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Item 1A. Risk Factors

2024-02-29 compared with 2023-02-27 · 154 added, 157 removed, 487 unchanged (39% of the section changed)

You should carefully consider the following risks and other information in this Annual Report in evaluating F&G and our common stock.

You should carefully consider the following risks and other information in this Annual Report on Form 10-K in evaluating F&G and our common stock.

The occurrence of any of the following risks could materially and adversely affect our business, financial condition, prospects, results of operations and cash flows.

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risks related to economic conditions and market conditions;

risks related to legal, regulatory and tax;

legal, regulatory and tax risks;

risks relating to our indebtedness and financing;

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Our debt instruments may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

At December 31, 2022, we had outstanding (i) $550 million of borrowings under an unsecured revolving credit agreement with Bank of America, N.A., as administrative agent, the lenders (“the Lenders”) and guarantors party thereto and the other parties thereto (the “Credit Agreement”) and (ii) $550 million aggregate principal amount of 5.50% senior notes due 2025 (the “5.50% F&G Notes”).

A net partial revolver paydown of $35 million was made on January 6, 2023 and, on February 21, 2023, we entered into an amendment with the Lenders to increase the available aggregate principal amount of the Credit Agreement by $115 million to $665 million.

On January 13, 2023, we completed the issuance and sale of $500 million aggregate principal amount of our 7.40% Senior Notes due 2028 (the "7.40% F&G Notes").

The Credit Agreement imposes significant operating and financial restrictions, including financial covenants, and the Credit Agreement and the indenture governing the 5.50% F&G Notes limit, among other things, our and our subsidiaries’ ability to:

• incur or assume additional indebtedness, including guarantees;

• incur or assume liens;

• engage in mergers or consolidations;

• convey, transfer, lease or dispose of assets;

• make certain investments;

• enter into transactions with affiliates;

• declare or make any dividend payments or distributions or repurchase capital stock or other equity interests;

• change the nature of our business materially,

• make changes in accounting treatment or reporting practices that affect the calculation of financial covenants, or change our fiscal year;

• enter into certain agreements that would restrict the ability of subsidiaries to make payments to us.

Upon the occurrence of a “change of control triggering event” as defined in the indentures governing the 5.50% F&G Notes and 7.40% F&G Notes, respectively, the holders of the notes will have the right to require us to repurchase all or any part of their notes at a price equal to 101% of the principal amount plus any accrued but unpaid

interest to the repurchase date.

In addition, under the indenture governing the 7.40% F&G Notes, the interest rate payable on the 7.40% F&G Notes may be subject to adjustment if either S&P or Fitch (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the credit ratings assigned to such notes.

As a result of these covenants and restrictions, we are, and will be, limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities.

The terms of any future indebtedness we may incur could include additional or different restrictive covenants.

If we fail to comply with these covenants in the future, we would be required to obtain waivers or amend the covenants, which we may not be successful in obtaining.

Our failure to comply with the restrictive covenants in existing or future debt instruments could result in an event of default, which, if not cured or waived, could result in our being required to repay outstanding indebtedness before their due date.

At December 31, 2023, we had outstanding (i) $345 million in aggregate principal of our 7.95% Senior Notes due 2053 (the “7.95% F&G Notes”), (ii) $500 million in aggregate principal of our 7.40% Senior Notes due 2028 (the “7.40% F&G Notes”), (iii) $365 million of borrowings under an unsecured revolving credit agreement with Bank of America, N.A., as administrative agent, the lenders ( the “Lenders”) and guarantors party there-to and the other parties there-to (the “Credit Agreement”) and (iv) $550 million in aggregate principal of our 5.50% Senior Notes due 2025 (the “5.50% F&G Notes”).

The Credit Agreement imposes operating and financial restrictions, including financial covenants, and the Credit Agreement and the indentures governing the 7.95% F&G Notes, the 7.40% F&G Notes and the 5.50% F&G Notes impose limitations.

As a result of these restrictions, covenants and limitations, we may be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or take advantage of new business opportunities.

We do not believe these restrictions, covenants or limitations will have a material impact on the Company’s current or future operations.

However, our failure to comply with the restrictive covenants in existing or future debt instruments could result in an event of default, which, if not cured or waived, could result in our being required to repay outstanding indebtedness before their due date.

If we are forced to refinance indebtedness on less favorable terms or are unable to refinance at all, our results of operations and financial condition could be materially adversely affected.

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Our long-term strategic capital requirements will depend on many factors, including our accumulated statutory earnings and the relationship between our statutory capital and surplus and various elements of required capital.

To support long-term capital requirements, we may need to increase or maintain statutory capital and surplus of our insurance subsidiaries through financings which could include debt, equity, financing arrangements or other surplus relief transactions.

To support long-term capital requirements, we may need to increase or maintain statutory capital and surplus of our insurance subsidiaries through financing which could include debt, equity, financing arrangements or other surplus relief transactions.

On June 24, 2022, FNF capitalized $400 million of intercompany indebtedness into common stock of F&G.

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Adverse market conditions have affected and continue to affect the availability and cost of capital from external sources.

If we cannot maintain adequate capital for our insurance subsidiaries, or if we are obligated to provide capital contributions in the event of funding shortfalls, we may be required to limit growth in sales of new policies, and such action could materially adversely affect our business, operations and financial condition.

If we cannot maintain adequate capital for our insurance subsidiaries, or if we are obligated to provide capital contributions in the event of funding shortfalls, we may be required to limit growth in sales of new policies which could materially adversely affect our business, operations and financial condition.

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.

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Downgrades, unfavorable changes in rating methodology or other negative action by a rating agency could have a material adverse effect on us in many ways, including the following:

• adversely affecting relationships with distributors, independent marketing organizations (“IMOs”) and sales agents, which could result in reduction of sales;

• adversely affecting relationships with distributors, independent marketing organizations (“IMO”) and sales agents, which could result in reduction of sales;

• increasing the number or amount of policy lapses or surrenders and withdrawals of funds;

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As of December 31, 2023, the amount funded under the note agreement was insignificant;

• requiring us to collateralize balances or obligations under derivatives agreements.

As of December 31, 2022, we had no derivatives contracts that required us to post collateral.

• limiting our ability to hedge index risk inherent in the products offered due to Additional Termination Event (“ATE”) provisions in our International Swap and Derivative Association (“ISDA”)/Credit Support Annex (“CSA”), which could allow counterparties to opt not to trade with us should our rating fall below a certain threshold.

As of December 31, 2023, our ratings exceeded the ATE threshold in our ISDA/CSAs.

We may face losses if our actual experience differs significantly from our reserving assumptions.

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If emerging experience deviates from our assumptions on GMWB utilization, it could have a significant effect on our reserve levels and related results of operations.

Based on experience of GMWB utilization, which continues to emerge, we updated our GMWB utilization assumption during 2022, with a favorable impact on reserves.

We will continue to monitor the GMWB utilization assumption and update our best estimate as applicable.

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Fixed maturities, equity securities and derivatives represent the majority of total cash and invested assets reported at fair value on our balance sheet.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

Fair value is defined as the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time.

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In addition, we conduct various quantitative credit screens on the investment portfolio to create a credit watchlist.

The credit watchlist investments are then further analyzed by our portfolio manager for likelihood of loss of contractual principal and interest.

The credit watchlist investments are then further analyzed by our portfolio managers for likelihood of loss of contractual principal and interest.

Our portfolio managers also maintain a credit spotlight for investments that do not meet the quantitative screens.

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It is possible the collateral will not meet performance expectations leading to adverse changes in the cash flows on our holdings of these types of securities.

See Note C Investments to the consolidated financial statements including the notes thereto, (the “Consolidated Financial Statements”) included elsewhere in this Annual Report for additional information about our investment portfolio.

The pattern of amortizing our VOBA , DAC and DSI balances relies on assumptions and estimates made by management.

Changes in these assumptions and estimates could impact our results of operations and financial condition.

Amortization of our value of business acquired ("VOBA"), deferred acquisition costs ("DAC"), and deferred sales inducements ("DSI") balances depends on the actual and expected profits generated by the respective lines of business that incurred the expenses.

Expected profits are dependent on assumptions regarding a number of factors including investment returns, benefit payments, expenses, mortality, and policy lapse.

Due to the uncertainty associated with establishing these assumptions, we cannot, with precision, determine the exact pattern of profit emergence.

As a result, amortization of these balances will vary from period to period.

Any difference in actual experience versus expected results could require us to, among other things, accelerate the amortization of VOBA, DAC and DSI which would reduce profitability for such lines of business in the current period.

Please refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates ” for additional details on the amortization of VOBA, DAC and DSI balances.

Also, please refer to Note Q Recent Accounting Pronouncements, regarding the upcoming implementation of ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts, as clarified and amended by ASU 2019-09, Financial Services-Insurance:

Effective Date and ASU 2020-11, Financial Services-Insurance:

Effective Date and Early Application, effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years.

Amongst other requirements, this update provides that deferred acquisition costs are no longer required to be amortized in proportion to premiums, gross profits, or gross margins;

instead, those balances must be amortized on a constant level basis over the expected term of the related contracts and deferred acquisition costs must be written off for unexpected contract terminations;

See Note C - Investments to the Consolidated Financial Statements, including the notes thereto, in this Annual Report on Form 10-K for additional information about our investment portfolio.

Change in our evaluation of the recoverability of our deferred tax assets could materially adversely affect our results of operations and financial condition.

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Factors that may be considered a change in circumstance indicating the carrying value of goodwill may not be recoverable include, but are not limited to, significant underperformance relative to historical or projected future operating results, divestitures, and negative industry or economic trends.

Evaluating this asset’s recoverability

requires us to make estimates and assumptions to estimate the fair value of our reporting unit.

For the years ended December 31, 2022 and 2021, the period from June 1, 2020 to December 31, 2020 and FGL Holdings and its subsidiaries as predecessor (“Predecessor”) period from January 1, 2020 to May 31, 2020 (prior to the FNF Acquisition), no goodwill impairment charge was recorded.

However, if there is an adverse event affecting the value of our reporting unit in the future, the carrying amount of our goodwill may no longer be recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition.

Evaluating this asset’s recoverability requires us to make estimates and assumptions to estimate the fair value of our reporting unit.

For the years ended December 31, 2023, and 2022, no goodwill impairment charge was recorded.

However, if there is an adverse event affecting the value of our reporting unit in the future, the carrying amount of our goodwill may no longer be

recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition.

We will continue to monitor our operating results and the impact of the economy to determine if there is an impairment of goodwill in future periods.

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Insurance companies compete vigorously for productive agents.

We compete with other life insurance companies for marketers and agents primarily on the basis of our financial position, support services, compensation and product features.

Such marketers and agents may promote products offered by other life insurance companies that offer a larger variety of products than we do.

We compete with private equity investments as well as other life insurance companies for marketers and agents primarily on the basis of our financial position, support services, compensation and product features.

If we are unable to attract and retain a sufficient number of marketers and agents to sell our products, our ability to compete and our revenues would suffer.

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Concentration in certain states for the distribution of our products may subject us to losses attributable to economic downturns or catastrophes in those states.

For the year ended December 31, 2022 our top five states for the distribution of our products were Florida, California, Texas, Pennsylvania and New Jersey, which together accounted for 37% of our premiums.

For the year ended December 31, 2023, our top five states for the distribution of our products were Florida, California, Pennsylvania, Ohio and Texas, which together accounted for 38.5% of our premiums.

Any adverse economic developments or catastrophes in these states could have an adverse impact on our business.

Concentration in one or more of our products (for example, FIAs) may subject us to greater volatility of sales if such products experienced a significant decrease in sales.

Concentration in one or more of our products may subject us to greater volatility of sales if such products experienced a significant decrease in sales.

We may experience greater volatility in our sales performance from period to period to the extent we have a high concentration of sales in one or more of our products and those products suffer a material decline (for whatever reason) in a particular period.

For example, for the years ended December 31, 2022, 2021 and 2020, FIAs generated approximately 40%, 45% and 77% of our gross sales, respectively.

We may not be able to increase the sales of other

products at the same pace, or at all, to the extent there is a decrease in sales of our products that made up the majority of our sales in historical periods.

We may not be able to increase the sales of other products at the same pace, or at all, to the extent there is a decrease in sales of our products that made up the majority of our sales in historical periods.

As a result, decreased sales in high concentration products could adversely affect our financial condition, liquidity and results of operations.

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 six with our recent entrance into the RILA markets.

We are subject to the credit risk of our counterparties, including companies with whom we have reinsurance agreements or from whom we have purchased options.

We cede material amounts of insurance and transfers related assets and certain liabilities to other insurance companies through reinsurance.

We cede material amounts of insurance to other insurance companies through reinsurance.

Accordingly, we bear credit risk with respect to our reinsurers.

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ASPIDA Life Re Ltd.

(“Aspida Re”), Wilton Reassurance Company (“Wilton Re”), and Somerset Reinsurance Ltd.

(“Somerset”) represent our largest third-party reinsurance counterparty exposure.

As of December 31, 2022, the net amount recoverable from Aspida Re, Wilton Re, and Somerset were $3,121 million, $1,231 million and $570 million, respectively.

We also have funds withheld reinsurance counterparty risk.

Under funds withheld reinsurance arrangements, we retain possession and legal title to assets backing the ceded liabilities.

(“Aspida Re”), Wilton Reassurance Company (“Wilton Re”), Somerset Reinsurance Ltd.

(“Somerset”) and Everlake Life Insurance Company (“Everlake”) represent our largest third-party reinsurance counterparty exposures.

As of December 31, 2023, the net amount recoverable from Aspida Re, Wilton Re, Somerset and Everlake were $6,128 million, $1,092 million, $716 million and $509 million, respectively.

The risk of non-performance is mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit.

We are also exposed to credit loss in the event of non-performance by our counterparties on options.

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There can be no assurance we will not suffer losses in the event of counterparty non-performance.

Several of our derivative counterparty International Swap and Derivative Association (“ISDA”) agreements contain additional termination event triggers based on a downgrade of FGL Insurance.

Several of our derivative counterparty ISDA agreements contain additional termination event triggers based on a downgrade of FGL Insurance.

These triggers would give these counterparties the option to terminate our options, which could lead to losses if occurring at an inopportune time.

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If there is a delay in our third-party providers’ introduction of our new products or if our third-party providers are unable to service our customers appropriately, we may experience a loss of business that could have a material adverse effect on our business, financial condition and results of operations.

We have a formal vendor management program that follows a continuous lifecycle for all third-party providers.

The lifecycle includes an initial risk assessment for new relationships to determine risk tier;

vendor due diligence depending on the risk tier;

contract management to effectively address all terms, conditions, duties and obligations, risks/issues identified;

ongoing monitoring and management to ensure compliance with contract provisions and service level agreements;

and termination/offboarding to ensure appropriate communication and any other requirements such as destruction of data.

In addition, our reliance on third-party service providers that we do not control does not relieve us of our responsibilities and contractual, legal and other requirements.

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We do not believe the departure of any particular individual would cause a material adverse effect on our operations;

however, the unexpected loss of several key employees could have a material adverse effect on our operations due to the loss of their skills, knowledge of our business, and their years of industry experience as well as the potential difficulty of promptly finding qualified replacement employees.

however, the unexpected loss of several key employees could have a

material adverse effect on our operations due to the loss of their skills, knowledge of our business, and their years of industry experience as well as the potential difficulty of promptly finding qualified replacement employees.

Our risk management policies and procedures may not capture unidentified or unanticipated risk, which could negatively affect our business or result in losses.

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In addition, future adoption of more restrictive privacy laws, rules or industry security requirements by federal or state regulatory bodies or by a specific industry in which we do business could have an adverse impact on us through increased costs or restrictions on business processes.

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.

Security breaches like the recent MOVEit incident and other disruptions to our information technology infrastructure could compromise Company, consumer and customer information, interfere with our operations, cause us to incur significant costs for remediation and enhancement of our IT systems and expose us to legal liability, all of which could have a substantial negative impact on our business and reputation.

In the ordinary course of business, we collect, process, transmit and store sensitive data, including intellectual property, proprietary business information and personally identifiable information.

The secure operation of our information technology systems, and of the processing and maintenance of this information, is critical to our business operations and strategy.

Despite our substantial investment in physical and technological security measures, our information technology infrastructure (or those of our third-party vendors and other service providers) are potentially vulnerable to unauthorized access to data or breaches of confidential information.

In June 2023, we were notified that PBI Research Services (“PBI”), a third-party vendor to F&G, was the victim of the security incident associated with the MOVEit file transfer system.

PBI provides services to F&G and other companies in the insurance industry, including services to satisfy certain regulatory obligations related to identifying the deaths of insured persons that may trigger the payment of certain insurance benefits.

It was widely reported that numerous organizations around the world, including Fortune 500 companies, governmental agencies, and non-governmental organizations, were affected by a zero-day vulnerability in the MOVEit file transfer system.

This vulnerability resulted in access to PBI’s instance of the MOVEit system and acquisition of certain data within the MOVEit system by an unauthorized third party.

The incident did not affect any F&G systems, including any of F&G’s financial systems.

In addition, the incident did not affect F&G’s ability to serve its customers.

Because our products and services involve the storage and transmission of personal information of consumers, we will continue to routinely be the target of attempted cyber and other security threats by outside third parties.

Our increased dependence on third parties to store our data systems may also subject us to further cyber threats.

In addition, a significant number of our employees continue to work from home and we believe this will continue into 2024 and future years.

The remote work environment puts greater demands on our technological systems, puts us at greater risk of cybersecurity incidents and adds complexity to our programs that are designed to protect private data.

While we currently maintain cybersecurity insurance, such insurance may not be sufficient in type or amount to cover us against claims related to cybersecurity breaches or attacks, failures or other data security-related incidents, and we cannot be certain that cyber insurance will continue to be available to us on economically reasonable terms, or at all, or that an insurer will not deny coverage as to any future claim.

The successful assertion of one or more claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductibles, could materially and adversely affect our financial condition, results of operations and cash flows.

Advancements in Artificial Intelligence, Machine Learning, and Large Language Models (“AI/ML/LLM”) pose risks and challenges.

State regulators and the NAIC are evaluating existing regulatory frameworks for insurance industry wide use of AI/ML/LLM.

On November 14, 2023, the Colorado Division of Insurance’s AI insurance regulations went into effect, making Colorado the first state in the nation to adopt regulations specifically aimed at insurance regulations.

Generally, regulators are concerned about bias and discrimination resulting from the use of AI/ML/LLM in algorithms and predictive models that are directly or indirectly used by insurance companies.

They want to ensure that consumers understand the insurance products that they are buying, insurance products are accessible and fairly priced without reference to criteria that could be regarded as discriminatory, and individual consumer data is adequately protected and kept private.

These concerns could lead to development of or modifications to model laws, regulations, handbooks, and regulatory guidance.

The resulting guidance and control requirements may prove to be onerous to implement in a timely manner.

The new and emerging types of AI and their uses are very early stage in the industry and may be subject to many uncertain future developments and regulations.

Regulatory agencies are evaluating existing regulatory frameworks for insurance industry wide use of AI.

New AI algorithms and predictive models may be used by insurance companies in selling insurance products to consumers.

However, the use of new artificial intelligence models may make insurance companies more susceptible to potential bias, discrimination, and data breaches.

These concerns could lead to development of new, or modifications to, laws and regulations pertaining to the use of Artificial Intelligence by insurance companies, or the broader financial services sector, that may prove to be onerous for companies to implement in a timely manner.

The use of artificial intelligence and machine learning technologies, including generative artificial intelligence, has increased rapidly with increasing complexity and changes in the nature of the technology.

Our potential uses of generative artificial intelligence may be subject to various risks including flaws or limitations in the large language models or training datasets that may result in biased or inaccurate results, ethical considerations, and the ability to safely deploy and implement governance and controls for such systems.

Laws and regulations related to artificial intelligence are evolving, and there is uncertainty as to potential adoption of new laws and regulations and the application of existing laws and regulations to use of artificial intelligence, which may restrict or impose burdensome and costly requirements on our ability to use artificial intelligence.

In addition, there has been considerable patent and other intellectual property development activity in the artificial intelligence industry, which has resulted in litigation based on allegations of infringement or other violations of intellectual property rights.

We may receive claims from third parties, including our competitors, alleging that our use of artificial intelligence technology infringes on or violates such third party's intellectual property rights.

Adverse consequences of these risks related to artificial intelligence could undermine the decisions, predictions or analysis such technologies produce and subject us to competitive harm, legal liability, heightened regulatory scrutiny and brand or reputational harm.

Our ability to adopt new technologies may be inhibited by the emergence of industry-wide standards, a changing legislative and regulatory environment, an inability to develop appropriate governance and controls, a lack of internal product and engineering expertise, resistance to change from consumers, or lack of appropriate change management processes or the complexity of our systems.

In addition, our adoption of new technologies and our introduction of new products and services may expose us to new or enhanced risks, particularly in areas where we have less experience or our existing governance and control systems may be insufficient, which could require us to make substantial expenditures or subject us to legal liability, heightened regulatory scrutiny and brand or reputational harm.

We rely on our investment management advisory agreements (“IMA”) with Blackstone ISG-I Advisors LLC (“BIS”) and other investment managers and sub-managers for the management of portions of certain of our life insurance companies’ investment portfolios.

Our insurance company subsidiaries are parties to IMAs with BIS and other investment managers and sub-managers.

These entities depend in large part on their ability to attract and retain key people, including senior executives, finance professionals and information technology professionals.

Intense competition exists for key

employees with demonstrated ability, and our investment managers may be unable to hire or retain such employees.

Intense competition exists for key employees with demonstrated ability, and our investment managers may be unable to hire or retain such employees.

The unexpected loss by any of our investment managers, including BIS, of key employees could have a material adverse effect on their ability to manage our investment portfolio and have an adverse impact on our investment portfolio and results of operations.

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However, we and FNF have agreed in the omnibus termination side letter to cause our insurance company subsidiaries to engage BIS as an investment manager.

The initial term of this side letter expires on June 1, 2027 and contains an automatic renewal provision which provides for successive one year terms thereafter.

The initial term of this side letter expires on June 1, 2029, and contains an automatic renewal provision which provides for successive two-year terms thereafter.

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.

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, during which time BIS may seek to cure the events giving arise to our termination right.

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 will not become effective for one year, during which time BIS may seek to cure the events giving arise to our termination right.

If one of our subsidiaries were to terminate an IMA or take other actions that we have agreed will not be taken under the omnibus termination side letter, we and FNF may be in breach of our respective obligations to BIS under such side letter.

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The regulatory environment for investment managers is evolving, and changes in the regulation of investment managers may adversely affect the ability of BIS to effect transactions that utilize leverage or pursue their strategies in managing our investment portfolio.

BIS, in conjunction with its investment managers, continuously monitors the ongoing regulatory conversations.

In addition, the securities and futures markets are subject to comprehensive statutes, regulations and margin requirements.

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Due to our reliance on these relationships in particular to manage a significant portion of our investment portfolio, any regulatory action or enforcement against BIS could have an adverse effect on our financial condition.

In addition, the NAIC continues to consider the nature of the relationships between insurance companies and their investment advisors and investment managers, and more broadly the impact of private equity within the

insurance industry.

We are continuing to monitor the development of any proposals that could have a material impact on the contractual relationships between us and BIS.

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Factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates and inflation levels all affect the business and economic environment and, ultimately, the amount and profitability of our business.

In an economic downturn characterized by higher unemployment, lower family income, negative investor sentiment and lower consumer spending, the demand for our insurance products could be adversely affected.

economic downturn characterized by higher unemployment, lower family income, negative investor sentiment and lower consumer spending, the demand for our insurance products could be adversely affected.

Under such conditions, we may also experience an elevated incidence of policy lapses, policy loans, withdrawals and surrenders.

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However, we cannot predict if it will impact our business, results of operations and financial condition in the future for the forgoing reasons.

See also “— Risks Relating to Economic Conditions and Market Conditions — Interest rate fluctuations could adversely affect our business, financial condition, liquidity and results of operations ” in this Annual Report.

Please refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Trends and Conditions ” for additional details on risk factors relating to economic conditions and market conditions.

See also “— The COVID-19 pandemic could have a material adverse effect on our liquidity, financial condition and results of operations.

Please refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Trends and Conditions ” for additional details on economic conditions and market conditions that may impact our business.

Our investments are subject to geopolitical risk.

The on-going conflict in Russia and Ukraine could heighten and expand to peripheral countries in the region.

We have no exposure to investments in Russia or Ukraine and de minimis investments in peripheral countries in the region.

If the conflict and it’s inflationary impact on energy costs and other goods leads to a wider recession in Europe, our investments in those countries could suffer losses, which could have a negative impact on our financial results.

The on-going conflicts in Russia, Ukraine and Israel could heighten and expand to peripheral countries in the regions, which may adversely affect our business, financial condition, results of operations and cash flows.

While we have no exposure to investments in Russia or Ukraine, we have de minimis exposure in Israel and the surrounding regions.

If the conflicts and their inflationary impact leads to a wider recession or other restrictive actions by the United States and/or other countries, our investments could suffer losses, which could have a negative impact on our financial results.

The current invasion of Ukraine by Russia has escalated tensions among the United States, the North Atlantic Treaty Organization (“NATO”) and Russia.

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Further, such invasion, ongoing military conflict, resulting sanctions and related countermeasures by NATO states, the United States and other countries are likely to lead to market disruptions, including significant volatility in the credit and capital markets, which could have an adverse impact on our operations and financial performance.

The ongoing armed conflicts in and around Israel may negatively impact the business environment, both within and outside of Israel, including due to reluctance of foreign investors to invest or transact business, as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions.

To the extent that any of these negative developments do occur, they may have an adverse effect on our business, results of operations and financial condition.

Our investments are subject to market risks that could be heightened during periods of extreme volatility or disruption in financial and credit markets.

Our invested assets and derivative financial instruments are subject to risks of credit defaults and changes in market values.

Periods of extreme volatility or disruption in the financial and credit markets could increase these

Periods of extreme volatility or disruption in the financial and credit markets could increase these risks.

Changes in interest rates and credit spreads could cause market price and cash flow variability in the fixed income instruments in our investment portfolio.

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We are also subject to the risk that cash flows resulting from the payments on pools of mortgages that serve as collateral underlying the mortgage-backed securities we own may differ from our expectations in timing or size.

Any event reducing the estimated fair value of these securities, other than on a temporary basis, could have an adverse effect on our business, results of operations, liquidity and financial condition.

Historically, we have not experienced material credit losses;

however, any event reducing the estimated fair value of these securities, other than on a temporary basis, could have an adverse effect on our business, results of operations, liquidity and financial condition.

We also maintain holdings in floating rate, and less rate-sensitive investments, including senior tranches of collateralized loan obligations (“CLOs”) and directly originated senior secured loans.

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We invest in asset-backed securities (“ABS”) (traditional and specialty finance) and asset-backed and consumer whole loans.

Consumer balance sheets are healthy and underwriting standards have become more conservative following the Global Funding Crisis.

However, high inflation rates are a headwind for consumers, and efforts by the Federal Reserve to stem inflation could induce a recession which would have an adverse impact on consumers and potentially increase delinquencies to a higher level than what is assumed in our underwriting.

In addition, the discontinuation of London Inter-Bank Offered Rate (“LIBOR”) could adversely affect the value of our investment portfolio, derivatives transactions and issued funding agreements bearing interest at LIBOR.

There can be no assurance that the alternative rates and fallbacks utilized by the various markets will be effective at preventing or mitigating disruption as a result of the discontinuation of LIBOR.

Should such disruption occur, it may adversely affect, among other things, the trading market for LIBOR-based securities, including those held in our investment portfolio, the market for derivative instruments, including those that we use to achieve our hedging objectives, and our ability to issue funding agreements bearing a floating rate of interest.

Consumer balance sheets are healthy and underwriting standards have become more conservative following the Global Financial Crisis.

However, high inflation rates have been a headwind for consumers, and efforts by the Federal Reserve to stem inflation could induce a recession which would have an adverse impact on consumers and potentially increase delinquencies to a higher level than what is assumed in our underwriting.

Interest rate fluctuations could adversely affect our business, financial condition, liquidity and results of operations.

Interest rate risk is a significant market risk for us, as our business involves issuing interest rate sensitive obligations backed primarily by investments in fixed income assets.

As of December 31, 2022, we also maintained approximately 18% of the assets in our investment portfolio in floating rate instruments and had executed a variable interest rate Credit Agreement, which are both subject to an element of market risk from changes in interest rates.

Prior to 2022, interest rates had been at or near historical low levels over the the preceding several years.

As of December 31, 2023, we also maintained approximately 21% of the assets in our investment portfolio in floating rate investments.

During the year ended December 31, 2023, we executed some variable interest rate credit agreements, floating rate funding agreements and pay-float and receive-fixed interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

All of these assets are subject to an element of market risk from changes in interest rates.

Prior to 2022, interest rates had been at or near historical low levels over the preceding several years.

A prolonged period of low rates exposes us to the risk of not achieving returns sufficient to meet our earnings targets and/or our contractual obligations.

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Lower interest rates may also result in decreased sales of certain insurance products, negatively impacting our profitability from new business.

Since March 2022, the Federal Reserve has increased the Federal Funds (“Fed Funds”) rate 11 times from approximately 0% to approximately 5.50% before pausing in the latter half of 2023, and market rates have risen during that time.

During periods of increasing interest rates, we may offer higher crediting rates on interest-sensitive products, such as universal life insurance and fixed annuities, and we may increase crediting rates on in-force products to keep these products competitive.

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We may have difficulty selling these investments in a timely manner and/or be forced to sell them for less than we otherwise would have been able to realize, which could have a material adverse effect on our business, financial condition or operating results.

We have developed and maintain asset liability management (“ALM”) programs and procedures that are, we believe, designed to mitigate interest rate risk by matching asset cash flows to expected liability cash flows.

In addition, we assess surrender charges on withdrawals in excess of allowable penalty-free amounts that occur during the surrender charge period.

We have developed and maintain ALM programs and procedures that are, we believe, designed to mitigate interest rate risk by matching asset cash flows to expected liability cash flows, and robust inflows provide additional opportunities to allocate in force assets in support of news business, further mitigating potential losses due to disintermediation risk.

In addition, we assess surrender charges on withdrawals in

excess of allowable penalty-free amounts that occur during the surrender charge period.

The significant new business written in recent years strengthens the surrender charge protection since the surrender charges are highest in the early years of a policy.

There can be no assurance that actual withdrawals, contract benefits, and maturities will match our estimates.

Despite our efforts to reduce the impact of rising interest rates, we may be required to sell assets to raise the cash necessary to respond to an increase in surrenders, withdrawals and loans, thereby realizing capital losses on the assets sold.

We may experience spread income compression, and a loss of anticipated earnings, if credited interest rates are increased on renewing contracts in an effort to decrease or manage withdrawal activity.

Our expectation for future spread income is an important component in amortization of VOBA, DAC and DSI under GAAP.

Significant reductions in spread income may cause us to accelerate VOBA, DAC and DSI amortization.

Liabilities that are held on our balance sheet at fair value, including embedded derivatives on our FIA and IUL business and market risk benefits (“MRB”) on our FIA and fixed rate annuity business, are sensitive to fluctuations in interest rates.

Decreases in interest rates generally would have the impact of increasing the value of these liabilities, which will result in a reduction in our net income.

Liabilities for future policy benefits (“FPB”) are valued using locked-in discount rates, and any changes in interest rates since the inception of those contracts are reflected in other comprehensive income (“OCI”).

Decreases in interest rates would result in a reduction in our OCI.

In addition, certain statutory capital and reserve requirements are based on formulas or models that consider interest rates and a prolonged period of low interest rates may increase the statutory capital we are required to hold as well as the amount of assets we must maintain to support statutory reserves.

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However, we cannot predict if it will impact our business, results of operations and financial condition in the future for the forgoing reasons.

Higher interest rates have decreased the fair value of our investment security portfolio as of December 31, 2022, primarily our fixed maturity securities, resulting in our AOCI being a loss of $2.8 billion compared to income of $0.7 billion as of December 31, 2021.

See “ Quantitative and Qualitative Disclosure about Market Risk ” in this Annual Report for a more detailed discussion of interest rate risk.

Higher interest rates have decreased the fair value of our investment security portfolio, primarily our fixed maturity securities, as of December 31, 2023, and December 31, 2022, resulting in our AOCI being a loss of $2.0 billion and $2.8 billion, respectively.

See “ Quantitative and Qualitative Disclosure about Market Risk ” in this Annual Report on Form 10-K for a more detailed discussion of interest rate risk.

Equity market volatility could negatively impact our business.

The estimated cost of providing GMWB riders associated with our annuity products incorporates various assumptions about the overall performance of equity markets over certain time periods.

Periods of significant and sustained downturns in equity markets or increased equity volatility could result in an increase in the valuation of the future policy benefit or policyholder account balance liabilities associated with such products, resulting in a reduction in our revenues and net income.

The estimated cost of providing guaranteed minimum withdrawal benefit riders associated with our annuity products incorporates various assumptions about the overall performance of equity markets over certain time periods.

Periods of significant and sustained downturns in equity markets or increased equity volatility could result in an increase in the valuation of the MRBs or contractholder funds liabilities associated with such products, resulting in a reduction in our revenues and net income.

We are exposed to liquidity risk as a result of our other risks.

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If the value of the eligible securities declines significantly, and there is no available eligible security collateral in the portfolio, we may need to supplement the collateral account with cash.

• Kubera NPA:

we issued a variable note purchase agreement to Kubera for which we may be liable to fund any shortfall in Kubera’s ability to pay its obligations under the amended reinsurance agreement with FGL Insurance, assuring such principal up to $300 million is timely paid.

Our business could be materially and adversely affected by the occurrence of a catastrophe, including natural or man-made disasters.

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• any such event could have a material adverse effect on our liquidity, financial condition and the operating results of our insurance business due to its impact on the economy and financial markets;

• our workforce being unable to be physically located at one of our facilities could result in lengthy interruptions in our ability to perform or deliver our services;

• we could experience long-term interruptions in the services provided by our significant vendors due to the effects of catastrophic events, including but not limited to government mandates to self-quarantine, work remotely and prolonged travel restrictions;

• we could experience long-term interruptions in the services provided by our significant vendors due to the effects of catastrophic events;

• some of our operational systems are not fully redundant, and our disaster recovery and business continuity planning cannot account for all eventualities.

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While we believe we have taken steps to identify and mitigate these types of risks, such risks cannot be reliably predicted, nor fully protected against even if anticipated.

In addition, such events could result in overall macroeconomic volatility or specifically a decrease or halt in economic activity in large geographic areas, adversely affecting the marketing or administration of our business within such geographic areas or the general economic

climate, which in turn could have an adverse effect on our business, results of operations and financial condition.

The possible macroeconomic effects of such events could also adversely affect our asset portfolio.

The COVID-19 pandemic could have a material adverse effect on our liquidity, financial condition and results of operations.

The health, economic and business conditions precipitated by the worldwide COVID-19 pandemic that emerged in 2020 increased our mortality experience in 2021 and 2020 in both our single premium immediate annuity (“SPIA”) and IUL business which largely offset each other.

In addition, savings and investment behavior of our policyholders may have been changed as a result of financial stress due to the pandemic.

A significant number of our employees continue to work from home and we believe this will continue into 2023 and future years.

In addition, the changing nature of the work environment post-COVID with more remote employment opportunities has reduced the friction in changing jobs which has increased the mobility of our workforce and provided more opportunities for our employees to transition into jobs at other companies.

COVID-related changes to how employees work has introduced increased risk to our ability to retain key personnel.

By embracing flexibility, we continue to experience lower than industry attrition.

The severe restriction in economic activity caused by the COVID-19 pandemic and initial increased level of unemployment in the United States have contributed to increased volatility and uncertainty regarding expectations for the economy and markets going forward.

Although states have eased restrictions and the capital and labor markets have generally recovered, we are now experiencing a period of higher inflation and it is unclear when the economy will experience lower inflation.

For example, in response to the economic impact of the COVID-19 pandemic, the Federal Reserve cut interest rates to near zero in March 2020.

The Federal Reserve has increased interest rates in 2022 and signaled that interest rates will increase potentially in 2023.

See “ Quantitative and Qualitative Disclosure about Market Risk ” in this Annual Report for a more detailed discussion of interest rate risk.

See also “— Interest rate fluctuations could adversely affect our business, financial condition, liquidity and results of operations .”

Legal, Regulatory and Tax Risks

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State insurance regulators, the NAIC and federal regulators continually reexamine existing laws and regulations and may impose changes in the future.

New interpretations of existing laws and the passage of new legislation may harm our ability to sell new policies, increase our claim exposure on policies we issued previously and adversely affect our profitability and financial strength.

New interpretations of existing laws and the passage of new legislation may

harm our ability to sell new policies, increase our claim exposure on policies we issued previously and adversely affect our profitability and financial strength.

We are also subject to the risk that 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.

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We cannot predict what form any future changes in these or other areas of regulation affecting the insurance industry might take or what effect, if any, such proposals might have on us if enacted into law.

In addition, because our activities are relatively concentrated in a small number of lines of business, any change in law or regulation

affecting one of those lines of business could have a disproportionate impact on us as compared to other more diversified insurance companies.

Please refer to “ Business-Regulation of F&G ” included in this Annual Report for additional details on the impact of regulations on our business.

In addition, because our activities are relatively concentrated in a small number of lines of business, any change in law or regulation affecting one of those lines of business could have a disproportionate impact on us as compared to other more diversified insurance companies.

Please refer to “ Business-Regulation of F&G ” included in this Annual Report on Form 10-K for additional details on the impact of regulations on our business.

Our business is subject to government regulation in each of the jurisdictions in which we conduct business and regulators have broad administrative and discretionary authority over our business and business practices.

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In addition, regulators may change their interpretation or application of existing laws and regulations, including, for example, broadening the scope of carriers that must contribute towards long-term care insolvencies.

Our regulation in the United States is influenced by the NAIC, which continues to consider reforms including relating to cybersecurity regulations, best interest standards, RBC and life insurance reserves.

Our business in the United States is regulated by the NAIC, which continues to consider reforms including relating to cybersecurity regulations, best interest standards, RBC and life insurance reserves.

Although our business is subject to regulation in each state in which we conduct business, along with the District of Columbia and Puerto Rico, in many instances the state regulatory models emanate from the NAIC.

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Changes currently under consideration include adding an operational risk component, factors for asset credit risk, and group wide capital calculations.

See “— 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 the business, and could hinder our ability to participate in certain market segments, thereby adversely affect our financial condition and results of operations ” for a discussion of risks relating to our financial strength ratings.

Current and emerging developments relating to market conduct standards for the financial industry emerging from the DOL’s implementation of the “fiduciary rule” may over time materially affect our business.

adversely affect our financial condition and results of operations ” for a discussion of risks relating to our financial strength ratings.

Current and emerging developments relating to market conduct standards for the financial industry emerging from the Department of Labor’s (“DOL”) implementation of the “fiduciary rule” may over time materially affect our business.

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 the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986, as amended (the “Code”), and sets forth a new exemption, referred to as

prohibited transaction class exemption (“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 IRA products and withdraws the DOL’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 we supervise our distribution force, compensation practices and liability exposure and costs.

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Our business is subject to regulation in Bermuda and the Cayman Islands, including the Bermuda Monetary Authority (“BMA”) and the Cayman Islands Monetary Authority (“CIMA”).

These regulations may limit or curtail our activities, including activities that might be profitable, and changes to existing regulations may affect our ability to continue to offer our existing products and services, or new products and services we may wish to offer in the future.

These regulations may limit or curtail

our activities, including activities that might be profitable, and changes to existing regulations may affect our ability to continue to offer our existing products and services, or new products and services we may wish to offer in the future.

Our reinsurance subsidiary, F&G Life Re Ltd.

(“F&G Life Re”), is registered in Bermuda under the Bermuda Insurance Act of 1978 (the “Insurance Act”) and is subject to the rules and regulations promulgated thereunder.

(“F&G Life Re”), is registered in Bermuda under the Bermuda Insurance Act 1978, as amended, (the “Bermuda Insurance Act”) and is subject to the rules and regulations promulgated thereunder.

The BMA has sought regulatory equivalency, which enables Bermuda’s commercial insurers to transact business with the European Union (“EU”) on a “level playing field.” In connection with its initial efforts to achieve equivalency under the EU’s Directive (2009/138/EC) (“Solvency II”), the BMA implemented and imposed additional requirements on the companies it regulates.

Effective 1 January 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.

The European Commission in 2016 granted Bermuda’s commercial insurers full equivalency in all areas of Solvency II for an indefinite period of time.

Effective 1 January 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 any collateral.

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

Our reinsurance subsidiary, F&G Cayman Re, is a licensed Class D insurer in the Cayman Islands and a wholly owned direct subsidiary of ours, is licensed by the CIMA and is subject to supervision by CIMA.

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The SECURE Act 2.0 contains provisions that may impact our F&G insurance subsidiaries, and these changes could affect the desirability of IRAs, necessitate changes to our administrative system to implement the Act, and affect, to some extent, the length of time that IRA assets remain in our annuity products.

These provisions include, for

example, raising the age for required minimum distributions from IRAs from 72 to 73 (age 74 after 2032);

These provisions include, for example, raising the age for required minimum distributions from IRAs from 72 to 73 (age 74 after 2032);

additional exceptions to the 10% penalty tax for distributions before age 59-1/2;

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For example, federal income taxation on any increases in non-qualified annuity contract values (i.e., the “inside build-up”) is deferred until it is received by the policyholder.

Non-qualified

annuities are annuities that are not sold to a qualified retirement plan or are in the form of a qualified contract such as an IRA.

Non-qualified annuities are annuities that are not sold to a qualified retirement plan or are in the form of a qualified contract such as an IRA.

With other savings investments, such as certificates of deposit and taxable bonds, the increase in value is generally taxed each year as it is realized.

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We, like other financial services companies, are involved in litigation and arbitration in the ordinary course of business.

For further discussion on litigation and regulatory investigation risk, see Note F Commitments and Contingencies to the Consolidated Financial Statements included in this Annual Report.

For further discussion on litigation and regulatory investigation risk, see Note N - Commitments and Contingencies to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

From time to time, we receive inquiries and requests for information from state insurance departments, attorneys general and other regulatory agencies about various matters relating to our business.

Sometimes these take the form of civil investigative demands or subpoenas.

We cooperate with all such inquiries and we have responded to or are

currently responding to inquiries from multiple governmental agencies.

We cooperate with all such inquiries, and we have responded to or are currently responding to inquiries from multiple governmental agencies.

Various governmental entities are studying the insurance product, market, pricing, and business practices, and potential regulatory and legislative changes, which may materially affect our business and operations.

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Such lawsuits can result in substantial judgments and damage to our reputation that is disproportionate to the actual damages, including material amounts of punitive non-economic compensatory damages.

In some states, juries, judges and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages, which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration.

or awards in any given lawsuit or arbitration.

Arbitration awards are subject to very limited appellate review.

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Risks Related to the Separation and Distribution and our Status as a Subsidiary of FNF

We may not achieve some or all of the expected benefits of the separation and distribution, and the separation and distribution may materially adversely affect our business, financial condition or operating results.

Following the separation and distribution, F&G and FNF are two separately governed companies.

We may not be able to achieve some or all of the benefits that we expect to achieve as a separate company from FNF in the time we expect, if at all.

For instance, we may not be able to achieve our expectations for growth or to raise the necessary equity or debt capital to finance such growth.

We may not achieve the expected benefits for a variety of reasons, including, among others that we may be more susceptible to market fluctuations and other adverse events than if we were still a part of FNF.

If we fail to achieve some or all of the benefits expected to result from the separation and distribution, or if such benefits are delayed or are not realized at all, it could have a material adverse effect on our business, financial condition or operating results.

Although we have past history of operating as a public company, our historical financial information and summary historical financial information are not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

The historical information about us in this Annual Report includes periods where we operated as a wholly owned subsidiary of FNF or as a stand-alone public company.

Our historical financial information and summary historical financial information included in this Annual Report is derived from the Consolidated Financial Statements and the accounting records of F&G and FNF.

Accordingly, the historical financial information for periods prior to the separation and distribution included in this Annual Report does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented, or those that we will achieve in the future, including:

The historical information about us in this Annual Report on Form 10-K includes periods where we operated as a wholly owned subsidiary of FNF or as a stand-alone public company.

Our historical financial information and summary historical financial information included in this Annual Report on Form 10-K is derived from the Consolidated Financial Statements and the accounting records of F&G and FNF.

Accordingly, the historical financial information for periods prior to the separation and distribution included in this Annual Report on Form 10-K does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented, or those that we will achieve in the future, including:

• The ongoing cost of capital for our business may be higher than our access to FNF’s cost of capital prior to the separation and distribution.

• Our historical financial information for periods prior the separation and distribution does not reflect the debt or the associated interest expense that we have incurred in connection with the separation and distribution or expect to incur in the future.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from FNF.

For additional information about the past financial performance of our business and the basis of presentation of the Consolidated Financial Statements and summary historical financial information of our business, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and the historical financial statements and accompanying notes included elsewhere in this Annual Report.

Other changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from FNF.

FNF is our principal shareholder and retains significant rights with respect to our governance and certain corporate actions.

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FNF owns approximately 85% of our outstanding common stock.

As a result, FNF is able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other shareholders, the outcome of any corporate transaction or other matter submitted to our shareholders for approval,

including potential mergers or acquisitions, asset sales and other significant corporate transactions.

FNF also has sufficient voting power to approve amendments to our organizational documents.

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These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

We are a “controlled company” within the meaning of the NYSE rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements.

We are a “controlled company” within the meaning of the New York Stock Exchange (“NYSE”) rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements.

FNF controls a majority of the voting power of our outstanding common stock.

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In connection with the separation and distribution, we and FNF entered into the separation and distribution agreement.

In connection with the separation, F&G also entered into various ancillary agreements to effect the separation and provide a framework for its relationship with FNF after the separation and distribution, such as a corporate services agreement (the “Corporate Services Agreement”), a reverse corporate services agreement (the “Reverse Corporate Services Agreement”), a tax sharing agreement (the “Tax Sharing Agreement”) and other agreements entered into in connection therewith (collectively with the Separation and Distribution Agreement, the “Transaction Agreements”).

In connection with the separation, F&G also entered into various ancillary agreements to effect the separation and provide a framework for its relationship with FNF after the separation and distribution, such as a corporate services agreement (the “Corporate Services Agreement”), a reverse corporate services agreement (the “Reverse Corporate Services Agreement”), a tax sharing agreement (the “Tax Sharing Agreement”) and other agreements entered into in connection therewith (collectively with a Separation and Distribution Agreement, the “Transaction Agreements”).

The Transaction Agreements determine the allocation of assets, rights and liabilities between the companies following the separation and distribution and include indemnifications related to liabilities and obligations.

The Corporate Services Agreement provides for the performance of certain services by FNF for the

benefit of us for a limited period of time after the separation and distribution.

The Corporate Services Agreement provides for the performance of certain services by FNF for the benefit of us for a limited period of time after the separation and distribution.

The reverse services agreement provides for the performance of certain services by us for the benefit of FNF for a limited period of time after the separation and distribution.

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This statutory presumption of control may be rebutted by a showing that control does not exist in fact.

State insurance regulators, however, may find that “control” exists in circumstances in

which a person owns or controls less than 10% of the voting securities.

State insurance regulators, however, may find that “control” exists in circumstances in which a person owns or controls less than 10% of the voting securities.

We are a subsidiary of FNF, the common stock (its voting securities) of which trades on the NYSE.

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• changes in regulatory and other dynamics;

• the other factors described in this “ Risk Factors ” section and elsewhere in this Annual Report.

• the other factors described in this “ Risk Factors ” section and elsewhere in this Annual Report on Form 10-K.

In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

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These sales also could impede our ability to raise future capital.

We cannot predict the size of future sales of shares of our common stock in the open market following the distribution or the effect, if any, that such future sales,

or the perception that such sales may occur, would have on the market price of our common stock.

We cannot predict the size of future sales of shares of our common stock in the open market following the distribution or the effect, if any, that such future sales, or the perception that such sales may occur, would have on the market price of our common stock.

We are also unable to predict whether a sufficient number of buyers would be in the market at that time.

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Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.

Unresolved Staff Comments

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

What changed 10-K

Item 1A. Risk Factors