreements, and pension risk transfer.

We have plenty of momentum to continue to deliver sustainable asset growth from our retail and pension risk transfer growth strategies, and ongoing margin expansion from enhanced investment margin opportunities, operational scale benefits and fee-based earnings from accretive flow reinsurance.

We are also well positioned to diversify our earnings given the strong growth of our middle market life insurance business and owned distribution strategies over time.

As of December 31, 2023 , we had $3.1 billion of total F&G equity and $5.1 billion of total F&G shareholders’ equity excluding accumulated other comprehensive earnings (loss) (“AOCI”).

FGL Insurance’s estimated U.S.

RBC ratio was approximately 440% as of December 31, 2022, as compared to 451% and 415% as of December 31, 2021 and December 31, 2020, respectively.

RBC ratio was approximately 451% a s of December 31, 2023, as compared to 442% and 451% as of December 31, 2022 and December 31, 2021, respectively.

FGL Insurance expects to maintain its U.S.

RBC ratio at or above our target of 400%.

risk-based capital (“RBC”) ratio at

or above our target of 400%.

Going forward, we intend to fund our continued growth through strong and growing statutory earnings, reinsurance programs, and unused debt capacity.

F&G Dividend Distribution (the “separation and distribution”)

On March 16, 2022, FNF announced its intention to partially spin off F&G through a dividend to FNF shareholders.

On December 1, 2022, FNF distributed, on a pro rata basis, approximately 15% of the common stock of F&G.

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For additional information about risks to F&G related to the separation and distribution, please see “Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF.”

Through a diversification growth strategy, F&G has demonstrated profitable, compound annual growth rates (“CAGRs”) in gross sales of 42% and AUM of 18% for the three-year period 2019 to 2022 and, more recently, annual increases in gross sales of 17% and AUM of 19% for the year ended December 31, 2022 as compared to the year ended December 31, 2021.

Through a diversification growth strategy, F&G has demonstrated profitable, compound annual growth rates in gross sales of 50% and AUM of 23% for the four-year period 2019 to 2023 and, more recently, annual increases in gross sales of 17% and AUM of 14% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

We have expanded our business in our traditional channels, and entered new markets.

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F&G’s deep and experienced management team has successfully diversified products and channels in recent years and demonstrated our ability to deliver consistent top line growth, increase assets under management and generate steady spreads and ROA, excluding short-term mark-to-market effects, across varying market cycles.

• Driving margin expansion and improved returns.

We are pursuing strategies to continue to grow earnings, while generating significant positive net cash flow and diversifying into “capital light” flow reinsurance and accretive owned distribution to generate higher return on equity.

Our Competitive Advantages

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• Trusted by distributors.

We have long-standing relationships with a broad range of distributors representing more than 82,000 independent agents and financial advisors, and built on our reputation for transparency and a consistently competitive product portfolio.

We offer fixed annuities and life insurance products through a network of approximately 20 leading banks and broker dealers and approximately 271 Independent Marketing Organizations (“IMOs”) that provide back-office support for thousands of independent insurance agents.

We have long-standing relationships with a broad range of distributors representing nearly 112,000 independent agents and financial advisors, and built on our reputation for transparency and a consistently competitive product portfolio.

We offer fixed annuities and life insurance products through a network of approximately 21 leading banks and broker dealers and approximately 280 Independent Marketing Organizations (“IMO”) that provide back-office support for thousands of independent insurance agents.

• Winning in high-growth markets.

retirement and middle markets are growing, and we are both well-established and well-positioned for continued growth.

Our strategic alignment with our distribution partners allows us to reach a diverse, growing and underserved middle market demographic in both our retail and institutional channels.

Our strategic alignment with our distribution

partners allows us to reach a diverse, growing and underserved middle market demographic in both our retail and institutional channels.

• Durable investment management edge.

FGL Insurance and certain other subsidiaries of F&G (other than FGL NY Insurance) are party to investment management agreements (“IMAs”) with Blackstone ISG-I Advisors LLC (“BIS”) pursuant to which BIS is appointed as investment manager of substantially all assets in the general and separate accounts of those entities (the “F&G Accounts”).

MVB Management, LLC, (“MVB Management”), an entity that is 50% owned by affiliates of William Foley, the Chairman of FNF and a director of F&G, receives a participation fee from BIS in connection with assets of F&G and its subsidiaries that are managed by BIS.

BIS also receives services from MVB Management.

BIS pays MVB Management a fee of approximately 15% of certain fees paid to BIS and its affiliates pursuant to the investment management agreements with BIS.

BIS, in accordance with our IMAs, has delegated certain

investment services to its affiliates, including Blackstone’s Credit, Real Estate Debt and Asset-Based Finance businesses, in each case, pursuant to separate sub-management agreements executed between BIS and each such affiliate.

Our strategic partnership with Blackstone provides a sustained competitive advantage for our business.

Blackstone and BIS partner with our strategic investment office to deeply understand our liability profile when making asset allocation decisions and then originates unique investment opportunities not traditionally available to insurers.

These investments allow us to enter higher-margin lines and create the potential to intermediate investment banks in credit origination.

Our liability profile and risk appetite drives our investment strategy.

F&G’s investment and risk offices set strategic asset allocation and risk limits.

Blackstone is responsible for idea generation and security selection.

Blackstone’s capabilities expand our investment universe to new asset classes and their origination capabilities provide incremental spread.

Our high quality, diversified investment portfolio is well positioned to withstand macroeconomic headwinds and continues to perform well.

We have enhanced the return while improving the credit quality of our portfolio, and credit related impairments remain low, averaging 5 basis points over the past 3 years, below our pricing assumption.

• Clean and profitable in-force book.

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guaranteed income traditionally provided by pensions is going away, requiring many retirees to rely solely on their personal assets;

for many, Social Security income is not enough and the value of Certificates of Deposit (“CDs”), once a reliable source of income, has eroded;

finally, today’s retirees must plan for a retirement that could last 30 or 40 years, weathering the ups and downs of the markets along the way.

for many, Social Security income is not enough.

Today’s retirees must plan for a retirement that could last 25 to 30 years, weathering the ups and downs of the markets along the way.

Insurance solutions can simplify retirement planning through features that generate more accumulation than traditional fixed income vehicles and generate more (and guaranteed) retirement income than traditional strategies.

retirement market opportunity is vast and comprised of the $2.3 trillion U.S.

consumer savings market, the $600 billion CD market and the $354 billion retail life and annuities market.

retirement market opportunity is vast and includes the $777 billion U.S.

consumer savings market and the $326 billion retail life and annuities market.

While insured products are designed to effectively serve the needs of retirees, annuities and life insurance solutions continue to be underutilized.

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(ii) 9th and 4th in MYGA sales in the broker dealer and bank channels and 9th in MYGA industry sales;

and (iii) 7th in IUL sales in the IMO channel, 3rd in the number of IUL policies sold and 8th in IUL industry sales, in each case, for the third quarter of 2022, as sourced from Wink’s Sales and Market Report.

and (iii) 5th in IUL

sales in the IMO channel, 3rd in the number of IUL policies sold and 6th in IUL industry sales, in each case, for the third quarter of 2023, as sourced from Wink’s Sales and Market Report.

We successfully expanded into new retail channels and diversified our annuity distribution, yet not at the expense of our traditional IMO channel.

Over the same period, we grew our IMO channel sales by 16% in the full year 2021, above and beyond the industry’s 14%, and by 11% for the full year ended December 31, 2022, as compared to the year ended December 31, 2021.

We grew our IMO channel sales by 6% and 11% during the years ended December 31, 2023, and December 31, 2022, respectively.

We continue to invest in our life insurance business, focusing our approach to meet the needs of the underserved middle market which we reach largely through Network Marketing Groups (“NMGs”).

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Untapped opportunities remain in this channel, particularly among younger and more diverse demographics.

The life insurance protection gap has widened to $23.4 trillion, which is equivalent to over 60% of the current in-force individual life insurance.

In the United States, 41% of adults reported a need for life insurance or more coverage, which equates to approximately 101 million adults with a life insurance gap.

Hispanics, the second largest ethnic group behind Caucasians, have the largest uninsured population among adults at 39% representing significant opportunity for us to serve this market.

We purchased a 30% minority ownership stake in Freedom Equity Group (“FEG”) in October 2021.

Owned Distribution.

With industry consolidation of independent agent distribution underway, we believe we are uniquely positioned to partner as a distribution consolidator.

In October 2021, we purchased a 30% minority ownership stake in Freedom Equity Group (“FEG”).

FEG is a nearly 4,000 agent strong NMG that focuses on cultural markets including Mexican-American, Hmong, Laotian, Filipino, Burmese, Congolese-American, Samoan, African-American, Thai and Vietnamese.

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Syncis is an approximately 1,200 agent NMG that focuses on cultural markets including Korean, African-American, and Persian.

We continued to consolidate in the distribution space in 2023 with the purchase of a 30% minority ownership stake in Quility Holdings, LLC (“Quility”), a leading insurtech company that offers a frictionless experience for insurance agents, insurance distribution companies and the clients they serve, and the purchase of a 40% minority ownership stake in DCMT Worldwide, LLC (“DCMT”), who distributes life insurance and annuity products through a network of over 1,000 agents.

In January 2024, we purchased a 70% majority ownership stake in Roar Joint Venture, LLC (“Roar”), a wholeseller of annuities and life insurance products to financial institutions and the broker-dealer community.

Institutional .

In 2021, F&G entered two institutional business lines to further diversify our sources of revenue.

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Our FABN Program (the “FABN Program”) offers funding agreements to institutional clients by means of capital markets transactions through investment banks.

Together, this business line has generated $2.3 billion in sales for F&G in 2021, its year of inception of FABN, and $1.4 billion in sales for the year ended December 31, 2022.

Together, this business line has generated $2.3 billion in sales for F&G in 2021, its year of inception of FABN, $1.4 billion in sales for the year ended December 31, 2022, and $1.3 billion in sales for the year ended December 31, 2023.

• We also offer PRT solutions to a $40 billion (of $2 trillion total defined benefit plan assets) market.

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We expect our opportunity to continue to grow as employers shift away from traditional defined benefit pension plans and seek to de-risk frozen pension plans.

This line of business generated $1.1 billion in sales for F&G in 2021, its year of inception, and $1.4 billion in sales for the year ended December 31, 2022.

This line of business generated $1.1 billion in sales for F&G in 2021, its year of inception, $1.4 billion in sales for the year ended December 31, 2022, and $2.0 billion in sales for the year ended December 31, 2023.

We Have Meaningfully Diversified Our Business

With the addition of the retail bank and broker dealer channels and our success in entering the PRT and funding agreement institutional markets, F&G has diversified our product and distribution capabilities from one primary channel to now five, and from one primary product to now five.

We completed this expansion over a three-year period and, combined with organic growth in our core IMO channel, increased gross sales by 190%, from $3.9 billion in 2019 to $11.3 billion in 2022.

We completed this expansion over a four -year period and, combined with organic growth in our core IMO channel, increased gross sales by 238%, from $3.9 billion in 2019 to $13.2 billion in 2023.

We have reinforced our earnings engine in addition to driving top-line growth.

We have acquired and retained customers through the COVID years, growing AUM from $26.5 billion at the time of FNF’s acquisition to $44 billion as of December 31, 2022.

We have acquired and retained customers through the years, growing AUM from $26.5 billion at the time of FNF’s acquisition to $49.5 billion as of December 31, 2023.

Profitable growth in AUM is the most important driver of F&G’s earnings and our ability to return capital to shareholders.

An Inflection Point:

Numerous opportunities to create value for our shareholders

Through a diversified growth strategy, F&G seeks to deliver shareholder value by increasing ANE driven by asset growth.

The successful execution of this strategy has provided a clear line of sight to both AUM and ANE growth.

We are able to optimize sales growth by products and channels based on market and competitive conditions.

We are also able to adjust capital usage by, for example, moving to higher margin or less capital-intensive products.

This leads to increasing margins and higher returns on capital.

In addition, as we scale, we expect our expense ratios to decline due to our significant investments in technology and other operating platforms over the last three years.

Finally, we have reached an inflection point with our first dividend and expect to increase dividends over time.

Our Financial Goals

Our competitive advantages – product and channel diversification, as well as our strategic partnership with Blackstone – enable us to address a greater share of the markets in which we play.

Further, the strength of our distribution partner relationships has allowed the Company to achieve double digit profitable sales growth, increase AUM and retain the higher margin business such as FIA and middle market cultural life insurance while diversifying sources of margin.

We will continue using retained sales as a lever for capital efficient diversified margins as we earn additional fee income through reinsurance.

We will also strategically use reinsurance to further diversify our sources of earnings into less capital-intensive adjacent products and services.

We began our reinsurance program in 2021 by ceding 50% of our MYGA premiums, which amounted to approximately $869 million in 2021 and $2,246 million through December 31, 2022.

During September 2022, we amended this reinsurance program to provide for the cession of 75% of our MYGA premiums dating from and following September 1, 2022, capped at $350 million cession per month.

The reinsurer pays the Company an up-front fee on the premium as well as an ongoing annual fee for generating the business.

The reinsurance enhances our overall return of the business issued and diversifies a portion of earnings to fee income.

We continue to strategically review and determine if the Company could benefit from other opportunities to leverage our core core competency of new business generation by potentially earning fees from third parties through reinsurance partnerships or from additional products and services.

Further, the strength of our distribution partner relationships and pension risk transfer growth strategy has allowed the Company to achieve profitable double digit sales growth.

The launch of our RILA product in early 2024 will further boost our sales growth as we enter a large and fast-growing market.

We also expect to deliver ongoing margin expansion from enhanced investment margin opportunities, effectively managing our operating expenses while scaling our organization over time and driving fee-based earnings from accretive flow reinsurance.

Lastly, we continue to diversify and enhance our earnings power as we execute on our own distribution strategy.

Our ownership stakes generate a higher margin earnings stream at a lower cost of capital, which we expect to be accretive to our returns over time.

The Products We Offer

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We believe this principal protection fills the need for middle-income Americans who must save for retirement but who want to limit the risk of decline in their savings.

As noted above, in 2021, we launched into two institutional markets to originate FABN and PRT transactions.

These markets leverage our existing team's spread-based capabilities as well as our strategic partnership with Blackstone.

For the year ended December 31, 2023, FIAs generated approximately 36% of our gross sales.

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A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued.

An immediate annuity is a type of contract that begins

making specified payments within one annuity period (e.g., one month or one year) and typically pays principal and earnings in equal payments over some period of time.

An immediate annuity is a type of contract that begins making specified payments within one annuity period (e.g., one month or one year) and typically pays principal and earnings in equal payments over some period of time.

Deferred Annuities – FIAs .

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All FIA products allow policyholders to allocate funds once a year among several different crediting strategies, including one or more index-based strategies and a traditional fixed rate strategy.

High surrender charges apply for early withdrawal, typically for seven to fourteen years after purchase.

Surrender charges apply for early withdrawal, typically for seven to fourteen years after purchase.

We purchase derivatives consisting predominantly of over-the-counter options and, to a lesser degree, futures contracts (specifically for FIA contracts) on the equity indices underlying the applicable policy such as the S&P 500.

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The change in the fair value of the options and futures contracts is generally designed to offset the equity market related change in the fair value of the FIA/IUL contract’s related reserve liability.

The options and futures contracts are marked to fair value with the change in fair value included as a component of “Recognized gains and losses, net” in our Consolidated Statements of Earnings.

The options and futures contracts are marked to fair value with the change in fair value included as a component of “Recognized gains and (losses), net” in our Consolidated Statements of Operations.

The change in fair value of the options and futures contracts includes the gains and losses recognized at the expiration of the instrument’s term or upon early termination and the changes in fair value of open positions.

GAAP accounting of the reserve liability for products with embedded derivatives such as FIA creates additional volatility beyond the accounting for the options and the futures.

Generally accepted accounting principles (“GAAP”) accounting of the reserve liability for products with embedded derivatives such as FIA creates additional volatility beyond the accounting for the options and the futures.

The contract holder account value of a FIA contract is equal to the sum of deposits paid, premium bonuses, if any, (described below), and index credits based on the change in the relevant market index (subject to a cap, spread and/or a participation rate) less any fees for riders and any withdrawals taken to-date.

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Guaranteed withdrawal payments may be stopped and restarted at the election of the contract owner.

Some of the FIA contract riders that we offer include an additional death benefit or an increase in benefit amounts under chronic health conditions.

Some of the FIA contract riders that we offer include an additional death benefit or an increase in benefit amounts under chronic

health conditions.

Rider fees range from 0% to 1%.

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The average crediting rate on all outstanding fixed rate annuities at December 31, 2023 was 5%.

Deferred Annuities - Registered Index-Linked Annuities (“RILA”) – In early 2024, we entered into the RILA markets.

RILAs are similar to FIAs in offering the policyholder the opportunity for tax-deferred growth based in part on the performance of a market index.

Compared to an FIA, RILAs have the potential for higher returns but also have the potential for risk of loss to principal and related earnings.

RILAs provide the ability for the policyholder to participate in the positive performance of certain market indices during a term, limited by a cap or adjusted for a participation rate.

Negative performance of the market indices during a term can result in negative policyholder returns, with downside protection typically provided in the form of either a “buffer” or a “floor” to limit the policyholder’s exposure to market loss.

A “buffer” is protection from negative exposure up to a certain percentage, typically 10 or 20 percent.

A “floor” is protection from negative exposure less than a stated percentage (i.e., the policyholder risks exposure of loss up to the “floor,” but is protected against any loss in excess of this amount).

Withdrawal Options for Deferred Annuities.

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Generally, if interest rates have risen, the MVA will decrease surrender value, whereas if rates have fallen, it will increase surrender value.

MVAs are included on all policies, if allowed (for FIAs since 2015 and for a longer time for fixed rate annuities).

At December 31, 2023, approximately 78% of our business included an MVA feature.

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Single Premium Immediate Annuities .

We have previously sold single premium immediate annuities (or “SPIAs”), which provide a series of periodic payments for a fixed period of time or for the life of the policyholder, according to the policyholder’s choice at the time of issue.

We have previously sold single premium immediate annuities (“SPIA”), which provide a series of periodic payments for a fixed period of time or for the life of the policyholder, according to the policyholder’s choice at the time of issue.

The amounts, frequency and length of time of the payments are fixed at the outset of the annuity contract.

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The balance of the cash value account is credited interest at a fixed rate or returns based on the performance of a market index, or both, at the option of the policyholder, using a method similar to that described above for FIAs.

Almost all of the life insurance policies in force, except for the return of premium benefits on term life insurance products and universal life contracts issued after March 1, 2010, are subject to a reinsurance arrangement with Wilton Re.

See “ — Wilton RE Transaction.

Funding Agreements.

As defined by the IID, a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued.

As defined by the Iowa Insurance Division (“IID”), a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued.

In essence, funding agreement providers are agreeing to a defined stream of future payments in exchange for a single upfront premium.

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Funding agreements through the FHLB are flexible in their format and the ability to issue during broad windows, as long as sufficient eligible collateral has been deposited with the bank.

F&G and it’s predecessors have been entering into funding agreements with the FHLB since at least 2004.

In June 2021, we established a FABN Program, which is a medium term note program under which funding agreements are issued to a special-purpose trust that issues marketable notes.

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These products primarily create earnings through spread income.

In each transaction FGL Insurance and/or FGL NY Insurance issues a group annuity contract to discharge pension plan liabilities from a pension plan sponsor, either through a separate account or through a general account guarantee.

Certificate holders covered under a group annuity contract have a guaranteed benefit from the insurance company.

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Our insurance subsidiaries cede insurance to other insurance companies.

We use reinsurance to diversify risks and earnings, to manage loss exposures, to enhance our capital position, and to

manage new business volume.

We use reinsurance to diversify risks and earnings, to manage loss exposures, to enhance our capital position, and to manage new business volume.

The effects of certain reinsurance agreements are not accounted for as reinsurance as they do not reinsure insurance contracts, or they do not transfer the risks of the reinsured policies.

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To minimize the risk of credit loss on such contracts, we generally diversify our exposures among many reinsurers and limit the amount of exposure to each based on financial strength ratings, which are reviewed annually.

We are able to further manage risk via funds withheld arrangements.

Please refer to the section titled “ Quantitative and Qualitative Disclosure about Market Risk ” in this Annual Report for further discussion on credit risk and counterparty risk.

We are able to further manage risk with various forms of collateral or collateral arrangements, including secured trusts, funds withheld arrangements and irrevocable letters of credit.

Please refer to Note E - Reinsurance to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K for further discussion on reinsurance, reinsurance recoverables for our largest reinsurers and credit risk and counterparty risk.

Please refer to “ Risk Factors ” for additional details regarding credit risk related to reinsurance agreements.

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Wilton Reinsurance Transaction .

Pursuant to the agreed upon terms, Wilton Reassurance Company (“Wilton Re”) purchased through a 100% quota share reinsurance agreement certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX, as well as another block of FGL Insurance’s in-force traditional, universal life and IUL insurance policies.

Almost all of the life insurance policies in force issued before March 1, 2010, except for the return of premium benefits on term life insurance products, are subject to a reinsurance arrangement with Wilton Reassurance Company (“Wilton Re”).

Pursuant to the agreed upon terms, Wilton Re purchased through a 100% quota share reinsurance agreement certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX, as well as another block of FGL Insurance’s in-force traditional, universal life and IUL insurance policies.

The effects of this agreement are accounted for as reinsurance as the ceded policies qualify as insurance products and because the agreement satisfies the risk transfer requirements for GAAP.

Hannover Reinsurance Transaction.

FGL Insurance has a reinsurance agreement with Hannover Life Reassurance Company of America (Bermuda) Ltd.

(“Hannover Re”), an unaffiliated reinsurer, to reinsure an in-force block of FGL Insurance’s FIA and fixed deferred annuity contracts with GMWB and Guaranteed Minimum Death Benefit (“GMDB”) guarantees.

In accordance with the terms of this agreement, we cede 70% net retention of secondary guarantee payments in excess of account value for GMWB and GMDB guarantees.

Originally effective January 1, 2017, FGL Insurance has a reinsurance agreement with Hannover Life Reassurance Company of America (“Hannover Re”), an unaffiliated reinsurer, to reinsure an in-force block of FGL Insurance’s FIA and fixed rate deferred annuity contracts with GMWB and Guaranteed Minimum Death Benefit (“GMDB”) guarantees.

In accordance with the terms of this agreement, FGL Insurance cedes 70% net retention of secondary guarantee payments in excess of account value for GMWB and death benefits in excess of account value for GMDB guarantees.

The effects of this agreement are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP;

therefore, deposit accounting is applied.

Canada Life Reinsurance Transaction.

Effective May 1, 2020, FGL Insurance entered into an indemnity reinsurance agreement with Canada Life Assurance Company United States Branch (“Canada Life”), a third-party reinsurer, to reinsure FIA policies with GMWB.

In accordance with the terms of this agreement, FGL Insurance cedes a quota share percentage of the net retention of guarantee payments in excess of account value for GMWB.

Effective October 1, 2022, FGL Insurance and Canada Life Amended and restated this agreement to, among other changes, also reinsure additional FIA business policies.

therefore, deposit accounting is applied and FGL insurance applies the right of offset in the reinsurance agreement.

Kubera Reinsurance Transaction.

FGL Insurance has a reinsurance agreement with Kubera Insurance (SAC) Ltd.

(“Kubera”), an unaffiliated reinsurer, to cede a quota share of certain FIA statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

The effects of this agreement are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP;

therefore, deposit accounting is applied.

therefore, deposit accounting is applied and FGL Insurance applies the right of offset in the reinsurance agreement.

To enhance Kubera's ability to pay its obligations under the amended reinsurance agreement, F&G entered into a Variable Note Purchase Agreement (the “NPA”), whereby F&G agreed to fund a note to Kubera to be used to ultimately settle with F&G, with principal increases up to a maximum amount of $300 million, to the extent a potential funding shortfall (treaty assets are less than the total funding requirement) is projected relative to the business ceded to Kubera from F&G as part of the amended reinsurance agreement.

The potential funding shortfall will be determined quarterly and, among other items, is impacted by the market value of the assets in the funds withheld account related to the reinsurance agreement and Kubera's capital as calculated on a Bermuda regulatory basis.

The NPA matures on November 30, 2071.

Based on the current level of the treaty assets and projections that these policies will be profitable over the lifetime of the agreement, we do not expect significant fundings to occur under the NPA.

As of December 31, 2023 and December 31, 2022, the amount funded under the NPA was insignificant.

Kubera & Somerset Reinsurance Transactions.

FGL Insurance entered into a reinsurance agreement with Kubera Insurance (SAC) Ltd.

(“Kubera”), an unaffiliated reinsurer, effective December 31, 2018, to cede certain MYGA and deferred annuity reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

FGL Insurance entered into a reinsurance agreement with Kubera, effective December 31, 2018, to cede certain fixed rate annuity (including MYGA) GAAP and statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

Effective October 31, 2021, this agreement was novated from Kubera to Somerset Reinsurance Ltd.

(“Somerset”), a certified third-party reinsurer.

As the policies ceded to Somerset are investment contracts, there is no significant insurance risk present and therefore the reinsurance agreement is accounted for as a separate investment contract.

The presentation of this agreement is similar to other reinsurance agreements that apply reinsurance accounting as discussed in further detail within Note J Reinsurance to our Consolidated Financial Statements included in this Annual Report.

Effective December 1, 2023, FGL Insurance executed an additional coinsurance funds withheld agreement with Somerset to cede certain flow MYGA business written effective on or after December 1, 2023.

As the policies ceded to Somerset are investment contracts, there is no significant insurance risk present and the reinsurance agreements are accounted for as separate investment contracts.

Everlake Reinsurance Transaction.

Effective September 1, 2023, FGL Insurance executed a coinsurance agreement with Everlake Life Insurance Company (“Everlake”), an unaffiliated reinsurer to cede, on a quota share basis, certain flow MYGA business written effective on or after September 1, 2023.

As the policies ceded to Everlake are investment contracts, there is no significant insurance risk present and the effects of this agreement are accounted for as a separate investment contract.

Aspida Reinsurance Transaction.

FGL Insurance has a reinsurance agreement with ASPIDA Life Re Ltd.

(“Aspida Re”), an unaffiliated reinsurer, to cede certain MYGA business, on a funds withheld coinsurance basis, net

of applicable existing reinsurance.

(“Aspida Re”), an unaffiliated reinsurer, to cede certain flow MYGA business, on a funds withheld coinsurance basis, net of applicable existing reinsurance, written effective on or after January 15, 2021.

As the policies ceded to Aspida Re are investment contracts, there is no significant insurance risk present and therefore the reinsurance agreement is accounted for as a separate investment contract.

New Reinsurance Transaction.

Effective December 31, 2022, FGL Insurance entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd.

(“New Re”), a third-party reinsurer and wholly owned subsidiary of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (d/b/a Munich Re), to cede certain fixed index annuity policies.

New Re Reinsurance Transaction.

Effective December 31, 2022, FGL Insurance entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd., an unaffiliated reinsurer and wholly owned subsidiary of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (d/b/a Munich Re), to cede certain FIA policies.

Effective July 1, 2023, this agreement was amended to reinsure additional FIA products.

The coinsurance quota share is only applicable to the base contract benefits under the FIA policies.

The yearly renewable term is applicable to the waiver of surrender charges and return of premium.

The effects of this agreement are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP;

therefore, deposit accounting is applied and FGL Insurance applies the right of offset in the reinsurance agreement.

The CARVM Facility.

Life insurance companies operating in the United States must calculate required reserves for life and annuity policies based on statutory principles.

The insurance divisions have adopted the methodology contained in the NAIC Valuation Manual (“VM”) as the prescribed methodology for the insurance industry.

The insurance divisions have adopted the methodology contained in the NAIC Valuation Manual as the prescribed methodology for the insurance industry.

The industry has reduced or eliminated redundancies thereby increasing capital using a variety of techniques including reserve facilities.

FGL Insurance has a reinsurance treaty with Raven Reinsurance Company (“Raven Re”), its wholly owned captive reinsurance company, to cede the Commissioners Annuity Reserve Valuation Method (“CARVM”) liability for annuity benefits where surrender charges are waived.

In connection with the CARVM reinsurance agreement (the “CARVM Treaty”), FGL Insurance and Raven Re entered into an agreement with Nomura Bank International plc (“NBI”) to upsize and extend its reserve financing facility in the form of a letter of credit issued by NBI.

F&G has a reinsurance treaty with Raven Reinsurance Company (“Raven Re”), its wholly owned captive reinsurance company, to cede the Commissioners Annuity Reserve Valuation Method (“CARVM”) liability for annuity benefits where surrender charges are waived related to certain FIA, DA and MYGA policies.

In connection with the CARVM reinsurance agreement, FGL Insurance and Raven Re entered into an agreement with Nomura Bank International plc (“NBI”) to establish a reserve financing facility in the form of a letter of credit issued by NBI.

The financing facility has $200 million available to draw on as of December 31, 2023.

The facility may terminate earlier than the current termination date of October 1, 2027, in accordance with the terms of the reimbursement agreement.

Under the terms of the reimbursement agreement, in the event the letter of credit is drawn upon, Raven Re is required to repay the amounts utilized, and Fidelity & Guaranty Life Holdings, Inc.

(“FGLH”) is obligated to repay the amounts utilized if Raven Re fails to make the required reimbursement.

FGLH also is required to make capital contributions to Raven Re in the event that Raven Re’s statutory capital and surplus falls below certain defined levels.

As of December 31, 2022, December 31, 2021 and December 31, 2020, Raven Re’s statutory capital and surplus was $11 million, $62 million and $29 million, respectively, in excess of the minimum level required under the reimbursement agreement.

The amended facility may terminate earlier than the current termination date of October 1, 2027, in accordance with the terms of the

reimbursement agreement.

Under the terms of the reimbursement agreement, in the event the letter of credit is drawn upon, Raven Re is required to repay the amounts utilized, and FGAL is obligated to repay the amounts utilized if Raven Re fails to make the required reimbursement.

Under the terms of the agreement, FGAL is also required to make a capital contribution to Raven Re in certain circumstances, including in the event that Raven Re’s statutory capital and surplus falls below defined levels.

As of December 31, 2023 and December 31, 2022, no capital contributions were required to be made due to these conditions.

As this letter of credit is provided by an unaffiliated financial institution, Raven Re is permitted to carry the letter of credit as an admitted asset on the Raven Re statutory balance sheet.

Effective December 31, 2022, FGL Insurance entered into a Coinsurance Agreement with its affiliate F&G Life Re Ltd.

(“F&G Life Re”), a Bermuda reinsurer, to reinsure a quota share of certain pension risk transfer group annuity contracts on a funds withheld coinsurance and modified coinsurance basis.

The cession is on an 80% quota share basis, net of applicable incurring reinsurance, with the liabilities payable out of FGL Insurance’s separate account ceded on a modified coinsurance basis and general accounts liabilities ceded on a funds withheld basis.

GMWB/GWP Reinsurance Transaction .

Effective December 31, 2023, FGL Insurance recaptured its reinsurance arrangement with Canada Life Assurance Company (“Canada Life”) United States Branch covering FIA policies with GMWB and guaranteed withdrawal payment (“GWP”) features and entered into a reinsurance treaty with Corbeau Re, Inc.

(“Corbeau Re”), its wholly owned captive reinsurance company, to cede certain FIA policies with GMWB and GWP.

In accordance with the terms of this agreement, FGL Insurance cedes a 100% quota share of GMWB and GWP paid in excess of account value.

In connection with the reinsurance agreement between FGL Insurance and Corbeau Re, Corbeau Re entered into an excess of loss reinsurance agreement (“XOL”) with Canada Life Barbados Branch to finance the portion of statutory reserves considered to be non-economic.

The XOL matures on December 31, 2043, and provides for coverage on losses up to $1,500 million as of December 31, 2023.

With Corbeau Re, non-economic reserves were financed through the maturity date of the XOL and statutory reserves are recorded for all risks expected to be incurred after the maturity date of the XOL.

The XOL is not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP;

therefore, deposit accounting is applied.

Under the terms of the agreement, FGAL is required to make a capital contribution to Corbeau Re in certain circumstances, including in the event that Corbeau Re’s statutory capital and surplus falls below defined levels.

As of December 31, 2023, no capital contributions were required to be made due to these conditions.

Corbeau Re is permitted to account for the excess of loss reinsurance agreement from Canada Life as an admitted asset on the Corbeau Re statutory balance sheet.

PRT Reinsurance Transaction .

Effective October 1, 2023, FGL Insurance recaptured a reinsurance agreement with its affiliate F&G Life Re Ltd.

(“F&G Life Re”), a Bermuda reinsurer, covering a quota share of certain pension risk transfer group annuity contracts and entered into an agreement with its affiliate F&G Cayman Re Ltd.

(“F&G Cayman Re”), a Cayman Islands reinsurer, to reinsure a quota share of certain pension risk transfer group annuity contracts (previously ceded to F&G Life Re) in addition to flow pension risk transfer group annuity contracts.

Some of the contracts reinsured are held by FGL Insurance’s general account and others are held by a FGL Insurance separate account (which does not meet the GAAP definition of a separate account).

Reinsurance of the general account contracts are maintained on a coinsurance funds withheld basis for the general account statutory reserves.

Reinsurance of the separate account contracts are maintained on a modified coinsurance basis for the separate account statutory reserves and coinsurance basis for the general account statutory reserves supporting the separate account.

In connection with the agreement, F&G Cayman Re entered into a financing agreement with Deutsche Bank AG (“DB”), operating out of its New York branch, whereby DB issued a letter of credit used to support the coinsured general account statutory reserves (generally considered to be the non-economic reserves).

Our Retail Distribution Channels

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We monitor the business issued by each distribution partner for pricing metrics, mortality, persistency, as well as market conduct and suitability.

We offer our products through a network of approximately 271 IMOs, representing approximately 73,000 agents.

We offer our products through a network of approximately 280 IMOs, representing nearly 102,000 agents.

We believe that our relationships with these IMOs are strong.

The average tenure of the Power Partners is approximately 20 years.

We identify Power Partners as those who have demonstrated the ability to generate

significant production for our business.

We identify Power Partners as those who have demonstrated the ability to generate significant production for our business.

We currently have 41 Power Partners, comprised of 19 annuity IMOs and 22 life insurance IMOs.

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Bank and broker dealers represented 51% of annuity sales for the year ended December 31, 2023.

The top five states for the distribution of F&G’s retail products in the year ended December 31, 2022 were Florida, California, Texas, Pennsylvania and New Jersey, which together accounted for 37% of F&G’s retail sales.

The top five states for the distribution of F&G’s retail products in the year ended December 31, 2023 were Florida, California, Pennsylvania, Ohio and Texas, which together accounted for 38.5% of F&G’s retail sales.

Our Investment Management Governance and Approach

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The types of assets in which we may invest are influenced by various state laws, which prescribe qualified investment assets applicable to insurance companies.

FGL Insurance and certain other subsidiaries of F&G (other than FGL NY Insurance) are party to IMAs with BIS pursuant to which BIS is appointed as investment manager of the F&G Accounts.

MVB Management, LLC, (“MVB Management”), an entity that is 50% owned by BilCar, LLC (an affiliate of William Foley, the Executive Chairman and a director of the Company) (“BilCar”), receives a participation fee from BIS in connection with assets of F&G and its subsidiaries that are managed by BIS.

BIS also receives services from MVB Management.

Pursuant to the investment management agreements with BIS, BIS pays MVB Management a fee of approximately 7.5% of certain fees paid to BIS and its affiliates for AUM relating to new business generated after March 31, 2023 (“New AUM”) (15% prior to that date).

In March 2023 BilCar waived its right to receive any portion of payments made by BIS to MVB in respect of such New AUM.

Additionally, in March 2023 the Company entered into an agreement with BilCar to pay BilCar the fees that it would have received through MVB Management from BIS over the 10-year period ending March 31, 2033.

BIS, in accordance with our IMAs, has delegated certain investment services to its affiliates, including Blackstone’s Credit, Real Estate Debt and Asset-Based Finance businesses, in each case, pursuant to separate sub-management agreements executed between BIS and each such affiliate.

There are no specified minimum amounts of assets that we have agreed that BIS will manage;

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The management fees payable to BIS under the IMAs are calculated based on the aggregate assets under management in the F&G Accounts, such that that BIS’s per annum management fee is based upon:

On March 10, 2023, the IMAs were amended such that, for assets under management as of March 31, 2023, BIS’s per annum management fees are as follows:

• for aggregate assets under management in the F&G Accounts up to $25 billion, 0.26% of such aggregate assets under management;

• for aggregate assets under management in the F&G Accounts above $25 billion and up to $34 billion, a rate equal to (x) the sum of $25 billion multiplied by 0.26% and the excess over $25 billion multiplied by 0.24% divided by (y) total aggregate assets under management;

• for aggregate assets under management in the F&G Accounts above $34 billion, a rate equal to (x) the sum of $25 billion multiplied by 0.26%, $9 billion multiplied by 0.24%, 80% of the aggregate assets under management above $34 billion multiplied by 0.12% and 20% of the aggregate assets under management above $34 billion multiplied by 0.24% divided by (y) total aggregate assets under management;

provided, that in the event BIS and MVB Management amend their participation fee agreement in the future to reduce the fee payable for assets under management in the F&G Accounts over $34 billion by 50%, BIS’s per annum management fee for assets under management in the F&G Accounts over $34 billion will be reduced such that all aggregate assets under management above $34 billion will be multiplied by 0.12%.

Aggregate fees paid to BIS were $155 million and $132 million for the years ended December 31, 2022 and 2021, respectively, $62 million for the seven month period between June 1, 2020 and ended December 31, 2020 and $39 million for the five months ended May 31, 2020 (or $101 million for the year ended December 31, 2020).

In the third quarter of 2021, we negotiated a reduction in the fee rates charged by BIS for AUM in the F&G Accounts in excess of $34 billion (which prior to such amendment would have been charged at a fee rate of 0.22% or 0.20%).

• for aggregate assets under management in the F&G Accounts above $25 billion and up to $34 billion, 0.24% of such aggregate assets under management;

• for aggregate assets under management in the F&G Accounts above $34 billion, .12% of such aggregate assets under management.

In addition, the Sub-Manager Fee Agreement has been amended to provide for certain updates thereto, including, among other things, to reflect certain additional asset classes, certain revisions to the applicable sub-manager fee rates in respect of certain existing asset classes and certain revisions to the applicable sub-manager fee rates in respect of assets under management relating to new business of the Company and its subsidiaries generated after March 31, 2023.

For the avoidance of doubt, there will be no management fee payable under the IMAs with respect to New AUM.

Aggregate fees paid to BIS were $194 million, $155 million and $132 million for the years ended December 31, 2023, 2022 and 2021, respectively.

F&G has a robust governance process and framework to manage the investment portfolio.

While BIS is primarily responsible for security selection, F&G makes all investment strategy decisions and sets risk parameters.

All major decisions need to be reviewed and approved by the F&G Investment Committee, and new investment asset classes go through an internal risk assessment process ‘RAP’ at F&G to ensure the investments are suitable for an insurance company balance sheet.

All major decisions need to be reviewed and approved by the F&G Investment Committee, and new investment asset classes go through an internal risk assessment process at F&G to ensure the investments are suitable for an insurance company balance sheet.

We define risk tolerance across a wide range of factors, including credit risk, liquidity risk, concentration (issuer and sector) risk, and caps on specific asset classes, which in turn establish conservative risk thresholds.

F&G and BIS undertook a substantial investment portfolio reposition to improve the credit quality and asset-liability duration match of the portfolio, as well as to add diversification, by reducing exposure to BBB rated corporates and adding higher quality structured credit, specialty finance assets, commercial & residential mortgage loans, and alternative investments.

This was completed in 2018, and the result was a meaningful yield pick-up along with improved credit quality which was accomplished by taking advantage of illiquidity and structural complexity premiums, and not by increasing credit risk in the portfolio.

Since then several de-risking programs have been undertaken to take advantage of the extended credit cycle and favorable market conditions or to undertake prudent risk management in anticipation of an unfavorable economic environment.

Also, F&G has flexibility to use other asset management partners through our flow reinsurance platform over time.

F&G, along with BIS, continually monitors portfolio allocations and holdings to optimize the portfolio profile.

F&G has undertaken several programs to take advantage of the credit cycle and market conditions or to undertake prudent risk management in anticipation of an unfavorable economic environment.

We have also added several new asset classes to the investment portfolio to further enhance diversification.

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See also “ Risk Factors—Risks Relating to Our Business—We rely on our investment management or advisory agreements with BIS and other investment managers and sub-managers for the management of portions of certain of our life insurance companies’ investment portfolios.”

The initial term of the side letter expires in 2027 and will automatically renew for successive one-year terms unless F&G terminates the side letter.

The initial term of the side letter expires in 2029 and will automatically renew for successive two-year terms unless F&G terminates the side letter.

Prior to June 1, 2029, we and FNF may only terminate the side letter for cause.

Cause is generally limited to circumstances where BIS is legally unable to manage our assets, if BIS fails to offer us “most favored nations” rights with respect to certain products it may issue to third parties, or where BIS has acted with gross negligence, willful misconduct or reckless disregard of its obligations under the investment management agreements.

In addition, at the expiration of the initial term of the side letter in 2027, or at the end of any renewal term, we may with prior notice terminate the side letter for (i) unsatisfactory long term performance by BIS that is materially detrimental to one of our subsidiaries or (ii) unfair and excessive fees charged by BIS compared to those that would be charged by a comparable asset manager (taking into account the experience, education and qualification of BIS’s personnel, the scale and scope of the services being provided by BIS, and the composition of the managed investment portfolio and comparable investment guidelines).

If we provide any such notice, the termination would not become effective for two years from the date of termination given in the notice, during which time BIS may seek to cure the events giving arise to the termination notice.

Because our subsidiaries can terminate an investment management agreement at any time upon 30 days' notice, it is possible that such a termination by one of our subsidiaries could cause us to be in breach of our obligations under the side letter.

In addition, at the expiration of the initial term of the side letter in 2029, or at the end of any renewal term, we may with prior notice terminate the side letter for unsatisfactory long-term performance by BIS based on underperformance.

If we provide any such notice, the termination would not become effective for one year from the date of termination given in the notice, during which time BIS may seek to cure the events giving arise to the termination notice.

under the side letter.

BIS’s contractual remedies under the side letter include specific performance and the right to seek damages including, in the event of a non-permitted termination of an investment management agreement by one of our subsidiaries, as compensation for the costs incurred in performing services under, and the failure to receive the benefits reasonably anticipated by, an IMA, the full amount of damages available at law in the same manner and to the same extent as if such IMA had been terminated by us our at our direction in violation of the terms of the side letter.

Our investment portfolio consists of high-quality fixed maturities, including publicly issued and privately issued corporate bonds, municipal and other government bonds, ABS, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), commercial mortgage loans (“CMLs”), residential mortgage loans (“RMLs”), limited partnership investments, and other investments.

We also maintain holdings in floating rate, and less rate-sensitive investments, including senior tranches of CLOs, non-agency RMBS, and various types of ABS.

Our investment portfolio consists of fixed-rate high-quality fixed maturities, including publicly and privately issued corporate bonds, municipal and other government bonds, asset-backed securities (“ABS”), residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), commercial mortgage loans (“CMLs”), residential mortgage loans (“RMLs”), limited partnership investments, and other investments.

We also maintain holdings in floating rate, and less rate-sensitive investments, including collateralized loan obligations (“CLO”), non-agency RMBS, and various types of ABS.

It is our expectation that our investment portfolio will broaden in scope and diversity to include other asset classes held by life and annuity insurance writers.

We also have a small amount of equity holdings required as part of our funding arrangements with the FHLB.

Over the year, we have hedged a portion of the existing floating rate asset exposure in the portfolio.

In addition to hedging the existing floating-rate assets, subject to the broader macro and interest rate environment, we will also look to hedge a significant share of new purchases of floating-rate assets.

The portfolio also has exposure to U.S.

dollar denominated emerging market bonds, highly rated preferred stocks and hybrids, and structured securities including ABS.

We currently maintain:

• a well-matched asset/liability profile (asset duration, including cash and cash equivalents, of 4.9 years vs.

dollar denominated emerging market bonds, highly rated preferred stocks and hybrids.

We currently maintain a well-matched asset/liability profile (asset duration, including cash and cash equivalents, of 5.2 years vs.

liability duration of 4.7 years).

• an exposure to less rate-sensitive assets of 30% of invested assets as of December 31, 2022.

Please refer to Note C Investments in the Consolidated Financial Statements and the “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investment Portfolio” in this Annual Report for additional information about our investment portfolio.

Please refer to Note C - Investments in the Consolidated Financial Statements and the “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investment Portfolio” in this Annual Report on Form 10-K for additional information about our investment portfolio.

Mature Risk Management Framework and Governance

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identifying, documenting and communicating key business risks in a timely fashion.

Our most significant risks are governed through holding company governance committees and overall by the enterprise risk management committee.

Our most significant risks are governed through holding company governance committees and overall by the Enterprise Risk Management Committee (“ERMC”).

Our most significant risks such as credit risk, liquidity risk, and policyholder behavior associated with interest rate risk have established risk limits associated with our risk appetite statements.

These include investment limits by asset class, ratings and issuer.

Liquidity risk is managed through frequent forecasting of sources and uses of cash and managed to our Liquidity Policy.

Liquidity risk is managed

through frequent forecasting of sources and uses of cash and managed to our Liquidity Policy.

Asset liability management procedures and limits protect the Company, within limits, against significant changes in interest rates.

In addition, the risks are stressed as part of our scenario testing process to identify areas requiring mitigation plans based on the macroeconomic environment.

Risk limits, risk appetite and scenario testing results of the stresses are discussed with stakeholders such as the F&G ERM Committee, the Board of Directors and Audit Committee of F&G, regulators and rating agencies.

Risk limits, risk appetite and scenario testing results of the stresses are discussed with stakeholders such as the F&G ERMC, the Board of Directors (“Board”) and Audit Committee (“AC”) of F&G, regulators and rating agencies.

The responsibility for monitoring, evaluating and responding to risk embedded across the organization:

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• underwriting administration of life insurance applications;

• life reinsurance administration;

• call centers;

• information technology development and maintenance;

• investment accounting and custody;

• certain investment accounting and custody;

• co-located data centers and hosting of financial systems.

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Financial strength ratings and credit ratings are important factors affecting public confidence in an insurer and its competitive position in marketing products.

As of the date of this Annual Report, A.M.

As of the date of this Annual Report on Form 10-K, A.M.

Best, Fitch, Moody’s, and S&P had issued credit ratings, financial strength ratings and/or outlook statements regarding us, as listed below.

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Generally, rating agencies base their financial strength ratings upon information furnished to them by the insurer and upon their own investigations, studies and assumptions.

Financial strength ratings are based upon factors of concern to policyholders, agents and intermediaries and are not directed toward the protection of investors.

strength ratings are based upon factors of concern to policyholders, agents and intermediaries and are not directed toward the protection of investors.

Credit and financial strength ratings are not recommendations to buy, sell or hold securities and they may be revised or revoked at any time at the sole discretion of the rating organization.

In addition to the financial strength ratings, rating agencies use an “outlook statement” to indicate a medium- or long-term trend that, if continued, may lead to a rating change.

A positive outlook indicates a rating may be raised

and a negative outlook indicates a rating may be lowered.

A positive outlook indicates a rating may be raised and a negative outlook indicates a rating may be lowered.

A stable outlook is assigned when ratings are not likely to be changed.

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Issuer Credit / Default Rating Not Rated BBB- BBB Ba1

Outlook Stable Stable Positive

Senior Unsecured Notes (2028 maturity) (a)

Not Rated BBB- BBB- Not Rated

Outlook Stable Stable Stable

Senior Unsecured Notes Not Rated BBB- BBB- Not Rated

CF Bermuda Holdings Limited

Issuer Credit / Default Rating Not Rated BBB- BBB Ba1

Outlook Stable Stable Positive

Issuer Credit / Default Rating Not Rated BBB- BBB Baa3

Outlook Stable Stable Stable

Fidelity & Guaranty Life Holdings, Inc.

Issuer Credit / Default Rating BBB BBB- BBB Not Rated

Outlook Positive Stable Stable

Senior Unsecured Notes (2025 maturity) (b)

Outlook Stable Stable Stable

Senior Unsecured Notes (2025 maturity) (a)

BBB BBB BBB Baa2

Outlook Positive Stable

Outlook Stable Stable

Operating Subsidiary Ratings

Fidelity & Guaranty Life Insurance Company

Financial Strength Rating A- A- A- Baa1

Outlook Positive Stable Stable Positive

Financial Strength Rating A A- A- A3

Outlook Stable Stable Stable Stable

Fidelity & Guaranty Life Insurance Company of New York

Financial Strength Rating A A- A- Not Rated

Outlook Positive Stable Stable

Outlook Stable Stable Stable

F&G Life Re Ltd

Financial Strength Rating Not Rated A- A- Baa1

Outlook Stable Stable Positive

Financial Strength Rating Not Rated A- A- A3

Outlook Stable Stable Stable

F&G Cayman Re Ltd

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Outlook Stable

(a) Issuance by F&G Annuities & Life, Inc.

on January 13, 2023

(b) Explicitly guaranteed by parent Fidelity National Financial, Inc.

(a) Explicitly guaranteed by parent Fidelity National Financial, Inc.

upon acquisition of F&G on June 1, 2020

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While the degree to which ratings adjustments will affect sales and persistency is unknown, we believe if our ratings were to be negatively adjusted for any reason, we could experience a material decline in the sales of our products and the persistency of our existing business.

See “ Risk Factors ” in this Annual Report.

See “ Risk Factors ” in this Annual Report on Form 10-K.

Potential Impact of a Ratings Downgrade.

We are required to maintain minimum ratings as a matter of routine practice as part of our over-the-counter derivatives agreements on ISDA forms.

We are required to maintain minimum ratings as a matter of routine practice as part of our over-the-counter derivatives agreements on International Swap and Derivative Association

(“ISDA”) forms.

Under some ISDA agreements, we have agreed to maintain certain financial strength ratings.

Please refer to Note D Derivative Financial Instruments to the Consolidated Financial Statements for disclosure around our requirement to maintain minimum ratings.

If the insurance subsidiaries held net short positions against a counterparty, and the subsidiaries’ financial strength ratings were below the levels required in the ISDA agreement with the counterparty, the counterparty would

demand immediate further collateralization, which could negatively impact overall liquidity.

Please refer to Note D - Derivative Financial Instruments to the Consolidated Financial Statements in this Annual Report on Form 10-K for disclosure around our requirement to maintain minimum ratings.

Based on the fair value of our derivatives as of December 31, 2023, we hold no net short positions against a counterparty;

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Regulatory Overview

FGL Insurance, FGL NY Insurance and Raven Re are subject to comprehensive regulation and supervision in their domiciles, Iowa, New York and Vermont, respectively, and in each state in which they do business.

FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re are subject to comprehensive regulation and supervision in their domiciles, Iowa, New York, Vermont and Vermont, respectively, and in each state in which they do business.

FGL Insurance does business throughout the United States and Puerto Rico, except for New York.

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Raven Re is a special purpose captive reinsurance company that only provides reinsurance to FGL Insurance under the CARVM Treaty.

Corbeau Re, a wholly owned captive reinsurance company, reinsures certain of FGL Insurance’s FIA policies with GMWB and GWP.

FGL Insurance’s principal insurance regulatory authority is the IID;

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Generally, insurance products underwritten by, and rates used by, FGL Insurance and FGL NY Insurance must be approved by the insurance regulators in each state or territory in which they are sold.

In addition, insurance products may also be subject to ERISA.

In addition, insurance products may also be subject to the Employee Retirement Income Security Act of 1974 (“ERISA”).

State insurance authorities have broad administrative powers over FGL Insurance and FGL NY Insurance with respect to all aspects of the insurance business, including:

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Financial Regulation

State insurance laws and regulations require FGL Insurance, FGL NY Insurance and Raven Re to file reports, including financial statements, with state insurance departments in each state in which they do business, and their operations and accounts are subject to examination by those departments at any time.

FGL Insurance, FGL NY Insurance and Raven Re prepare statutory financial statements in accordance with accounting practices and procedures prescribed or permitted by these departments.

State insurance laws and regulations require FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re to file reports, including financial statements, with state insurance departments in each state in which they do business, and their operations and accounts are subject to examination by those departments at any time.

FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re prepare statutory financial statements in accordance with accounting practices and procedures prescribed or permitted by these departments.

The NAIC has approved a series of statutory accounting principles and various model regulations that have been adopted, in some cases with certain modifications, by all state insurance departments.

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Moreover, compliance with any particular regulator’s interpretation of a legal or accounting issue may not result in compliance with another regulator’s interpretation of the same issue, particularly when compliance is judged in hindsight.

Any particular regulator’s interpretation of a legal or accounting issue may change over time to FGL Insurance’s, FGL NY Insurance’s and Raven Re’s detriment, or changes to the overall legal or market environment, even absent any change of interpretation by a particular regulator, may cause FGL Insurance, FGL NY Insurance and Raven Re to change their views regarding the actions they need to take from a legal risk management perspective, which could necessitate changes to FGL Insurance’s, FGL NY Insurance’s or and Raven Re’s practices that may, in some cases, limit their ability to grow and improve profitability.

Any particular regulator’s interpretation of a legal or accounting issue may change over time to FGL Insurance’s, FGL NY Insurance’s, Raven Re’s or Corbeau Re’s detriment, or changes to the overall legal or market environment, even absent any change of interpretation by a particular regulator, may cause FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re to change their views regarding the actions they need to take from a legal risk management perspective, which could necessitate changes to FGL Insurance’s, FGL NY Insurance’s, Raven Re’s or Corbeau Re’s practices that may, in some cases, limit their ability to grow and improve profitability.

State insurance departments conduct periodic examinations of the books and records, financial reporting, policy and rate filings, market conduct and business practices of insurance companies domiciled in their states, generally once every three to five years.

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

The IID last completed a routine examination of FGL Insurance for the five year period ending 2017 and found no material deficiencies and proposed no adjustments to the financial statements as filed.

The IID is currently in the process of executing an exam for the five year period ending 2022.

Results of the most recent examination have not been finalized.

The NYDFS last completed a routine financial examination of FGL NY Insurance for the five year period ended December 31, 2017, and found no material deficiencies and proposed no adjustments to the financial statements as filed.

The NYDFS is currently in the process of executing an exam for the five year period ending 2022.

Results of the most recent examination have not been finalized.

The Vermont Department of Financial Regulation completed a routine financial examination of Raven Re for the five year period ending December 31, 2017, and found no material deficiencies and proposed no adjustments to the financial statements as filed.

An examination for the five year period ending 2022 will be executed during the 2024 calendar year.

Dividend and Other Distribution Payment Limitations

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FGL Insurance’s maximum ordinary dividend capacity for 2024 is $0.

Any payment of dividends by FGL Insurance is subject to the regulatory restrictions described above and the approval of such payment by the board of directors of FGL Insurance, which must consider various factors, including general economic and business conditions, tax considerations, FGL Insurance’s strategic plans, financial results and condition, FGL Insurance’s expansion plans, any contractual, legal or regulatory restrictions on the

payment of dividends and its effect on RBC and such other factors the board of directors of FGL Insurance considers relevant.

For example, payments of dividends could reduce FGL Insurance’s RBC and financial condition and lead to a reduction in FGL Insurance’s financial strength rating.

See "Risk Factors—Risks Relating to Our Business—A financial strength ratings downgrade, potential downgrade, or any other negative action by a rating agency could increase our cost of capital, making it challenging to grow our business, and could hinder our ability to participate in certain market segments, thereby adversely affecting our results of operations and our financial condition” in this Information Statement.

Each year, FGL NY Insurance may pay a certain limited amount of ordinary dividends or other distributions as calculated under New York insurance laws without being required to obtain the prior consent of the NYDFS.

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Insurers that have less statutory capital than the RBC calculation requires are considered to have inadequate capital and are subject to varying degrees of regulatory action depending upon the level of capital inadequacy.

As of the most recent annual statutory financial statements filed with insurance regulators, the RBC ratios for FGL Insurance and FGL NY Insurance each exceeded the minimum RBC requirements.

As of the most recent annual statutory financial statements

filed with insurance regulators, the RBC ratios for FGL Insurance and FGL NY Insurance each exceeded the minimum RBC requirements.

It is desirable to maintain an RBC ratio in excess of the minimum requirements in order to maintain or improve financial strength ratings.

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RBC ratio was approximately 451% as of December 31, 2023.

See “Risk Factors — Risks Relating to Our Business — A financial strength ratings downgrade, potential downgrade, or any other negative action by a rating agency could increase our cost of capital, making it challenging to grow our business, and could hinder our ability to participate in certain market segments, thereby adversely affecting our results of operations and our financial condition” in this Information Statement.

See “Risk Factors — Risks Related to Our Business — A financial strength ratings downgrade, potential downgrade, or any other negative action by a rating agency could increase our cost of capital, making it challenging to grow our business, and could hinder our ability to participate in certain market segments, thereby adversely affecting our results of operations and our financial condition” in this Annual Report on Form 10-K.

See “ Bermuda Regulatory Overview — ECR and Bermuda Solvency Capital Requirements ” for a discussion of Bermuda regulatory requirements that impact F&G Life Re.

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Rather, unusual values are viewed as part of the regulatory early monitoring system.

In many cases, it is not unusual for financially sound companies to have one

or more ratios that fall outside the usual range.

In many cases, it is not unusual for financially sound companies to have one or more ratios that fall outside the usual range.

Insurance companies generally submit data annually to the NAIC, which in turn analyzes the data using prescribed financial data ratios, each with defined “usual ranges”.

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each ratio has a “usual range” of results.

As of December 31, 2022, FGL Insurance, FGL NY Insurance and Raven Re had three, four and three ratios outside the usual range, respectively.

The IRIS ratios for net income to total income (including realized capital gains and losses), change in premium and change in product mix for FGL Insurance were outside the usual range.

The IRIS ratios for net change in capital and surplus, gross change in capital and surplus, net income to total income (including realized capital gains and losses) and change in reserving ratio for FGL NY Insurance were outside the usual range.

The IRIS ratios for net income to total income (including realized capital gains and losses), adequacy of investment income and change in premium for Raven Re were outside the usual range.

As of December 31, 2023, FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re had four , one, two and three ratios outside the usual range, respectively.

The IRIS ratios for net income to total income (including realized capital gains and losses), total affiliated investments to capital and surplus, change in premium and change in product mix for FGL Insurance were outside the usual range.

The IRIS ratio for change in reserving ratio for FGL NY Insurance was outside the usual range.

The IRIS ratios for adequacy of investment income and change in premium for Raven Re were outside the usual range.

The IRIS ratios for net income to total income (including realized capital gains and losses), adequacy of investment income and surplus relief - Over $5 million capital and surplus for Corbeau Re were outside the usual range.

In all instances in prior years, regulators have been satisfied upon follow-up that no regulatory action was required.

FGL Insurance, FGL NY Insurance and Raven Re are not currently subject to regulatory restrictions based on these ratios.

FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re are not currently subject to regulatory restrictions based on these ratios.

Group Capital Calculation

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Legislation was introduced in New York in May 2022 that would require a group capital calculation.

The Company’s lead regulator has not yet adopted a requirement for Group Capital.

FNF’s lead regulator, which is also the Company’s lead regulator for this purpose, has not yet adopted a requirement for group capital.

Insurance Reserves

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Following the implementation of principle-based reserving for life insurance products, the NAIC is now developing a principle-based reserving framework for fixed annuity products.

The respective appointed actuaries for FGL Insurance, FGL NY Insurance and Raven Re must each submit an opinion on an annual basis that their respective reserves, when considered in light of the respective assets FGL Insurance, FGL NY Insurance and Raven Re hold with respect to those reserves, make adequate provision for the contractual obligations and related expenses of FGL Insurance, FGL NY Insurance and Raven Re.

FGL Insurance, FGL NY Insurance and Raven Re have filed all of the required opinions with the insurance departments in the states in which they do business.

The respective appointed actuaries for FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re must each submit an opinion on an annual basis that their respective reserves, when

considered in light of the respective assets FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re hold with respect to those reserves, make adequate provision for the contractual obligations and related expenses of FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re.

FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re have filed all of the required opinions with the insurance departments in the states in which they do business.

Credit for Reinsurance Regulation

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(ii) the posting of an unconditional and irrevocable letter of credit by a qualified U.S.

withholds transfer to the reinsurer of the assets, which support the liabilities to be owed by the reinsurer, with the ceding insurer retaining title to and exclusive control over such assets.

financial institution in favor of the ceding company allowing the ceding company to draw upon the letter of credit up to the amount of the unpaid liabilities of the reinsurer and (iii) a “funds withheld” arrangement by which the ceding company withholds transfer to the reinsurer of the assets, which support the liabilities to be owed by the reinsurer, with the ceding insurer retaining title to and exclusive control over such assets.

In addition, all U.S.

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In addition, investors deemed to have a direct or indirect controlling interest are required to make regulatory filings and respond to regulatory inquiries.

Under most states’ statutes, including those of Iowa and New York, acquiring 10% or more of the voting stock of an insurance company or its parent company is presumptively considered a change of control, although such presumption may be rebutted.

Under most states’ statutes, including those of Iowa and New York, acquiring 10% or more of the voting stock of an insurance company or its parent company is presumptively

considered a change of control, although such presumption may be rebutted.

In addition, the insurance laws of Iowa and New York permit a determination of control in circumstances where the thresholds for the presumption of control have not been crossed.

Similar laws apply to a direct or indirect change of ownership of Raven Re.

Any person who is deemed to acquire control over F&G, FNF, FGL US Holdings, CF Bermuda, FGLH, FGL Insurance, FGL NY Insurance, Raven Re or certain of their affiliates including any person who acquires 10% or more of our or FNF’s voting securities of FGL Insurance, FGL NY Insurance or certain of their affiliates, without the prior approval of the insurance regulators of Iowa and New York, will be in violation of those states’ laws and may be subject to injunctive action requiring the disposition or seizure of those securities by the relevant insurance regulator or prohibiting the voting of those securities and to other actions determined by the relevant insurance regulator.

Similar laws apply to a direct or indirect change of ownership of Raven Re and Corbeau Re.

Any person who is deemed to acquire control over F&G, FNF, FGL US Holdings, CF Bermuda, FGLH, FGL Insurance, FGL NY Insurance, Raven Re, Corbeau Re or certain of their affiliates including any person who acquires 10% or more of our or FNF’s voting securities of FGL Insurance, FGL NY Insurance or certain of their affiliates, without the prior approval of the insurance regulators of Iowa and New York, will be in violation of those states’ laws and may be subject to injunctive action requiring the disposition or seizure of those securities by the relevant insurance regulator or prohibiting the voting of those securities and to other actions determined by the relevant insurance regulator.

Insurance Guaranty Association Assessments

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In addition, FGL Insurance and FGL NY Insurance must file, and in many jurisdictions and for some lines of business obtain regulatory approval for, rates and forms relating to the insurance written in the jurisdictions in which they operate.

FGL Insurance is currently the subject of four ongoing market conduct examinations in various states.

FGL Insurance is currently the subject of two ongoing market conduct examinations in various states.

Market conduct examinations can result in monetary fines or remediation and generally require FGL Insurance to devote significant resources to the management of such examinations.

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Regulation of Investments

FGL Insurance, FGL NY Insurance and Raven Re are subject to state laws and regulations that require diversification of their investment portfolios and limit the amount of investments in certain asset categories, such as below investment grade fixed income securities, equity, real estate, other equity investments and derivatives.

FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re are subject to state laws and regulations that require diversification of their investment portfolios and limit the amount of investments in certain asset categories, such as below investment grade fixed income securities, equity, real estate, other equity investments and derivatives.

Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as either non-admitted assets for purposes of measuring surplus or as not qualified as an asset held for reserve purposes and, in some instances, would require divestiture or replacement of such non-qualifying investments.

We believe that the investment portfolios of FGL Insurance, FGL NY Insurance, and Raven Re as of December 31, 2022, complied in all material respects with such regulations.

We believe that the investment portfolios of FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re as of December 31, 2023, complied in all material respects with such regulations.

In 2023, the NAIC released new regulations the define a residual interest.

All the Company’s impacted insurance subsidiaries have complied with the new regulations.

Beginning January 1, 2025, these investments will be subject to a new accounting model, which the Company is currently in the process of implementing.

Also in 2023, the NAIC released new regulations that define the criteria for investments that can be classified as a bond, which the Company is currently in the process of implementing for all of its impacted insurance subsidiaries.

See “Risk Factors — Risks Related to Our Business — Increased regulation or scrutiny of alternative investment advisers, arrangements with such investment advisers and investment activities may affect BIS’s or, if engaged, any other asset manager’s ability to manage our investment portfolio or impact of the reputation of our business” in this Annual Report on Form 10-K.

On December 7, 2021, the NAIC assigned to its Macroprudential Working Group, the evaluation of a list of “Regulatory Considerations Applicable (But Not Exclusive) to Private Equity (PE) Owned Insurers.” Included within this list is the consideration of material increases in privately structured securities (both by affiliated and non-affiliated asset managers), which the NAIC says introduces other sources of risk or increases traditional credit risk, such as complexity risk and illiquidity risk.

As a result, the NAIC has issued several clarifying revisions to the guidance and disclosure requirements for related party and affiliated securities and continues to consider additional proposals and disclosure requirements.

In addition, the NAIC continues to refine its application of RBC factors for certain investments.

Privacy Regulation

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However, there can be no assurance that federal or state securities laws or state insurance laws and regulations will not be amended or interpreted to impose further requirements on FIAs.

If FIAs were to be treated as securities, federal and state securities laws would require additional registration and licensing of these products and the agents selling them, and FGL Insurance and FGL NY Insurance would be required to seek additional marketing relationships for these

products, any of which could impose significant restrictions on its ability to conduct operations as currently operated.

ERISA and Fiduciary Standards

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State and federal regulators have been adopting stronger consumer protection regulations that may materially impact our company, business, distribution, and products.

The NAIC adopted an amended Suitability in Annuity Transactions Model Regulation in February 2020 incorporating a requirement that agents act in the best interest of consumers without putting their own financial interests or insurer’s interests ahead of consumer interests.

The NAIC adopted an amended Suitability in Annuity Transactions Model Regulation in February 2020 incorporating a requirement that agents act in the best interest of

consumers without putting their own financial interests or insurer’s interests ahead of consumer interests.

The best interest requirement is satisfied by complying with four regulatory obligations relating to care, disclosure, conflict of interest, and documentation.

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FGL NY Insurance separately instituted new business procedures in response to the NYDFS best interest rule adopted in August 2019 which survived a legal challenge and deviates from the NAIC model regulation and is considered more onerous in certain respects including its broader application to life insurance sales.

In December 2020, the DOL issued its final version of an investment advice rule replacing the previous “Fiduciary Rule” that had been challenged by industry participants and vacated in March 2018 by the United States Fifth Circuit Court of Appeals.

The new investment advice rule reinstates the five-part test for determining whether a person is considered a fiduciary for purposes of ERISA and the Code and sets forth a new PTE referred to as PTE 2020-02.

In December 2020, the Department of Labor (“DOL”) issued its final version of an investment advice rule replacing the previous “Fiduciary Rule” that had been challenged by industry participants and vacated in March 2018 by the United States Fifth Circuit Court of Appeals.

The new investment advice rule reinstates the five-part test for determining whether a person is considered a fiduciary for purposes of ERISA and the Code and sets forth a new prohibited transaction exemption (“PTE”) referred to as PTE 2020-02.

The rule’s preamble also contains the DOL’s reinterpretation of elements of the five-part test that appears to encompass more insurance agents selling individual retirement account (“IRA”) products and withdraws the agency’s longstanding position that rollover recommendations out of employer plans are not subject to ERISA.

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Meanwhile, the DOL has publicly announced its intention to consider future rulemaking that may revoke or modify PTE 84-24.

On November 2, 2023, following previous attempts to expand fiduciary regulation for advisers, the DOL released a proposed rule (the “New Fiduciary Rule”) to significantly broaden the definition of “fiduciary” under ERISA.

Among other requirements, if finalized in its proposed form, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if they provide investment advice or make an investment recommendation to a retirement investor ( i.e., a plan, plan fiduciary, plan participant or beneficiary, IRA, IRA owner or beneficiary, or IRA fiduciary) for a fee or other compensation, and the person provides the advice or makes the recommendation on a regular basis as part of their business and the recommendation is provided under circumstances indicating that the recommendation is based on the particular needs or individual investor circumstances of the retirement investor.

Unlike the current ERISA standard, the New Fiduciary Rule would subject non-discretionary investment advice to retirement plans and accounts to the prudent-person “best interest” standard that has historically been reserved for investment advisors with discretionary authority or control over ERISA plan assets.

If the New Fiduciary Rule is adopted in its present form, certain of the Company’s agents would likely be considered fiduciaries for purposes of ERISA and the Internal Revenue Code—subjecting the Company, and the insurance industry on the whole, to greater regulatory risk.

Management believes these current and emerging developments relating to market conduct standards for the financial services industry may over time materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how the company supervises its distribution force, compensation practices, and liability exposure and costs.

In addition to implementing the compliance procedures described above, management is monitoring further developments closely and will be working with IMOs and distributors to adapt to evolving regulatory requirements and risks.

Structured Securities

within this list is the consideration of material increases in privately structured securities (both by affiliated and non-affiliated asset managers), which the NAIC says introduces other sources of risk or increases traditional credit risk, such as complexity risk and illiquidity risk.

The NAIC is considering proposals to increase disclosure requirements for these risks, as well as additional disclosure regarding private securities.

In addition, the NAIC continues to refine its application of RBC factors for certain investments and is considering changes related to the risk assessment of structured securities.

The SECURE 2.0 Act

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See “Risk Factors— Legal, Regulatory and Tax Risks—The SECURE 2.0 Act of 2022 may impact our business and the markets in which we compete .”

Corporate Alternative Minimum Tax

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law on August 16, 2022.

Among other changes, the Inflation Reduction Act introduced a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income and a 1% excise tax on treasury stock repurchases.

These provisions were effective January 1, 2023.

For purposes of calculating the adjusted financial statement income, the Company is included in the controlled group of FNF, its parent company.

Though the Company is subject to the minimum tax, the Company does not expect to be in a perpetual CAMT position.

The life companies will join the consolidated tax return group with FNF and file a life/non-life consolidated return once the five-year waiting period has completed in 2026, which should strengthen that position as FNF is not anticipating owing CAMT on its future returns.

For the year ended December 31, 2023, the Company was subject to CAMT, but there is no impact to total tax.

A CAMT credit carryforward was created and is expected to be able to be utilized in future years.

On November 15, 2021, NYDFS issued final Guidance for New York Domestic Insurers on Managing the Financial Risks from Climate Change, detailing NYDFS’s expectations related to domestic insurers' management of the financial risks from climate change.

These guidelines are applicable to FGL NY Insurance and are effective in 2022.

These guidelines are applicable to FGL NY Insurance and became effective in 2022.

Under the guidelines, climate change risk must be specifically included in an insurance group's enterprise risk management function.

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This guidance is applicable to FGL NY Insurance.

NYDFS intends to include questions relating to diversity and inclusion efforts in its examination process starting in 2022.

Bermuda Regulatory Overview

F&G Life Re is a Bermuda exempted company incorporated under the Companies Act 1981, as amended (the “Companies Act”) and registered as a Class E insurer under the Insurance Act.

F&G Life Re is a Bermuda exempted company incorporated under the Companies Act, 1981, as amended (the “Bermuda Companies Act”) and registered as a Class E insurer under the Insurance Act 1978, as amended, and its related regulations (the “Bermuda Insurance Act”).

F&G Life Re is regulated by the Bermuda Monetary Authority (“BMA”).

The Insurance Act provides that no person may carry on an insurance business in or from within Bermuda unless registered as an insurer under the Insurance Act by the BMA.

The Bermuda Insurance Act provides that no person may carry on an insurance business in or from within Bermuda unless registered as an insurer under the Bermuda Insurance Act by the BMA.

In deciding whether to grant registration, the BMA has broad discretion to act as it thinks fit in the public interest.

The BMA is required by the Insurance Act to determine whether the applicant is a fit and proper body to be engaged in the insurance business and, in particular, whether it has, or has available to it, adequate knowledge and expertise.

The BMA is required by the Bermuda Insurance Act to determine whether the applicant is a fit and proper body to be engaged in the insurance business and, in particular, whether it has, or has available to it, adequate knowledge and expertise.

The registration of an applicant as an insurer is subject to the insurer complying with the terms of its registration and such other conditions as the BMA may impose at any time.

In addition, the Insurance Act requires BMA approval of increases in control or dispositions of control of an insurance company.

In addition, the Bermuda Insurance Act requires BMA approval of increases in control or dispositions of control of an insurance company.

Effective January 1, 2015, Bermuda was placed on the NAIC’s List of Qualified Jurisdictions, which makes Bermuda-domiciled reinsurers that meet certain criteria to qualify as a certified reinsurer eligible for reduced

reinsurance collateral requirements under the NAIC’s Credit for Reinsurance Model Law and Regulations as adopted by various states.

F&G Life Re has not applied for a determination to be designated as a certified reinsurer in any state.

Bermuda has been awarded full equivalence for commercial insurers under Europe’s Solvency II regime applicable to insurance companies, which regime came into effect on January 1, 2016.

All insurers are required to implement corporate governance policies and processes as the BMA considers appropriate given the nature, size, complexity and risk profile of the insurer and all insurers, on an annual basis, are required to deliver a declaration to the BMA confirming whether or not they meet the minimum criteria for registration under the Insurance Act.

Effective January 1, 2020, Bermuda was granted NAIC Reciprocal Jurisdiction status, which makes Bermuda domiciled reinsurers that satisfy certain conditions eligible to be designated as a reciprocal jurisdiction reinsurer.

Under the NAIC’s Credit for Reinsurance Model Law and Regulations which has been adopted by all states, a ceding insurer may take credit for reinsurance ceded to a reciprocal jurisdiction reinsurer without posting collateral.

F&G Life Re has not applied for a determination to be designated a reciprocal jurisdiction reinsurer in any state.

All insurers are required to comply with the Bermuda Insurance Code of Conduct, which is a codification of best practices for insurers provided by the BMA, and to submit annually to the BMA with its statutory financial return a declaration of compliance confirming it complies with the Bermuda Insurance Code of Conduct.

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Thereafter the BMA keeps its analysis of relative risk within individual institutions under review on an ongoing basis, including through the scrutiny of audited financial statements, and, as appropriate, meeting with senior management during onsite visits.

The Insurance Act imposes on Bermuda insurance companies solvency and liquidity standards, as well as auditing and reporting requirements.

The Bermuda Insurance Act imposes solvency and liquidity standards on Bermuda insurance companies, as well as auditing and reporting requirements.

Certain significant aspects of the Bermuda insurance regulatory framework are set forth below.

Minimum Solvency Margin.

The Insurance Act provides that the value of the assets of an insurer must exceed the value of its liabilities by an amount greater than its prescribed minimum solvency margin.

The Bermuda Insurance Act provides that the value of the assets of an insurer must exceed the value of its liabilities by an amount greater than its prescribed minimum solvency margin.

The minimum solvency margin that must be maintained by a Class E insurer is the greater of:

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and (iii) 25% of that insurer’s enhanced capital requirement (“ECR”).

An insurer may file an application under the Insurance Act to waive the aforementioned requirements.

An insurer may file an application under the Bermuda Insurance Act to waive the aforementioned requirements.

ECR and Bermuda Solvency Capital Requirements (“BSCR”).

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Furthermore, to enable the BMA to better assess the quality of the insurer’s capital resources, a Class E insurer is required to disclose the makeup of its capital in accordance with its 3-tiered capital system.

An insurer may file an application under the Insurance Act to have the aforementioned ECR requirements waived.

An insurer may file an application under the Bermuda Insurance Act to have the aforementioned ECR requirements waived.

Restrictions on Dividends and Distributions.

In addition to the requirements under the Companies Act (as discussed below), the Insurance Act limits the maximum amount of annual dividends and distributions that may be paid or distributed by F&G Life Re without prior regulatory approval.

In addition to the requirements under the Bermuda Companies Act (as discussed below), the Bermuda Insurance Act limits the maximum amount of annual dividends and distributions that may be paid or distributed by F&G Life Re without prior regulatory approval.

F&G Life Re is prohibited from declaring or paying a dividend if it fails to meet its minimum solvency margin, or ECR, or if the declaration or payment of such dividend would cause such breach.

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In the event a dividend complies with the above, F&G Life Re must ensure the amount of any such dividend does not exceed that excess.

Furthermore, as a Class E insurer, F&G Life Re must not declare or pay a dividend in any financial year which would exceed 25% of its total capital and statutory surplus, as set out in its previous year’s financial statements, unless at least seven days before payment of such dividend F&G Life Re files with the BMA an affidavit signed by at least two directors of F&G Life Re and its principal representative under the Insurance Act stating that, in the opinion of those signing, declaration of such dividend has not caused the insurer to fail to meet its relevant margins.

The Companies Act also limits F&G Life Re’s ability to pay dividends and make distributions to its shareholders.

Furthermore, as a Class E insurer, F&G Life Re must not declare or pay a dividend in any financial year which would exceed 25% of its total capital and statutory surplus, as set out in its previous year’s financial statements, unless at least seven days before payment of such dividend F&G Life Re files with the BMA an affidavit signed by at least two directors of F&G Life Re and its principal representative under the Bermuda Insurance Act stating that, in the opinion of those signing, declaration of such dividend has not caused the insurer to fail to meet its relevant margins.

The Bermuda Companies Act also limits F&G Life Re’s ability to pay dividends and make distributions to its shareholders.

F&G Life Re is not permitted to declare or pay a dividend, or make a distribution out of its contributed surplus, if it is, or would after the payment be, unable to pay its liabilities as they become due or if the realizable value of its assets would be less than its liabilities.

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Total statutory capital consists of the insurer’s paid in share capital, its contributed surplus (sometimes called additional paid in capital) and any other fixed capital designated by the BMA as statutory capital.

Bermuda Corporate Income Tax

The Corporate Income Tax (“CIT”) Act of 2023 was passed in Bermuda on December 27, 2023.

The CIT Act will commence on January 1, 2025 and will apply a statutory rate of 15% to the taxable income or loss of Bermuda tax resident entities and permanent establishments.

F&G Life Re, a 953(d) company with no or minimal US permanent tax differences, is not expected to owe any Bermuda CIT due to the foreign tax credit.

The deferred tax asset recorded for the year ended December 31, 2023 of $24 million has a full valuation allowance.

As a result, there is no material impact to the financial statements.

Cayman Islands Regulatory Overview

F&G Cayman Re Ltd.

(“F&G Cayman Re”) is licensed as a class D insurer in the Cayman Islands by CIMA.

(“F&G Cayman Re”) is a Cayman Islands exempted company incorporated under the Companies Act, (2023 Revision) as amended, (the “Cayman Islands Companies Act”) and licensed as a Class D insurer in the Cayman Islands under the Insurance Act, 2010 as amended and its related regulations (the “Cayman Islands Insurance Act”).

F&G Cayman Re is regulated by the Cayman Islands Monetary Authority (“CIMA”).

The Cayman Islands Insurance Act provides that no person may carry on an insurance business in or from within the Cayman Islands unless licensed under the Cayman Islands Insurance Act.

CIMA has broad discretion in its consideration of whether to grant a license and must act in the public interest.

CIMA is required by the Cayman Islands Insurance Act to determine whether an applicant is a fit and proper body to be engaged in insurance business.

A licensed insurer must comply with the terms of its license and such other conditions as CIMA may impose at any time.

In addition, the Cayman Islands Insurance Act requires CIMA approval of increases in control or dispositions of control of an insurance company.

All insurers are required to implement corporate governance policies as CIMA considers appropriate given the nature, size, complexity and risk profile of the insurer.

All insurers are also required to comply with the CIMA's Rules and Statements of Guidance as applicable to insurers which is a codification of best practices provided by CIMA, and to submit annually to CIMA audited financial statements and a declaration of compliance confirming it complies with the Cayman Islands Insurance Act.

Capital Requirements.

The Cayman Islands Insurance Act provides that an insurer must maintain a minimum capital requirement based on its license class.

For a Class D insurer, the minimum capital requirement is $50,000,000.

In addition, an insurer must maintain a minimum margin of solvency at a level equal to or in excess of the total prescribed capital requirement which is established by reference to either the applicable prescribed capital

requirements based on license class or an internal capital model approved by CIMA.

Notwithstanding the minimum capital requirements, CIMA may set an enhanced prescribed capital requirement in respect of any insurer.

CIMA may also, for class B, C and D insurers, exclude from the calculations assets that it deems inappropriate.

CIMA utilizes a risk-based approach to licensing and supervising insurers and to determining limitations and/or specific requirements.

CIMA reviews on an ongoing basis, an insurer’s audited financial statements, actuarial valuation report and, as appropriate, meeting with senior management during onsite visits.

The Cayman Islands Insurance Act and regulations promulgated thereunder impose solvency and liquidity standards on Cayman Islands insurance companies, as well as auditing and reporting requirements.

As a regulated insurance company, F&G Cayman Re is subject to the supervision of CIMA and CIMA may at any time direct F&G Cayman Re, in relation to a policy, a line of business or the entire business, to cease or refrain from committing an act or pursing a course of conduct and to perform such acts as in the opinion of CIMA are necessary to remedy or ameliorate the situation.

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Any failure to meet the applicable requirements or minimum statutory capital requirements could subject it to further examination or corrective action by CIMA, including restrictions on dividend payments, limitations on our writing of additional business or engaging in finance activities, supervision or liquidation.

Human Capital Resources

As of December 31, 2023, we had 1,165 full-time equivalent employees.

None of our employees are subject to collective bargaining agreements.

We believe that our relations with employees are generally good.

Talent Management

F&G embeds diversity, equity and inclusion into our culture and is embraced within our core values - Collaborative, Authentic, Dynamic and Empowered.

These core values coupled with our competitive total rewards philosophy and flexible work environment provide an attractive employee value proposition.

We recruit top talent to join our team and provide opportunities for personal and professional growth.

Our development programs are designed to provide opportunities for all employees to grow and develop.

Development programs are aligned to the skills and behaviors defined in our F&G Competencies - Think Enterprise Wide, Leverage Data, Center Equity, Communicate with Courage, Be Accountable- and ensure our employees are developing skills that are critical to achieve business goals now and in the future.

Leadership Academy is our premiere leadership development program designed to develop the next level of leaders at F&G and enables cross-functional leaders to hone their leadership capability and network with colleagues from across the enterprise.

Employee engagement is measured annually through two surveys.

Our strong engagement scores on the Energage Engagement Survey were rewarded with several “Top Places to Work” designations including Leadership, Innovation, Compensation & Benefits, Work-Life Flexibility and Financial Services Industry.

We are honored to be a recipient of the “Top Workplaces USA” designation in 2023 and 2022 and a recipient of the “Top Workplaces Iowa” designation since 2018.

The Gallup Employee Engagement survey data is our key metric to support strategic decisions on engaging and retaining our talent.

Initiatives such as our Employee Resource Groups and our Connection Week program are a few examples of programs that were identified based on our employee engagement data.

At F&G, we provide comprehensive benefits designed to meet the needs of our employees and demonstrate the value they bring to the organization.

Employees are eligible to participate in our 401(k) savings plan, to which we make matching and annual nondiscretionary contributions.

Employees are also eligible to participate in our Employee Stock Purchase Plan with a competitive match feature.

We offer competitive health care benefit options for medical, dental and vision coverage, as well as a health savings account with an employer contribution.

Other benefits offerings include health care and dependent care flexible spending accounts, employee assistance program, wellness reimbursements, charitable matching donations, and adoption assistance.

To support a healthy work-life balance, all employees receive paid time off, holidays, volunteer time off and paid parental leave for new parents.

Employee retention is critical to the success of our business.

Turnover is monitored and analyzed to ensure we are protecting our most valuable asset, our team members.

Our turnover rates have been consistently below national and industry-specific benchmarks.

Our Approach to Environmental, Social, and Governance (“ESG”)

F&G’s solutions inherently provide a social good, and that sentiment of service also provides the foundation for F&G’s culture and guides business operations as well as interactions within our communities.

Our Company and our Board of Directors seek to address ESG issues to better serve our employees, business partners, and the communities impacted by our business.

To honor that goal, our management team leads our ESG efforts with oversight from the Audit Committee, who reports our ESG progress and efforts to the Board of Directors.

Being Environmentally Conscious:

F&G works to integrate environmental management practices into our operations, including our facilities.

As part of our commitment to preserve the environment, we understand that we not only have a duty to protect the local environments where we operate, but that environmental change also poses risks and opportunities to our business.

In 2022, we formed a Climate Risk Working Group to conduct our first climate risk assessment to understand climate-related risks that may impact our business and to manage these risks through our enterprise risk management systems.

F&G aims to reduce the Company’s environmental footprint through a variety of sustainable and environmentally sound programs throughout its new headquarters building in Des Moines, Iowa.

This includes:

• Sensors on restroom equipment to limit excess water flow

• Recycling bins at each workspace

• Installation of motion sensors to reduce electricity use

• Flexible work from home arrangements which reduce commute time and paper usage

Being the Best Place to Work:

F&G’s products and services inherently provide a social good, and that sentiment of service also provides the foundation for F&G’s culture and guides business operations as well as interactions within our communities.

Governance - Board oversight

Our Company and our Board seek to address ESG issues to better serve our employees, business partners, and the communities impacted by our business.

The F&G AC is responsible for overseeing the Company’s ESG risks.

The AC Charter states that “The Committee shall review with management the Company’s policies and practices with respect to risk assessment and risk management, including with respect to … environmental, social, and governance risk, except with respect to those risks for which oversight has been assigned to other committees of the Board or retained by the Board.” The AC meets at least four times per year.

Climate expertise resides on the Board and the AC.

The AC receives updates from the Company’s Chief Risk Officer (“CRO”) on a quarterly basis regarding enterprise risk management (“ERM”) including an overview of current and emerging risks.

Such risks may include climate risks as a subset of investment risks and an update on overall ESG-related matters.

The CRO will continue to update the AC on F&G’s climate risk profile as risks and opportunities arise.

Management’s role in assessing and managing ESG-related risks and opportunities.

F&G’s management team leads ESG efforts with oversight from the AC, who reports the Company’s ESG progress and efforts to the Board.

F&G’s Chief Executive Officer (“CEO”) has the ultimate responsibility within management for governance-related matters at F&G.

The CEO, CRO, General Counsel (“GC”), SVP Chief People Officer (“SVP-PO”), Deputy Chief Investment Officer (“D-CIO”), and Chief Financial Officer (“CFO”), SVP Investor & External Relations comprise the ESG Executive Steering Committee, which is responsible for making key enterprise decisions around strategy, capital and asset allocation, planning and budgeting, and developing human capital.

The CRO chairs the ESG Executive Steering Committee.

The D-CIO, GC and SVP-PO are responsible for assessing the recommendations made to the ESG Executive Steering Committee and providing effective input prior to agreeing on strategy, initiatives, or other courses of action.

The Senior Vice President of Investor & External Relations and the CFO are consulted for input prior to final approval of actions.

The ultimate decision rests with the CEO.

F&G has an ESG working group that is comprised of functional and business-level management responsible for performing any underlying analysis, research, documentation, and implementation supporting the ESG Executive Steering Committee efforts.

This group may spin up sub-working groups or task forces to address specific activities.

For example, a targeted group was formed to assist with a pilot climate stress scenario analysis performed in 2023.

Additional governance committees

The AC and ESG Executive Steering Committee utilize and rely on other groups and committees within F&G beyond the ESG working group to ensure all risks and opportunities related to ESG are addressed appropriately.

The ERMC is an enterprise committee, consisting of C-suite level executives including the CEO, CFO, CRO, and Chief Investment Officer, who are responsible for reviewing risks and associated strategy across the business.

The ESG risks are included in the overall F&G Risk Register that is the basis for quarterly risk assessments.

The overall risk posture of the organization is updated in the quarterly ERM dashboard report.

The development of an enterprise-ESG program, including climate-risks, is included in F&G’s 2023 Own Risk and Solvency Assessment (“ORSA”) summary report, and articulates the responsibility for actively monitoring and focusing resources on ESG-related activities.

The Investment Committee provides oversight of investments held, approves new asset classes, and reviews investment managers and mandates.

The Investment Committee also oversees the relationships with F&G’s Asset Management companies, which includes assessing their ESG policies and practices for consistency with F&G’s missions and vision.

The Diversity, Equity and Inclusion (“DEI”) Advisory Council (“Council”) is an ongoing cross functional group that includes the CEO & President.

The Council was established to help create a comprehensive DEI strategy, objectives, and success metrics for DEI.

The Council provides advice, guidance, and championship for the DEI strategy execution, and helps to ensure a high-functioning interaction model for the Council, Employee Resource Groups (“ERG”), Human Resources, Communications, and the business lines.

The Council reports initiatives and progress up through the Management Committee as needed.

F&G’s product solutions provide social good by supporting clients to achieve their retirement goals and to improve their financial lives, while protecting against unforeseen events through life insurance policies.

This sentiment of service provides the foundation for F&G’s culture and guides business operations as well as interactions within our communities.

Through the underlying ESG investment policies of F&G’s asset management partners, the investment portfolio supporting the current range of products offered by F&G considers climate-related risks and the transition to a low carbon economy.

As long-term investors, F&G understands the energy transition will be gradual, and the focus should be on investment outcomes that will support our fiduciary duty to our clients and the investment goals of our clients.

F&G completed a qualitative assessment of climate risks and opportunities in 2023 with input from the ESG Executive Steering Committee and ESG working group.

The assessment identified potential impacts of climate change on the F&G businesses and financial plans over short-, medium-, and long-term time horizons.

Generally, short term is defined as present and 1 – 5 years in the future, medium-term is 5- 10 years in the future, and long-term is 10-30 years in the future.

The assessment also identified the risks applicable to F&G based on physical presence, products sold, and credit/counterparty risk.

The identified risks were added to the enterprise risk register for inclusion in the quarterly self-assessment and annual risk assessment processes.

Most risks can be addressed more acutely in the short and medium term, as well as integrated into long-term planning.

Impact of pending and passed legislation

Developments in national, state, and international regulations related to climate risk are increasing.

Business emissions are categorized into Scope 1, 2 and 3 emissions and account for both direct and indirect emitted gases (“GHG”).

Scope 1 emissions are GHGs released directly from the business.

Scope 2 emissions are indirect GHGs

released from the energy purchased by an organization.

Scope 3 emissions are also indirect GHG emissions, accounting for upstream and downstream emissions of a product or service and emissions across a business value chain.

Additional compilation of data is required for disclosure requirements of scope 1 & 2 emissions, which impacts operational processes, although not material in cost.

Moreover, F&G is diligently working to identify and gather the appropriate data for Scope 3 emissions.

F&G provides information on ESG efforts to its investor, client, and employee stakeholders through the State Climate Survey, client and investor surveys, and internal communications.

While there is interest in F&G’s efforts, demand for changes to F&G products has not changed as a result of information provided.

Capital expenditures related to climate change

Current expenditures related specifically to climate change have been minimal.

F&G added an ESG module to the Governance, Risk, and Compliance application to maintain risk information and metrics related to ESG efforts.

Future expenditures will likely increase as F&G moves forward with plans for ongoing scenario analysis and data stores to facilitate the calculation of Scope 3 emissions.

Operational sustainability and workforce flexibility

F&G aims to reduce the company’s environmental footprint through a variety of sustainable and environmentally sound programs within its LEED-certified headquarters building in Des Moines, Iowa.

F&G also promotes flexible work from home arrangements which reduce commute time, greenhouse gas emissions, and paper usage.

F&G is committed to providing employees with the opportunities and flexibility they need to succeed, as well as ensuring a culture of belonging and inclusion by:

• Providing competitive benefits offerings to meet diverse employee needs including more flexible PTO, an Employee Assistance Program and a wellness reimbursement

• Supporting employee growth through learning programs, tuition reimbursement, and manager and leadership training

• Increasing the percentage of women and people of color in leadership roles;

F&G’s executive team is now comprised of 40% female leadership

• Driving diversity and inclusion in the workplace and beyond through partnerships including:

◦ The International Association of Black Actuaries and The Organization of Latino Actuaries where F&G employees are members and serve as a network for potential new hires

◦ Women Lead Change, an organization dedicated to the development, advancement and promotion of women, their organizations, and impact to the economy and future workforce

◦ Capitol City Pride, brings together members of Iowa’s LGBTQ+ community, allies and businesses and honored F&G as the 2021 Corporate Partner of the Year

• Enabling our employee-led Employee Resource Groups work in creating awareness and support around important topics such as mental health awareness with guidance from a Diversity, Equity and Inclusion (“DEI”) Advisory Council

• Ranking as a Top Workplaces company for 5 consecutive years according to the Des Moines Register Top Workplace Survey

Being a Responsible & Award-Winning Community Partner:

F&G believes people are not in a position to turn their aspirations into reality if their most essential needs are not satisfied.

Therefore, F&G focuses its community engagement and charitable giving to support essential needs such as food insecurity and housing.

In 2021 and 2020, F&G won awards from the United Way for its corporate support and employee involvement.

• Providing well rounded benefits that support employees diverse needs such as, domestic partner medical coverage, gender dysphoria services, $50k lifetime maximum for infertility services ($35k is United Health Care standard), travel & lodging reimbursement for services rendered out-of-state due to state law, Employee Assistance Program including 6 free counseling sessions per person per incident per year, in addition to other emotional health solutions, $10k in adoption assistance benefit, parental leave benefits, flexible PTO and wellness reimbursements.

• Supporting employee training, developing and educating through LinkedIn learning with a wide array of topics (e.g., Using Gender inclusive language, Fueling your Company Culture, Inclusive Leadership, Unconscious Bias, etc.), tuition reimbursement, and manager and leadership training.

• Hosting educational and developmental events such as, a Mental Awareness and Racial Equity Master Class, a Mental Health panel, and a panel on Neurodiversity.

• Growing the share of people of color in leadership roles (VP+) from 2022 to 2023;

F&G’s management committee (C-suite) is comprised of 40% female leadership.

• Recognized for several Cultural Excellence Awards in 2022 and 2023 through Energage, for excellence in 1) Compensation and Benefits, 2) Leadership, 3) Work-Life Flexibility, 4) Innovation, 5) Appreciation, and 6) Employee Wellbeing.

Diversity and inclusion

Specific diversity and inclusion programs and organizations supported by F&G include:

• The International Association of Black Actuaries and The Organization of Latino Actuaries, both of which F&G employees are members of and serve as a network for potential new hires.

• Women Lead Change, an organization dedicated to the development, advancement and promotion of women, their organizations, and impact on the economy and future workforce.

• Capitol City Pride, which brings together members of Iowa’s LGBTQ+ community, allies and businesses.

• Enabling our employee-led Council’s work in creating awareness and support around important topics such as mental health awareness, including the launch of ERGs.

ERGs are a safe space for employees of similar identity/affinity to network, grow, voice, engage, and help the organization build a culture of inclusion and belonging.

They are forums that deliver intentional, impactful and powerful programming for the benefit of members.

Our ERGs launched in 2023 include Women’s Empowerment, Wellness, PRIDE, F&G Ultimate Network (“F.U.N”), and Community Impact, and in early 2024, we launched two new ERGs, Black Originators, Leaders and Doers (“BOLD”) and Asian Pacific Islander Alliance (“APIA”).

Community engagement

F&G focuses its community engagement and charitable giving to support essential needs such as food insecurity and housing.

In recent years, F&G has won multiple awards for its corporate support and employee involvement with United Way, including Outstanding Corporate/Foundation Philanthropist for 2023 from the Association of Fundraising Professionals Central Iowa Chapter.

Other community investments include:

• Serving as founding partner of the American Council of Life Insurers’ Impact Investments Initiative to make housing affordable and sustainable in underserved communities

• Serving as founding partner of the American Council of Life Insurer’s Impact Investments Initiative to make housing affordable and sustainable in underserved communities.

• Fostering partnerships in the Des Moines community with the Iowa Food Bank and Polk County Housing Trust.

• Offering company-wide volunteer events for employees to make an impact locally with organizations such as Rebuilding Together.

• Providing employees with 16 hours of paid time off per year for corporate volunteering and 16 hours for personal volunteering

• Providing employees with 32 hours of paid time off per year for volunteering.

• Supporting dozens of other community organizations identified by F&G employees in support of essential needs within the community where they live and work.

Investment Portfolio climate scenario analysis

F&G conducted a one-time pilot scenario analysis exercise with the advisory support of Baringa using BlackRock’s Aladdin Climate technology (incorporating Baringa’s industry-leading Climate Change Scenario Model).

This analysis included an overall scenario analysis on the investment portfolio and assessed the transition risks by asset class and sector for the portfolio using different climate scenarios.

The overall scenario analysis covered multiple industry-recognized scenarios, including a 2°C or lower scenario.

The pilot run scenario included nine sectors of the global economy in three countries, representing a cross-section of F&G’s physical and transition risk exposures across 21 securities.

These securities were a high-level representation of F&G’s public asset ownership and real estate assets.

The selection captured high-carbon positions to better understand those risks.

Three scenarios (orderly, disorderly, and hot house) were used in the assessment to evaluate expected risk under forward-looking climate scenarios.

Orderly and Disorderly scenarios include transition and physical risk while Hot House captured physical risk only.

Network for Greening the Financial System scenarios were leveraged for transition risk and Intergovernmental Panel on Climate Change scenarios were used for physical risk.

The Orderly scenario reflects an aggressive introduction of carbon pricing from 2030, which directly and negatively impacts the financials of those companies and sectors which are more carbon intensive.

After the initial value decline, there is stabilization from 2030 onwards as the grid decarbonizes rapidly (reducing Scope 2 emissions for most companies).

The Disorderly scenario follows a similar profile to the Orderly scenario but there is little movement until 2030 when the delayed transition starts.

At this point the value decline is very steep but flattens from 2035 onwards.

Both Order and Disorderly arrive at a similar impact in 2050 by reaching net zero.

In contrast, there is no transition risk in the Hot House scenario.

In this scenario the only driver of value change is the impact of physical risks disrupting operations and/or causing damage to physical assets owned by individual companies.

The impact is lower than the transition risk scenarios as physical risk becomes more significant in the modeling only after 2050, past the end point of the current scenario analysis.

For the pilot portfolio temperature alignment was calculated, aligning F&G’s pilot portfolio with a warming trajectory through 2050.

The analysis also included an assessment of physical risk of three commercial properties held in the F&G portfolio.

The evaluation included electricity and gas expenditures, outdoor labor costs, vulnerability to rising sea levels, and weather-related catastrophes.

The overall results of the pilot scenario analysis indicated larger impacts under the Orderly and Disorderly scenarios by 2050, as expected, highlighting energy-intensive industries.

Utilities saw larger variability between the issuers, while energy and airlines saw more uniform impacts.

Automobile manufacturers saw the largest impact and variability, while financials and structured products had smaller impacts.

F&G plans to use climate scenario analysis with the intention of expanding its assessments and looking for opportunities to better incorporate its investment and enterprise risk process over the next few years.

The pilot results will aid in developing a comprehensive strategy related to climate risk, which includes a plan to conduct an overall scenario analysis on the investment portfolio and to assess transition risk by asset class and sector for the portfolio using different climate scenarios.

Risk Management

F&G’s ERM policy defines the approach to risk identification, risk assessment, and risk response.

The ERMC owns the ERM Policy and is responsible for reviewing and approving the policy on an annual basis.

Updates to the policy are determined by the ERM leadership team.

The ERM process includes a risk appetite statement which outlines the level of acceptable risk in the pursuit of overall financial and strategic objectives.

Risk appetite statements and risk tolerances are linked to the strategic objectives set out in the corporate plan and are stressed using a variety of multifactor scenarios.

Qualitative and quantitative approaches are used to manage risk appetite and are monitored as part of the strategy and planning process.

Risks are defined in the risk taxonomy, based on International Organization for Standardization (“ISO”) 31000, and captured in a risk library.

The taxonomy includes four parent categories:

Operational, Governance/Strategy, Product/Distribution, and Investments.

These four parent categories are broken down further into 31 sub-categories (IMO/Agent Servicing, Business Continuity/Disaster Recovery, Third-Party Administration/Outsourcing, Fraud, Human Resources/People, Policy Administration, IT Systems, Information Security, Accounting and Financial Reporting, Actuarial and Governance Operations, Project Management, Model Risk, Compliance, Capital Management, Risk Management, Business Strategy, Corporate Governance, Marketing/Communications, ESG, Legal/Litigation, Regulatory Environment, Reputation, Pricing and Product Design, Product Governance, In-force Performance Management, Distribution, Asset Liability Management (“ALM”), Investment Guidelines and Compliance, Credit, Foreign Exchange, and Liquidity Risk).

The library identifies risk ownership, corresponding risk limits, and high-level controls for monitoring, reporting, and mitigating material risks.

Risks are identified via ongoing discussions between ERM and the business partners, as well as through monitoring of industry groups and publications.

New and emerging risks are reviewed at the ERMC and added to the risk register.

Each quarter, ERM works with the risk owners to assess the impact and likelihood of each risk in the register to determine the inherent risk rating, and then apply a control assurance rating to identify the residual risk rating.

The rating scales are three by three (low, medium, high).

The quarterly self-assessment results are reported in the ERM dashboard to the ERMC.

The dashboard reflects the residual risk ratings at the sub-category level for the Enterprise, and the direction the risk is trending (increasing, decreasing, stable).

F&G monitors risks via an annual risk assessment, the quarterly risk self-assessments, quarterly ERMC meetings, monthly Investment Committee meetings, monthly Capital Committee meetings, and ad hoc analysis.

The overall risk posture of the organization is updated in the ERMC meeting report that includes a CRO assessment, emerging risks, ERM dashboard, market risk discussion, stress testing results, and risk appetite measures.

The development of an enterprise ESG program, including climate risks, is included in F&G’s 2023 ORSA summary report, and articulates the Management Committee’s responsibility for actively monitoring and focusing resources on ESG-related activities.

Overall climate risk was deemed to be minimal by the ESG Steering Committee during a qualitative review of risks and opportunities based on the insurance-related products sold by F&G.

As a life insurance and annuities company, physical climate risks that are material risks for property and casualty insurers are less impactful.

Climate-related underwriting risk (mortality/morbidity) is monitored within the overall risk framework, although it is not considered material to F&G’s overall business.

F&G recognizes the rapidly evolving regulatory environment on climate-related risks and opportunities and has a regulatory monitoring process.

The ongoing monitoring of ESG-related regulations is included in the overall regulatory monitoring process overseen by the Legal Department.

Any new regulation passed related to ESG is entered into the Comply On Demand Enterprise system and assigned to subject matter experts for review.

If policy or procedure changes are required, the implementation of those changes is monitored through this system.

Climate risks will be identified and assessed in accordance with the ERM Policy and managed through the ERM framework.

The framework utilizes the three lines of defense model:

Business/Operational Management, the ERM function (Risk Management), and Internal Audit.

The 1st line of defense develops and implements mitigation activities for risks in business activities and provides monitoring and reporting of such risks on an ongoing basis;

the 2nd line of defense challenges and supports the 1st line of defense, while helping to identify activities to mitigate risks and advise on risk management activities.

The 3rd line of defense provides management with independent, objective assurance of the overall effectiveness, and efficiency of the design and operation of internal controls.

The framework and process alignment includes utilization of committee structure to identify, assess, and prioritize risk to ensure both senior management and the board of directors understand and can manage the risk profile.

Any changes in business trends as a result of climate change would be identified through Risk Management interaction with the 1st line of defense discussions and risk assessments.

No material or significant changes due to climate change have been identified to date.

Investment risk is one of the largest sources of risk to the company, and the Deputy CRO - Investments with the Deputy Chief Investment Officer are responsible for integrating ESG, including understanding and managing climate-related risks, into F&G’s investment process.

Our primary asset manager generally considers material ESG factors a key part of evaluating new investments.

By considering applicable ESG factors in the investment process, they aim to identify and address material investment risks and opportunities.

They also continuously monitor ESG related risks throughout the investment holding period and engage on certain focus areas such as Climate Risk, Diversity & Inclusion and good Corporate Governance.

Metrics and Targets

F&G is evaluating how climate-related metrics can be leveraged to better understand the potential risks and opportunities to our business.

F&G anticipates conducting an expanded quantitative analysis of the investment portfolio, as well as considering other metrics and proactive contributions to reduce uncertainty, filling data gaps, and working with investment managers and other stakeholders to collect additional data about climate risks.

F&G anticipates gathering Scope 1 and Scope 2 emissions in the coming year for additional office locations in New York, Bermuda and Cayman.

F&G is also evaluating industry developments related to the available frameworks and methodologies to quantify and collect emissions to better understand our scope 3 emissions footprint.

F&G’s existing risk management framework includes various metrics to manage risks across the investment portfolio.

F&G is currently assessing the development of climate-related targets to improve the existing risk management framework.

Efforts will continue to develop and enhance key policies and statements to reflect our ongoing commitment to mitigating climate-related risk, including climate scenario analysis, and F&G will continue to monitor risks and opportunities related to our climate risk assessment.

Available Information

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Item 1. Business