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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-27 · 1709 added, 1173 removed, 1037 unchanged (74% of the section changed)

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Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control O ver Financial Reporting (Ernst & Young, LLP, Des Moines, IA , Auditor Firm ID:

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (Ernst & Young, LLP, Des Moines, IA, Auditor Firm ID :

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Earnings for the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 and the predecessor period from January 1, 2020 to May 31, 2020

Consolidated Statements of Comprehensive Earnings for the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 and the predecessor period from January 1, 2020 to May 31, 2020

Consolidated Statements of Equity for the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 and the predecessor period from January 1, 2020 to May 31, 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 and the predecessor period from January 1, 2020 to May 31, 2020

Consolidated Statements of Operations for the years ended December 31, 2023, December 31, 2022 and December 31, 2021

Consolidated Statements of Comprehensive Earnings for the years ended December 31, 2023, December 31, 2022 and December 31, 2021

Consolidated Statements of Equity for the years ended December 31, 2023, December 31, 2022 and December 31, 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2023, December 31, 2022 and December 31, 2021

Notes to Consolidated Financial Statements

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To the Shareholders and the Board of Directors of F&G Annuities & Life, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited F&G Annuities & Life, Inc.

and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, F&G Annuities & Life, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive earnings, equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(2) and our report dated February 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Des Moines, Iowa

February 29, 2024

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of F&G Annuities & Life, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of F&G Annuities & Life, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of earnings, comprehensive earnings, equity and cash flows for each of the years ended December 31, 2022 and 2021, and the periods January 1, 2020 through May 31, 2020 and June 1, 2020 through Decembers 31, 2020 and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years ended December 31, 2022 and 2021, and the periods January 1, 2020 through May 31, 2020 and June 1, 2020 through Decembers 31, 2020, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive earnings, equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024, expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Value of Business Acquired (VOBA), Deferred Acquisition Costs (DAC), Deferred Sales Inducements (DSI) and secondary guarantee liabilities

Description of the Matter At December 31, 2022 VOBA, DAC, and DSI reported within other intangible assets, net totaled $3.7 billion and contractholder funds totaled $41.2 billion, a portion of which related to indexed universal life (IUL)-type and Investment-type contracts with secondary guarantees.

As discussed in Note A to the consolidated financial statements, VOBA, DAC, and DSI are generally amortized over the lives of the policies in relation to the emergence of actual gross profits (AGPs) and estimated gross profits (EGPs).

Secondary guarantee liabilities on IUL-type products or Investment-type contracts are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest.

The benefit ratio is the ratio of the present value of secondary guarantees to the present value of the assessments used to provide the secondary guarantees.

The assessments are calculated using the same assumptions used in VOBA, DAC, and DSI EGPs.

There is significant uncertainty inherent in calculating EGPs and assessments as the calculation is sensitive to management’s best estimate of assumptions such as earned rate, budgeted option costs, surrender rates, mortality, and guaranteed minimum withdrawal benefit (GMWB) utilization.

Changes in assumptions, including the Company’s earned rate, budgeted option costs, surrender rates, mortality, and GMWB utilization can have a significant impact on the pattern of EGPs of the underlying business and as a result the amortization of VOBA, DAC and DSI balances.

Management’s assumptions are adjusted, also known as unlocking, based on actual policyholder behavior and market experience and projecting for expected trends.

The unlocking results in amortization being recalculated using the new assumptions for estimated gross profits, resulting either in additional or less cumulative amortization expense.

Additionally, if experience or assumption changes result in a new benefit ratio, the secondary guarantee liabilities are adjusted to reflect the changes in a manner similar to the unlocking of VOBA, DAC, and DSI.

Auditing the valuation of the Company’s VOBA, DAC, and DSI that are amortized in relation to the emergence of AGPs/EGPs and valuation of secondary guarantee liabilities on IUL-type products or Investment-type contracts was complex because of the highly judgmental nature of the methods used and determination of the assumptions applied to determine the EGPs and assessments.

The high degree of judgment was primarily due to the sensitivity of the EGPs and assessments to the methods used and assumptions applied which have a significant effect on the valuation of VOBA, DAC, DSI and secondary guarantee liabilities on IUL-type products or Investment-type contracts.

How we Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the VOBA, DAC, DSI, and contractholder funds estimation processes.

These controls included, among others, the review and approval process management has in place for the development of the significant assumptions described above.

To evaluate the judgment used by management in determining the EGPs and assessments, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the EGPs and assessments with those used in prior periods.

To evaluate the significant assumptions used by management, we compared policyholder behavior assumptions that we identified as being higher risk to prior actual experience, observable market data or management’s estimates of prospective changes in these assumptions.

We performed an independent recalculation of EGPs and secondary guarantee liabilities for a sample of product cohorts, which we compared to the actuarial model used by management.

Valuation of Investments in Securities

Description of the Matter The Company’s fair value of fixed maturity securities totaled $31.2 billion as of December 31, 2022.

The fair value of a subset of these securities, including asset backed securities and bonds, is based on non-binding broker quotes as described in Note B to the consolidated financial statements.

The lack of visibility into assumptions used in non-binding broker quotes is a significant unobservable input, which creates greater subjectivity when determining the fair values.

Auditing the fair value of the securities valued by brokers was especially challenging because determining the fair value is complex and highly judgmental and involves using inputs and assumptions that are not directly observable in the market.

How we Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of management’s valuation process for broker-quoted securities.

These controls included management’s evaluation of the broker-quoted values compared to an independently calculated range of values.

To test the fair value of the securities, we utilized the support of our valuation specialists which included, among other procedures, independently calculating a reasonable range of fair values for a sample of securities based on independently obtained information or available transaction data for similar securities.

We compared these ranges to management’s estimates of fair value for the selected securities.

Assumptions related to Fixed Indexed Annuity Embedded Derivative Liability

Description of the Matter As of December 31, 2022, the fair value of the Company’s fixed indexed annuity embedded derivative liability totaled $3.1 billion.

Certain of the Company’s fixed indexed annuity contracts allow the policyholder to elect an equity index linked feature, where amounts credited to the contract’s account value are linked to the performance of designated equity indices selected by the policyholder.

The equity index crediting feature is accounted for as an embedded derivative liability and reported at fair value as discussed in Note B to the consolidated financial statements.

Auditing the valuation of the Company’s fixed indexed annuity embedded derivative was complex because of the highly judgmental nature of the determination of the assumptions required to determine the fair value of the embedded derivative.

In particular, the fair value was sensitive to the significant assumptions used to determine future policy growth including the mortality, surrender rates, partial withdrawals, GMWB utilization, non-performance spread, and option cost.

There is significant uncertainty inherent in determining the mortality, surrender rates, partial withdrawals, GMWB utilization, non-performance spread and option cost assumptions.

How we Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over management’s process for the development of the significant assumptions used in measuring the fair value of the embedded derivative for fixed indexed annuities.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fixed Indexed Annuity Embedded Derivative Liability, Market Risk Benefits, and Future Policy Benefits Liability

Description of the Matter At December 31, 2023, the fair value of the Company’s fixed indexed annuity embedded derivative liability totaled $4.3 billion.

Certain of the Company’s fixed indexed annuity (FIA) contracts allow the policyholder to elect an equity index linked feature, where amounts credited to the contract’s account value are linked to the performance of designated equity indices and crediting strategy selected by the policyholder.

The equity index crediting feature is accounted for as an embedded derivative liability and reported at fair value as discussed in Notes A (see section on Contractholder Funds), B, D, and I to the consolidated financial statements.

A subset of FIA contracts include certain contract features that provide minimum guarantees to policyholders, such as guaranteed minimum withdrawal benefits and guaranteed minimum death benefit features that are market risk benefits (MRB) measured at fair value as discussed in Notes A (see section on MRBs), B, G and P to the consolidated financial statements.

The Company’s MRB assets and MRB liabilities totaled $88 million and $403 million, respectively, as of December 31, 2023.

At December 31, 2023, future policy benefits (FPB) liabilities related to traditional life and life-contingent immediate annuity policies (which includes life-contingent pension risk transfer annuities) totaled $7.0 billion.

The future policy benefits liability related to these products is based on estimates of how much the Company will need to pay for future benefits and related claim expenses and the amount of net premiums to be collected from policyholders as discussed in Notes A (see section on Future Policy Benefits), J and P to the consolidated financial statements.

Auditing the valuation of the Company’s fixed indexed annuity embedded derivative, MRBs, and FPB liabilities was complex because of the highly judgmental nature of the determination of the assumptions required to determine the fair value of the embedded derivative and MRBs and valuation of FPB liabilities.

In particular, the fair value of fixed indexed annuity embedded derivative and MRBs was sensitive to the significant assumptions including surrender rates, GMWB utilization, and non-performance spread.

In addition, option cost was a significant assumption used in the valuation of fixed index annuity embedded derivatives and mortality, partial withdrawals, and capital market performance scenarios were significant assumptions used in the valuation of MRBs.

Mortality is a significant assumption used in the valuation of FPB liabilities.

These controls included, among others, the review and approval process management has in place for the development of the significant assumptions.

To evaluate the judgment used by management in determining the assumptions used in measuring the fair value of the fixed indexed annuity embedded derivative, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the fair value with those used in the prior period and in the industry.

To evaluate the significant assumptions used by management in the methodology applied, we compared policyholder behavior assumptions to prior actual experience and management’s estimate of prospective changes in the assumptions.

In addition, we compared the nonperformance spread and option costs assumptions to observable market data.

We performed an independent recalculation of the embedded derivative for a sample of products for comparison with the actuarial model used by management.

How we Addressed the Matter in Our Audit (continued) To evaluate the judgment used by management in determining the assumptions used in measuring the fair value of the fixed indexed annuity embedded derivative and MRBs and the valuation of FPB liabilities, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the valuation with those used in the prior period and in the industry.

To evaluate the significant assumptions used by management in the methodology applied, we compared as applicable, the significant assumptions noted above to historical experience, observable market data, and management’s estimates of prospective changes in these assumptions.

We also performed an independent recalculation of the embedded derivative, MRB, and FPB liabilities for a sample of policies or cohorts for comparison with the actuarial models used by management.

/s/ Ernst & Young LLP

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(Dollars in millions, except share data)

2022 December 31,

Fixed maturity securities available for sale, at fair value, at December 31, 2022 and December 31, 2021, at an amortized cost of $ 35,723 and $ 28,724 , respectively, net of allowance for credit losses of $ 31 and $ 8 , respectively

Fixed maturity securities available for sale, at fair value, at December 31, 2023 and 2022, at an amortized cost of $ 43,601 and $ 35,723 , respectively, net of allowance for credit losses of $ 35 and $ 31 , respectively

$ 40,419 $ 31,218

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Derivative investments 797 244

Mortgage loans, net of allowance for credit losses of $ 42 and $ 31 at December 31, 2022 and December 31, 2021, respectively

Investments in unconsolidated affiliates 2,427 2,350

Mortgage loans, net of allowance for credit losses of $ 66 and $ 42 at December 31, 2023 and 2022, respectively

Investments in unconsolidated affiliates (certain investments at fair value of $ 285 and $ 23 at December 31, 2023 and 2022, respectively)

Other long-term investments 608 537

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Cash and cash equivalents 1,563 960

Trade and notes receivables 3 3

Reinsurance recoverable, net of allowance for credit losses of $ 10 and $ 20 at December 31, 2022 and December 31, 2021, respectively

Reinsurance recoverable, net of allowance for credit losses of $ 21 and $ 10 at December 31, 2023 and 2022, respectively

Goodwill 1,749 1,749

Prepaid expenses and other assets 931 941

Lease assets 8 8

Other intangible assets, net 4,207 3,429

Property and equipment, net 13 13

Market risk benefits asset 88 117

Income taxes receivable 27 28

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Future policy benefits 7,050 5,021

Market risk benefits liability 403 282

Accounts payable and accrued liabilities 2,011 1,260

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Funds withheld for reinsurance liabilities 7,083 3,703

Lease liabilities 13 14

Deferred tax liability, net — 24

Total liabilities $ 67,099 $ 52,223

F&G common stock, $ 0.001 par value;

authorized 500,000,000 shares as of December 31, 2022 and December 31, 2021;

outstanding of 126,409,904 and 105,000,000 as of December 31, 2022 and December 31, 2021, respectively, and issued of 126,409,904 and 105,000,000 as of December 31, 2022 and December 31, 2021, respectively

authorized 500,000,000 shares as of December 31, 2023 and 2022;

outstanding of 126,332,142 and 126,409,904 as of December 31, 2023 and 2022, respectively, and issued of 127,234,902 and 126,409,904 as of December 31, 2023 and 2022, respectively

Additional paid-in-capital 3,185 3,162

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Accumulated other comprehensive (loss) earnings ( 1,990 ) ( 2,818 )

Treasury stock, at cost ( 902,760 shares and 7,762 shares as of December 31, 2023 and 2022, respectively)

Total equity $ 3,103 $ 2,405

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in millions, except per share data)

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Year ended December 31,

2023 2022 2021

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Total revenues 4,500 2,349 3,974

Benefits and expenses:

Benefits and other changes in policy reserves (remeasurement gains (losses) (a)) 3,553 1,126 1,932

Market risk benefit (gains) losses 95 ( 182 ) ( 44 )

Depreciation and amortization 412 324 271

Personnel costs 232 157 129

Other operating expenses 146 102 105

Benefits and other changes in policy reserves 1,125 2,138 866 298

Depreciation and amortization 329 484 123 ( 51 )

Interest expense 97 29 29

Total expenses 4,535 1,556 2,422

Earnings (loss) from continuing operations before income taxes 598 1,077 86 ( 214 )

Income tax expense (benefit) 117 220 ( 75 ) ( 14 )

Net earnings (loss) from continuing operations 481 857 161 ( 200 )

Net earnings (loss) from discontinued operations, net of tax — 8 ( 25 ) ( 114 )

Earnings (loss) before income taxes ( 35 ) 793 1,552

Income tax expense 23 158 320

Earnings (loss) from continuing operations ( 58 ) 635 1,232

Earnings from discontinued operations, net of tax — — 8

Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

Preferred stock dividend — — — 8

Net earnings (loss) attributable to common shareholders $ 481 $ 865 $ 136 $ ( 322 )

Earnings per Share

Basic (millions)

Net earnings (loss) from continuing operations $ 4.18 $ 8.16 $ 1.54 $ ( 0.97 )

Net earnings (loss) from discontinued operations — 0.08 ( 0.24 ) ( 0.54 )

Net earnings (loss) per common share:

$ 4.18 $ 8.24 $ 1.30 $ ( 1.51 )

Diluted (millions)

Net earnings (loss) from continuing operations $ 4.18 $ 8.16 $ 1.54 $ ( 0.97 )

Net earnings (loss) from discontinued operations — 0.08 ( 0.24 ) ( 0.54 )

Net earnings (loss) from continuing operations per share, basic $ ( 0.47 ) $ 5.52 $ 11.73

Net earnings from discontinued operations per share, basic — — 0.08

Net earnings (loss) per share, basic $ ( 0.47 ) $ 5.52 $ 11.81

Net earnings (loss) per share, diluted $ ( 0.47 ) $ 5.52 $ 11.73

Weighted average common shares used in computing net earnings (loss) per common share:

115 105 105 213

Weighted average shares outstanding F&G common stock, diluted basis (a) 115 105 105 213

(a) Weighted average shares outstanding for the year ended December 31, 2021 and for the period June 1, 2020 to December 31, 2020, retrospectively include the effects of the 105,000 for 1 stock split that became effective on June 24, 2022 .

Net earnings from discontinued operations per share, diluted — — 0.08

Net earnings (loss) per share, diluted $ ( 0.47 ) $ 5.52 $ 11.81

Weighted average shares outstanding F&G common stock, basic basis (b) 124 115 105

Weighted average shares outstanding F&G common stock, diluted basis (b) 124 115 105

(a) The remeasurement gains (losses) for the years ended December 31, 2023, 2022 and 2021 were $ 7 million, $ 1 million and $ 1 million, respectively .

(b) Weighted average shares outstanding for the year ended December 31, 2021 includes the effects of the 105,000 for 1 stock split that became effective on June 24, 2022 .

See accompanying Notes to Consolidated Financial Statements

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(In millions)

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Year ended December 31,

2023 2022 2021

Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

Other comprehensive (loss) earnings:

Unrealized (loss) gain on investments and other financial instruments, net of adjustments to intangible assets and unearned revenue (1)

( 3,744 ) ( 378 ) 1,255 ( 751 )

Other comprehensive earnings (loss):

Changes in current discount rate - future policy benefits (1) ( 189 ) 764 124

Changes in instrument-specific credit risk - market risk benefits (2) ( 34 ) 67 10

Unrealized (loss) gain on investments and other financial instruments, net of deferred income taxes (3) 919 ( 4,689 ) ( 438 )

Unrealized (loss) gain on foreign currency translation (4) 2 ( 5 ) ( 5 )

( 5 ) ( 5 ) 6 ( 1 )

Reclassification adjustments for change in unrealized gains and losses included in net earnings (5) 130 212 ( 83 )

212 ( 83 ) ( 61 ) 57

Change in reinsurance liabilities held at fair value resulting from a change in the instrument-specific credit risk — 3 ( 3 ) 6

Other comprehensive (loss) earnings:

( 3,537 ) ( 463 ) 1,197 ( 689 )

Comprehensive (loss) earnings $ ( 3,056 ) $ 402 $ 1,333 $ ( 1,003 )

(1) Net of income tax (benefit) expense of $( 991 ) million, $( 100 ) million, $ 332 million and $( 200 ) million for the years ended December 31, 2022 and 2021, the period June 1, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to May 31, 2020, respectively.

Change in reinsurance liabilities held at fair value resulting from a change in instrument-specific credit risk — — 3

Other comprehensive earnings (loss) 828 ( 3,651 ) ( 389 )

Comprehensive earnings (loss) $ 770 $ ( 3,016 ) $ 851

(1) Net of income tax (benefit) expense of $( 50 ) million, $ 203 million, and $ 33 million for the years ended December 31, 2023, 2022, and 2021, respectively.

(2) Net of income tax (benefit) expense of $( 9 ) million, $ 18 million.

$ 2 million, and $ — million for the years ended December 31, 2022 and 2021, the period June 1, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to May 31, 2020, respectively.

(3) Net of income tax (benefit) expense of $ 56 million, $( 22 ) million, $( 16 ) million and $ 15 million for the years ended December 31, 2022 and 2021, the period June 1, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to May 31, 2020, respectively.

and $ 3 million, for the years ended December 31, 2023, 2022, and 2021, respectively.

(3) Net of income tax (benefit) expense of $ 240 million, $( 1,242 ) million, and $( 119 ) million for the years ended December 31, 2023, 2022, and 2021, respectively.

(4) Net of income tax (benefit) expense of $ 1 million, $( 1 ) million, and $( 1 ) million for the years ended December 31, 2023, 2022, and 2021, respectively.

(5) Net of income tax (benefit) expense of $ 35 million, $ 56 million, and $( 22 ) million for the years ended December 31, 2023, 2022, and 2021, respectively.

See accompanying Notes to Consolidated Financial Statements

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Preferred Stock Common Stock Additional Paid-in-Capital Retained Earnings Accumulated Other Comprehensive Earnings (Loss) Treasury Stock Total Equity

Predecessor balance, January 1, 2020 $ — $ — $ 2,099 $ 134 $ 421 $ ( 69 ) $ 2,585

Cumulative effect for change in accounting principle — — — ( 27 ) — — ( 27 )

Other comprehensive earnings - unrealized gain on investments and other financial instruments — — — — ( 751 ) — ( 751 )

Other comprehensive earnings - unrealized loss on foreign currency translation — — — — ( 1 ) — ( 1 )

Balance, January 1, 2021 $ — $ — $ 2,741 $ 136 $ 1,197 $ — $ 4,074

Cumulative effect of retrospective adoption of ASU 2018-12 — — — 75 25 — 100

Unrealized (loss) gain on investments and other financial instruments — — — — ( 438 ) — ( 438 )

Unrealized (loss) gain on foreign currency translation — — — — ( 5 ) — ( 5 )

Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — ( 83 ) — ( 83 )

Common stock dividends — — — ( 4 ) — — ( 4 )

Preferred stock dividends (paid in kind) — — 15 ( 8 ) — — 7

Option exercises — — 10 — — — 10

Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk — — — — 6 — 6

Stock-based compensation — — 9 — — — 9

Net loss — — — ( 314 ) — — ( 314 )

Predecessor balance, May 31, 2020 $ — $ — $ 2,127 $ ( 219 ) $ ( 268 ) $ ( 69 ) $ 1,571

Purchase accounting adjustments — — 610 219 268 69 $ 1,166

Balance, June 1, 2020 $ — $ — $ 2,737 $ — $ — $ — $ 2,737

Other comprehensive earnings - unrealized gain on investments in unconsolidated affiliates — — — — 1,255 — 1,255

Other comprehensive earnings - unrealized gain on foreign currency translation — — — — 6 — 6

Instrument-specific credit risk - market risk benefits — — — — 10 — 10

Current discount rate - liability for future policy benefits — — — — 124 — 124

Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk — — — — 3 — 3

Net earnings — — — 1,240 — — 1,240

Balance, December 31, 2021 $ — $ — $ 2,750 $ 1,451 $ 833 $ — $ 5,034

Unrealized (loss) gain on investments and other financial instruments — — — — ( 4,689 ) — ( 4,689 )

Unrealized (loss) gain on foreign currency translation — — — — ( 5 ) — ( 5 )

Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — 212 — 212

Stock-based compensation — — 12 — — — 12

Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk — — — — ( 3 ) — ( 3 )

Instrument-specific credit risk - market risk benefits — — — — 67 — 67

Current discount rate - liability for future policy benefits — — — — 764 — 764

Dividends declared — — — ( 25 ) — — ( 25 )

Debt to equity conversion — — 400 — — — 400

Net earnings — — — 635 — — 635

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(In millions, except per share data)

F&G Annuities & Life, Inc.

Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Earnings (Loss) Treasury Stock Total Equity

Balance, January 1, 2021 $ — $ — $ 2,741 $ 136 $ 1,197 $ — $ 4,074

Other comprehensive earnings - unrealized loss on investments and other financial instruments — — — — ( 378 ) — ( 378 )

Other comprehensive earnings - unrealized loss on foreign currency translation — — — — ( 5 ) — ( 5 )

Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — ( 83 ) — ( 83 )

Stock-based compensation — — 9 — — — 9

Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk — — — 3 3

Net earnings — — — 865 — — 865

Balance, December 31, 2022

$ — $ — $ 3,162 $ 2,061 $ ( 2,818 ) $ — $ 2,405

Other comprehensive earnings - unrealized loss on investments and other financial instruments — — — — ( 3,744 ) — ( 3,744 )

Other comprehensive earnings - unrealized loss on foreign currency translation — — — — ( 5 ) — ( 5 )

Treasury stock repurchased — — — — — ( 18 ) ( 18 )

Unrealized (loss) gain on investments and other financial instruments — — — — 919 — 919

Unrealized (loss) gain on foreign currency translation — — — — 2 — 2

Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — 130 — 130

Stock-based compensation — — 23 — — — 23

Instrument-specific credit risk - market risk benefits — — — — ( 34 ) — ( 34 )

Current discount rate - liability for future policy benefits — — — — ( 189 ) — ( 189 )

Dividends declared — — — ( 77 ) — — ( 77 )

Debt to Equity conversion — — 400 — — — 400

Net earnings — — — 481 — — 481

Net earnings (loss) — — — ( 58 ) — — ( 58 )

Balance, December 31, 2023 $ — $ — $ 3,185 $ 1,926 $ ( 1,990 ) $ ( 18 ) $ 3,103

$ — $ — $ 3,162 $ 1,457 $ ( 2,803 ) $ — $ 1,816

See accompanying Notes to Consolidated Financial Statements

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(In millions)

Year Ended December 31, Period from

June 1 to December 31, Period from January 1 to May 31,

Year ended December 31,

2023 2022 2021

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Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities:

Depreciation and amortization 412 324 271

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Interest credited/index credits to contractholder account balances 1,409 ( 560 ) 573

Change in market risk benefits, net 95 ( 182 ) ( 44 )

Deferred policy acquisition costs and deferred sales inducements ( 1,082 ) ( 814 ) ( 675 )

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Net change in other assets and other liabilities 491 ( 516 ) 27

Net cash provided by (used in) operating activities 3,171 1,871 287 ( 224 )

Net cash provided by operating activities 5,834 3,171 1,871

Cash Flows from Investing Activities:

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Debt issuance costs ( 16 ) ( 4 ) —

Exercise of stock options — — — 10

Net revolving credit facility (repayments) borrowings ( 185 ) — —

Dividends paid ( 101 ) — —

Purchases of treasury stock ( 18 ) — —

Contractholder account deposits 7,787 8,530 8,166

Contractholder account withdrawals ( 4,625 ) ( 3,450 ) ( 2,931 )

Net cash provided by (used in) financing activities 5,626 5,635 1,640 877

Net cash provided by financing activities 3,687 5,626 5,635

Net increase (decrease) in cash and cash equivalents 603 ( 573 ) 644

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Description of the Business

We provide insurance solutions and issue a broad portfolio of annuity and life insurance products, including deferred annuities (fixed indexed and fixed rate annuities), immediate annuities, and indexed universal life ("IUL") insurance, through our retail distribution channels.

We provide insurance solutions and market a broad portfolio of annuity and life insurance products, including deferred annuities (fixed indexed annuities (“FIA”) and fixed rate annuities including multi-year guarantee annuities (“MYGA”)), immediate annuities, indexed universal life (“IUL”) insurance and, beginning in early 2024, registered index-linked annuities (“RILA”), through our retail distribution channels.

We also provide funding agreements and pension risk transfer (“PRT”) solutions through our institutional channels.

F&G has one reporting segment, which is consistent with and reflects the manner by which our chief operating decision maker views and manages the business.

For certain disclosures within this Report, we have elected to aggregate business based on the applicable product type, the manner in which information is regularly reviewed by management and the nature of disclosures that exist outside the Company’s GAAP financial statements.

FNF acquired 100 % of the outstanding equity of FGL Holdings, the prior parent company, on June 1, 2020.

FGAL, a Delaware corporation, was formed on August 7, 2020, and following a series of reorganizations, became the parent company for the consolidated financial statements via a contribution agreement between Fidelity National Financial, Inc.

FNF)(“FNF”) and FGAL on November 26, 2020.

The prior parent company, FGL Holdings, a Cayman Islands exempted company, was incorporated in the Cayman Islands on January 2, 2020, and became the parent company effective June 1, 2020, in conjunction with the acquisition by FNF, as discussed below.

The parent company prior to June 1, 2020, also named FGL Holdings, a Cayman Islands exempted company, was originally incorporated in the Cayman Islands on February 26, 2016, as a Special Purpose Acquisition Company ("SPAC") and was publicly traded on the New York Stock Exchange.

On June 1, 2020, FNF acquired 100 % of the outstanding equity of FGL Holdings for approximately $ 2.7 billion pursuant to the Agreement and Plan of Merger, dated February 7, 2020, as amended (the "Merger Agreement").

In connection with the Merger, FNF issued approximately 24 million shares of FNF common stock and paid approximately $ 1.8 billion in cash to former holders of FGL Holdings ordinary and preferred shares.

On August 26, 2020, FNF issued an additional 1 million shares of FNF common stock and paid approximately $ 100 million in cash to certain former owners of FGL Holdings common stock.

At closing, all outstanding shares of FGL Holdings common stock, excluding shares associated with the liability to former owners, were converted into the right to receive the Merger Consideration (as defined in the Merger Agreement).

Additionally, each outstanding FGL Holdings Option and FGL Holdings Phantom unit was canceled and converted into options to purchase FNF common stock and phantom units denominated in FNF common stock, and each outstanding warrant to purchase FGL Holdings common stock was converted into the right to purchase and receive upon exercise $ 8.18 in cash and .0833 shares of FNF common stock.

At closing, FNF's subsidiaries' ownership of FGL Holdings common and preferred shares was converted into approximately 7 million shares of FNF common stock.

As a result of the Merger Agreement, our financial statement presentation includes the consolidated financial statements of FGL Holdings and its subsidiaries as "Predecessor" for the period prior to the completion of the merger, as well as the consolidated financial statements of FGAL and its subsidiaries after the merger under a new basis established under purchase accounting in accordance with generally accepted accounting principles in the United States ("GAAP").

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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In connection with the FNF acquisition, certain third party offshore reinsurance businesses were deemed discontinued operations and are presented as such within our consolidated financial statements for all periods presented through the date of their disposition, in accordance with GAAP.

On December 18, 2020, we sold F&G

Reinsurance Ltd (“F&G Re”) to Aspida Holdings Ltd (“Aspida”).

On May 31, 2021, we sold third party reinsurance business held within Front Street Re Cayman Ltd (“FSRC”) to Archipelago Lexa (C) Limited.

The transactions did not have a material impact to our GAAP financial results.

Refer to Note R Discontinued Operations for more information.

The transaction and the results of discontinued operations for the year ended December 31, 2021 did not have a material impact to our GAAP financial results.

Recent Developments

Adoption of Accounting Standards Update (“ASU”) 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”)

F&G adopted ASU 2018-12 on January 1, 2023, with a transition date of January 1, 2021, which is the earliest period presented in the annual December 31, 2023 Consolidated Financial Statements.

We elected to adopt ASU 2018-12 using the full retrospective transition method and balances for liability for future policy benefits (“FPB”), deferred acquisition costs (“DAC”) and balances amortized on a basis consistent with DAC (value of business acquired (“VOBA”), deferred sales inducements (“DSI”), and unearned revenue liabilities (“URL”)), and market risk benefits (“MRB”) were adjusted to conform to ASU 2018-12 starting as of the FNF acquisition date, June 1, 2020 (the “FNF Acquisition Date”).

The 2022 and 2021 financial information contained herein have been adjusted for our full retrospective adoption of this update.

For more information, refer to Principles of Consolidation and Basis of Presentation below, Note F - Intangibles , Note G - Market Risk Benefits, Note H - Income Taxes, Note I - Contractholder Funds , Note J - Future Policy Benefits , Note K - Accounts Payable and Accrued Liabilities , Note P - ASU 2018-12 Transition and Note T - Recent Accounting Pronouncement s.

Revolving Credit Facility

On February 16, 2024, F&G entered into an amendment and extension of its existing senior unsecured revolving credit agreement (the “Credit Agreement”).

The maturity date of the Credit Agreement has been extended by approximately two years from November 22, 2025 to November 22, 2027.

Total commitments will increase from $ 665 million to $ 750 million.

Pricing and advance rates remain unchanged.

Financial covenants also remain essentially the same.

As noted below, we used $ 150 million of net proceeds from our 7.95 % F&G Notes to pay down the Credit Agreement to a balance of approximately $ 365 million as of December 31, 2023.

On February 14, 2024, our Board of Directors declared a quarterly cash dividend of $ 0.21 per share, payable on March 29, 2024, to F&G common shareholders of record as of March 15, 2024.

Generally, no dividends will be declared or paid on F&G common stock and no common stock can be acquired by F&G unless all preferred dividends are declared and paid on the F&G 6.875 % Series A Mandatory Convertible Preferred Stock, par value $ .001 per share, liquidation preference of $ 50.00 per share (the “FNF Preferred Stock”) discussed below.

On February 14, 2024, our Board of Directors also declared a quarterly cash dividend of $ 0.8976 per share on the FNF Preferred Stock for the period from January 12, 2024 to and excluding April 15, 2024, to be paid on April 15, 2024, to FNF Preferred Stock record holders as of April 1, 2024.

FNF $ 250 million Preferred Stock Investment

On January 12, 2024 we completed a $ 250 million preferred stock investment from FNF.

F&G will use net proceeds from the investment to support the growth of its assets under management.

Under the terms of the agreement, FNF agreed to invest $ 250 million in exchange for 5,000,000 shares of FNF Preferred Stock.

Unless earlier converted at the option of the holder, each outstanding share of the FNF Preferred Stock will automatically convert into shares of F&G common stock on January 15, 2027.

For further information related to this preferred stock issuance, refer to Note Q - Related Party Transactions.

7.95 % F&G Senior Notes

On December 6, 2023, F&G completed the public offering of $ 345 million aggregate principal amount of its 7.95 % Senior Notes due 2053 (the “ 7.95 % F&G Notes”).

F&G intends to use the net proceeds from the offering to repay borrowings under its revolving credit facility and for general corporate purposes, including the support of organic growth opportunities.

As of December 31, 2023, we used approximately $ 150 million of net proceeds to repay borrowings under our revolving credit facility.

The Senior notes were registered under the Securities Act of 1933 (as amended) (the “Securities Act”).

7.40 % F&G Senior Notes

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

F&G intends to use the net proceeds from the offering for general corporate purposes, including to support the growth of assets under management and for F&G's future liquidity requirements.

On December 8, 2022, F&G announced that its Board of Directors declared an inaugural quarterly cash dividend of $ 0.20 per share of common stock pursuant to the previously announced dividend program in which the Company intends to pay quarterly cash dividends on its common stock at an initial aggregate amount of approximately $ 100 million per year.

The dividend was paid January 31, 2023, to stockholders of record as of January 17, 2023.

Going forward, starting next quarter, F&G expects to announce the record date and payment date for each dividend, subject to quarterly review and approval by its Board of Directors and any required regulatory approvals, following completion of the relevant fiscal quarter and with payment in the third month of each subsequent quarter, based on the Company’s view of the prevailing and prospective macroeconomic conditions, regulatory landscape and business performance.

F&G Distribution

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

Revolving Credit Facility

On November 22, 2022, we entered into a Credit Agreement (the “Credit Agreement”) with certain lenders (the “Lenders”) and Bank of America, N.A.

as administrative agent (in such capacity, the “Administrative Agent”), swing line lender and an issuing bank, pursuant to which the Lenders have made available an unsecured revolving credit facility in an aggregate principal amount of $ 550 million to be used for working capital and general corporate purposes.

As of December 31, 2022, the revolving credit facility was fully drawn with $ 550 million outstanding.

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.

For further information related to the revolving credit facility, refer to Note E Notes Payable .

Stock Split, Increase to Authorized shares and Exchange Agreement with FNF

On June 24, 2022, the following actions previously approved by the F&G board of directors became effective:

(i) a stock split in a ratio of 105,000 for 1.

FNF, as the sole shareholder, received, in the form of a dividend, 104,999 additional shares of common stock for each share of common stock held.

Earnings per share has been retrospectively adjusted to reflect as if the split occurred as of June 1, 2020 in accordance with GAAP;

(ii) an increase in the number of authorized shares of common stock from one thousand ( 1,000 ) to five hundred million ( 500,000,000 );

(iii) an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired.

There was no gain or loss recorded with respect to the exchange agreement.

For the twelve months ended December 31, 2022, interest expense on the FNF Promissory Note was approximately $ 6 million.

Also refer to Note S Subsequent Events .

F&G is using the net proceeds from the offering for general corporate purposes, including to support the growth of assets under management and for F&G's future liquidity requirements.

The Senior notes were registered under the Securities Act.

Refer to Note L - Notes Payable, for further information related to financing facilities.

Share Repurchase Program

On March 21, 2023, F&G’s Board of Directors approved a new three-year stock repurchase program, effective March 21, 2023, under which the Company may repurchase up to $ 25 million of F&G common stock.

On November 7, 2023, the Board of Directors increased the share repurchase authorization to $ 50 million.

The Company believes the share repurchase program is an efficient means of returning cash to shareholders when we consider the shares to be undervalued.

Purchases may be made from time to time by the Company in the open market at prevailing market prices or through privately negotiated transactions or accelerated share repurchase

transactions through November 6, 2026.

All purchases are held as treasury stock.

The timing and extent of share repurchases will depend on a variety of factors, including, market conditions, regulatory requirements, and considerations as determined by management.

During the year ended December 31, 2023, the Company purchased approximately 869,000 shares pursuant to the program, for a total cost of approximately $ 18 million with an average cost per share of $ 21.07 .

At December 31, 2023, the total remaining authorization of F&G common stock that may be repurchased was approximately $ 32 million.

Owned Distribution Investments

On January 2, 2024, F&G acquired a 70 % majority ownership stake in the equity of Roar Joint Venture, LLC (“Roar”).

Roar wholesales life insurance and annuity products to banks and broker dealers through a network of agents.

Total initial consideration is comprised of cash of approximately $ 269 million and contingent consideration.

Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to approximately $ 90 million over a three year period upon the achievement of certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) milestones of Roar.

On August 4, 2023, F&G purchased a 30 % minority ownership stake in Quility Holdings, LLC (“Quility”).

Quility is a leading insurtech company that offers a frictionless experience for insurance agents, insurance distribution companies and the clients they serve.

On June 20, 2023, F&G purchased a 40 % minority ownership stake in DCMT Worldwide, LLC (“DCMT”).

DCMT distributes life insurance and annuity products through a network of over 1,000 agents.

On January 30, 2023, F&G purchased a 49 % minority ownership stake in Syncis Holdings, LLC (“Syncis”).

Syncis is an approximately 1,200 agent Network Marketing Group (“NMG”).

We have elected the fair value option to account for these investments and have included them in Investments in unconsolidated affiliates on the accompanying Consolidated Balance Sheets.

Reclassifications

In addition to the adjustments made related to the implementation of ASU 2018-12, we also reclassified approximately $ 28 million and $ 21 million from Other long-term investments to Investments in unconsolidated affiliates on the Consolidated Balance Sheets for consistency as of December 31, 2022 and 2021, respectively.

These reclassifications had no impact on Net earnings or Equity.

Principles of Consolidation and Basis of Presentation

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All intercompany profits, transactions and balances have been eliminated.

Refer to Note T - Recent Accounting Pronouncements for information on recent accounting pronouncements that may have an impact on our Consolidated Financial Statements.

We are involved in certain entities that are considered variable interest entities (“VIEs”) as defined under GAAP.

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Fixed maturity securities are purchased to support our investment strategies, which are developed based on factors including rate of return, maturity, credit risk, duration, tax considerations and regulatory requirements.

Our investments in fixed maturity securities have been designated as available-for-sale ("AFS") and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive income (loss) ("AOCI"), net of associated adjustments for deferred acquisition costs ("DAC"), value of business acquired ("VOBA"), deferred sales inducements ("DSI"), unearned revenue ("UREV"), Statement of Position 03-1 , Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts, (“SOP 03-1”) reserves, and deferred income taxes.

Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive earnings (loss) (“AOCI”), net of deferred income taxes.

Fair values for fixed maturity securities are principally a function of current market conditions and are primarily valued based on quoted prices in markets that are not active or model inputs that are observable or unobservable.

We recognize investment income on fixed maturities based on the effective interest method, which results in the recognition of a constant rate of return on the investment equal to the prevailing rate at the time of purchase or at the time of subsequent adjustments of book value.

Realized gains and losses on sales of our fixed maturity securitie s are determined on the first-in first-out cost basis.

Realized gains and losses on sales of our fixed maturity securities are determined on the first-in first-out cost basis.

We generally record security transactions on a trade date basis except for private placements, which are recorded on a settlement date basis.

Realized gains and losses on sales of fixed maturity securities are reported within Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

Realized gains and losses on sales of fixed maturity securities are reported within Recognized gains and (losses), net in the accompanying Consolidated Statements of Operations.

Fixed maturity securities AFS are subject to an allowance for credit loss and changes in the allowance are reported in net earnings as a component of Recognized gains and (losses), net.

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Preferred and Equity Securities

Equity and prefer red securities held are carried at fair value as of the balance sheet dates.

The fair values of our equity and preferred securities are based on quoted prices in active markets, or are valued based on quoted prices in markets that are not active, model inputs that are observable or unobservable or based on net asset value (“NAV”).

Changes in fair value and realized gains and losses on sales of our preferred and equity securities are reported within Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

Recognized gains and losses on sales of our preferred and equity securities are credited or charged to earnings on a trade date basis, unless the security is a private placement in which case settlement date basis is used.

Interest and dividend income from these investments is reported in Interest and investment income in the accompanying Consolidated Statements of Earnings.

Preferred and equity securities held are carried at fair value as of the balance sheet dates.

The fair values of our preferred and equity securities are based on quoted prices in active markets or are valued based on quoted prices in markets that are not active, model inputs that are observable or unobservable or based on net asset value (“NAV”).

Realized gains and losses on sales of our preferred and equity securities are determined on the first-in first-out cost basis and are credited or charged to earnings on a trade date basis, unless the security is a private placement in which case settlement date basis is used.

Interest and dividend income from these investments is reported in Interest and investment income in the accompanying Consolidated Statements of Operations.

Derivative Financial Instruments

We hedge certain portions of our exposure to product related equity market risk by entering into derivative transactions (primarily call options).

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

All such derivative instruments are recognized as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value.

The changes in fair value are reported within Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

The changes in fair value are reported within Recognized gains and losses, net in the accompanying Consolidated Statements of Operations.

We purchase financial instruments and issue products that may contain embedded derivative instruments.

If it is determined that the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract for measurement purposes.

The embedded derivative is carried at fair value, which is determined through a combination of market observable inputs such as market value of option and interest swap rates and unobservable inputs such as the mortality multiplier, surrender and withdrawal rates and non-performance spread.

The changes in fair value are reported within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Earnings.

The Company’s embedded derivative associated to our FIA crediting rates policies is carried at fair value, which is determined through a combination of market observable inputs such as market value of option and interest swap rates and unobservable inputs such as the mortality multiplier, surrender and withdrawal rates and non-performance spread.

The changes in fair value of the FIA embedded derivative are reported within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Operations.

See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments.

Reinsurance Related Embedded Derivatives

As discussed in Note J Reinsurance , F&G entered into reinsurance agreements with Kubera Insurance (SAC) Ltd.

("Kubera"), effective December 31, 2018, and Aspida Life Re Ltd.

("Aspida Re"), effective January 1, 2021, and amended in August 2021 and September 2022, to cede a quota share of certain deferred annuity and multi-year guaranteed annuities ("MYGA"), respectively, and GAAP and statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

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

("Somerset"), a certified third-party reinsurer.

Funds withheld arrangements allow the Company to retain legal ownership of assets backing reinsurance arrangements until they are earned by the reinsurer while passing credit risk associated with the assets in the funds withheld account to the reinsurer.

These arrangements create embedded derivatives considered to be total return swaps with contractual returns that are attributable to the assets and liabilities associated with the reinsurance arrangement.

The fair value of the total return swap is based on the change in fair value of the underlying assets held in the funds withheld portfolio.

Investment results for the assets that support the coinsurance with funds withheld reinsurance arrangement, including gains and losses from sales, are passed directly to the reinsurer pursuant to contractual terms of the reinsurance arrangement.

F&G cedes certain business on a coinsurance funds withheld basis.

Investment results for the assets that support the coinsurance that are segregated within the funds withheld account are passed directly to the reinsurer pursuant to

the contractual terms of the reinsurance agreement, which creates embedded derivatives considered to be total return swaps.

These total return swaps are not clearly and closely related to the underlying reinsurance contract and thus require bifurcation.

The reinsurance related embedded derivative is reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and losses, net, on the Consolidated Statements of Earnings.

The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account.

These embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and (losses), net, on the Consolidated Statements of Operations.

Mortgage Loans

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Residential mortgage loans have a primary credit quality indicator of either a performing or nonperforming loan.

We define nonperforming residential mortgage loans as those that are 90 or more days past due and/or in

nonaccrual status, which is assessed monthly.

We define nonperforming residential mortgage loans as those that are 90 or more days past due and/or in nonaccrual status, which is assessed monthly.

Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

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Loan commitment fees are deferred and amortized on an effective yield basis over the term of the loan.

Interest income, amortization of premiums and discounts, prepayment fees, and loan commitment fees are reported in Interest and investment income in the accompanying Consolidated Statements of Earnings.

Short-term investments

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Investments in Unconsolidated Affiliates

We primarily account for our investments in unconsolidated affiliates (primarily limited partnerships) using the equity method, where the cost is initially recorded as an investment in the entity.

Adjustments to the carrying amount reflect our pro rata ownership percentage of the operating results as indicated by NAV in the limited partnership financial statements.

Income from investments in unconsolidated affiliates is included within Interest and investment income in the accompanying Consolidated Statements of Earnings.

Recognition of income and adjustments to the carrying amount are delayed due to the availability of the related financial statements, which are obtained from the general partner generally on a one to three-month delay.

Management meets quarterly with the general partner to determine whether any credit or other market events have occurred since prior quarter financial statements to ensure any material events are properly included in current quarter valuation and investment income.

We account for our investments in unconsolidated affiliates using the equity method or by electing the fair value option.

Initial investments are recorded at cost.

For investments subsequently measured using the equity method (primarily limited partnerships), adjustments to the carrying amount reflect our pro rata ownership percentage of the operating results as indicated by net asset value (“NAV”) in the unconsolidated affiliates’ financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles.

Distributions received from investments measured using the equity method are recorded as a decrease in the investment balance.

For investments subsequently measured using the fair value option, adjustments to the carrying amount reflecting the change in fair value of the investment are reported along with realized gains and losses on sales of investments in unconsolidated affiliates in Recognized gains and (losses), net in the accompanying Consolidated Statements of Operations.

Distributions received from investments measured using the fair value option are reported within Interest and investment income in the accompanying Consolidated Statements of

Recognition of income and adjustments to the carrying amount can be delayed due to the availability of the related financial statements, which are obtained from the general partner or managing member generally on a one to three-month delay.

For investments using the equity method, management inquires quarterly with the general partner or managing member to determine whether any credit or other market events have occurred since prior quarter financial statements to ensure any material events are properly included in current quarter valuation and investment income.

Interest and investment income

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Fair Value of Financial Instruments

The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at a specific point in time using available market information and appropriate valuation methodologies.

The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at the balance sheet date using available market information and appropriate valuation methodologies.

These estimates are subjective in nature and involve uncertainties and significant judgment in the interpretation of current market data.

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During the measurement period, we are also required to recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date.

The measurement period ends the sooner of one year from the acquisition date or when we receive the information we were seeking about facts and circumstances that existed as of the acquisition date or learn that more information is not obtainable.

The measurement period ends the sooner of one year from the acquisition date or when we receive the information we were seeking about facts and circumstances that

existed as of the acquisition date or learn that more information is not obtainable.

Contingent consideration liabilities or receivables recorded in connection with business acquisitions must also be adjusted for changes in fair value until settled.

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We complete annual goodwill impairment analyses in the fourth quarter of each period presented using a September 30 measurement date.

For the years ended December 31, 2022, December 31, 2021, the period from June 1, 2020 to December 31, 2020 and for the Predecessor periods from January 1, 2020 to May 31, 2020 we determined there were no events or circumstances which indicated that the carrying value of a reporting unit exceeded the fair value.

VOBA, DAC and DSI

For the years ended December 31, 2023 and 2022, we determined there were no events or circumstances which indicated that the carrying value of a reporting unit exceeded the fair value.

VOBA, DAC, DSI and URL

Our intangible assets include the value of insurance and reinsurance contracts acquired (hereafter referred to as VOBA), DAC and DSI.

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VOBA is a function of the VIF, current GAAP reserves, GAAP assets, and deferred tax liability.

The VIF is determined by the present value of statutory distributable earnings less opening required capital, and is sensitive to assumptions including the discount rate, surrender rates, partial withdrawals, utilization rates, projected

investment spreads, mortality, and expenses.

DAC consists principally of commissions that are related directly to the successful sale of new or renewal insurance contracts, which may be deferred to the extent recoverable.

The VIF is determined by the present value of statutory distributable earnings less opening required capital.

DAC consists principally of commissions and other acquisition costs that are related directly to the successful sale of new or renewal insurance contracts.

Indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expense as incurred.

DSI represents up front bonus credits and vesting and persistency bonuses to policyholder account values, which may be deferred to the extent recoverable.

The methodology for determining the amortization of VOBA, DAC and DSI varies by product type.

For all insurance contracts accounted for under long-duration contract deposit accounting, amortization is based on assumptions consistent with those used in the development of the underlying contract liabilities, adjusted for emerging experience and expected trends.

For all of the insurance intangibles (VOBA, DAC and DSI), the balances are generally amortized over the lives of the policies in relation to the expected emergence of estimated gross profits (“EGPs”) from investment income, surrender charges and other product fees, less policy benefits, maintenance expenses, mortality, and expense margins.

Recognized gains (losses) on investments, changes in fair value of derivatives, and changes in fair value of the embedded derivative on our FIA and IUL products are included in actual gross profits in the period realized as described further below.

Amortization is reported within Depreciation and amortization in the accompanying Consolidated Statements of Earnings.

Changes in assumptions, including our earned rate (i.e., long term assumptions of the Company’s expected earnings on related investments), budgeted option costs (i.e., the expected cost to purchase call options in future periods to fund the equity indexed linked feature) and surrender rates can have a significant impact on VOBA, DAC and DSI balances and amortization rates.

Due to the relative size and sensitivity to minor changes in underlying assumptions of those intangible balances, we perform quarterly and annual analyses of the VOBA, DAC and DSI balances for recoverability to ensure that the unamortized portion does not exceed the expected recoverable amounts.

At each evaluation date, actual historical gross profits are reflected with the impact on the intangibles reported as “unlocking” as a component of amortization expense, and estimated future gross profits and related assumptions are evaluated for continued reasonableness.

Any adjustment in estimated future gross profits requires that the amortization rate be revised (“unlocking”) retroactively to the date of the contract issuance or acquisition date with respect to VOBA.

The cumulative unlocking adjustment is recognized as a component of current period amortization and reflected within Depreciation and amortization in the accompanying Consolidated Statements of Earnings.

For investment-type products, the VOBA, DAC and DSI assets are adjusted for the impact of unrealized gains (losses) on AFS investments as if these gains (losses) had been realized, with corresponding credits or charges included in AOCI ("shadow adjustments").

Refer to Note Q Recent Accounting Pronouncements for further discussion of accounting pronouncements not yet adopted that may have a significant impact on future estimated amortization expense upon adoption.

DSI represents up front bonus credits and persistency or vesting bonuses credited to contractholder fund balances.

VOBA, DAC, and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization.

Contracts are grouped by product type, feature and issue year into cohorts consistent with the grouping used in estimating the associated liability, where applicable.

The constant level amortization bases of VOBA, DAC and DSI varies by product type.

For universal life and IUL insurance products, the constant level basis used is face amount in force.

For deferred annuities (FIA and fixed rate annuities), the constant level basis used is initial premium deposit for DAC and DSI and vested account value as of the acquisition date for VOBA.

For immediate annuity contracts, the VOBA balance is amortized in alignment with the Company’s accounting policy of amortizing the deferred profit liability (“DPL”).

All amortization bases are adjusted by full lapses, which includes deaths, full surrenders, annuitizations and maturities, where applicable.

The constant level basis used for amortization are projected using mortality and lapse assumptions that are based on Company’s experience, industry data, and other factors and are consistent with those used for the FPB, where applicable.

If those projected assumptions change in future periods, they will be reflected in the cohort level amortization basis at that time.

Unexpected contract terminations, due to higher mortality and/or lapse experience than expected, are recognized in the current period as a reduction of the capitalized balances.

All balances are reduced for actual experience in excess of expected experience with changes in future estimates recognized prospectively over the remaining expected grouped contract term.

The impact of changes in projected assumptions and the impact of actual experience that is different from expectations both impact the amortization of these intangible assets, which is reported within Depreciation and amortization in the accompanying Consolidated Statements of Operations.

Some of our IUL policies require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies or contracts.

These payments are established as URL upon receipt and included in Accounts payable and other accrued liabilities in the Consolidated Balance Sheets.

URL is amortized like DAC over the estimated lives of these policies.

Other Intangible Assets

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For internal-use computer software products, internal and external costs incurred during the preliminary project stage are expensed as they are incurred.

Internal and external costs incurred during the application development stage are capitalized and amortized

on a product by product basis commencing on the date the software is ready for its intended use.

Internal and external costs incurred during the application development stage are capitalized and amortized on a product by product basis commencing on the date the software is ready for its intended use.

We do not capitalize any costs once the software is ready for its intended use.

We recorded $ 14 million of impairment expense to other intangible assets for the year ended December 31, 2022.

We recorded no impairment expense to other intangible assets during the year ended December 31, 2021, the period from June 1 to December 31, 2020, and the Predecessor period from January 1 to May 31, 2020.

We review VOBA, DSI and other intangible assets for impairment annually or when events or circumstances occur that indicate a potential change in the underlying basis .

Refer to Note F - Intangibles for details of impairment expense.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation.

Property and equipment are recorded at cost, less accumulated depreciation in Prepaid expenses and other assets on the Consolidated Balance Sheets.

Depreciation is computed primarily using the straight-line method based on the estimated useful lives of the related assets:

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Contractholder Funds

Contractholder funds include FIAs, fixed rate annuities, IULs, funding agreements and PRT and immediate annuities contracts without life contingencies.

The liabilities for contractholder funds for fixed rate annuities, funding agreements and PRT and immediate annuities contracts without life contingencies consist of contract account balances that accrue to the benefit of the contractholders.

Contractholder funds include deferred annuities (FIAs and fixed rate annuities), IULs, funding agreements and non-life contingent (“NLC”) immediate annuities (which includes NLC PRT annuities).

The liabilities for contractholder funds for fixed rate annuities, funding agreements and NLC immediate annuities consist of contract account balances that accrue to the benefit of the contractholders.

The liabilities for FIA and IUL policies consist of the value of the host contract plus the fair value of the indexed crediting feature of the policy, which is accounted for as an embedded derivative.

The embedded derivative is carried at fair value in Contractholder Funds in the accompanying Consolidated Balance Sheets with changes in fair value reported in Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Earnings.

The embedded derivative liability is carried at fair value in Contractholder funds in the accompanying Consolidated Balance Sheets with changes in fair value reported in Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Operations.

See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments .

Liabilities for the Guaranteed Minimum Withdrawal Benefits ("GMWB") and Guaranteed Minimum Death Benefit ("GMDB") riders on FIA and fixed rate annuity products are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative guaranteed minimum withdrawal and death benefit payments plus interest.

The benefit ratio is the ratio of the present value of future guaranteed minimum withdrawal and death benefit payments to the present value of the assessments used to provide the guaranteed minimum withdrawal and death benefit payments using the same assumptions as we use for our intangible assets.

If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes in a manner similar to the unlocking of VOBA, DAC and DSI.

The accounting for these GMWB and GMDB benefit liabilities (also referred to as “SOP 03-1 liabilities”) impact EGPs used to calculate amortization of VOBA, DAC and DSI.

The related reserve is adjusted for the impact of unrealized gains (losses) on AFS investments as if these gains (losses) had been realized, with corresponding credits or charges included in AOCI ("shadow adjustments").

Contractholder funds include funds related to funding agreements that have been issued pursuant to the FABN Program as well as to the Federal Home Loan Bank of Atlanta ("FHLB").

Single premiums are received at the initiation of the funding agreements.

As of December 31, 2022 and December 31, 2021, we had approximately $ 2,200 million and $ 1,900 million, respectively, outstanding under the FABN Program, which provides for semi-annual interest payments with principal maturities.

Reserves for the FHLB funding agreements totaled $ 1,982 million and $ 1,543 million as of December 31, 2022 and December 31, 2021, respectively.

The FHLB agreements provide a guaranteed stream of payments or provide for a bullet payment at maturity with renewal provisions.

In accordance with the FHLB agreements, the investments supporting the funding agreement liabilities are pledged as collateral to secure the FHLB funding agreement liabilities and are not available to settle our general obligations.

The collateral investments had a fair value of $ 3,387 million and $ 2,469 million as of December 31, 2022 and December 31, 2021, respectively.

Payments pursuant to FABN and FHLB funding agreements extend through 2029.

Future Policy Benefits

The liabilities for future policy benefits and claim reserves for traditional life policies and life-contingent immediate annuity policies (which includes life-contingent PRT annuities) are computed using assumptions for

investment yields, mortality and withdrawals, with a provision for adverse deviation, based on generally accepted actuarial methods and assumptions at the time of acquisition or contract issue.

The investment yield assumption for the years ended December 31, 2022 and December 31, 2021 was 4.3 % for traditional direct life reserves for all contracts, 4.1 % for life contingent pay-out annuities, and ranges from 3.6 % to 6.9 % for PRT annuities with life contingencies.

The FPB are determined as the present value of future policy benefits and related claims expenses to be paid to or on behalf of the policyholder less the present value of future net premiums to be collected from policyholders.

The FPB for traditional life policies and life-contingent immediate annuity policies (which includes life-contingent

PRT annuities) are estimated using current assumptions that include discount rate, mortality and surrender/lapse terminations for traditional life insurance policies only, and expenses.

The expense assumption is locked-in at contract issuance and not subsequently reviewed or updated.

The initial assumptions are based on generally accepted actuarial methods and a combination of internal and industry experience.

Policies are terminated through surrenders, lapses and maturities, where surrenders represent the voluntary terminations of policies by policyholders, lapses represent cancellations by us due to nonpayment of premiums, and maturities are determined by policy contract terms.

Surrender assumptions are based upon policyholder experience adjusted for expected future conditions.

For long-duration contracts the assumptions are locked in at contract inception and only modified if we deem the reserves to be inadequate.

We periodically review actual and anticipated experience compared to the assumptions used to establish policy benefits.

If the net GAAP liability (gross reserves less VOBA, DAC and DSI) is less than the gross premium liability, impairment is deemed to have occurred, and the VOBA, DAC and DSI asset balances are reduced until the net GAAP liability is equal to the gross premium liability.

If the VOBA, DAC and DSI asset balances are completely written off and the net GAAP liability is still less than the gross premium liability, then an additional liability is recorded to arrive at the gross premium liability.

For traditional life policies and life-contingent immediate annuity policies, contracts are grouped into cohorts by product type, legal entity, and issue year, or acquisition year for cohorts established as of the FNF Acquisition Date.

Life-contingent PRT annuities are grouped into cohorts by deal and legal entity.

At contract inception, a net premium ratio (“NPR”) is determined, which is calculated based on discounted future cash flows projected using best estimate assumptions and is capped at 100 %, as net premiums cannot exceed gross premiums.

Cohorts with NPRs less than 100 % are not used to offset cohorts with NPRs greater than 100 %.

The NPR is adjusted for changes in cash flow assumptions and for differences between actual and expected experience.

We assess the appropriateness of all future cash flow assumptions, excluding the expense assumption, on a quarterly basis and perform an in-depth review of future cash flow assumptions in the third quarter of each year.

Updates are made when evidence suggests a revision is necessary.

Updates for actual experience, which includes actual cash flows and insurance in-force, are performed on a quarterly basis.

These updated cash flows are used to calculate a revised NPR, which is used to derive an updated liability as of the beginning of the current reporting period, discounted at the original contract issuance date.

The updated liability is compared with the carrying amount of the liability as of that same date before the revised NPR.

The difference between these amounts is the remeasurement gain or loss, presented parenthetically within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Operations.

In subsequent periods, the revised NPR is used to measure the FPB, subject to future revisions.

If the NPR is greater than 100 %, and therefore capped at 100 %, the liability is increased and expensed immediately to reflect the amount necessary for net premiums to equal gross premiums.

As the liability assumptions are reviewed and updated, if deemed necessary, at least annually, if conditions improve whereby the contracts are no longer expected to have net premiums in excess of gross premiums, the improvements would be captured in the remeasurement process and reflected in the accompanying Consolidated Statements of Operations in the period of improvement.

For traditional life policies and life-contingent immediate annuity policies (which includes life-contingent PRT annuities), the discount rate assumption is an equivalent single rate that is derived based on A-credit-rated fixed-income instruments with similar duration to the liability.

We selected fixed-income instruments that have been A-rated by Bloomberg.

In order to reflect the duration characteristics of the liability, we will use an implied forward yield curve and linear interpolation will be used for durations that have limited or no market observable points on the curve.

The discount rate assumption is updated quarterly and used to remeasure the liability at the reporting date, with the resulting change reflected in the accompanying Consolidated Statements of Comprehensive Earnings.

Deferred Profit Liability

For life-contingent immediate annuity policies, gross premiums received in excess of net premiums are deferred at initial recognition as a DPL.

Gross premiums are measured using assumptions consistent with those used in the measurement of the related liability for FPBs, including discount rate, mortality, and expenses.

The DPL is amortized and recognized as premium revenue with the amount of expected future benefit payments, discounted using the same discount rate determined and locked-in at contract issuance that is used in the measurement of the related FPB.

Interest is accreted on the balance of the DPL using this same discount rate.

We periodically review and update our estimates using the actual historical experience and updated cash flows for the DPL at the same time as the estimates of cash flows for the FPB.

When cash flows are updated, the updated estimates are used to recalculate the initial DPL at contract issuance.

The recalculated DPL as of the beginning of the current reporting period is compared to the carrying amount of the DPL as of the beginning of the current reporting period, with any differences recognized as a remeasurement gain or loss, presented parenthetically within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Operations.

The DPL is recorded as a component of the Future policy benefits in the accompanying Consolidated Balance Sheets.

Market Risk Benefits

MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest rate and foreign exchange risk) and expose the Company to other-than-nominal capital market risk.

MRBs include certain contract features primarily on FIA products that provide minimum guarantees to policyholders, such as guaranteed minimum death benefit (“GMDB”), guaranteed minimum withdrawal benefit (“GMWB”) riders and guaranteed minimum accumulation benefit (“GMAB”) riders.

MRBs are measured at fair value using an attributed fee measurement approach where attributed fees are explicit rider charges collectible from the policyholder used to cover the excess benefits, which represent expected benefits in excess of the policyholder’s account value.

At contract inception, an attributed fee ratio is calculated equal to rider charges over benefits paid in excess of the account value attributable to the MRBs.

The attributed fee ratio remains static over the life of the MRBs and is capped at 100 %.

Each period subsequent to contract inception, the attributed fee ratio is used to calculate the fair value of the MRBs using a risk neutral valuation method and is based on current net amounts at risk, market data, internal and industry experience, and other factors.

The balances are computed using assumptions including mortality, full and partial surrender, GMWB utilization, risk-free rates including non-performance spread and risk margin, market value of options and economic scenarios.

Policyholder behavior assumptions are reviewed at least annually, typically in the third quarter, for any revisions.

MRBs can either be in an asset or liability position and are presented separately on the Consolidated Balance Sheets as the right of setoff criteria are not met.

Changes in fair value are recognized in Market risk benefits gain (losses) in the Consolidated Statements of Operations, except for the change in fair value due to a change in the instrument-specific credit risk, which is recognized in the Consolidated Statements of Comprehensive Earnings.

See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments and Note G - Market Risk Benefits .

We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards.

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Our insurance subsidiaries enter into reinsurance agreements with other companies in the normal course of business.

For arrangements in which F&G follows reinsurance accounting and for most arrangements that are accounted for as separate investment contracts, we present the amounts consistently and on a gross basis in our Consolidated Balance Sheets with the ceded reserves balance presented as a Reinsurance recoverable.

Where applicable, deferred gains associated with the reinsurance of insurance and investment contracts will be included within Accounts payable and accrued expenses with the related accretion reflected within Life insurance premiums and other fees on the Consolidated Balance Sheets and Statements of Earnings, respectively.

Where applicable, deferred costs associated with the reinsurance of insurance and investment contracts will be included within the Prepaid expense and other assets with the related amortization reflected within Other operating expenses in the Consolidated Balance Sheets and Statements of Earnings, respectively.

Premium and expense are recorded net of reinsurance ceded for both insurance and investment contracts.

For some arrangements for which deposit accounting is applied or the arrangement is accounted for as a separate investment contract, the assets and liabilities of certain reinsurance contracts are presented on a net basis in the accompanying Consolidated Balance Sheets.

The related net investment income, investment gain/loss, and change in reserves are presented net on the accompanying Consolidated Statements of Earnings.

For arrangements that meet the criteria to be accounted for as reinsurance, we present the amounts consistently and on a gross basis in our Consolidated Balance Sheets with the ceded reserves balance presented as a Reinsurance recoverable.

Deferred gains will be included within Accounts payable and accrued expenses with the related accretion reflected within Life insurance premiums and other fees on the Consolidated Balance Sheets and Statements of Operations, respectively.

Deferred costs will be included within the Prepaid expense and other assets with the related amortization reflected within Other operating expenses in the Consolidated Balance Sheets and Statements of Operations, respectively.

Premium and expense are recorded net of reinsurance ceded.

For arrangements in which the underlying contracts do not included insurance risk or do not meet the criteria to be accounted for as reinsurance, the arrangements are accounted for as separate investment contracts or deposit accounting is applied, respectively.

In both cases, we calculate a deposit asset based on the actual and expected cash flows associated to each arrangement and use the interest method to accrete the deposit asset using an effective yield based on changes in actual and expected cash flows.

The deposit asset is presented within Reinsurance recoverable on the Consolidated Balance Sheets and the accretion of the deposit asset is presented within Benefits and other changes in policy reserves on the accompanying Consolidated Statements of Operations.

For certain arrangements that are not accounted for as reinsurance, the right of offset is applied when there is a right of offset explicit in the reinsurance agreement.

This results in the assets and liabilities associated with the arrangement presented on a net basis in the accompanying Consolidated Balance Sheets, and the related net investment income, investment gain/loss, and change in deposit asset are presented net on the accompanying Consolidated Statements of Operations.

F&G intends to apply the right of offset where there is a right of offset explicit in the reinsurance agreement.

See Note J Reinsurance for more details over F&G's reinsurance agreements.

Revenue Recognition

The Company's life insurance premiums reflect premiums for traditional life policies and life-contingent immediate annuity policies (which includes life-contingent PRT annuities) which are recognized as revenue when

due from the policyholder.

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on FIA policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts.

We have ceded the majority of our traditional life business to unaffiliated third-party reinsurers.

While the base contract has been reinsured, we continue to retain the return of premium rider.

Insurance and investment product fees and other consist primarily of the cost of insurance on IUL policies, unearned revenue on IUL policies, policy rider fees primarily on FIA policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts.

Surrender charges are earned when a policyholder withdraws funds from the contract early or cancels the contract.

Other income related to riders is earned when elected by the policyholder.

Surrender charges are earned when a policyholder withdraws funds from the contract early or cancels the contract.

Premium and annuity deposit collections for FIA, fixed rate annuities, immediate annuities and PRT without life contingencies, and amounts received for funding agreements are reported in the financial statements as deposit liabilities (i.e., Contractholder Funds) instead of as sales or revenues.

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Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization of VOBA, DAC and DSI, other operating costs and expenses, and income taxes.

Premiums, annuity deposits (net of reinsurance) and funding agreements, which are not included as revenues in the accompanying Consolidated Statements of Earnings, collected by product type were as follows:

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Premiums, annuity deposits (net of reinsurance and reinsurance recoverable) and funding agreements, which are not included as revenues in the accompanying Consolidated Statements of Operations, collected by product type were as follows:

Year Ended December 31,

2023 2022 2021

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Life insurance and other (a)

446 329 152 102

Total $ 7,787 $ 8,342 $ 8,285

(a) Life insurance and other primarily includes indexed universal life insurance.

Interest and investment income consist primarily of interest payments received on fixed maturity security holdings and dividends received on equity and preferred security holdings along with the investment income of limited partnerships and is recognized when earned.

Interest and investment income consist primarily of interest payments received on fixed maturity security holdings and dividends received on preferred and equity security holdings along with the investment income of limited partnerships and is recognized when earned.

Benefits and Other Changes in Policy Reserves

Benefit expenses for FIAs, fixed rate annuities, IUL policies and funding agreements include interest credited and, for FIA and IUL policies, index credits, to contractholder account balances.

Benefit expenses for deferred annuities (FIAs and fixed rate annuities), IUL policies and funding agreements include interest credited, fixed interest, floating interest (specific to funding agreements) and/or index credits (specific to FIA and IUL policies), to contractholder account balances.

Benefit claims in excess of contract account balances, net of reinsurance recoveries, are charged to expense in the period that they are earned by the policyholder based on their selected strategy or strategies.

Interest crediting rates associated with funds invested in the general account of our insurance subsidiaries for the years ended December 31 2022 and December 31, 2021 range from 0.5 % to 6.0 % for fixed rate annuities and FIAs combined and 3.0 % to 4.8 % for IULs.

For funding agreements, the rates range from 0.8 % to 5.15 % for the year ended December 31, 2022 and 0.2 % to 5.0 % for the year ended December 31, 2021.

Other changes in policy reserves include the change in the fair value of the FIA embedded derivative and the change in the SOP 03-1 reserve for GMWB and GMDB benefits.

Other changes in policy reserves include the change in the fair value of the FIA embedded derivative.

Other changes in policy reserves also include the change in reserves for life insurance products.

For traditional life and immediate annuities (which includes PRT annuities with life contingencies), policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries.

For traditional life and life-contingent immediate annuities (which includes PRT annuities with life contingencies), policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries.

Remeasurement gains or losses on the related FPB and DPL balances are presented parenthetically within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Operations.

Stock-Based Compensation Plans

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Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date using quoted market prices and recognized over the service period.

Refer to Note R - Employee Benefit Plans for more details regarding our stock compensation plans.

Earnings Per Share

Basic earnings per share ("EPS"), as presented on the Consolidated Statement of Earnings, is computed by dividing net earnings from continuing operations and separately from discontinued operations by the weighted average number of common shares outstanding during the period.

Basic earnings per share (“EPS”), as presented on the Consolidated Statements of Operations, is computed by dividing net earnings from continuing operations and separately from discontinued operations by the weighted average number of common shares outstanding during the period.

In periods when earnings are positive, diluted earnings per share is calculated by dividing net earnings from continuing operations and separately from discontinued operations by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities.

For periods when we recognize a net loss, diluted earnings per share is equal to basic earnings per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive.

Prior to the FNF acquisition, we had certain non-vested stock, stock options, warrants and performance share units, which have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported.

For periods prior to the FNF acquisition, the effect of a potential conversion of outstanding preferred shares to common shares is not considered in the diluted EPS calculation as the preferred shareholders did not yet have the right to convert.

On June 24, 2022, the following action previously approved by the F&G board of directors became effective:

(i) a stock split in a ratio of 105,000 for 1.

Earnings per share has been retrospectively adjusted to reflect as if the split occurred as of June 1, 2020, in accordance with GAAP.

Refer to Note P - Earnings Per Share for more details over our calculation of EPS.

Refer to Note S - Earnings Per Share for more details over our calculation of EPS.

Comprehensive Earnings (Loss)

We report Comprehensive earnings (loss) in accordance with GAAP on the Consolidated Statements of Comprehensive Earnings.

We report Comprehensive earnings (loss) in accordance with GAAP on the Consolidated Statements of Comprehensive Earnings (Loss).

Total comprehensive earnings are defined as all changes in shareholders' equity during a period, other than those resulting from investments by and distributions to shareholders.

While total comprehensive earnings is the activity in a period and is largely driven by net earnings in that period, accumulated other comprehensive earnings or loss represents the cumulative balance of other comprehensive earnings, net of tax, as of the balance sheet date.

Amounts reclassified to net earnings relate to the realized gains (losses) on our investments and other financial instruments, excluding investments in unconsolidated affiliates, and are included in Recognized gains and losses, net on the Consolidated Statements of Earnings.

Management Estimates

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Actual results could differ from those estimates.

Periodically, and at least annually, typically in the third quarter, we review the assumptions associated with reserves for policy benefits, product guarantees, and amortization of intangibles.

During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and certain assumptions used to calculate SOP 03-1 liabilities and intangible balances.

These changes, taken together, resulted in an increase in contractholder funds and future policy benefits of $ 97 million and an increase to intangible assets of $ 47 million .

Periodically, and at least annually, typically in the third quarter, we review the assumptions associated with reserves for policy benefits and product guarantees.

During the third quarter of 2023 and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain FIA assumptions to calculate the fair value of the embedded derivative component within the contractholder funds and also aligned reserves to actual policyholder behavior.

These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $ 73 million.

These changes, taken together, resulted in an increase in contractholder funds and market risk benefits of $ 99 million .

During the third quarter of 2021, we implemented a new actuarial valuation system.

As a result, our third quarter 2021 assumption updates include model refinements and assumption updates resulting from the implementation.

The system implementation and assumption review process that occurred in the third quarter of 2021, included refinements in the calculation of the fair value of the embedded derivative component of our FIAs within contractholder funds and updates to the surrender rates, GMWB utilization, IUL premium persistency,

maintenance expenses, and earned rate assumptions to reflect our current and expected future experience.

These changes, taken together, resulted in a decrease in contractholder funds and future policy reserves of $ 425 million and a decrease to intangible assets of $ 136 million.

These model refinements and assumptions are also used in the SOP 03-1 liability for GMWB and GMDB benefits and resulted in an increase in the liability of $ 28 million.

There was no material change to underlying policyholder behavior.

As a result, our third quarter 2021 assumption updates include model refinements and assumption updates resulting from the

implementation.

These changes, taken together, resulted in a decrease in contractholder funds and future policy reserves of $ 435 million.

The majority of the changes represent one-time adjustments in the third quarter of 2021 related to the cumulative impact of the system implementation and are not expected to re-occur in the future.

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In addition, our unconsolidated affiliates (primarily limited partnerships) are primarily accounted for using the equity method of accounting with fair value determined using NAV as a practical expedient.

Our carrying value reflects our pro rata ownership percentage as indicated by NAV in the limited partnership financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles.

The underlying investments of the limited partnerships may have significant unobservable inputs, which may include, but are not limited to, comparable multiples and weighted average cost of capital rates applied in valuation models or a discounted cash flow model.

Our carrying value reflects our pro rata ownership percentage as indicated by NAV in the unconsolidated affiliate’s financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles.

The underlying investments of the unconsolidated affiliates may have significant unobservable inputs, which may include, but are not limited to, comparable multiples and weighted average cost of capital rates applied in valuation models or a discounted cash flow model.

Additionally, management meets quarterly with the general partner to determine whether any credit or other market events have occurred since prior quarter financial statements to ensure any material events are properly included in current quarter valuation and investment income.

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In addition to the unobservable inputs, Level 3 fair value investments may include observable components, which are components that are actively quoted or can be validated to market-based sources.

The carrying amounts and estimated fair values of our financial instruments for which the disclosure of fair values is required, including financial assets and liabilities measured and carried at fair value on a recurring basis, with the exception of investment contracts, portions of other long-term investments and debt, which are disclosed later within this footnote, was summarized according to the hierarchy previously described, as follows (in millions):

The carrying amounts and estimated fair values of our financial instruments for which the disclosure of fair values is required, including financial assets and liabilities measured and carried at fair value on a recurring basis, was summarized according to the hierarchy previously described, as follows (in millions):

December 31, 2023

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Derivative investments — 740 57 — 797 797

Investment in unconsolidated affiliates — — 285 — 285 285

Short term investments 1,444 8 — — 1,452 1,452

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Other long-term investments — — 37 37 37

Market risk benefits asset — — 88 — 88 88

Total financial assets at fair value $ 3,593 $ 32,095 $ 9,652 $ 59 $ 45,399 $ 45,399

FIA/ IUL embedded derivatives, included in contractholder funds $ — $ — $ 4,258 $ — $ 4,258 $ 4,258

Market risk benefits liability — — 403 — 403 403

Total financial liabilities at fair value $ — $ — $ 4,661 $ — $ 4,661 $ 4,661

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Derivative investments — 244 — — 244 244

Investment in unconsolidated affiliates — — 23 — 23 23

Short-term investments 1,556 — — — 1,556 1,556

Reinsurance related embedded derivative, included in other assets — 279 — — 279 279

Other long-term investments — — 48 — 48 48

Market risk benefits asset — — 117 — 117 117

Total financial assets at fair value $ 2,943 $ 24,016 $ 8,262 $ 47 $ 35,268 $ 35,268

FIA/ IUL embedded derivatives, included in contractholder funds $ — $ — $ 3,115 $ — $ 3,115 $ 3,115

Reinsurance related embedded derivatives, included in accounts payable and accrued liabilities — 73 — — 73 73

Market risk benefits liability — — 282 — 282 282

Total financial liabilities at fair value $ — $ — $ 3,397 $ — $ 3,397 $ 3,397

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For broker-quoted only securities, quotes from market makers or broker-dealers are obtained from sources recognized to be market participants.

We believe the broker quotes are prices at which trades could be executed based on historical trades executed at broker-quoted or slightly higher prices.

the broker quotes are prices at which trades could be executed based on historical trades executed at broker-quoted or slightly higher prices.

We analyze the third-party valuation methodologies and related inputs to perform assessments to determine the appropriate level within the fair value hierarchy.

However, we did not adjust prices received from third parties as of December 31, 2022 or December 31, 2021.

However, we did not adjust prices received from third parties as of December 31, 2023 or 2022.

Certain equity investments are measured using NAV as a practical expedient in determining fair value.

Derivative Financial Instruments

The fair value of call options is based upon valuation pricing models, which represents what we would expect to receive or pay at the balance sheet date if we canceled the options, entered into offsetting positions, or exercised the options.

Fair values for these instruments are determined internally, based on industry accepted valuation pricing models, which use market-observable inputs, including interest rates, yield curve volatilities, and other factors.

The fair value of futures contracts (specifically for FIA contracts) represents the cumulative unsettled variation margin (open trade equity, net of cash settlements), which represents what we would expect to receive or pay at the balance sheet date if we canceled the contracts or entered into offsetting positions.

These contracts are classified as Level 1.

Our call options, futures contracts, and interest rate swaps can either be exchange traded or over the counter.

Exchange traded derivatives typically fall within Level 1 of the fair value hierarchy if there is active trading activity.

Two methods are used to value over-the-counter derivatives.

When required inputs are available, certain derivatives are valued using valuation pricing models, which represent what we would expect to receive or pay at the balance sheet date if we cancelled or exercised the derivative, or entered into offsetting positions.

Valuation models require a variety of inputs, which include the use of market-observable inputs, including interest rate, yield curve volatilities, and other factors.

These over-the-counter derivatives are typically classified within Level 2 of the fair value hierarchy as the majority trade in liquid markets, we can verify model inputs and model selection does not involve significant management judgment.

When inputs aren’t available for valuation models, certain over-the-counter derivatives are valued using independent broker quotes, which are based on unobservable market data and classified within Level 3.

The fair value measurement of the FIA/IUL embedded derivatives included in contractholder funds is determined through a combination of market observable information and significant unobservable inputs using the option budget method.

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The significant unobservable inputs are the budgeted option cost (i.e., the expected cost to purchase call options in future periods to fund the equity indexed linked feature), surrender rates, mortality multiplier and non-performance spread.

The mortality multiplier at December 31, 2022 and December 31, 2021 was applied to the 2012 Individual Annuity mortality tables.

The mortality multiplier at December 31, 2023 and 2022 was applied to the 2012 Individual Annuity mortality tables.

Increases or decreases in the market value of an option in isolation would result in a higher or lower, respectively, fair value measurement.

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Generally, a change in any one unobservable input would not directly result in a change in any other unobservable input.

Also refer to Management's Estimates in Note A Business and Summary of Significant Accounting Policies regarding updated assumptions during the fourth quarter of 2022 and the implementation of a new actuarial valuation system and assumption updates during the third quarter of 2021.

The system implementation and assumption review process included refinements in the calculation of the fair value of the embedded derivative component of our fixed indexed annuities.

The fair value of the reinsurance-related embedded derivatives in the funds withheld reinsurance agreements with Kubera (effective October 31, 2021, this agreement was novated from Kubera to Somerset, a certified third party reinsurer) and Aspida Re are estimated based upon the fair value of the assets supporting the funds withheld from reinsurance liabilities.

Also refer to Management's Estimates in Note A - Business and Summary of Significant Accounting Policies regarding certain assumption updates.

The fair value of the reinsurance-related embedded derivatives in our funds withheld reinsurance agreements are estimated based upon the fair value of the assets supporting the funds withheld from reinsurance liabilities.

The fair value of the assets is based on a quoted market price of similar assets (Level 2), and therefore the fair value of the embedded derivative is based on market-observable inputs and classified as Level 2.

See Note J Reinsurance for further discussion on F&G reinsurance agreements.

Investments in Unconsolidated affiliates

We have elected the fair value option for certain investments in unconsolidated affiliates as we believe this better aligns them with other investments in unconsolidated affiliates that are measured using NAV as a practical expedient in determining fair value.

Investments measured using the fair value option are included in Level 3 and the fair value of these investments are determined using a multiple of the affiliates’ EBITDA, which is derived from market analysis of transactions involving comparable companies.

The EBITDA used in this calculation is based on the affiliates’ financial information.

The inputs are usually considered unobservable, as not all market participants have access to this data.

Short-term Investments

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We hold a fund-linked note, which provides for an additional payment at maturity based on the value of an embedded derivative based on the actual return of a dedicated return fund.

Fair value of the embedded derivative is based on an unobservable input, the net asset value of the fund at the balance sheet date.

The embedded derivative is similar to a call option on the net asset value of the fund with a strike price of zero since we will not be required to make any additional payments at maturity of the fund-linked note in order to receive the net asset value of the fund on the maturity date.

A Black-Scholes model determines the net asset value of the fund as the fair value of the call option regardless of the values used for the other inputs to the option pricing model.

The net asset value of the fund is provided by the fund manager at the end of each calendar month and represents the value an investor would receive if it withdrew its investment on the balance sheet date.

Therefore, the key unobservable input used in the

Black-Scholes model is the value of the fund.

Fair value of the embedded derivative is based on an unobservable input, the NAV of the fund at the balance sheet date.

A Black-Scholes model determines the NAV of the fund as the fair value of the call option regardless of the values used for the other inputs to the option pricing model.

The NAV of the fund is provided by the fund manager at the end of each calendar month and represents the value an investor would receive if it withdrew its investment on the balance sheet date.

Therefore, the key unobservable input used in the Black-Scholes model is the value of the fund.

As the value of the fund increases or decreases, the fair value of the embedded derivative will increase or decrease.

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The fair value of the note is provided by the fund manager at the end of each quarter.

Market Risk Benefits

MRBs are measured at fair value using an attributed fee measurement approach where attributed fees are explicit rider charges collectible from the policyholder used to cover the excess benefits.

The fair value is calculated using a risk neutral valuation method and is based on current net amounts at risk, market data, internal and industry experience, and other factors.

The balances are computed using assumptions including mortality, full and partial surrender, rider benefit utilization, risk-free rates including non-performance spread and risk margin, market value of options and economic scenarios.

Policyholder behavior assumptions are reviewed at least annually, typically in the third quarter, for any revisions.

See further discussion on MRBs in Note G - Market Risk Benefits .

Quantitative information regarding significant unobservable inputs used for recurring Level 3 fair value measurements of financial instruments carried at fair value as of December 31, 2023 and 2022, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are as follows (in millions):

Fair Value at Valuation Technique Unobservable Input(s) Range (Weighted average)

December 31, 2022

(in millions) December 31, 2022

Asset-backed securities $ 5,916 Broker-quoted Offered quotes 52.85 % - 117.17 %

Asset-backed securities 347 Third-Party Valuation Offered quotes 41.43 % - 210.50 %

Commercial mortgage-backed securities 20 Broker-quoted Offered quotes 109.02 % - 109.02 %

Commercial mortgage-backed securities 17 Third-Party Valuation Offered quotes 74.66 % - 88.48 %

Corporates 602 Broker-quoted Offered quotes 79.16 % - 102.53 %

Corporates 825 Third-Party Valuation Offered quotes — % - 104.96 %

Municipals 29 Third-Party Valuation Offered quotes 93.95 % - 93.95 %

Residential mortgage-backed securities 302 Broker-quoted Offered quotes 0.00 % - 91.04 %

Foreign governments 16 Third-Party Valuation Offered quotes 99.78 % - 102.29 %

December 31, 2023 December 31, 2023

Asset-backed securities 57 Third-Party Valuation Discount Rate 5.09 % - 6.95 %

Corporates 787 Third-Party Valuation Discount Rate 0.00 % - 12.87 %

Municipals 32 Third-Party Valuation Discount Rate 6.25 % - 6.25 %

Residential mortgage-backed securities 3 Third-Party Valuation Discount Rate 5.46 % - 5.46 %

Foreign governments 16 Third-Party Valuation Discount Rate 6.94 % - 7.68 %

Investment in unconsolidated affiliates 285 Market Comparable Company Analysis EBITDA Multiple 4.4 x - 31.8 x

Other long-term investments:

Available-for-sale embedded derivative 28 Black Scholes Model Market Value of Fund 100.00 %

Secured borrowing receivable 10 Broker-quoted Offered quotes 100.00 % - 100.00 %

Credit linked note 15 Broker-quoted Offered quotes 96.23 %

Investment in affiliate 23 Market Comparable Company Analysis EBITDA multiple 5 x- 5.5 x

Total financial assets at fair value $ 8,145

Derivative investments:

Market risk benefits asset 88 Discounted Cash Flow Mortality 100.00 % - 100.00 %

Surrender Rates 0.25 % - 10.00 %

Partial Withdrawal Rates 0.00 % - 23.26 %

Non-Performance Spread 0.38 % - 1.10 %

GMWB Utilization 50.00 % - 60.00 %

Total financial assets at fair value (a) $ 1,296

FIA/IUL embedded derivatives, included in contractholder funds $ 4,258 Discounted Cash Flow Market Value of Option 0.00 % - 18.93 %

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Option cost 0.07 % - 5.48 %

Market risk benefits liability 403 Discounted Cash Flow Mortality 100.00 % - 100.00 %

Surrender Rates 0.25 % - 10.00 %

Partial Withdrawal Rates 0.00 % - 23.26 %

Non-Performance Spread 0.38 % - 1.10 %

GMWB Utilization 50.00 % - 60.00 %

Total financial liabilities at fair value $ 4,661

(a) Excludes $ 8,356 million of assets for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services)

Fair Value at Valuation Technique Unobservable Input(s) Range (Weighted average)

December 31, 2021

(in millions) December 31, 2021

Asset-backed securities $ 3,844 Broker-quoted Offered quotes 52.56 % - 260.70 %

Asset-backed securities 115 Third-Party Valuation Offered quotes 93.02 % - 108.45 %

Commercial mortgage-backed securities 24 Broker-quoted Offered quotes 126.70 % - 126.70 %

Commercial mortgage-backed securities 11 Third Party Valuation Offered quotes 97.91 % - 97.91 %

Corporates 380 Broker-quoted Offered quotes — % - 109.69 %

Corporates 741 Third-Party Valuation Offered quotes 85.71 % - 119.57 %

Municipals 43 Third-Party Valuation Offered quotes 135.09 % - 135.09 %

Foreign governments 18 Third-Party Valuation Offered quotes 107.23 % - 116.44 %%

Short-term 321 Broker-quoted Offered quotes 100.00 % - 100.00 %

Preferred securities 1 Income-Approach Yield 2.43 %

December 31, 2022 December 31, 2022

Asset-backed securities 91 Third-Party Valuation Discount Rate 5.23 % - 8.98 %

Corporates 796 Third-Party Valuation Discount Rate 4.75 % - 12.45 %

Municipals 29 Third-Party Valuation Discount Rate 7.62 % - 7.62 %

Foreign governments 16 Third-Party Valuation Discount Rate 5.99 % - 6.28 %

Investment in unconsolidated affiliates 23 Market Comparable Company Analysis EBITDA Multiple 5 x - 5.5 x

Other long-term investments:

Available-for-sale embedded derivative 23 Black Scholes Model Market Value of Fund 100.00 %

Credit linked note 23 Broker-quoted Offered quotes 100.00 %

Investment in affiliate 21 Market Comparable Company Analysis EBITDA multiple 8 x- 8 x

Total financial assets at fair value $ 5,576

Market risk benefits asset 117 Discounted Cash Flow Mortality 100.00 % - 100.00 %

Surrender Rates 0.25 % - 10.00 %

Partial Withdrawal Rates 2.00 % - 21.74 %

Non-Performance Spread 0.48 % - 1.44 %

GMWB Utilization 50.00 % - 60.00 %

Total financial assets at fair value (a) $ 1,095

FIA/ IUL embedded derivatives, included in contractholder funds $ 3,115 Discounted Cash Flow Market Value of Option 0.00 % - 23.90 %

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Option Cost 0.07 % - 4.97 %

Market risk benefits liability 282 Discounted Cash Flow Mortality 100.00 % - 100.00 %

Surrender Rates 0.25 % - 10.00 %

Partial Withdrawal Rates 2.00 % - 21.74 %

Non-Performance Spread 0.48 % - 1.44 %

GMWB Utilization 50.00 % - 60.00 %

Total financial liabilities at fair value $ 3,397

The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the years ended December 31, 2022 and 2021, respectively.

This summary excludes any impact of amortization of VOBA, DAC and DSI.

(a) Excludes $ 7,167 million of assets for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services)

The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

Year ended December 31, 2023

(in millions)

Balance at Beginning

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Corporates 1,427 ( 2 ) ( 21 ) 652 — ( 94 ) 8 1,970 ( 20 )

Hybrids — — — — — — — — —

Municipals 29 — 20 — — — — 49 20

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Preferred securities — — 1 — — — 6 7 1

Equity securities — — — — — — — — —

Derivative instruments — 57 — — — — — 57 —

Other long-term investments:

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Secured borrowing receivable 10 — — — — ( 10 ) — — —

Total assets at Level 3 fair value

Subtotal assets at Level 3 fair value

$ 8,145 $ 16 $ 199 $ 2,989 $ ( 144 ) $ ( 1,041 ) $ ( 600 ) $ 9,564 $ 199

Market risk benefits asset (a) 117 88 106

Total assets at Level 3 fair value $ 8,262 $ 9,652

FIA/IUL embedded derivatives, included in contractholder funds 3,115 257 — 1,049 — (163) — 4,258 —

Subtotal liabilities at Level 3 fair value

$ 3,115 $ 257 $ — $ 1,049 $ — $ ( 163 ) $ — $ 4,258 $ —

Market risk benefits liability (a) 282 403

Total liabilities at Level 3 fair value

$ 3,397 $ 4,661

(a) The net transfers out of Level 3 during the year ended December 31, 2022 were to Level 2, except for the net transfers out related to our other long-term investment, which was to Level 1.

(a) Refer to Note G - Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liability.

Year ended December 31, 2022

(in millions)

Balance at Beginning of Period Total Gains (Losses) Purchases Sales Settlements Net transfer In (Out) of Level 3 (a)

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Corporates 1,121 1 ( 187 ) 710 ( 20 ) ( 215 ) 17 1,427 ( 188 )

Hybrids 4 — — — — ( 4 ) — — —

Municipals 43 — ( 14 ) — — — — 29 ( 13 )

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Foreign Governments 18 — ( 2 ) — — — — 16 ( 1 )

Investment in unconsolidated affiliates 21 — 2 — — — — 23 2

Short-term 321 — ( 1 ) 20 — — ( 340 ) — ( 1 )

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Credit linked note 23 ( 1 ) ( 1 ) — ( 2 ) ( 4 ) — 15 —

Investment in affiliate — — — 21 — — — 21 —

Total assets at Level 3 fair value

Secured borrowing receivable — — — — — — 10 10

Subtotal assets at Level 3 fair value

$ 5,576 $ ( 17 ) $ ( 602 ) $ 4,315 $ ( 61 ) $ ( 760 ) $ ( 306 ) $ 8,145 $ ( 632 )

Future policy benefits 5 — — — ( 4 ) ( 1 ) — — —

Market risk benefits asset (a) 41 117

Total assets at Level 3 fair value $ 5,617 $ 8,262

FIA/IUL embedded derivatives, included in contractholder funds 3,883 ( 1,382 ) — 768 — ( 154 ) — 3,115 —

Subtotal liabilities at Level 3 fair value

$ 3,883 $ ( 1,382 ) $ — $ 768 $ — $ ( 154 ) $ — $ 3,115 $ —

Market risk benefits liability (a) 469 282

Total liabilities at Level 3 fair value

$ 4,352 $ 3,397

( a) The net transfers out of Level 3 during the year ended December 31, 2021 were to Level 2.

(a) Refer to Note G - Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liabil ity.

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value

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Investments in Unconsolidated affiliates

The fair value of investments in unconsolidated affiliates is determined using NAV as a practical expedient.

As discussed in Note A Business and Summary of Significant Accounting Policies, r ecognition of income and adjustments to the carrying amount are delayed due to the availability of the related financial statements, which are obtained from the general partner generally on a one to three-month delay.

The fair value of investments in unconsolidated affiliates is primarily determined using NAV as a practical expedient.

As discussed in Note A - Business and Summary of Significant Accounting Policies, recognition of income and adjustments to the carrying amount are delayed due to the availability of the related financial statements, which are obtained from the general partner generally on a one to three-month delay.

Policy Loans (included within Other long-term investments)

Fair values for policy loans are estimated from a discounted cash flow analysis, using interest rates currently being offered for loans with similar credit risk.

Loans with similar characteristics are aggregated for purposes of the calculations.

Loans with similar characteristics are aggregated for purposes of the calculations, policy loans are classified as Level 3 in the fair value hierarchy.

Company Owned Life Insurance

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Investment Contracts

Investment contracts include deferred annuities (FIAs and fixed rate annuities), indexed universal life policies (“IULs”), funding agreements and PRT and immediate annuity contracts without life contingencies.

Investment contracts include deferred annuities (FIAs and fixed rate annuities), IUL policies, funding agreements and PRT and immediate annuity contracts without life contingencies.

The FIA/ IUL embedded derivatives, included in contractholder funds, are excluded as they are carried at fair value.

The fair value of the FIA, fixed rate annuity and IUL contracts is based on their cash surrender value (i.e.

the cost the Company would incur to extinguish the liability) as these contracts are generally issued without an annuitization date.

The fair value of the deferred annuities (FIA and fixed rate annuities) and IUL contracts is based on their cash surrender value (i.e., the cost the Company would incur to extinguish the liability) as these contracts are generally issued without an annuitization date.

The fair value of funding agreements and PRT and immediate annuity contracts without life contingencies is derived by calculating a new fair value interest rate using the updated yield curve and treasury spreads as of the respective reporting date.

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Federal Home Loan Bank of Atlanta (“FHLB”) common stock, Accounts receivable and Notes receivable are carried at cost, which approximates fair value.

FHLB common stock is classified as Level 2 within the fair value hierarchy.

The carrying amount of FHLB common stock represents the value it can be sold back to the FHLB and is classified as Level 2 within the hierarchy.

Accounts receivable and Notes receivable are classified as Level 3 within the fair value hierarchy.

The fair value of the $ 550 million aggregate principal amount of 5.50 % senior notes due 2025 is based on quoted market prices of debt with similar credit risk and tenor.

The inputs used to measure the fair value of this debt results in a Level 2 classification within the fair value hierarchy.

The fair value of the $ 400 million promissory note with FNF is estimated using a discounted cash flow analysis wherein contractual cash flows are discounted using then current interest rates being offered for debt with similar credit risk and tenor.

This debt is classified as Level 3 within the fair value hierarchy.

The carrying value of the revolving credit facility at December 31, 2022 approximates fair value as the rates are comparable to those at which we could currently borrow under similar terms.

The fair value of the $ 345 million aggregate principal amount of its 7.95 % F&G Notes, $ 500 million aggregate principal amount of its 7.40 % F&G Notes and the $ 550 million aggregate principal amount of its 5.50 % Senior Notes due 2025 (the “ 5.50 % F&G Notes”) are based on quoted market prices of debt with similar credit risk and tenor.

The inputs used to measure the fair value of these debts results in a Level 2 classification within the fair value hierarchy.

The carrying value of the revolving credit facility at December 31, 2023 and 2022 approximates fair value as the rates are comparable to those at which we could currently borrow under similar terms.

As such, the fair value of the revolving credit facility was classified as a Level 2 measurement.

The following tables provide the carrying value and estimated fair value of our financial instruments that are carried on the Consolidated Balance Sheets at amounts other than fair value, summarized according to the fair value hierarchy previously described.

December 31, 2023

(in millions)

Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount

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Policy loans — — 71 — 71 71

Other invested assets — — 15 — 15 15

Company-owned life insurance — — 362 — 362 362

4 unchanged sentences

December 31, 2022

(in millions)

Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount

4 unchanged sentences

Policy loans — — 52 — 52 52

Other invested assets — — 10 — 10 10

Company-owned life insurance — — 328 — 328 328

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Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities.

Such reclassifications are reported as transfers in and out of Level 3, or between other levels, at the beginning fair value for the reporting

period in which the changes occur.

Such reclassifications are reported as transfers in and out of Level 3, or between other levels, at the beginning fair value for the reporting period in which the changes occur.

The transfers into and out of Level 3 were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value.

Note C - Investments

Our fixed maturity securities investments have been designated as available-for-sale, and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included in AOCI, net of associated adjustments for VOBA, DAC, DSI, UREV, SOP 03-1 reserves, and deferred income taxes.

Our investments in fixed maturity securities have been designated as AFS and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within AOCI, net of deferred income taxes.

Our preferred and equity securities investments are carried at fair value with unrealized gains and losses included in net earnings.

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Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Carrying Value

Available-for-sale securities

AFS securities

Asset-backed securities $ 14,623 $ ( 11 ) $ 191 $ ( 469 ) $ 14,334 $ 14,334

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Foreign Governments 263 — 2 ( 39 ) 226 226

Total available-for-sale securities

Total AFS securities

$ 43,601 $ ( 35 ) $ 444 $ ( 3,591 ) $ 40,419 $ 40,419

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Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Carrying Value

Available-for-sale securities

AFS securities

Asset-backed securities $ 12,209 $ ( 8 ) $ 36 $ ( 770 ) $ 11,467 $ 11,467

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Foreign Governments 185 — — ( 37 ) 148 148

Total available-for-sale securities

Total AFS securities

$ 35,723 $ ( 31 ) $ 96 $ ( 4,570 ) $ 31,218 $ 31,218

Securities held on deposit with various state regulatory authorities had a fair value of $ 17,751 million and $ 22,219 million at December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2022 and December 31, 2021, the Company held $ 27 million and no material investments that were non-income producing for a period greater than twelve months, respectively.

As of December 31, 2022 and December 31, 2021, the Company's accrued interest receivable balance was $ 358 million and $ 246 million, respectively.

As of December 31, 2023 and 2022, the Company held $ 47 million and $ 27 million of investments that were non-income producing for a period greater than twelve months, respectively.

As of December 31, 2023 and 2022, the Company's accrued interest receivable balance was $ 469 million and $ 358 million , respectively.

Accrued interest receivable is classified within Prepaid expenses and other assets within the Consolidated Balance Sheets.

In accordance with our FHLB agreements, the investments supporting the funding agreement liabilities are pledged as collateral to secure the FHLB funding agreement liabilities and are not available to us for general purposes.

The collateral investments had a fair value of $ 3,387 million and $ 2,469 million as of December 31, 2022 and December 31, 2021, respectively.

The amortized cost and fair value of fixed maturity securities by contractual maturities, as applicable, are shown below.

The collateral investments had a fair value of $ 4,345 million and $ 3,387 million as of December 31, 2023 and 2022, respectively.

The amortized cost and fair value of fixed maturity securities by contractual maturities, as applicable, are shown below (in millions).

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

December 31, 2023 December 31, 2022

(in millions) (in millions)

Amortized Cost Fair Value Amortized Cost Fair Value

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Commercial mortgage-backed securities 4,732 4,410 3,309 3,036

Structured hybrids — — 5 5

Residential mortgage-backed securities 2,501 2,424 1,631 1,521

Subtotal 21,856 21,168 17,149 16,024

Total fixed maturity available-for-sale securities $ 35,723 $ 31,218 $ 28,724 $ 29,962

Total fixed maturity AFS securities $ 43,601 $ 40,419 $ 35,723 $ 31,218

Allowance for Current Expected Credit Loss

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We recognize an allowance for current expected credit losses on fixed maturity securities in an unrealized loss position when it is determined, using the factors discussed above, a component of the unrealized loss is related to credit.

We measure the credit loss using a discounted cash flow model that utilizes the single best estimate cash flow and the recognized credit loss is limited to the total unrealized loss on the security (i.e.

the fair value floor).

Cash flows are discounted using the implicit yield of bonds at their time of purchase and the current book yield for asset and mortgage backed securities as well as variable rate securities.

We recognize the expected credit losses in Recognized gains and losses, net in the Consolidated Statements of Earnings, with an offset for the amount of non-credit impairments recognized in AOCI.

We recognize the expected credit losses in Recognized gains and losses, net in the Consolidated Statements of Operations, with an offset for the amount of non-credit impairments recognized in AOCI.

We do not measure a credit loss allowance on accrued investment income because we write-off accrued interest through Interest and investment income when collectability concerns arise.

We consider the following in determining whether write-offs of a security’s amortized cost is necessary:

We consider the following in determining whether write-offs of a security’s amortized cost are necessary:

• We believe amounts related to securities have become uncollectible;

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• It is more likely than not that we will be required to sell a security prior to recovery.

If we intend to sell a fixed maturity security or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis and the fair value of the security is below amortized cost, we will write down the security to current fair value, with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

If we do not intend to sell a fixed maturity security or it is more likely than not that we will not be required to sell a fixed maturity security before recovery of its amortized cost basis but believe amounts related to a security are uncollectible (generally based on proximity to expected credit loss), an impairment is deemed to have occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

The remainder of unrealized loss is held in AOCI.

The activity in the allowance for expected credit losses of available-for-sale securities aggregated by investment category was as follows (in millions):

If we do not intend to sell a fixed maturity security or it is more likely than not that we will not be required to sell a fixed maturity security before recovery of its amortized cost basis but believe amounts related to a security are uncollectible, an impairment is deemed to have occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Recognized gains and losses, net in the accompanying Consolidated Statements of Operations.

The remainder of unrealized loss is held in other comprehensive income in the accompanying Consolidated Statements of Equity.

The activity in the allowance for expected credit losses of AFS securities aggregated by investment category was as follows (in millions):

Year ended December 31, 2023

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Balance at Beginning of Period For credit losses on securities for which losses were not previously recorded For initial credit losses on purchased securities accounted for as PCD financial assets (a) (Additions) reductions in allowance recorded on previously impaired securities For securities sold during the period For securities intended/required to be sold prior to recovery of amortized cost basis Write offs charged against the allowance Recoveries of amounts previously written off Balance at End of Period

Available-for-sale securities

AFS securities

Asset-backed securities $ ( 8 ) $ ( 18 ) $ — $ 15 $ — $ — $ — — $ ( 11 )

2 unchanged sentences

Residential mortgage-backed securities ( 7 ) ( 7 ) — 12 — — — — ( 2 )

Total available-for-sale securities $ ( 8 ) $ ( 24 ) $ — $ ( 3 ) $ 3 $ — $ 1 $ — $ ( 31 )

Total AFS securities $ ( 31 ) $ ( 47 ) $ — $ 28 $ 15 $ — $ — $ — $ ( 35 )

Year ended December 31, 2022

1 unchanged sentence

Available-for-sale securities

AFS securities

Asset-backed securities $ ( 3 ) $ ( 7 ) $ — $ ( 1 ) $ 2 $ — $ 1 — $ ( 8 )

2 unchanged sentences

Residential mortgage-backed securities ( 3 ) ( 2 ) — ( 2 ) — — — — ( 7 )

Total available-for-sale securities $ ( 10 ) $ ( 2 ) $ ( 1 ) $ 4 $ — $ — $ — $ 1 $ ( 8 )

Period from June 1 to December 31, 2020

Additions Reductions

Available-for-sale securities

Asset-backed securities $ — $ 7 $ ( 9 ) $ 2 $ — $ — $ — $ — $ —

Corporates — 1 ( 17 ) — 3 4 2 — ( 7 )

Hybrids — — ( 3 ) — 3 — — — —

Residential mortgage-backed securities — 2 ( 7 ) 1 1 — — — ( 3 )

Total available-for-sale securities $ — $ 10 $ ( 36 ) $ 3 $ 7 $ 4 $ 2 $ — $ ( 10 )

Period from January 1 to May 31, 2020

Total AFS securities $ ( 8 ) $ ( 24 ) $ — $ ( 3 ) $ 3 $ — $ 1 $ — $ ( 31 )

Year ended December 31, 2021

Additions Reductions

Available-for-sale securities

AFS securities

Asset-backed securities $ — $ — $ ( 1 ) $ ( 2 ) $ — $ — $ — $ — $ ( 3 )

Commercial mortgage-backed securities — ( 2 ) — — — — — — ( 2 )

Corporates ( 7 ) — — 6 — — — 1 —

Residential mortgage-backed securities ( 3 ) — — — — — — — ( 3 )

Total available-for-sale securities $ — $ ( 51 ) $ — $ 15 $ 8 $ 12 $ 1 $ — $ ( 15 )

Total AFS securities $ ( 10 ) $ ( 2 ) $ ( 1 ) $ 4 $ — $ — $ — $ 1 $ ( 8 )

(a) Purchased credit deteriorated financial assets (“PCD”).

PCD’s are AFS securities purchased at a discount, where part of that discount is attributable to credit.

PCDs are AFS securities purchased at a discount, where part of that discount is attributable to credit.

Credit loss allowances are calculated for these securities as of the date of their acquisition, with the initial allowance serving to increase amortized cost.

The following table summarizes year to date PCD AFS security purchases (in millions).

Purchased credit-deteriorated available-for-sale debt securities December 31, 2022 December 31, 2021

Purchase price $ — $ 4

Allowance for credit losses at acquisition — 1

AFS purchased credit-deteriorated par value $ — $ 5

The fair value and gross unrealized losses of AFS securities, excluding securities in an unrealized loss position with an allowance for expected credit loss, aggregated by investment category and duration of fair value below amortized cost were as follows (dollars in millions):

There were no purchases of PCD AFS securities during the years ended December 31, 2023 and 2022.

December 31, 2023

1 unchanged sentence

Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

Available-for-sale securities

AFS securities

Asset-backed securities $ 1,707 $ ( 56 ) $ 5,835 $ ( 404 ) $ 7,542 $ ( 460 )

6 unchanged sentences

Foreign Government 25 ( 1 ) 145 ( 38 ) 170 ( 39 )

Total available-for-sale securities $ 20,533 $ ( 2,600 ) $ 8,007 $ ( 1,930 ) $ 28,540 $ ( 4,530 )

Total AFS securities $ 5,594 $ ( 293 ) $ 19,711 $ ( 3,242 ) $ 25,305 $ ( 3,535 )

Total number of available-for-sale securities in an unrealized loss position less than twelve months 927

4 unchanged sentences

Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

Available-for-sale securities

AFS securities

Asset-backed securities $ 7,001 $ ( 410 ) $ 3,727 $ ( 360 ) $ 10,728 $ ( 770 )

6 unchanged sentences

Foreign Government 119 ( 32 ) 14 ( 5 ) 133 ( 37 )

Total available-for-sale securities $ 10,821 $ ( 176 ) $ 641 $ ( 40 ) $ 11,462 $ ( 216 )

Total AFS securities $ 20,533 $ ( 2,600 ) $ 8,007 $ ( 1,930 ) $ 28,540 $ ( 4,530 )

Total number of available-for-sale securities in an unrealized loss position less than twelve months 2,774

1 unchanged sentence

Total number of AFS securities in an unrealized loss position 3,986

We determined the increase in unrealized losses as of December 31, 2022 was caused by higher treasury rates as well as wider spreads.

This is in part due to the Federal Reserve's action to increase rates in efforts to combat inflation.

We determined the unrealized losses were caused by higher treasury rates compared to those at the time of the FNF acquisition or the purchase of the security if later.

For securities in an unrealized loss position as of December 31, 2023, our allowance for expected credit loss was $ 35 million.

3 unchanged sentences

Commercial Mortgage Loans

Commercial mortgage loans (“CMLs”) represented approximately 6 % of our total investments as of December 31, 2022 and December 31, 2021.

The mortgages loans in our investment portfolio, are generally comprised of high quality commercial first lien and mezzanine real estate loans.

Commercial mortgage loans (“CMLs”) represented approximately 5 % and 6 % of our total investments as of December 31, 2023 and 2022, respectively.

The mortgage loans in our investment portfolio, are generally comprised of high quality commercial first lien and mezzanine real estate loans.

Mortgage loans are primarily on income producing properties including industrial properties, retail buildings, multifamily properties and office buildings.

3 unchanged sentences

December 31, 2023 December 31, 2022

Amortized Cost % of Total Amortized Cost % of Total

Gross Carrying Value % of Total Gross Carrying Value % of Total

Property Type:

7 unchanged sentences

Other 392 15 % 335 13 %

Total commercial mortgage loans, gross of valuation allowance $ 2,416 100 % $ 2,174 100 %

Total CMLs, gross of valuation allowance $ 2,550 100 % $ 2,416 100 %

Allowance for expected credit loss ( 12 ) ( 10 )

Total commercial mortgage loans, net of valuation allowance $ 2,406 $ 2,168

Total CMLs, net of valuation allowance $ 2,538 $ 2,406

East North Central $ 151 6 % $ 151 6 %

7 unchanged sentences

West South Central 117 5 % 117 5 %

Total commercial mortgage loans, gross of valuation allowance $ 2,416 100 % $ 2,174 100 %

Total CMLs, gross of valuation allowance $ 2,550 100 % $ 2,416 100 %

Allowance for expected credit loss ( 12 ) ( 10 )

Total commercial mortgage loans, net of valuation allowance $ 2,406 $ 2,168

Total CMLs, net of valuation allowance $ 2,538 $ 2,406

CMLs segregated by aging of the loans and charge offs (by year of origination) were as follows for the year ended December 31, 2023 (in millions):

December 31, 2023

Amortized Cost by Origination Year

2023 2022 2021 2020 2019 Prior Total

Current (less than 30 days past due) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528

30-89 days past due — — — — — — —

90 days or more past due — — — — — — —

Total CMLs (a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528

Charge offs $ — $ — $ — $ — $ — $ 3 $ 3

(a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million at December 31, 2023.

CMLs segregated by aging of the loans (by year of origination) were as follows for the year ended December 31, 2022 (in millions):

December 31, 2022

Amortized Cost by Origination Year

2022 2021 2020 2019 2018 Prior Total

Current (less than 30 days past due) $ 341 $ 1,300 $ 488 $ — $ — $ 269 $ 2,398

30-89 days past due — — — — — — —

90 days or more past due — — — — — 9 9

Total CMLs (a) $ 341 $ 1,300 $ 488 $ — $ — $ 278 $ 2,407

(a) Excludes loans under development with an amortized cost and estimated fair value of $ 9 million at December 31, 2022.

Loan-to-value (“LTV”) and debt service coverage (“DSC”) ratios are measures commonly used to assess the risk and quality of mortgage loans.

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We normalize our DSC ratios to a 25 -year amortization period for purposes of our general loan allowance evaluation.

The following tables presents the recorded investment in CMLs by LTV and DSC ratio categories and estimated fair value by the indicated loan-to-value ratios, gross of valuation allowances (dollars in millions) :

The following tables present the recorded investment in CMLs by LTV and DSC ratio categories and estimated fair value by the indicated loan-to-value ratios, gross of valuation allowances at December 31, 2023 and 2022 (dollars in millions) :

Debt-Service Coverage Ratios Total Amount % of Total Estimated Fair Value % of Total

5 unchanged sentences

75.00% to 84.99% — 6 9 15 1 % 14 1 %

Commercial mortgage loans (a) $ 2,371 $ 7 $ 29 $ 2,407 100 % $ 2,074 100 %

CMLs (a) $ 2,443 $ 66 $ 19 $ 2,528 100 % $ 2,231 100 %

December 31, 2022

2 unchanged sentences

60.00% to 74.99% 1,154 3 — 1,157 48 % 955 45 %

Commercial mortgage loans $ 2,132 $ 33 $ 9 $ 2,174 100 % $ 2,265 100 %

(a) Excludes loans under development with an amortized cost and estimated fair value of $ 9 million.

75.00% to 84.99% — — 18 18 1 % 14 1 %

CMLs (a) $ 2,371 $ 7 $ 29 $ 2,407 100 % $ 2,074 100 %

(a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million and $ 9 million at December 31, 2023 and 2022, respectively.

December 31, 2023

Amortized Cost by Origination Year

2023 2022 2021 2020 2019 Prior Total

Less than 50.00% $ 85 $ 17 $ 77 $ 232 $ — $ 122 $ 533

50.00% to 59.99% 53 149 267 158 — 137 764

60.00% to 74.99% 69 113 912 122 — — 1,216

75.00% to 84.99% 6 9 — — — — 15

Total CMLs (a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 2,528

Greater than 1.25x $ 154 $ 276 $ 1,256 $ 512 $ — $ 245 $ 2,443

1.00x - 1.25x 59 3 — — — 4 66

Less than 1.00x — 9 — — — 10 19

Total CMLs(a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528

December 31, 2022

Amortized Cost by Origination Year

2022 2021 2020 2019 2018 Prior Total

Less than 50.00% $ 70 $ 120 $ 207 $ — $ — $ 129 $ 526

50.00% to 59.99% 149 268 158 — — 131 706

60.00% to 74.99% 113 912 123 — — 9 1,157

75.00% to 84.99% 9 — — — — 9 18

Total CMLs (a) $ 341 $ 1,300 $ 488 $ — $ — $ 278 $ 2,407

Greater than 1.25x $ 329 $ 1,300 $ 488 $ — $ — $ 254 $ 2,371

1.00x - 1.25x 3 — — — — 4 7

Less than 1.00x 9 — — — — 20 29

Total CMLs (a) $ 341 $ 1,300 $ 488 $ — $ — $ 278 $ 2,407

(a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million and $ 9 million at December 31, 2023 and 2022, respectively.

We recognize a mortgage loan as delinquent when payments on the loan are greater than 30 days past due.

At December 31, 2022 we had one CML that was delinquent in principal or interest payments as shown in the risk rating exposure table below.

At December 31, 2021 we had no CMLs that were delinquent in principal or interest payments.

At December 31, 2023 and 2022, we had no CMLs that were delinquent in principal or interest payments as shown in the risk rating exposure table.

Residential Mortgage Loans

Residential mortgage loans (“RMLs”) represented approximately 5 % and 4 % of our total investments as of December 31, 2022 and December 31, 2021, respectively.

Our residential mortgage loans are closed end, amortizing loans and 100 % of the properties are located in the United States.

Residential mortgage loans (“RMLs”) represented approximately 5 % and 5 % of our total investments as of December 31, 2023 and 2022, respectively.

Our RMLs are closed end, amortizing loans and 100 % of the properties are located in the United States.

We diversify our RML portfolio by state to attempt to reduce concentration risk.

3 unchanged sentences

Florida $ 163 6 %

Texas 215 10 %

New Jersey 172 8 %

Pennsylvania 153 7 %

California 139 6 %

New York 129 5 %

Georgia 125 6 %

Texas 129 5 %

All other states (a) 2,431 84 %

Total residential mortgage loans $ 2,180 100 %

Total RMLs, gross of valuation allowance $ 2,852 100 %

Allowance for expected credit loss ( 54 )

Total RMLs, net of valuation allowance $ 2,798

(a) The individual concentration of each state is equal to or less than 5% as of December 31, 2023.

4 unchanged sentences

New Jersey 172 8 %

Pennsylvania 153 7 %

California 139 6 %

New York 138 6 %

Georgia 125 6 %

All other states (a) 914 42 %

Total residential mortgage loans $ 1,606 100 %

(a) The individual concentration of each state is less than 9% as of December 31, 2021.

Residential mortgage loans have a primary credit quality indicator of either a performing or nonperforming loan.

Total RMLs, gross of valuation allowance $ 2,180 100 %

Allowance for expected credit loss ( 32 )

Total RMLs, net of valuation allowance $ 2,148

(a) The individual concentration of each state is equal to or less than 5% as of December 31, 2022.

RMLs have a primary credit quality indicator of either a performing or nonperforming loan.

We define non-performing residential mortgage loans as those that are 90 or more days past due or in nonaccrual status, which is assessed monthly.

5 unchanged sentences

Non-performing 57 2 % 62 3 %

Total residential mortgage loans, gross of valuation allowance $ 2,180 100 % $ 1,606 100 %

Total RMLs, gross of valuation allowance $ 2,852 100 % $ 2,180 100 %

Allowance for expected loan loss ( 54 ) — ( 32 ) —

Total residential mortgage loans, net of valuation allowance $ 2,148 100 % $ 1,581 100 %

Loans segregated by risk rating exposure were as follows, gross of valuation allowances (in millions):

Total RMLs, net of valuation allowance $ 2,798 100 % $ 2,148 100 %

There were no charge offs recorded on RMLs during the year ended December 31, 2023.

RMLs segregated by aging of the loans (by year of origination) as of December 31, 2023 and 2022 were as follows, gross of valuation allowances (in millions):

December 31, 2023

1 unchanged sentence

2023 2022 2021 2020 2019 Prior Total

Residential mortgages

Current (less than 30 days past due) $ 373 $ 985 $ 854 $ 192 $ 183 $ 192 $ 2,779

1 unchanged sentence

Over 90 days past due — 6 16 13 21 1 57

Total residential mortgages $ 771 $ 900 $ 229 $ 223 $ 24 $ 33 $ 2,180

Commercial mortgages

Current (less than 30 days past due) $ 350 $ 1,300 $ 488 $ — $ — $ 269 $ 2,407

30-89 days past due — — — — — — —

Over 90 days past due — — — — — 9 9

Total commercial mortgages $ 350 $ 1,300 $ 488 $ — $ — $ 278 $ 2,416

Total RMLs $ 373 $ 995 $ 877 $ 208 $ 204 $ 195 $ 2,852

December 31, 2022

1 unchanged sentence

2022 2021 2020 2019 2018 Prior Total

Residential mortgages

Current (less than 30 days past due) $ 766 $ 884 $ 214 $ 185 $ 23 $ 33 $ 2,105

1 unchanged sentence

Over 90 days past due 3 9 15 34 1 — 62

Total residential mortgages $ 801 $ 320 $ 375 $ 53 $ 36 $ 21 $ 1,606

Commercial mortgages

Current (less than 30 days past due) $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174

30-89 days past due — — — — — — —

Over 90 days past due — — — — — — —

Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174

December 31, 2022

Amortized Cost by Origination Year

2022 2021 2020 2019 2018 Prior Total

Commercial mortgages

Less than 50.00% $ 70 $ 120 $ 207 $ — $ — $ 129 $ 526

50.00% to 59.99% 149 268 158 — — 131 706

60.00% to 74.99% 113 912 123 — — 9 1,157

75.00% to 84.99% 9 — — — — 9 18

Total commercial mortgages (a) $ 341 $ 1,300 $ 488 $ — $ — $ 278 $ 2,407

Commercial mortgages

Greater than 1.25x $ 329 $ 1,300 $ 488 $ — $ — $ 254 $ 2,371

1.00x - 1.25x 3 — — — — 4 7

Less than 1.00x 9 — — — — 20 29

Total commercial mortgages (a) $ 341 $ 1,300 $ 488 $ — $ — $ 278 $ 2,407

( a) Excludes loans under development with an amortized cost and estimated fair value of $ 9 million.

December 31, 2021

Amortized Cost by Origination Year

2021 2020 2019 2018 2017 Prior Total

Commercial mortgages

Less than 50.00% $ 120 $ 229 $ — $ 6 $ — $ 313 $ 668

50.00% to 59.99% 267 192 — — — 11 470

60.00% to 74.99% 914 122 — — — — 1,036

Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174

Commercial mortgages

Greater than 1.25x $ 1,301 $ 543 $ — $ 4 $ — $ 284 $ 2,132

1.00x - 1.25x — — — 2 — 31 33

Less than 1.00x — — — — — 9 9

Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174

Non-accrual loans by amortized cost were as follows (in millions):

Amortized cost of loans on non-accrual December 31, 2022 December 31, 2021

Total RMLs $ 771 $ 900 $ 229 $ 223 $ 24 $ 33 $ 2,180

Non-accrual loans by amortized cost as of December 31, 2023 and 2022, were as follows (in millions):

December 31, 2023 December 31, 2022

Residential mortgage $ 57 $ 62

1 unchanged sentence

Total non-accrual mortgages $ 57 $ 71

Immaterial interest income was recognized on non-accrual financing receivables for the twelve months ended December 31, 2022 and December 31, 2021.

It is our policy to cease to accrue interest on loans that are 90 days or more delinquent.

Immaterial interest income was recognized on non-accrual financing receivables for the years ended December 31, 2023 and 2022.

It is our policy to cease to accrue interest on loans that are delinquent for 90 days or more.

For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible.

If a loan becomes 90 days or more delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place.

As of December 31, 2022 and December 31, 2021, we had $ 71 million and $ 72 million, respectively, of mortgage loans that were over 90 days past due, of which $ 38 million and $ 39 million was in the process of foreclosure as of December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2023 and 2022, we had $ 57 million and $ 71 million, respectively, of mortgage loans that were over 90 days past due, of which $ 41 million and $ 38 million were in the process of foreclosure as of December 31, 2023 and 2022, respectively.

Allowance for Expected Credit Loss

2 unchanged sentences

The model projects losses using a two year reasonable and supportable forecast and then reverts over a three year period to market-wide historical loss experience.

Changes in our allowance for expected credit losses on mortgage loans are recognized in Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings.

The allowances for our mortgage loan portfolio is summarized as follows (in millions):

Year ended December 31, 2022

Changes in our allowance for expected credit losses on mortgage loans are recognized in Recognized gains and losses, net in the accompanying Consolidated Statements of Operations.

The allowances for our mortgage loan portfolio are summarized as follows (in millions):

Year Ended December 31,

Residential Mortgages Commercial Mortgages Total Residential Mortgages Commercial Mortgages Total

Beginning Balance

2023 2022 2021

Provision for loan losses 7 4 11 ( 12 ) 4 ( 8 )

Ending Balance

$ 32 $ 10 $ 42 $ 25 $ 6 $ 31

Period from June 1 to December 31, 2020 Period from January 1 to May 31, 2020

Residential Mortgages Commercial Mortgages Total Residential Mortgages Commercial Mortgages Total

Mortgages Commercial

Mortgages Total Residential

Mortgages Commercial

Mortgages Total Residential

Mortgages Commercial

Mortgages Total

Beginning Balance

1 unchanged sentence

Provision for loan losses 22 5 27 7 4 11 ( 12 ) 4 ( 8 )

For initial credit losses on purchased loans accounted for as PCD financial assets 7 — 7 — — —

Loans charged off — ( 3 ) ( 3 ) — — — — — —

Ending Balance

1 unchanged sentence

An allowance for expected credit loss is not measured on accrued interest income for commercial mortgage loans as we have a process to write-off interest on loans that enter into non-accrual status (90 days or more past due).

Allowances for expected credit losses are measured on accrued interest income for residential mortgage loans and were immaterial as of December 31, 2022 and December 31, 2021.

Allowances for expected credit losses are measured on accrued interest income for residential mortgage loans and were immaterial as of December 31, 2023 and 2022.

Interest and Investment Income

The major sources of Interest and investment income reported on the accompanying Consolidated Statements of Earnings were as follows (in millions):

Year Ended December 31, Period from

June 1 to December 31, Period from January 1 to May 31,

The major sources of Interest and investment income reported on the accompanying Consolidated Statements of Operations were as follows (in millions):

Year ended December 31,

2023 2022 2021

11 unchanged sentences

Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements.

Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $ 109 million, $ 53 million, $ 21 million and $ 15 million, for the year ended December 31, 2022, the year ended December 31, 2021, the period from June 1 to December 31, 2020 and the Predecessor period from January 1 to May 31, 2020, respectively.

Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $ 339 million, $ 109 million and $ 53 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

Recognized Gains and Losses, net

Details underlying Recognized gains and losses, net reported on the accompanying Consolidated Statements of Earnings were as follows (in millions):

Year Ended December 31, Period from

June 1 to December 31, Period from January 1 to May 31,

Details underlying Recognized gains and losses, net reported on the accompanying Consolidated Statements of Operations were as follows (in millions):

Year ended December 31,

2023 2022 2021

9 unchanged sentences

Unrealized (losses) gains on certain derivative instruments 358 ( 693 ) 160

Change in fair value of reinsurance related embedded derivatives (c)

352 34 ( 53 ) 19

Change in fair value of reinsurance related embedded derivatives ( 128 ) 352 34

Change in fair value of other derivatives and embedded derivatives 5 ( 10 ) 5

2 unchanged sentences

$ ( 124 ) $ ( 1,010 ) $ 715

(a) Includes net valuation (losses) gains of $( 40 ) million, $( 37 ) million, $ 30 million and $( 30 ) million for the years ended December 31, 2022 and 2021, the period from June 1 to December 31, 2020 and the Predecessor period from January 1 to May 31, 2020, respectively.

(b) Includes net valuation (losses) gains of $( 159 ) million, $( 14 ) million, $ 56 million and $( 34 ) million for the years ended December 31, 2022 and 2021, the period from June 1 to December 31, 2020 and the Predecessor period from January 1 to May 31, 2020, respectively.

(c) Change in fair value of reinsurance related embedded derivatives is due to activity related to the reinsurance treaties with Kubera (novated from Kubera to Somerset effective October 31, 2021) and Aspida Re.

(a) Includes net valuation (losses) gains of $ 18 million, $( 40 ) million, and $( 37 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

(b) Includes net valuation (losses) gains of $ 73 million, $( 159 ) million, and $( 14 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

Recognized gains and losses is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements.

Recognized gains and losses attributable to these agreements, and thus excluded from the totals in the table above, was $ 381 million, $ 15 million, $( 58 ) million and $ 21 million for the year ended December 31, 2022, the year ended December 31, 2021, the period from June 1 to December 31, 2020 and the Predecessor period from January 1 to May 31, 2020, respectively.

Recognized gains and losses attributable to these agreements, and thus excluded from the totals in the table above, was $( 123 ) million, $ 381 million and $ 15 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The proceeds from the sale of fixed-maturity securities and the gross gains and losses associated with those transactions were as follows (in millions):

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Year ended December 31,

2023 2022 2021

12 unchanged sentences

In addition, we invest in structured investments, which may be VIEs, but for which we are not the primary beneficiary.

These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities included in fixed maturity securities available for sale on our Consolidated Balance Sheets.

Our maximum exposure to loss with respect to these VIEs is limited to the investment carrying amounts reported in our Consolidated Balance Sheets for limited partnerships and the amortized costs of our fixed maturity securities, in addition to any required unfunded commitments (also refer to Note F Commitments and Contingencies ).

The following table summarizes the carrying value and the maximum loss exposure of our unconsolidated VIEs (in millions):

These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities,

commercial mortgage-backed securities and residential mortgage-backed securities included in fixed maturity securities available for sale on our Consolidated Balance Sheets.

Our maximum loss exposure with respect to these VIEs is limited to the investment carrying amounts reported in our Consolidated Balance Sheets for limited partnerships and the amortized costs of certain of our fixed maturity securities, in addition to any required unfunded commitments (also refer to Note N - Commitments and Contingencies ).

The following table summarizes the carrying value and the maximum loss exposure of our unconsolidated VIEs as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

4 unchanged sentences

Concentrations

Our underlying investment concentrations that exceed 10% of shareholders equity are as follows (in millions).

Certain of the investments disclosed as of December 31, 2022 were held as of December 31, 2021 but are not presented in the December 31, 2021 column as they did not exceed 10 % of shareholders equity as of December 31, 2021.

Our underlying investment concentrations that exceed 10% of shareholders equity as of December 31, 2023 and 2022 are as follows (in millions):

December 31, 2023 December 31, 2022

1 unchanged sentence

ELBA (b) 463 470

Verus Securitization Trust (c) 302 —

Jade 1 (d) 271 —

Jade 2 (d) 271 —

Jade 3 (d) 271 —

Jade 4 (d) 271 —

Maybay Finance, LLC (e) 224 —

Verus Securitization Trust (c)(e) — 302

Jade 1 (d)(e) — 271

Jade 2 (d)(e) — 271

Jade 3 (d)(e) — 271

Jade 4 (d)(e) — 271

(a) Represents a special purpose vehicle that holds investments in numerous limited partnership investments whose underlying investments are further diversified by holding interest in multiple individual investments and industries.

2 unchanged sentences

(d) Represents special purpose vehicles that hold numerous underlying corporate loans across various industries.

(e) Represents special purpose vehicles that hold investments in multiple aircraft leases.

(e) Investments did not exceed 10% of shareholder’s equity as of December 31, 2023.

Note D - Derivative Financial Instruments

3 unchanged sentences

Call options $ 739 $ 244

Interest rate swaps 57 —

Foreign currency forward 1 —

Other long-term investments:

2 unchanged sentences

Reinsurance related embedded derivatives 152 279

Total $ 977 $ 546

Contractholder funds:

FIA/IUL embedded derivatives $ 4,258 $ 3,115

Accounts payable and accrued liabilities:

Reinsurance related embedded derivatives — 73

$ 3,115 $ 3,956

The change in fair value of derivative instruments included within Recognized gains and losses, net, in the accompanying Consolidated Statements of Earnings is as follows (in millions):

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Total $ 4,258 $ 3,115

The change in fair value of derivative instruments included within Recognized gains and losses, net, in the accompanying Consolidated Statements of Operations is as follows (in millions):

Year ended December 31,

2023 2022 2021

1 unchanged sentence

Call options $ 92 $ ( 862 ) $ 597

Interest rate swaps 48 — —

Futures contracts 9 ( 7 ) 8

3 unchanged sentences

Total net investment gains (losses) $ 24 $ ( 515 ) $ 654

$ ( 515 ) $ 654 $ 192 $ ( 194 )

Benefits and other changes in policy reserves:

1 unchanged sentence

Additional Disclosures

FIA/IUL Embedded Derivative and Call Options and Futures

See descriptions of the fair value methodologies used for derivative financial instruments in Note B - Fair Value of Financial Instruments .

FIA/IUL Embedded Derivative, Call Options and Futures

We have FIA and IUL contracts that permit the holder to elect an interest rate return or an equity index linked component, where interest credited to the contracts is linked to the performance of various equity indices, primarily the S&P 500 Index.

This feature represents an embedded derivative under GAAP.

The FIA/IUL embedded derivatives are valued at fair value and included in the liability for contractholder funds in the accompanying Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in

policy reserves in the Consolidated Statements of Earnings.

See a description of the fair value methodology used in Note B Fair Value of Financial Instruments .

We purchase derivatives consisting of a combination of call options and futures contracts (specifically for FIA contracts) on the applicable market indices to fund the index credits due to FIA/IUL contractholders.

The call options are one , two , three , and five year options purchased to match the funding requirements of the underlying policies.

options are one , two , three , and five year options purchased to match the funding requirements of the underlying policies.

On the respective anniversary dates of the indexed policies, the index used to compute the interest credit is reset and we purchase new call options to fund the next index credit.

1 unchanged sentence

The change in the fair value of the call options and futures contracts is generally designed to offset the portion of the change in the fair value of the FIA/IUL embedded derivatives related to index performance through the current credit period.

The call 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 the accompanying Consolidated Statements of Earnings.

The call 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 the accompanying Consolidated Statements of Operations.

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

3 unchanged sentences

We intend to continue to adjust the hedging strategy as market conditions and our risk tolerance changes.

We are exposed to credit loss in the event of non-performance by our counterparties on the call options and reflect assumptions regarding this non-performance risk in the fair value of the call options.

Interest Rate Swaps

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

With an interest rate swap, we agree with another party to exchange the difference between fixed-rate and floating-rate interest amounts tied to an agreed upon notional principal at specified intervals.

The interest rate swaps are marked to fair value with the change in fair value, including accrued interest and related periodic cash flows received or paid, included as a component of Recognized gains and losses, net, in the accompanying Consolidated Statements of Operations.

Reinsurance Related Embedded Derivatives

F&G cedes certain business on a coinsurance funds withheld basis.

Investment results for the assets that support the coinsurance that are segregated within the funds withheld account are passed directly to the reinsurer pursuant to the contractual terms of the reinsurance agreement, which creates embedded derivatives considered to be total return swaps.

These total return swaps are not clearly and closely related to the underlying reinsurance contract and thus require bifurcation.

The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account.

These embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and losses, net, on the Consolidated Statements of Operations.

We are exposed to credit loss in the event of non-performance by our counterparties on the call options and interest rate swaps and reflect assumptions regarding this non-performance risk in the fair value of these derivatives.

The non-performance risk is the net counterparty exposure based on the fair value of the open contracts less collateral held.

We maintain a policy of requiring all derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement.

Information regarding our exposure to credit loss on the call options we hold is presented in the following table (in millions):

Information regarding our exposure to credit loss on the call options and interest rate swaps we hold is presented in the following table (in millions):

December 31, 2023

Counterparty Credit Rating (Fitch/Moody's/S&P) (1)

Notional Amount Fair Value Collateral Net Credit Risk

Counterparty Credit Rating (Fitch/Moody's/S&P) (a) Notional Amount Fair Value Collateral Net Credit Risk

Merrill Lynch AA/*/A+ $ 4,408 $ 96 $ 59 $ 37

Morgan Stanley */Aa3/A+ 1,699 14 19 —

Morgan Stanley AA-/Aa3/A+ 3,466 102 116 —

Barclay's Bank A+/A1/A+ 6,236 102 100 2

Canadian Imperial Bank of Commerce AA/Aa2/A+ 5,169 68 64 4

Wells Fargo A+/A1/BBB+ 1,361 17 17 —

Goldman Sachs A/A2/BBB+ 1,133 9 10 —

Credit Suisse BBB+/A3/A- 1,039 5 5 —

Canadian Imperial Bank of Commerce AA-/A2/A- 5,983 147 148 —

Wells Fargo AA-/Aa2/A+ 1,443 58 60 —

Goldman Sachs A+/A1/A+ 1,919 45 45 —

Credit Suisse A+/A3/A+ 92 4 4 —

Truist A+/A2/A 2,759 124 124 —

Citibank A+/Aa3/A+ 1,073 27 28 —

$ 23,297 $ 244 $ 219 $ 33

JP Morgan AA/Aa2/A+ 2,589 91 91 —

Total $ 29,968 $ 796 $ 775 $ 39

December 31, 2022

Counterparty Credit Rating (Fitch/Moody's/S&P) (1)

Notional Amount Fair Value Collateral Net Credit Risk

Counterparty Credit Rating (Fitch/Moody's/S&P) (a) Notional Amount Fair Value Collateral Net Credit Risk

Merrill Lynch AA/*/A+ $ 3,563 $ 23 $ — $ 23

4 unchanged sentences

Goldman Sachs A/A2/BBB+ 1,133 9 10 —

Credit Suisse A/A1/A+ 1,485 74 75 —

Credit Suisse BBB+/A3/A- 1,039 5 5 —

Truist A+/A2/A 2,489 35 36 —

Citibank A+/Aa3/A+ 795 8 9 —

Total $ 23,297 $ 244 $ 219 $ 33

__________________

(1) An * represents credit ratings that were not available.

(a) An * represents credit ratings that were not available.

Collateral Agreements

1 unchanged sentence

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

A downgrade below these levels provides the counterparty under the agreement the right to terminate the open option contracts between the parties, at which time any amounts payable by us or the counterparty would be dependent on the market value of the underlying option contracts.

A downgrade below these levels provides the counterparty under the agreement the right to terminate the open derivative contracts between the parties, at which time any amounts payable by us or the counterparty would be dependent on the market value of the underlying contracts.

Our current rating does not allow any counterparty the right to terminate ISDA agreements.

1 unchanged sentence

For all counterparties, except Merrill Lynch, this threshold is set to zero .

As of December 31, 2022 and December 31, 2021 counterparties posted $ 219 million and $ 790 million, respectively, of collateral of which $ 178 million and $ 576 million, respectively, is included in cash and cash equivalents with an associated payable for this collateral included in accounts payable and accrued liabilities on the Consolidated Balance Sheets.

Accordingly, the maximum amount of loss due to credit risk that we would incur if parties to the call options failed completely to perform according to the terms of the contracts was $ 33 million at December 31, 2022 and $ 42 million at December 31, 2021.

As of December 31, 2023 and 2022 counterparties posted $ 775 million and $ 219 million, respectively, of collateral of which $ 588 million and $ 178 million, respectively, is included in Cash and cash equivalents with an associated payable for this collateral included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets.

Accordingly, the maximum amount of loss due to credit risk that we would incur if parties to the derivatives failed completely to perform according to the terms of the contracts was $ 39 million at December 31, 2023 and $ 33 million at December 31, 2022.

We are required to pay counterparties the effective federal funds rate each day for cash collateral posted to F&G for daily mark to market margin changes.

We reinvest derivative cash collateral to reduce the interest cost.

Cash collateral is invested in overnight investment sweep products, which are included in cash and cash equivalents in the accompanying Consolidated Balance Sheets.

We held 409 and 329 futures contracts at December 31, 2022 and December 31, 2021, respectively.

collateral is invested in overnight investment sweep products, which are included in cash and cash equivalents in the accompanying Consolidated Balance Sheets.

We held 439 and 409 futures contracts at December 31, 2023 and 2022, respectively.

The fair value of the futures contracts represents the cumulative unsettled variation margin (open trade equity, net of cash settlements).

We provide cash collateral to the counterparties for the initial and variation margin on the futures contracts, which is included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.

The amount of cash collateral held by the counterparties for such contracts was $ 3 million and $ 3 million at December 31, 2022 and December 31, 2021, respectively.

Reinsurance Related Embedded Derivatives

The Company entered into a reinsurance agreement with Kubera effective December 31, 2018, to cede certain multi-year guaranteed annuity (“MYGA”) and deferred annuity business on a coinsurance funds withheld basis, net of applicable existing reinsurance.

Effective October 31, 2021, this agreement was novated from Kubera to Somerset, a certified third-party reinsurer.

Additionally, F&G entered into a reinsurance agreement with Aspida Re effective January 1, 2021, and amended in August 2021 and September 2022, to cede a quota share of certain deferred annuity business on a funds withheld basis.

Fair value movements in the funds withheld balances associated with these arrangements creates an obligation for F&G to pay Somerset and Aspida Re at a later date, which results

in embedded derivatives.

These embedded derivatives are considered total return swaps with contractual returns that are attributable to the assets and liabilities associated with the reinsurance arrangements.

The fair value of the total return swap is based on the change in fair value of the underlying assets held in the funds withheld portfolio.

Investment results for the assets that support the coinsurance with funds withheld reinsurance arrangements, including gains and losses from sales, were passed directly to the reinsurers pursuant to contractual terms of the reinsurance arrangements.

The reinsurance related embedded derivatives are reported in prepaid expenses and other assets if in a net gain position, or accounts payable and accrued liabilities, if in a net loss position, on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and losses, net on the Consolidated Statements of Earnings.

Note E — Notes Payable

Notes payable consists of the following:

December 31, 2022 December 31, 2021

(In millions)

Revolving Credit Facility - Short-term $ 547 $ —

5.50 % F&G Notes

FNF Promissory Note — 400

The amount of cash collateral held by the counterparties for such contracts was $ 4 million and $ 3 million at December 31, 2023 and 2022, respectively.

Note E - Reinsurance

F&G reinsures portions of its policy risks with other insurance companies.

The use of indemnity reinsurance does not discharge an insurer from liability on the insurance ceded.

The insurer is required to pay in full the amount of its insurance liability regardless of whether it is entitled to or able to receive payment from the reinsurer.

The portion of risks exceeding F&G's retention limit is reinsured.

F&G primarily seeks reinsurance coverage in order to manage loss exposures, to enhance our capital position, to diversify risks and earnings, and to manage new business volume.

F&G follows reinsurance accounting when the treaty adequately transfers insurance risk.

Otherwise, F&G follows deposit accounting if there is inadequate transfer of insurance risk or if the underlying policy for which risk is being transferred is an investment contract that does not contain insurance risk.

Refer to Note A - Business and Summary of Significant Accounting Policies for more information over our accounting policy for reinsurance agreements.

The effects of reinsurance on net premiums earned and net benefits incurred (benefits paid and reserve changes) for the years ended December 31, 2023, 2022, and 2021 respectively, were as follows (in millions):

Year Ended December 31,

2023 2022 2021

On November 22, 2022, we entered into a Credit Agreement (the “Credit Agreement”) with certain lenders (the “Lenders”) and Bank of America, N.A.

The Credit Agreement matures the earlier to occur of November 22, 2025 or 91 days prior to May 1, 2025, the stated maturity date of the 5.50 % F&G Notes, unless the principal amount of the 5.50 % F&G Notes is $ 150,000,000 or less at such time, the 5.50 % F&G Notes have been redeemed or defeased in full, and any refinancing Indebtedness incurred in connection therewith matures at least 91 days after the date that is 3 years from the Effective Date or certain other conditions are met.

As the revolving loans under the Credit Agreement mature in less than one year, the amounts outstanding under the Credit Agreement are considered short-term.

Revolving loans under the Credit Agreement generally bear interest at a variable rate based on either (i) the base rate (which is the highest of (a) one-half of one percent in excess of the federal funds rate, (b) the Administrative Agent’s “prime rate”, or (c) the sum of one percent plus Term The Secured Overnight Financing Rate (“SOFR”) plus a margin of between 30.0 and 80.0 basis points depending on the non-credit-enhanced, senior unsecured long-term debt ratings of F&G or (ii) Term SOFR plus a margin of between 130.0 and 180.0 basis points depending on the non-credit-enhanced, senior unsecured long-term debt ratings of F&G.

At the current Standard & Poor’s, Moody’s and Fitch non-credit-enhanced, senior unsecured long-term debt ratings of BBB-/Ba1//BBB-, respectively, the applicable margin for revolving loans subject to Term SOFR is 165 basis points.

In addition, we will pay a facility fee of between 20.0 and 45.0 basis points on the entire facility, also depending on the non-credit-enhanced, senior unsecured long-term debt ratings, which is payable quarterly in arrears.

As of December 31, 2022, the revolving credit facility was fully drawn with $ 550 million outstanding, offset by approximately $ 3 million of unamortized debt issuance costs.

For the year ended December 31, 2022, interest expense on the revolving credit facility was approximately $ 1 million.

On September 15, 2021, we entered into a promissory note with FNF for $ 400 million aggregate principal amount, quarterly interest at three-month LIBOR + 2.50 % ( 2.63 % at December 31, 2021), due 2028 (the "FNF Promissory Note").

On June 24, 2022, the following action previously approved by the F&G board of directors became effective:

(i) an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired.

gain or loss recorded with respect to the exchange agreement.

For the years ended December 31, 2022 and 2021, interest expense on the FNF Promissory Note was approximately $ 6 million and $ 3 million, respectively.

On December 29, 2020, we entered into a revolving note agreement with FNF for up to $ 200 million capacity (the "FNF Credit Facility") to be used for working capital and other general corporate purposes.

No amounts were outstanding under this revolving note agreement as of December 31, 2022 or December 31, 2021.

On April 20, 2018, Fidelity & Guaranty Life Holdings, Inc.

(“FGLH”), our indirect wholly owned subsidiary, completed a debt offering of $ 550 million aggregate principal amount of 5.50 % senior notes due May 1, 2025 (the " 5.50 % F&G Notes"), at 99.5 % of face value for proceeds of $ 547 million.

As a result of the FNF acquisition, a premium of $ 39 million was established for these notes and is being amortized over the remaining life of the debt through 2025.

In conjunction with the acquisition, FNF became a guarantor of FGLH’s obligations under the 5.50 % F&G Notes and agreed to fully and unconditionally guarantee the F&G 5.50 % Notes, on a joint and several basis.

Interest expense, net of premium amortization on the 5.50 % F&G Notes were $ 29 million, $ 29 million, $ 18 million and $ 13 million for the years ended December 31, 2022 and December 31, 2021, the period from June 1 to December 31, 2020 and the Predecessor period from January 1 to May 31, 2020, respectively.

The Credit Agreement and the indenture governing the 5.50 % F&G Notes impose certain operating and financial restrictions, including financial covenants, on F&G.

As of December 31, 2022, we were in compliance with all covenants.

Also refer to Note A - Business and Summary of Significant Accounting Policies - Recent Events for additional information about our Notes Payable.

Gross principal maturities of notes payable at December 31, 2022 are as follows (in millions):

Note F — Commitments and Contingencies

Legal and Regulatory Contingencies

In the ordinary course of business, we are involved in various pending and threatened litigation matters related to our operations, some of which include claims for punitive or exemplary damages.

Like other companies, our ordinary course litigation includes a number of class action and purported class action lawsuits, which make allegations related to aspects of our operations.

We believe that no actions, other than the matters discussed below, if any, depart from customary litigation incidental to our business.

We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions.

When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted.

For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and that represents our best estimate has been recorded.

Our accrual for legal and regulatory matters was insignificant as of December 31, 2022 and December 31, 2021.

We do not consider (i) the amounts we have currently recorded for all legal proceedings in which it has been determined that a loss is both probable and reasonably estimable and (ii) reasonably possible losses for all pending legal proceedings to be material to our financial statements either individually or in the aggregate.

Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending legal proceedings is generally not yet determinable.

While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe that the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition.

In August 2020, a lawsuit styled, In the Matter of FGL Holdings, was filed in the Grand Court of the Cayman Islands related to FNF's acquisition of F&G where dissenting shareholders, Kingfishers LP, Kingstown 1740 Fund LP, Kingstown Partners II LP, Kingstown Partners Master Ltd., and Ktown LP, asserted statutory appraisal rights relative to their ownership of 12,000,000 shares of F&G stock.

They sought a judicial determination of the fair value of their shares of F&G stock as of the date of valuation under the law of the Cayman Islands, together with interest.

On September 5, 2022 the Grand Court of the Cayman Islands decided in favor of F&G.

Kingstown Capital Management LP failed to appeal, and its appeal period expired on October 20, 2022.

The result in this case has no material adverse effect on our financial condition.

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.

From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities, which may require us to pay fines or claims or take other actions.

We do not anticipate such fines and settlements, either individually or in the aggregate, will have a material adverse effect on our financial condition.

We have unfunded investment commitments as of December 31, 2022 and December 31, 2021 based upon the timing of when investments are executed compared to when the actual investments are funded, as some investments require that funding occur over a period of months or years.

A summary of unfunded commitments by invested asset class as of December 31, 2022 and December 31, 2021 is included below (in millions):

Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred

Direct $ 2,112 $ 3,728 $ 1,522 $ 3,640 $ 1,314 $ 3,070

Ceded ( 105 ) ( 175 ) ( 128 ) ( 2,514 ) ( 137 ) ( 1,138 )

Net $ 2,007 $ 3,553 $ 1,394 $ 1,126 $ 1,177 $ 1,932

Amounts payable or recoverable for reinsurance on paid and unpaid claims are not subject to periodic or maximum limits.

No policies issued by F&G have been reinsured with any foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance.

F&G has not entered into any reinsurance agreements in which the reinsurer may unilaterally cancel any reinsurance for reasons other than non-payment of premiums or other similar credit issues.

The following summarizes our reinsurance recoverable (in millions):

Parent Company/

Principal Reinsurers Reinsurance Recoverable (a) Agreement Type Products

Covered Accounting

December 31, 2023 December 31, 2022

Unconsolidated VIEs:

Limited partnerships $ 1,603 $ 1,146

Whole loans 419 589

Fixed maturity securities, ABS 201 306

Other fixed maturity securities, AFS 48 119

Commercial mortgage loans 36 44

Other assets 120 156

Residential mortgage loans 2 —

Committed amounts included in liabilities 1 —

Aspida Life Re Ltd $ 6,128 $ 3,121 Coinsurance Funds Withheld Certain MYGA (b) Deposit

Wilton Reassurance Company 1,092 1,231 Coinsurance Block of traditional, IUL and UL (c) Reinsurance

Somerset Reinsurance Ltd 716 570 Coinsurance Funds Withheld Certain MYGA (b) and DA Deposit

Everlake Life Insurance Company 509 — Coinsurance (d) Certain MYGA (b) (d) Deposit

Other (e) 536 505

Reinsurance recoverable, gross of allowance for credit losses 8,981 5,427

Allowance for expected credit loss ( 21 ) ( 10 )

Reinsurance recoverable, net of allowance for credit losses $ 8,960 $ 5,417

(a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies.

(b) As of the years ended December 31, 2023 and 2022, the combined quota share flow reinsurance amongst all reinsurers was 90 % and 75 %, respectively.

(c) Also includes certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX.

(d) Reinsurance recoverable is collateralized by assets placed in a statutory comfort trust by the reinsurer and maintained for our sole benefit.

(e) Represents all other reinsurers, with no single reinsurer having a carrying value in excess of 5% of total reinsurance recoverable.

F&G incurred risk charge fees of $ 39 million, $ 36 million, and $ 28 million during the years ended December 31, 2023, 2022, and 2021, respectively, in relation to reinsurance agreements.

Credit Losses

F&G estimates expected credit losses on reinsurance recoverables using a probability of default/loss given default model.

Significant inputs to the model include the reinsurer's credit risk, expected timing of recovery, industry-wide historical default experience, senior unsecured bond recovery rates, and credit enhancement features.

The expected credit loss reserves were as follows (in millions):

December 31, 2023 December 31, 2022

Balance at Beginning of Period $ ( 10 ) $ ( 20 )

Provision for losses ( 11 ) 10

Charge offs — —

Balance at End of Period $ ( 21 ) $ ( 10 )

Concentration of Reinsurance Risk

As indicated above, the Company has a significant concentration of reinsurance risk with third party reinsurers, ASPIDA Life Re Ltd.

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

(“Somerset”) and Everlake Life Insurance Company (“Everlake”) that could have a material impact on our financial position in the event that any of these reinsurers fails to perform its obligations under the various reinsurance treaties.

We monitor the financial condition and financial strength of individual reinsurers using public ratings (refer to table below) and ratings reports of individual reinsurers to attempt to reduce the risk of default by such reinsurers.

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

We believe that all amounts due from Aspida Re, Wilton Re, Somerset and Everlake for periodic treaty settlements, net of any applicable credit loss

reserves, are collectible as of December 31, 2023.

The following table presents financial strength ratings as of December 31, 2023:

Parent Company/Principal Reinsurers Financial Strength Rating

AM Best S&P Fitch Moody's

Aspida Life Re Ltd A- not rated not rated not rated

Wilton Re A+ not rated A not rated

Somerset Reinsurance Ltd A- BBB+ not rated not rated

Everlake A+ not rated not rated not rated

Reinsurance Transactions

The following summarizes significant changes to third-party reinsurance agreements for the year ended December 31, 2023:

Everlake and Somerset:

F&G executed flow reinsurance agreements with Everlake and Somerset, third-party reinsurers, to cede certain MYGA business written effective September 1, 2023, and December 1, 2023, respectively, on a coinsurance quota share basis.

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

In accordance with the terms of this agreement, F&G cedes a quota share percentage of the net retention of guaranteed payments in excess of account value for GMWB.

Effective December 31, 2023, we entered a Recapture and Termination Agreement with Canada Life whereby 100 % of the liabilities and obligations were recaptured.

There were no significant changes to third party reinsurance agreements for the year ended December 31, 2022 .

Intercompany Reinsurance Agreements

The Company executes various intercompany reinsurance agreements between its insurance subsidiaries, including off shore entities, for purposes of managing regulatory statutory capital and risk.

Since these agreements are intercompany, the financial impacts are eliminated in the preparation of the Consolidated Financial Statements included within this Annual Report on Form 10-K.

Some of these intercompany transactions are executed with wholly owned reinsurance subsidiaries, Corbeau Re, Inc.

(“Corbeau Re”), Raven Reinsurance Company (“Raven Re”) and F&G Cayman Re (“Cayman Re”), to finance the portion of statutory reserves considered to be non-economic.

The financing arrangements involve Fidelity & Guaranty Life Insurance Company reinsuring certain annuity products and their related rider benefits to the captives and the captives executing third-party financing facilities that are classified as capital for statutory purposes.

The transaction with Raven Re and Cayman Re included the execution of letter of credits with Nomura Bank International plc (“NBI”) and Deutsche Bank AG (“DB”), respectively, that are undrawn and have maximum borrowing capacities of $ 200 million and $ 200 million, respectively, as of December 31, 2023.

The transaction with Corbeau Re included the execution of an excess of loss agreement (“XOL”) with Canada Life Barbados Branch that 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.

Note F - Intangibles

The following table reconciles to Other intangible assets, net, on the Consolidated Balance Sheets as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

VOBA $ 1,446 $ 1,615

DAC 2,215 1,411

Value of distribution asset 86 100

Computer software 65 61

Definite lived trademarks, tradenames, and other 41 34

Indefinite lived tradenames and other 8 8

Total Other intangible assets, net $ 4,207 $ 3,429

The following tables roll forward VOBA by product for the years ended December 31, 2023 and 2022 (in millions):

FIA Fixed Rate Annuities Immediate Annuities Universal Life Traditional Life Total

Balance at January 1, 2023

$ 1,166 $ 32 $ 201 $ 143 $ 73 $ 1,615

See Note A Business and Summary of Significant Accounting Policies , for discussion of funding agreements that have been issued pursuant to the FABN Program as well as to the FHLB that are included in Contractholder funds.

The Company leases office space under operating leases.

The largest leases are cancellable in 2027 and expire in 2030.

Rent expense and minimum rental commitments under all leases are immaterial.

As discussed in Note J Reinsurance , to enhance Kubera's ability to pay its obligations under the amended reinsurance agreement, effective October 31, 2021, 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, 2022 and December 31, 2021, the amount funded under the NPA was insignificant.

Note G — Supplemental Cash Flow Information

The following supplemental cash flow information is provided with respect to certain cash payment and non-cash investing and financing activities (in millions).

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Amortization ( 141 ) ( 5 ) ( 10 ) ( 9 ) ( 4 ) ( 169 )

Balance at December 31, 2023

$ 1,025 $ 27 $ 191 $ 134 $ 69 $ 1,446

Cash paid for:

Interest paid $ 34 $ 30 $ 30 $ 15 $ 15

Income taxes (refunded) paid ( 72 ) 44 2 —

Deferred sales inducements 87 90 46 43

Non-cash investing and financing activities:

Investments received from pension risk transfer premiums — 316 — —

Change in proceeds of sales of investments available for sale receivable in period 115 ( 160 ) ( 3 ) 5

Change in purchases of investments available for sale payable in period ( 10 ) 2 7 ( 6 )

Note H — Intangibles

A summary of the changes in the carrying amounts of our VOBA, DAC and DSI intangible assets is as follows (in millions):

VOBA DAC DSI Total

FIA Fixed Rate Annuities Immediate Annuities Universal Life Traditional Life Total

Balance at January 1, 2022

$ 1,314 $ 39 $ 212 $ 153 $ 25 $ 1,743

Deferrals — 727 87 814

Amortization ( 148 ) ( 7 ) ( 11 ) ( 10 ) ( 4 ) ( 180 )

Interest 25 30 2 57

Unlocking ( 5 ) ( 4 ) 5 ( 4 )

Adjustment for net unrealized investment losses (gains) 662 182 68 912

Shadow Premium Deficiency Testing (“PDT”) — — — — 52 52

Balance at December 31, 2022

$ 1,166 $ 32 $ 201 $ 143 $ 73 $ 1,615

VOBA DAC DSI Total

VOBA amortization expense of $ 169 million, $ 180 million, and $ 195 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021 respectively.

The following table presents a reconciliation of VOBA to the table above which is reconciled to the Consolidated Balance Sheets as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

FIA $ 1,025 $ 1,166

Fixed Rate Annuities 27 32

Immediate Annuities 191 201

Universal Life 134 143

Traditional Life 69 73

Total $ 1,446 $ 1,615

The following tables roll forward DAC by product for the years ended December 31, 2023 and 2022 (in millions):

FIA Fixed Rate Annuities Universal Life Total (a)

Balance at January 1, 2023

$ 971 $ 83 $ 348 $ 1,402

Purchase price allocation adjustments 61 — — 61

Deferrals — 585 90 675

Capitalization 510 177 229 916

Amortization ( 103 ) ( 51 ) ( 32 ) ( 186 )

Interest 30 13 1 44

Unlocking 13 1 ( 2 ) 12

Adjustment for net unrealized investment losses (gains) 51 ( 14 ) ( 2 ) 35

Reinsurance related adjustments — 79 — 79

Balance at December 31, 2023

$ 1,378 $ 288 $ 545 $ 2,211

VOBA DAC DSI Total

Balance at June 1, 2020 (a) $ 1,847 $ — $ — $ 1,847

Deferrals — 251 46 297

FIA Fixed Rate Annuities Universal Life Total (a)

Balance at January 1, 2022

$ 564 $ 38 $ 173 $ 775

Capitalization 474 56 196 726

Amortization ( 67 ) ( 11 ) ( 21 ) ( 99 )

Interest 20 2 — 22

Unlocking 2 — — 2

Adjustment for net unrealized investment losses (gains) ( 283 ) ( 25 ) ( 5 ) ( 313 )

Balance at December 31, 2022

Predecessor VOBA DAC DSI Total

$ 971 $ 83 $ 348 $ 1,402

(a) Excludes insignificant amounts of DAC related to Funding Agreement Backed Note (“FABN”).

DAC amortization expense of $ 186 million, $ 99 million, and $ 46 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the year s ended December 31, 2023, 2022, and 2021, respectively, excluding insignificant amounts related to FABN.

The following table presents a reconciliation of DAC to the table above which is reconciled to the Consolidated Balance Sheets as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

FIA $ 1,378 $ 971

Fixed Rate Annuities 288 83

Universal Life 545 348

Funding Agreements 4 9

Total $ 2,215 $ 1,411

The following tables roll forward DSI for the years ended December 31, 2023 and 2022 (in millions):

Balance at January 1, 2023

Deferrals — 184 43 227

Capitalization 168 168

Amortization ( 22 ) ( 22 )

Interest 7 8 2 17

Unlocking ( 9 ) ( 2 ) — ( 11 )

Adjustment for net unrealized investment losses (gains) 141 65 30 236

Balance at May 31, 2020 $ 752 $ 918 $ 321 $ 1,991

(a) As of the June 1, 2020 acquisition of F&G, due to purchase accounting adjustments, our prior intangible assets were valued at $ 0 and VOBA was re-established at fair value.

Amortization of VO BA, DAC, and DSI is based on the current and future expected gross margins or profits recognized, including investment gains and losses.

The interest accrual rates utilized to calculate the accretion of interest on VOBA ranged from 0 % to 4.71 % for the years ended December 31, 2022 and December 31, 2021.

The adjustment for unrealized net investment losses (gains) represents the amount of VOBA, DAC, and DSI that would have been amortized if such unrealized gains and losses had been recognized.

This is referred to as the “shadow adjustments” as the additional amortization is reflected in AOCI on the Consolidated Balance Sheet rather than as depreciation and amortization on the Consolidated Statements of Earnings.

As of December 31, 2022 and December 31, 2021, the VOBA balances included cumulative adjustments for net unrealized investment gains

(losses) of $( 430 ) million and $ 232 million, respectively, the DAC balances included cumulative adjustments for net unrealized investment gains (losses) of $( 143 ) million and $ 39 million, respectively, and the DSI balance included net unrealized investment gains (losses) of $( 61 ) million and $ 7 million, respectively.

For the in-force liabilities as of December 31, 2022, the estimated amortization expense for VOBA in future fiscal periods under existing accounting rules is as follows (in millions) (Refer to Note Q Recent Accounting Pronouncements for further discussion of accounting pronouncements not yet adopted that may have a significant impact on future estimated amortization expense upon adoption):

Balance at December 31, 2023

Balance at January 1, 2022

Capitalization 87 87

Amortization ( 14 ) ( 14 )

Balance at December 31, 2022

DSI amortization expense of $ 22 million, $ 14 million, and $ 7 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021, respectively.

The following table presents a reconciliation of DSI to the table above which is reconciled to the Consolidated Balance Sheets as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

FIA $ 346 $ 200

Total $ 346 $ 200

The cash flow assumptions used to amortize VOBA and DAC were consistent with the assumptions used to estimate the FPB for life contingent immediate annuities, and will be reviewed and unlocked, if applicable, in the same period as those balances.

For nonparticipating traditional life contracts, the VOBA amortization is straight-line, without the use of cash flow assumptions.

For FIA contracts, the cash flow assumptions used to amortize VOBA, DAC, and DSI were consistent with the assumptions used to estimate the value of the embedded derivative and MRBs, and will be reviewed and unlocked, if applicable, in the same period as those balances.

For fixed rate annuities and IUL the cash flow assumptions used to amortize VOBA, DAC and DSI reflect the Company’s best estimates for policyholder behavior, consistent with the development of assumptions for FIA and immediate annuity.

Refer to Note A - Business and Summary of Significant Accounting Policies for further information about accounting policies for amortization of VOBA, DAC and DSI.

We review cash flow assumptions annually, generally in the third quarter.

In 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuity (FIA and fixed rate annuity) and IUL products, including surrender rates, partial withdrawal rates, mortality improvement, premium persistency, and option budgets.

All updates to these assumptions brought us more in line with our company and overall industry experience since the prior assumption update.

In 2022, F&G undertook a review of all significant assumptions and revised GMWB utilization for our deferred annuity contracts (FIA and fixed rate annuities) to reflect internal and industry experience in the first several contract years.

For the in-force liabilities as of December 31, 2023, the estimated amortization expense for VOBA in future fiscal periods is as follows (in millions):

Estimated Amortization Expense

2023 $ ( 53 )

Thereafter 810

Total $ 1,446

Definite and Indefinite Lived Other Intangible Assets

11 unchanged sentences

Indefinite lived tradenames and other 8 N/A 8 Indefinite

Amortization expense for amortizable intangible assets, which consist primarily of VODA, computer software, and definite lived trademarks, tradenames and other was $ 25 million, $ 28 million, $ 17 million and $ 1 million for the years ended December 31, 2022 and December 31, 2021, the period June 1 to December 31, 2020 and the Predecessor period January 1 to May 31, 2020, respectively.

Estimated amortization expense for the next five years for assets owned at December 31, 2022, is $ 29 million in 2023, $ 26 million in 2024, $ 24 million in 2025, $ 23 million in 2026 and $ 22 million in 2027.

Note I — Goodwill

Goodwill of $ 1,756 million as of December 31, 2022, and December 31, 2021 relates to goodwill recorded in connection with the FNF acquisition at June 1, 2020.

There have been no changes in goodwill since the FNF

Refer to Note A Business and Summary of Significant Accounting Policies regarding our accounting policy for Goodwill and discussion of impairment testing.

Note J — Reinsurance

F&G reinsures portions of its policy risks with other insurance companies.

The use of indemnity reinsurance does not discharge an insurer from liability on the insurance ceded.

The insurer is required to pay in full the amount of its insurance liability regardless of whether it is entitled to or able to receive payment from the reinsurer.

The portion of risks exceeding F&G's retention limit is reinsured.

F&G primarily seeks reinsurance coverage in order to limit its exposure to mortality losses and enhance capital management.

F&G follows reinsurance accounting when there is adequate risk transfer or deposit accounting if there is inadequate risk transfer.

If the underlying policy being reinsured is an investment contract, the effects of the agreement are accounted for as a separate investment contract.

Refer to Note A Business and Summary of Significant Accounting Policies for more information over our accounting policy for reinsurance agreements.

The effect of reinsurance on net premiums earned and net benefits incurred (benefits paid and reserve changes) for the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 and the Predecessor period January 1, 2020 to May 31, 2020, respectively, were as follows (in millions):

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

Amortization expense for amortizable intangible assets, which consist primarily of VODA, computer software, and definite lived trademarks, tradenames and other was $ 26 million, $ 25 million and $ 28 million for the years ended December 31, 2023, 2022 and 2021, respectively.

We recorded $ 13 million, $ 14 million and $ 0 of impairment expense related to computer software during the years ended December 31, 2023, 2022 and 2021, respectively.

Estimated amortization expense for the next five years for assets owned at December 31, 2023, is $ 31 million in 2024, $ 26 million in 2025, $ 23 million in 2026, $ 22 million in 2027, $ 19 million in 2028 and $ 71 million thereafter.

Note G - Market Risk Benefits

The following table presents the balances of and changes in MRBs associated with FIAs and fixed rate annuities for the years ended December 31, 2023, 2022 and 2021 (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

FIA Fixed rate annuities FIA Fixed rate annuities FIA Fixed rate annuities

Balance, beginning of period, net liability $ 164 $ 1 $ 426 $ 2 $ 478 $ 1

Balance, beginning of period, before effect of changes in the instrument-specific credit risk $ 102 $ 1 $ 280 $ 1 $ 320 $ 1

Issuances and benefit payments ( 10 ) — ( 21 ) — ( 9 ) —

Attributed fees collected and interest accrual 131 — 107 1 99 1

Actual policyholder behavior different from expected 27 — 43 — ( 22 ) —

Changes in assumptions and other 29 — ( 76 ) — — —

Effects of market related movements ( 70 ) — ( 231 ) ( 1 ) ( 108 ) ( 1 )

Balance, end of period, before effect of changes in the instrument-specific credit risk $ 209 $ 1 $ 102 $ 1 $ 280 $ 1

Effect of changes in the instrument-specific credit risk 105 — 62 — 146 1

Balance, end of period, net liability $ 314 $ 1 $ 164 $ 1 $ 426 $ 2

Weighted-average attained age of policyholders weighted by total AV (years) 68.28 72.59 68.59 72.88 68.95 73.10

Net amount at risk $ 1,059 $ 2 $ 952 $ 3 $ 1,304 $ 4

The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRBs amounts in the Consolidated Balance Sheets (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Asset Liability Net Asset Liability Net Asset Liability Net

FIA 88 402 314 117 281 164 41 467 426

Fixed rate annuities — 1 1 — 1 1 — 2 2

Total $ 88 $ 403 $ 315 $ 117 $ 282 $ 165 $ 41 $ 469 $ 428

The net MRB liability increased for the year ended December 31, 2023, primarily as a result of attributed fees collected, increases as a result of actual policyholder behavior different than expected and changes in assumptions and other as discussed below.

These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections.

For the year ended December 31, 2023, notable changes made to the inputs to the fair value estimates of MRBs calculations included a significant increase in risk-free rates leading to a favorable change in the MRBs associated with FIA and fixed rate annuities;

increases in the equity market related projections resulted in a decrease in the net amount at risk associated with FIAs, lead to a favorable change in the value of the associated MRBs;

and F&G’s credit spread decreased, leading to a corresponding unfavorable change in the MRBs associated with both FIA and fixed rate annuities.

In addition, the cash flow assumptions used to calculate MRBs reflect the company’s best estimates for policyholder behavior.

We review cash flow assumptions annually, generally in the third quarter.

In 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuities (FIA and fixed rate annuities) with MRBs including surrender rates, partial withdrawal rates, mortality improvement, and option budgets.

All updates to these assumptions brought us more in line with our Company and overall industry experience since the prior assumption update.

These updates, in total, led to an unfavorable change in the MRB balance during the third quarter of 2023.

Additionally, in the fourth quarter of 2023, an update to the industry future mortality improvement table led to a corresponding update in our future mortality improvement assumption, which led to an unfavorable change in the MRB balance during the fourth quarter of 2023.

The net MRB liability decreased for the year ended December 31, 2022, primarily as a result of the effects of market related movements, including the impact of higher risk-free rates, and changes in assumptions and other as discussed below, partially offset by attributed fees collected and increases as a result of actual policyholder behavior different than expected.

For the year ended December 31, 2022, notable changes made to the inputs to the fair value estimates of MRBs calculations included a significant increase to risk-free rates leading to a favorable change in the MRBs associated with both FIA and fixed rate annuities;

decreases in the equity markets resulting in an increase in the net amount at risk associated with FIAs, leading to an unfavorable change in the value of the associated MRBs;

and volatility indices increased, leading to an unfavorable change in the MRBs associated with FIAs.

Cash flow assumptions for mortality and full and partial surrenders were unchanged during the annual third quarter review in 2022.

The GMWB utilization assumption was revised in the second quarter of 2022 to reflect additional internal and industry experience for the first several contract years.

This assumption update led to a decrease in the net MRB liability.

In addition, F&G’s credit spread increased during 2022, leading to a corresponding decrease in the net MRB liability.

Credit spreads on the block of business remain lower than the at-issue or at-purchase credit spreads, but the level has decreased since the beginning of 2022.

The net MRB liability decreased for the year ended December 31, 2021, primarily as a result of the effects of market related movements, including the impact of higher risk-free rates, and decreases as a result of actual policyholder behavior different than expected, partially offset by attributed fees collected.

For the year ended December 31, 2021, notable changes made to the inputs to the fair value estimates of MRBs calculations included a moderate increase to risk-free rates leading to a favorable change in the MRBs associated with both FIA and fixed rate annuities and increases in the equity markets resulting in a decrease in the net amount at risk associated with FIAs, leading to a favorable change in the value of the associated MRBs.

Note H - Income Taxes

Income tax expense (benefit) on continuing operations consists of the following (in millions):

Year Ended December 31,

2023 2022 2021

Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred

Direct $ 1,522 $ 3,671 $ 1,314 $ 3,282 $ 108 $ 976 $ 86 $ 402

Assumed — — — — — 1 — ( 1 )

Ceded ( 128 ) ( 2,546 ) ( 137 ) ( 1,144 ) ( 85 ) ( 111 ) ( 67 ) ( 103 )

Net $ 1,394 $ 1,125 $ 1,177 $ 2,138 $ 23 $ 866 $ 19 $ 298

Amounts payable or recoverable for reinsurance on paid and unpaid claims are not subject to periodic or maximum limits.

The Company did not write off any significant reinsurance balances during the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 or the Predecessor period from January 1, 2020 to May, 31, 2020.

The Company did not commute any ceded reinsurance treaties during the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020 or the Predecessor period from January 1, 2020 to May 31, 2020.

F&G estimates expected credit losses on reinsurance recoverables using a probability of default/loss given default model.

For the period ended May 31, 2020, the expected credit loss reserve was $ 22 million.

As of the June 1, 2020 acquisition of F&G, due to purchase accounting adjustments, our expected credit loss reserve was valued at $ 0 .

For the seven months ended December 31, 2020, the expected credit loss reserve increased from $ 0 to $ 21 million.

As of December 31, 2022 and December 31, 2021, the expected credit loss reserve was $ 10 million and $ 20 million, respectively.

No policies issued by F&G have been reinsured with any foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance.

F&G has not entered into any reinsurance agreements in which the reinsurer may unilaterally cancel any reinsurance for reasons other than non-payment of premiums or other similar credit issues.

New Reinsurance Transaction.

Effective December 31, 2022, F&G entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd.

(“New Re”), a third-party reinsurer, to cede a quota share of certain FIA policies and related waiver of surrender charges, issued after January 1, 2022, on a coinsurance and yearly

renewable term basis.

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.

As the FIA policies ceded do not include any GMWB or GMDB benefits, there is no significant insurance risk present and therefore the effects of this agreement are accounted for as a separate investment contract.

Aspida Reinsurance Transaction.

F&G executed a Funds Withheld Coinsurance Agreement with Aspida Re, a Bermuda reinsurer.

In accordance with the terms of this agreement, F&G cedes to the reinsurer, on a fifty percent ( 50 %) funds withheld coinsurance basis, certain multiyear guaranteed annuity business written effective January 1, 2021.

The agreement was originally executed January 15, 2021 and amended in August 2021 and September 2022.

For reinsured policies issued prior to September 1, 2022, the policies are ceded on a fifty percent ( 50 %) quota share basis.

For reinsured policies issued on or after September 1, 2022, the policies are ceded on a seventy-five percent ( 75 %) quota share basis, capped at $ 350 million cession per month.

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

Somerset Reinsurance Transaction.

F&G entered into a reinsurance agreement with Kubera, a third-party reinsurer, effective December 31, 2018, to cede certain MYGA and deferred annuity GAAP and statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

In accordance with the terms of this agreement, F&G cedes a quota share percentage of MYGA and deferred annuity policies for certain issue years to Kubera.

Effective October 31, 2021, this agreement was novated from Kubera to Somerset, a certified third-party reinsurer.

This agreement cedes GAAP and statutory reserves of approximately $ 1 billion.

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

Kubera Reinsurance Transaction.

Current $ 27 $ ( 31 ) $ 27

Deferred ( 4 ) 189 293

Total $ 23 $ 158 $ 320

Total income tax expense (benefit) was allocated as follows:

Year Ended December 31,

2023 2022 2021

Taxes on net earnings (loss) from continuing operations $ 23 $ 158 $ 320

Other comprehensive (loss) earnings:

Changes in current discount rate - future policy benefits ( 50 ) 203 33

Changes in instrument-specific credit risk-market benefits ( 9 ) 18 3

Unrealized (loss) gain on investments and other financial instruments 275 ( 1,186 ) ( 141 )

Unrealized gain on foreign currency translation and cash flow hedging 1 ( 1 ) ( 1 )

Total income tax (benefit) expense allocated to other comprehensive earnings 217 ( 966 ) ( 106 )

Total income taxes $ 240 $ ( 808 ) $ 214

A reconciliation of the federal statutory rate to our effective tax rate is as follows:

Year Ended December 31,

2023 2022 2021

Federal statutory rate 21.0 % 21.0 % 21.0 %

State income taxes, net of federal benefit ( 12.7 ) 0.1 0.3

Benefit for Capital Loss Carryback — ( 3.0 ) —

Stock compensation ( 8.5 ) 0.3 ( 0.1 )

Tax credits 16.2 ( 1.1 ) ( 0.3 )

Dividends received deduction 7.9 ( 0.4 ) ( 0.2 )

Valuation allowance for deferred tax assets ( 100.1 ) 3.4 ( 1.2 )

Adjustment of DTAs on sale of subsidiary — — 1.2

COLI 13.2 ( 0.4 ) ( 0.2 )

Non-deductible expenses and other, net ( 3.2 ) — 0.1

Effective tax rate ( 66.2 ) % 19.9 % 20.6 %

For the year ended December 31, 2023, the Company’s effective tax rate was ( 66.2 )%.

The effective tax rate was negatively impacted by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards.

For the year ended December 31, 2022, the Company’s effective tax rate was 19.9 %.

The effective tax rate was positively impacted by favorable permanent adjustments, including low income housing tax credits (“LIHTC”), the dividends received deduction (“DRD”), and COLI.

The effective tax rate was also impacted by the benefit of the capital loss carryback.

This benefit is offset by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards.

For the year ended December 31, 2021, the Company’s effective tax rate was 20.6 %.

The effective tax rate was positively impacted by favorable permanent adjustments, including LIHTC, DRD, and COLI.

The significant components of deferred tax assets and liabilities consist of the following:

(In millions)

Deferred Tax Assets:

Employee benefit accruals $ 25 $ 21

Net operating loss carryforwards 75 28

Accrued liabilities — 1

General Business Tax credits 43 30

CAMT Credit Carryforwards 36 —

Bermuda CIT NOL Carryforward 24 —

Investment securities 597 853

Capital loss carryover 38 8

Market Risk Benefit 61 32

Derivatives — 67

Life insurance and claim related adjustments 547 433

Funds held under reinsurance agreements 500 37

Total gross deferred tax asset 1,951 1,529

valuation allowance 85 30

Total deferred tax asset $ 1,866 $ 1,499

Deferred Tax Liabilities:

Amortization of goodwill and intangible assets ( 25 ) ( 29 )

Other ( 5 ) ( 2 )

Depreciation ( 15 ) ( 14 )

Partnerships ( 127 ) ( 93 )

Value of business acquired ( 304 ) ( 339 )

Derivatives ( 3 ) —

Deferred acquisition costs ( 361 ) ( 210 )

Transition reserve on new reserve method ( 17 ) ( 25 )

Funds held under reinsurance agreements ( 621 ) ( 187 )

Total deferred tax liability $ ( 1,478 ) $ ( 899 )

Net deferred tax asset (liability) $ 388 $ 600

Our net deferred tax asset (liability) was $ 388 million as of December 31, 2023 and a net deferred tax asset (liability) of $ 600 million as of December 31, 2022.

The significant changes in the deferred taxes are as follows:

the deferred tax asset for investment securities decreased by $ 256 million primarily due to unrealized capital gains on fixed maturities.

The deferred tax liability related to deferred acquisition costs increased by $ 151 million, which is consistent with the growth in sales in our U.S.

The deferred tax relating to derivatives decreased by $ 70 million due to unrealized gains on call options, interest rate swaps, and embedded derivatives.

The life insurance reserves and claim related adjustments deferred tax asset increased by $ 114 million primarily due to the GAAP reserves for the year increasing by more than the tax reserves.

The reinsurance receivable deferred tax asset increased by $ 463 million, and the reinsurance receivable deferred tax liability increased by $ 434 million, both due to the Modco reinsurance treatment of GAAP and tax reserves.

As of December 31, 2023, we have net operating losses (“NOLs”) on a pretax basis of $ 355 million, which are available to carryforward and offset future federal taxable income subject to the 80% taxable income limitation.

The life losses are U.S.

federal net operating losses and consist of $ 68 million of Internal Revenue Code Section 382 limited net operating losses, and $ 287 million of Internal Revenue Code Section 382 non-limited net operating losses.

These losses do not expire.

As of December 31, 2023 and 2022, we had $ 43 million and $ 30 million of general business tax credits, respectively, which expire between 2040 and 2043.

The tax credits consist of $ 43 million of tax credits with no IRC

Section 382 limitation.

We also had $ 36 million of corporate alternative minimum tax (“CAMT”) credits.

The CAMT credits are not limited by IRC Section 382, and have no expiration date.

As of December 31, 2023, the valuation allowance of $ 85 million consisted of a full valuation allowance of $ 4 million on the unrealized capital loss deferred tax assets for F&G Life Re, F&G Cayman Re, and the US Non-life Companies, a full valuation allowance of $ 24 million on the foreign deferred tax assets of F&G Life Re, a full valuation allowance of $ 4 million on the remaining capital loss carryforwards for the US Non-life Companies, and a partial valuation allowance of $ 53 million on the US Life Companies’ capital loss deferred tax assets.

Life insurance group is subject to a Tax Sharing Agreement within the members of the life insurance tax return group.

The agreement provides for an allocation based on separate return calculations and allows for reimbursement of company tax benefits absorbed by other members of the group.

non-life group is subject to a Tax Sharing Agreement with its parent, FNF, with which it files a consolidated federal income tax return.

The Company’s non-life group Tax Sharing Agreement allows for reimbursement of company tax benefits absorbed by FNF.

If, during the year ended December 31, 2023, the Company had computed taxes using the separate return method, the pro-forma provision for income taxes would remain unchanged.

Federal income tax returns of the Company for years prior to 2018 are no longer subject to examination by the taxing authorities.

The Company does no t have any unrecognized tax benefits (“UTBs”) at December 31, 2023 or December 31, 2022.

In the event the Company has UTBs, interest and penalties related to uncertain tax positions would be recorded as part of income tax expense in the financial statements.

The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its tax reserves based on new information or developments.

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.

The Company has elected to consider the effects of CAMT separately in evaluating the need for a valuation allowance.

For the year ended December 31, 2023, due to the reasons above, no valuation allowance is needed.

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.

The CIT Act of 2023 was passed in Bermuda on December 27, 2023.

The CIT 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.

Since the CIT did not have any material impact to the financial statements, the deferred tax asset and offsetting valuation allowance were netted together in the rate reconciliation above.

As a result of the adoption of ASU 2018-12, the changes required resulted in changes to deferred tax for the prior periods.

The decrease in the deferred tax asset as of December 31, 2022 due to ASU 2018-12 was $163 million.

See Note A - Business and Summary of Significant Accounting Policies for details on the changes required for the new accounting standard.

Note I- Contractholder Funds

The following tables summarize balances of and changes in contractholder funds’ account balances (in millions):

December 31, 2023

FIA Fixed rate annuities Universal Life FABN (b) FHLB (b)

Balance, beginning of year $ 24,766 $ 9,358 $ 2,112 $ 2,613 $ 1,982

Issuances 4,722 5,061 199 — 1,256

Premiums received 103 1 382 — —

Policy charges (a) ( 182 ) — ( 261 ) — —

Surrenders and withdrawals ( 2,005 ) ( 1,142 ) ( 90 ) — —

Benefit payments ( 526 ) ( 240 ) ( 27 ) ( 53 ) ( 763 )

Interest credited 270 405 76 54 64

Other 16 — — ( 1 ) —

Balance, end of year $ 27,164 $ 13,443 $ 2,391 $ 2,613 $ 2,539

Embedded derivative adjustment (c) 243 — 84 — —

Gross Liability, end of period $ 27,407 $ 13,443 $ 2,475 $ 2,613 $ 2,539

Reinsurance ( 17 ) ( 7,520 ) ( 894 ) — —

Net Liability, after Reinsurance $ 27,390 $ 5,923 $ 1,581 $ 2,613 $ 2,539

Weighted-average crediting rate 1.40 % 4.85 % 3.44 % N/A N/A

Net amount at risk (d) N/A N/A $ 60,389 N/A N/A

Cash surrender value (e) $ 25,099 $ 12,505 $ 1,872 N/A N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements.

However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

(e) These amounts are gross of reinsurance.

December 31, 2022

FIA Fixed rate annuities Universal Life FABN (b) FHLB (b)

Balance, beginning of year $ 21,997 $ 6,367 $ 1,907 $ 1,904 $ 1,543

Issuances 4,462 3,758 167 700 1,192

Premiums received 106 3 295 — —

Policy charges (a) ( 166 ) ( 1 ) ( 209 ) — —

Surrenders and withdrawals ( 1,322 ) ( 797 ) ( 74 ) — —

Benefit payments ( 485 ) ( 192 ) ( 22 ) ( 35 ) ( 789 )

Interest credited 198 220 48 45 36

Other ( 24 ) — — ( 1 ) —

Balance, end of year $ 24,766 $ 9,358 $ 2,112 $ 2,613 $ 1,982

Embedded derivative adjustment (c) ( 343 ) — 15 — —

Gross Liability, end of period $ 24,423 $ 9,358 $ 2,127 $ 2,613 $ 1,982

Reinsurance ( 17 ) ( 3,723 ) ( 947 ) — —

Net Liability, after Reinsurance $ 24,406 $ 5,635 $ 1,180 $ 2,613 $ 1,982

Weighted-average crediting rate 0.85 % 2.84 % 2.39 % N/A N/A

Net amount at risk (d) N/A N/A $ 53,348 N/A N/A

Cash surrender value (e) $ 23,049 $ 8,744 $ 1,698 N/A N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements.

However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(e) These amounts are gross of reinsurance.

December 31, 2021

FIA Fixed rate annuities Universal Life FABN (b) FHLB (b)

Balance, beginning of year $ 18,703 $ 5,142 $ 1,696 $ — $ 1,203

Issuances 4,400 1,743 114 1,899 759

Premiums received 103 3 233 — —

Policy charges (a) ( 148 ) ( 1 ) ( 167 ) — —

Surrenders and withdrawals ( 1,303 ) ( 543 ) ( 68 ) — —

Benefit payments ( 440 ) ( 145 ) ( 19 ) ( 7 ) ( 447 )

Interest credited 686 167 118 12 30

Other ( 4 ) 1 — — ( 2 )

Balance, end of year $ 21,997 $ 6,367 $ 1,907 $ 1,904 $ 1,543

Embedded derivative adjustment (c) 603 — 74 — —

Gross Liability, end of period $ 22,600 $ 6,367 $ 1,981 $ 1,904 $ 1,543

Reinsurance ( 17 ) ( 1,692 ) ( 984 ) — —

Net Liability, after Reinsurance $ 22,583 $ 4,675 $ 997 $ 1,904 $ 1,543

Weighted-average crediting rate 3.43 % 2.94 % 6.77 % N/A N/A

Net amount at risk (d) N/A N/A $ 41,326 N/A N/A

Cash surrender value (e) $ 20,455 $ 5,992 $ 1,572 N/A N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements.

However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(e) These amounts are gross of reinsurance.

The following table reconciles contractholder funds’ account balances to the contractholder funds liability in the Consolidated Balance Sheet (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

FIA $ 27,407 $ 24,423 $ 22,600

Fixed rate annuities 13,443 9,358 6,367

Immediate annuities 311 332 352

Universal life 2,475 2,127 1,981

Traditional life 5 5 5

Funding Agreement-FABN 2,613 2,613 1,904

FHLB 2,539 1,982 1,543

Total $ 48,798 $ 40,843 $ 34,753

Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees.

During the third quarter of 2023 and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder

These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $ 73 million for the year ended December 31, 2023.

The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums (in millions):

December 31, 2023

Range of guaranteed minimum crediting rate At Guaranteed Minimum 1 Basis Point- 50 Basis Points Above

51 Basis Points- 150 Basis Points Above

Greater Than 150 Basis Points Above

0.00%-1.50% $ 22,392 $ 1,444 $ 526 $ 1,953 $ 26,315

1.51%-2.50% 196 1 24 250 471

Greater than 2.50% 377 1 — — 378

Total $ 22,965 $ 1,446 $ 550 $ 2,203 $ 27,164

Fixed Rate Annuities

0.00%-1.50% $ 23 $ 25 $ 1,532 $ 10,271 $ 11,851

1.51%-2.50% 5 8 23 453 489

Greater than 2.50% 893 2 4 204 1,103

Total $ 921 $ 35 $ 1,559 $ 10,928 $ 13,443

Universal Life

0.00%-1.50% $ 1,987 $ 5 $ — $ 21 $ 2,013

1.51%-2.50% — — — — —

Greater than 2.50% 361 16 1 — 378

Total $ 2,348 $ 21 $ 1 $ 21 $ 2,391

December 31, 2022

Range of guaranteed minimum crediting rate At Guaranteed Minimum 1 Basis Point- 50 Basis Points Above

51 Basis Points- 150 Basis Points Above

Greater Than 150 Basis Points Above

0.00%-1.50% $ 22,848 $ 801 $ 410 $ 151 $ 24,210

1.51%-2.50% 162 — 1 — 163

Greater than 2.50% 390 — 3 — 393

Total $ 23,400 $ 801 $ 414 $ 151 $ 24,766

Fixed Rate Annuities

0.00%-1.50% $ 10 $ 32 $ 1,871 $ 6,379 $ 8,292

1.51%-2.50% 9 14 30 1 54

Greater than 2.50% 997 4 4 7 1,012

Total $ 1,016 $ 50 $ 1,905 $ 6,387 $ 9,358

Universal Life

0.00%-1.50% $ 1,701 $ 3 $ — $ 17 $ 1,721

1.51%-2.50% — — — — —

Greater than 2.50% 346 44 1 — 391

Total $ 2,047 $ 47 $ 1 $ 17 $ 2,112

December 31, 2021

Range of guaranteed minimum crediting rate At Guaranteed Minimum 1 Basis Point- 50 Basis Points Above

51 Basis Points- 150 Basis Points Above

Greater Than 150 Basis Points Above

0.00%-1.50% $ 20,162 $ 803 $ 388 $ — $ 21,353

1.51%-2.50% 171 11 25 — 207

Greater than 2.50% 431 3 3 — 437

Total $ 20,764 $ 817 $ 416 $ — $ 21,997

Fixed Rate Annuities

0.00%-1.50% $ 2 $ 28 $ 1,928 $ 3,219 $ 5,177

1.51%-2.50% 9 15 37 1 62

Greater than 2.50% 954 142 25 7 1,128

Total $ 965 $ 185 $ 1,990 $ 3,227 $ 6,367

Universal Life

0.00%-1.50% $ 1,486 $ 2 $ — $ 13 $ 1,501

1.51%-2.50% — — — — —

Greater than 2.50% 359 46 1 — 406

Total $ 1,845 $ 48 $ 1 $ 13 $ 1,907

Note J - Future Policy Benefits

The following table summarizes balances and changes in the present value of expected net premiums and the present value of the expected FPB for nonparticipating traditional contracts (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Expected net premiums

Balance, beginning of year $ 797 $ 1,020 $ 1,152

Beginning balance at original discount rate 974 1,045 1,131

Effect of actual variances from expected experience ( 1 ) 33 25

Balance adjusted for variances from expectation $ 973 $ 1,078 $ 1,156

Interest accrual 19 20 22

Net premiums collected ( 118 ) ( 124 ) ( 133 )

Ending Balance at original discount rate $ 874 $ 974 $ 1,045

Effect of changes in discount rate assumptions ( 152 ) ( 177 ) ( 25 )

Balance, end of year $ 722 $ 797 $ 1,020

Balance, beginning of year $ 2,151 $ 2,772 $ 3,105

Beginning balance at original discount rate 2,665 2,806 2,995

Effect of actual variances from expected experience ( 24 ) 13 ( 14 )

Balance adjusted for variances from expectation $ 2,641 $ 2,819 $ 2,981

Interest accrual 56 59 62

Benefits payments ( 205 ) ( 213 ) ( 237 )

Ending Balance at original discount rate $ 2,492 $ 2,665 $ 2,806

Effect of changes in discount rate assumptions ( 421 ) ( 514 ) ( 34 )

Balance, end of year $ 2,071 $ 2,151 $ 2,772

Net liability for future policy benefits $ 1,349 $ 1,354 $ 1,752

Reinsurance recoverable 413 612 749

Net liability for future policy benefits, after reinsurance recoverable $ 936 $ 742 $ 1,003

Weighted-average duration of liability for future policyholder benefits (years) 7.36 7.58 8.54

The following tables summarize balances and changes in the present value of the expected FPB for limited-payment contracts (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Balance, beginning of year $ 2,165 $ 1,148 $ —

Beginning balance at original discount rate 2,475 1,151 —

Effect of changes in cash flow assumptions ( 9 ) ( 20 ) —

Effect of actual variances from expected experience ( 7 ) 2 —

Balance adjusted for variances from expectation $ 2,459 $ 1,133 $ —

Issuances 2,041 1,418 1,155

Interest accrual 109 50 2

Benefits payments ( 258 ) ( 126 ) ( 6 )

Ending Balance at original discount rate $ 4,351 $ 2,475 $ 1,151

Effect of changes in discount rate assumptions ( 162 ) ( 310 ) ( 3 )

Balance, end of year $ 4,189 $ 2,165 $ 1,148

Net liability for future policy benefits $ 4,189 $ 2,165 $ 1,148

Reinsurance recoverable — — —

Net liability for future policy benefits, after reinsurance recoverable $ 4,189 $ 2,165 $ 1,148

Weighted-average duration of liability for future policyholder benefits (years) 8.23 8.09 8.75

December 31, 2023 December 31, 2022 December 31, 2021

Immediate annuities

Balance, beginning of year $ 1,429 $ 1,954 $ 2,153

Beginning balance at original discount rate 1,858 1,935 2,040

Effect of changes in cash flow assumptions — — —

Effect of actual variances from expected experience ( 15 ) ( 26 ) ( 47 )

Balance adjusted for variances from expectation $ 1,843 $ 1,909 $ 1,993

Issuances 22 26 18

Interest accrual 51 60 60

Benefits payments ( 128 ) ( 137 ) ( 136 )

Ending Balance at original discount rate $ 1,788 $ 1,858 $ 1,935

Effect of changes in discount rate assumptions ( 373 ) ( 429 ) 19

Balance, end of year $ 1,415 $ 1,429 $ 1,954

Net liability for future policy benefits $ 1,415 $ 1,429 $ 1,954

Reinsurance recoverable 116 118 145

Net liability for future policy benefits, after reinsurance recoverable $ 1,299 $ 1,311 $ 1,809

Weighted-average duration of liability for future policyholder benefits (years) 12.47 11.76 13.61

The following tables summarize balances and changes in the liability for DPL for limited-payment contracts (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Immediate annuities PRT Immediate annuities PRT Immediate annuities PRT

Balance, beginning of year $ 69 $ 4 $ 57 $ 7 $ 22 $ —

Effect of modeling changes 4 — — — — —

Effect of changes in cash flow assumptions — 1 — ( 2 ) — —

Effect of actual variances from expected experience 16 5 16 — 39 —

Balance adjusted for variances from expectation 89 10 73 5 61 —

Issuances 3 — 1 — — 7

Interest accrual 2 1 2 — 2 —

Amortization ( 7 ) ( 1 ) ( 7 ) ( 1 ) ( 6 ) —

Balance, end of year $ 87 $ 10 $ 69 $ 4 $ 57 $ 7

The following table reconciles the net FPB to the FPB in the Consolidated Balance Sheets (in millions).

The DPL for Immediate Annuities and PRT is presented together with the FPB in the Consolidated Balance Sheets and has been included as a reconciling item in the table below:

December 31, 2023 December 31, 2022 December 31, 2021

Traditional Life $ 1,349 $ 1,354 $ 1,752

Immediate annuities 1,415 1,429 1,954

PRT 4,189 2,165 1,148

Immediate annuities DPL 87 69 57

PRT DPL 10 4 7

Total $ 7,050 $ 5,021 $ 4,918

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts (in millions):

Undiscounted Discounted

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022

Traditional Life

Expected future benefit payments $ 2,935 $ 3,132 $ 2,075 $ 2,640

Expected future gross premiums 1,082 1,209 789 1,043

Immediate annuities

Expected future benefit payments $ 3,291 $ 3,434 $ 1,413 $ 1,858

Expected future gross premiums — — — —

Expected future benefit payments $ 6,709 $ 3,569 $ 4,350 $ 2,472

Expected future gross premiums — — — —

The following table summarizes the amount of revenue and interest related to nonparticipating traditional and limited-payment contracts recognized in the Consolidated Statements of Operations (in millions):

Gross Premiums (a) Interest Expense (b)

December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2023 December 31, 2022 December 31, 2021

Traditional Life $ 123 $ 137 $ 152 $ 37 $ 39 $ 40

Immediate annuities 24 23 16 51 60 60

PRT 1,964 1,362 1,146 109 50 2

Total $ 2,111 $ 1,522 $ 1,314 $ 197 $ 149 $ 102

(a) Included in Life insurance premiums and other fees on the Consolidated Statements of Operations.

(b) Included in Benefits and other changes in policy reserves (remeasurement gains (losses) (a)) on the Consolidated Statements of Operations.

The following table presents the weighted-average interest rate:

December 31, 2023 December 31, 2022 December 31, 2021

Traditional Life

Interest accretion rate 2.33 % 2.32 % 2.29 %

Current discount rate 5.03 % 5.37 % 2.41 %

Immediate annuities

Interest accretion rate 3.14 % 3.07 % 3.04 %

Current discount rate 4.98 % 5.21 % 3.07 %

Interest accretion rate 4.61 % 3.20 % 1.20 %

Current discount rate 5.03 % 5.40 % 2.79 %

The following tables summarize the actual experience and expected experience for mortality and lapses of the FPB:

December 31, 2023

Traditional Life Immediate annuities PRT

Actual experience 1.7 % 3.2 % 3.2 %

Expected experience 1.4 % 1.8 % 2.3 %

Actual experience — % — % — %

Expected experience 0.3 % — % — %

December 31, 2022

Traditional Life Immediate annuities PRT

Actual experience 1.5 % 3.0 % 1.9 %

Expected experience 1.3 % 1.9 % 2.5 %

Actual experience — % — % — %

Expected experience 0.3 % — % — %

December 31, 2021

Traditional Life Immediate annuities PRT

Actual experience 1.7 % 4.2 % — %

Expected experience 1.3 % 2.0 % — %

Actual experience 0.1 % — % — %

Expected experience 0.3 % — % — %

The following table provides additional information for periods in which a cohort has an NPR > 100% (and therefore capped at 100%) (dollars in millions):

December 31, 2022

Cohort X Description (a)

Net Premium Ratio before capping 100 % Term with ROP Non-NY Cohort

Reserves before NP Ratio capping $ 1,172 Term with ROP Non-NY Cohort

Reserves after NP Ratio capping $ 1,173 Term with ROP Non-NY Cohort

Loss Expense — Term with ROP Non-NY Cohort

(a) Return of Premium (“ROP”)

F&G realized actual-to-expected experience variances and made changes to assumptions during the years ended December 31, 2023 and 2022 as follows:

Traditional life

Significant assumption inputs to the calculation of the FPB for traditional life include mortality, lapses (including lapses due to nonpayment of premium and surrenders for cash surrender value), and discount rates (both accretion and current).

We review the cash flow assumptions annually, typically in the third quarter.

In 2023, F&G undertook a review of all significant assumptions and revised the lapse assumption, resulting in a slight decrease to the FPB.

There have been no other significant changes.

Market data that underlies current discount rates was updated in 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB.

In 2022, F&G similarly undertook a review in the third quarter of the significant cash flow assumptions and did not make any changes to mortality or lapses.

Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB.

Impacts to expected net premiums and expected FPBs due to discount rate changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.

Immediate annuities (life contingent)

Significant assumption inputs to the calculation of the FPB for immediate annuities (life contingent) include mortality and discount rates (both accretion and current).

We review the cash flow assumptions annually, typically in the third quarter.

In 2023, F&G undertook a review of the significant cash flow assumptions and did not make any changes to mortality.

Market data that underlies current discount rates was updated in 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB.

In 2022, F&G similarly undertook a review of the significant cash flow assumptions and did not make any changes to those assumptions.

Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB.

Impacts to expected FPBs due to assumption changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.

PRT (life contingent)

Significant assumption inputs to the calculation of the FPB for PRT (life contingent) include mortality and discount rates (both accretion and current).

We review the cash flow assumptions annually, typically in the third quarter.

In 2023, F&G undertook a review of the significant cash flow assumptions and did not make any changes to mortality.

Market data that underlies current discount rates was updated in 2023 from that utilized in 2022 resulting in decreased discount rates that drove a material increase to the FPB.

In 2022, F&G similarly undertook a review of the significant cash flow assumption and did not make any changes to mortality.

Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB.

Impacts to expected FPBs due to assumption changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.

Premium deficiency testing

F&G conducts annual premium deficiency testing for its long-duration contracts except for the FPB for nonparticipating traditional and limited-payment contracts.

F&G also conducts annual premium deficiency testing for the VOBA of all long-duration contracts.

Premium deficiency testing is performed by reviewing assumptions used to calculate the insurance liabilities and determining whether the sum of the existing contract liabilities and the present value of future gross premiums is sufficient to cover the present value of future benefits to be paid to or on behalf of policyholders and settlement costs and recover unamortized present value of future profits.

Anticipated investment income, based on F&G’s experience, is considered when performing premium deficiency testing for long-duration contracts.

During 2023 and 2022, F&G was not required to establish any additional liabilities as a result of premium deficiency testing.

Note K - Accounts Payable and Accrued liabilities

As of December 31, 2023 and 2022, the total URL balance of $ 270 million and $ 166 million, respectively, is included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets.

The following table presents a reconciliation of Accounts payable and accrued liabilities to the Consolidated Balance Sheets as of December 31, 2023 and 2022 (in millions):

Salaries and incentives $ 99 $ 72

Accrued benefits 60 58

Trade accounts payable 297 114

Liability for policy and contract claims 92 109

Retained asset account 81 117

Remittances and items not allocated 284 225

Option collateral liabilities 588 178

Lease liability 11 13

Investment purchases payable 21 4

Other accrued liabilities 208 204

Accounts payable and accrued liabilities

$ 2,011 $ 1,260

The following tables roll forward URL for the years ended December 31, 2023 and 2022 (in millions):

Universal Life Total

Balance at January 1, 2023

Capitalization 119 119

Amortization ( 15 ) ( 15 )

Balance at December 31, 2023

Universal Life Total

Balance at January 1, 2022

Capitalization 89 89

Amortization ( 10 ) ( 10 )

Balance at December 31, 2022

For IUL the cash flow assumptions used to amortize URL reflect the Company’s best estimates for policyholder behavior.

We review cash flow assumptions annually, generally in the third quarter.

In 2023, F&G undertook a review of all significant assumptions, and there were changes to IUL assumptions involving surrender rates and premium persistency.

In 2022, F&G undertook a review of all significant assumptions, and there were no changes with a significant impact.

Note L - Notes Payable

Notes payable consists of the following:

December 31, 2023 December 31, 2022

(In millions)

7.95 % F&G Notes, net of $ 9 of deferred issuance costs at December 31, 2023

7.40 % F&G Notes, net of $ 5 of deferred issuance costs at December 31, 2023

5.50 % F&G Notes, net of $ 11 and $ 19 of purchase premium at December 31, 2023 and 2022, respectively

Revolving Credit Facility - Short-term, net of deferred issuance costs of $ 3 and $ 3 at December 31, 2023 and 2022, respectively

Total $ 1,754 $ 1,114

7.95 % F&G Notes - On December 6, 2023, F&G issued $ 345 million of its 7.95 % Senior Notes due 2053.

The 7.95 % F&G Notes were issued at par, net of deferred issuance costs of approximately $ 9 million.

The 7.95 % F&G Notes are senior unsecured, unsubordinated obligations of F&G and are guaranteed by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement.

The 7.95 % F&G Notes mature on December 15, 2053, and become callable on or after December 15, 2028.

Interest is payable quarterly at a fixed rate of 7.95 %, and, if the 7.95 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture.

F&G used a portion of the net proceeds from the offering to repay borrowings under its revolving credit facility as discussed below and for general corporate purposes, including the support of organic growth opportunities.

7.40 % F&G Notes - On January 13, 2023, F&G issued $ 500 million of its 7.40 % F&G Notes due 2028.

The 7.40 % F&G Notes were issued at par, net of deferred issuance costs of approximately $ 6 million.

The 7.40 % F&G Notes are senior, unsecured unsubordinated obligations of F&G and are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement.

The 7.40 % F&G Notes mature on January 13, 2028, and become callable on or after December 13, 2027.

Interest is payable semi-annually at a fixed rate of 7.40 %, and if, the 7.40 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture.

F&G used the net proceeds from the offering for general corporate purposes, including to support the growth of assets under management and for F&G's future liquidity requirements.

5.50 % F&G Notes - On April 20, 2018, Fidelity & Guaranty Life Holdings, Inc.

(“FGLH”), our indirect wholly

owned subsidiary, completed a debt offering of $ 550 million aggregate principal amount of 5.50 % senior notes due May 1, 2025 at 99.5 % of face value for proceeds of $ 547 million.

As a result of the FNF acquisition, a premium of $ 39 million was established for these notes and is being amortized over the remaining life of the debt through 2025.

Revolving Credit Facility - On November 22, 2022, we entered into a Credit agreement (the “Credit Agreement”) with certain lenders (the “Lenders”) and Bank of America, N.A.

as administrative agent, swing line lender and an issuing bank, pursuant to which the Lenders have made available an unsecured revolving credit facility in an aggregate principal amount of $ 550 million to be used for working capital and general corporate purposes.

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

The Credit Agreement matures the earlier to occur of November 22, 2025 or 91 days prior to May 1, 2025, the stated maturity date of the 5.50 % F&G Notes, unless the principal amount of the 5.50 % F&G Notes is 150 million or less at such time, the 5.50 % F&G Notes have been redeemed or defeased in full, and any refinancing indebtedness incurred in connection therewith matures at least 91 days after the date that is 3 years from the Effective Date or certain other conditions are met.

As the revolving loans under the Credit Agreement mature in less than one year, the amounts outstanding under the Credit Agreement are considered short-term.

In addition, we pay a facility fee of between 20.0 and 45.0 basis points on the entire facility, also depending on the non-credit-enhanced, senior unsecured long-term debt ratings, which is payable quarterly in arrears.

The average variable interest rate on the revolver was 7.11 % and 6.07 % for the years ended December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023, and 2022, $ 365 million and $ 550 million, respectively, of gross principal balance, was outstanding on the revolving credit facility.

Net partial revolver paydowns of $ 185 million were made during the year ended December 31, 2023.

As of December 31, 2023, we had $ 300 million of remaining borrowing availability.

Refer to Note A - Business and Summary of Significant Accounting Policies, Recent Developments for a discussion of a revolver amendment and extension completed on February 16, 2024.

FNF Credit Facility - On December 29, 2020, we entered into a revolving note agreement with FNF for up to $ 200 million capacity (the "FNF Credit Facility") to be used for working capital and other general corporate purposes.

No amounts were outstanding under this revolving note agreement as of December 31, 2023 or December 31, 2022.

Covenants - 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 certain operating and financial restrictions, including financial covenants, on F&G.

As of December 31, 2023, we were in compliance with all covenants.

Interest Expense - Amortization of deferred issuance costs and purchase premiums are recognized as a component of interest expense.

Interest expense on F&G’s outstanding notes payable for the years ended December 31, 2023, 2022 and 2021 was as follows (in millions):

Year ended December 31,

2023 2022 2021

7.95 % F&G Notes

7.40 % F&G Notes

5.50 % F&G Notes

Revolving Credit Facility 37 1 —

FNF Promissory Note (a) — 6 3

Total $ 97 $ 29 $ 29

(a) In June 2022, the $ 400 million FNF Promissory Note was exchanged for F&G common stock, and the note was retired.

Maturities - Gross principal maturities of notes payable at December 31, 2023 are as follows (in millions):

Thereafter 345

Total $ 1,760

Note M - Supplemental Cash Flow Information

The following supplemental cash flow information is provided with respect to certain cash payment and non-cash investing and financing activities (in millions).

Year ended December 31,

2023 2022 2021

Cash paid for:

Interest paid $ 84 $ 34 $ 30

Income taxes (refunded) paid 4 ( 72 ) 44

Deferred sales inducements 168 87 90

Non-cash investing and financing activities:

Investments received from pension risk transfer premiums 464 — 316

Change in proceeds of sales of investments available for sale receivable in period 34 115 ( 160 )

Change in purchases of investments available for sale payable in period 20 ( 10 ) 2

Note N - Commitments and Contingencies

Legal and Regulatory Contingencies

In the ordinary course of business, we are involved in various pending and threatened litigation matters related to our operations, some of which include claims for punitive or exemplary damages.

Like other companies, our ordinary course litigation includes a number of class action and purported class action lawsuits, which make allegations related to aspects of our operations.

We believe that no actions, other than the matters discussed below, if any, depart from customary litigation incidental to our business.

We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions.

When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted.

For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and that represents our best estimate has been recorded.

Our accrual for legal and regulatory matters was insignificant as of December 31, 2023 and 2022.

financial statements either individually or in the aggregate.

Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending legal proceedings is generally not yet determinable.

In August 2020, a lawsuit styled, In the Matter of FGL Holdings , was filed in the Grand Court of the Cayman Islands related to FNF's acquisition of F&G where dissenting shareholders, Kingfishers LP, Kingstown 1740 Fund LP, Kingstown Partners II LP, Kingstown Partners Master Ltd., and Ktown LP, asserted statutory appraisal rights relative to their ownership of 12,000,000 shares of F&G stock.

They sought a judicial determination of the fair value of their shares of F&G stock as of the date of valuation under the law of the Cayman Islands, together with interest and legal costs.

On October 5, 2022, the Grand Court of the Cayman Islands decided in favor of F&G.

The dissenting shareholders failed to appeal the fair value order, and its appeal period expired on October 19, 2022.

On April 19, 2023, the Grand Court of the Cayman Islands determined that the dissenting shareholders should pay F&G's Cayman Islands legal expenses and discovery costs relating to the lawsuit, by way of interim payment of $ 4 million with the balance to be determined after assessment.

We are attempting to collect reimbursement of our expenses in this lawsuit.

F&G is a defendant in two putative class action lawsuits related to the alleged compromise of certain of F&G’s customers’ personal information resulting from an alleged vulnerability in the MOVEit file transfer software.

F&G’s vendor, Pension Benefit Information, LLC (“PBI”), used the MOVEit software in the course of providing audit and address research services to F&G and many other corporate customers.

4:23-cv-00326 (“Miller”), was filed against F&G in the Southern District of Iowa on August 31, 2023.

Miller alleges that he is a F&G customer whose information was impacted in the MOVEit incident and brings common law tort and implied contract claims.

F&G has yet to be served in Miller.

Plaintiff seeks injunctive relief and damages.

Progress Software Corp.

1:23-cv-12067 (“Cooper”), was filed against F&G and five other defendants in the District of Massachusetts on September 7, 2023.

F&G was served on September 15, 2023.

Cooper also alleges that he is an F&G customer and brings similar common law tort claims and alleges claims as a purported third-party beneficiary of an alleged contract.

Plaintiff seeks declaratory and injunctive relief and damages.

At this time, F&G does not believe the incident or resulting lawsuits will have a material impact on its business, operations, or financial results.

Well over 150 similar lawsuits have been filed against other entities impacted by the MOVEit incident including a number of such lawsuits related to PBI’s use of MOVEit.

On October 4, 2023, the U.S.

Judicial Panel on Multidistrict Litigation (JPML) created a multidistrict litigation (“MDL”) pursuant to 28 U.S.C.

§ 1407 to handle all litigation brought by individuals whose information was potentially compromised in connection with the alleged MOVEit vulnerability.

The JPML assigned the MDL to Judge Allison Burroughs of the U.S.

District Court for the District of Massachusetts.

Both Miller and Cooper have been transferred to Judge Burroughs in the MDL.

Following creation of the MDL, Judge Burroughs conducted an initial case management conference on November 30, 2023 and appointed lead plaintiffs’ counsel on January 19, 2024.

Judge Burroughs is currently considering the parties’ case management schedule proposals submitted on February 16, 2024.

Judge Burroughs is then likely to issue a Case Management Order with additional processes and a preliminary schedule as a next step in the consolidated litigations.

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 do not anticipate such fines and settlements, either individually or in the aggregate, will have a material adverse effect on our financial condition.

We have unfunded commitments as of December 31, 2023 based upon the timing of when investments and agreements are executed or signed compared to when the actual investments and agreements are funded or closed.

Some investments require that funding occur over a period of months or years.

A summary of unfunded commitments by commitment type as of December 31, 2023 is included below (in millions):

December 31, 2023

Commitment Type

Unconsolidated VIEs:

Limited partnerships $ 1,735

Whole loans 600

Fixed maturity securities, ABS 244

Direct Lending 667

Other fixed maturity securities, AFS 14

Commercial mortgage loans 72

Other assets 421

Other invested assets 15

See Note A - Business and Summary of Significant Accounting Policies , for discussion of funding agreements that have been issued pursuant to the FABN Program as well as to the FHLB that are included in Contractholder funds.

The Company leases office space under operating leases.

The largest leases expire in 2030.

Rent expense and minimum rental commitments under all leases are immaterial.

F&G has a reinsurance agreement with Kubera to cede certain FIA statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance.

In accordance with the terms of this agreement, F&G cedes a quota share percentage of FIA policies for certain issue years to Kubera.

Effective October 31, 2021, this agreement was amended to increase the ceded reserves from approximately $ 4 billion to approximately $ 10 billion.

The agreement was subsequently amended and restated on October 1, 2022 whereby F&G recaptured approximately $ 52 million in statutory reserves solely related to waiver of surrender charges.

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

F&G incurred risk charge fees of $ 12 million, $ 5 million, $ 4 million, and ($ 1 ) million during the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020, and the Predecessor period from January 1, 2020 to May 31, 2020, respectively, in relation to this 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.

To enhance Kubera's ability to pay its obligations under the amended reinsurance agreement, effective October 31, 2021, 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.

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As of December 31, 2022 and December 31, 2021, the amount funded under the NPA was insignificant.

Canada Life Reinsurance Transaction.

Effective May 1, 2020, F&G entered into an indemnity reinsurance agreement with Canada Life Assurance Company United States Branch, a third-party reinsurer, to reinsure FIA policies with GMWB.

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

This treaty was amended effective January 1, 2021 and January 1, 2022, and covers FIA policies with GMWB issued from January 1, 2020 to December 31, 2023.

Effective October 1, 2022, the treaty was then amended and restated to cover additional FIA business policies.

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.

F&G incurred risk charge fees of $ 4 million, $ 2 million and $ 1 million during the years ended December 31, 2022 and December 31, 2021 and the period from June 1, 2020 to December 31, 2020, respectively, in relation to this reinsurance agreement.

Hannover Reinsurance Transaction.

F&G has an indemnity reinsurance agreement with Hannover Re, a third-party reinsurer, to cede a quota share percentage of the net retention of guarantee payments in excess of account value for GMWB and GMDB guarantees associated with an in-force block of its FIA and fixed deferred annuity contracts.

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.

F&G incurred risk charge fees of $ 20 million, $ 21 million, $ 12 million, and $ 8 million during the years ended December 31, 2022 and December 31, 2021, the period from June 1, 2020 to December 31, 2020, and the Predecessor period from January 1, 2020 to May 31, 2020, respectively, in relation to this reinsurance agreement.

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.

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.

Concentration of Reinsurance Risk

The Company has a significant concentration of reinsurance risk with third party reinsurers, Aspida Re, Wilton Re, and Somerset that could have a material impact on our financial position in the event that any of these reinsurers fails to perform its obligations under the various reinsurance treaties.

Aspida Re has an A- issuer credit rating from AM Best as of December 31, 2022, and the risk of non-performance is further mitigated through the funds withheld arrangement.

Wilton Re has an A+ issuer credit rating from AM Best and an A issuer credit rating from Fitch as of December 31, 2022.

Somerset has an A- issuer credit rating from AM Best and a BBB+ issuer credit rating from S&P as of December 31, 2022, and the risk of non-performance is further mitigated through the funds withheld arrangement.

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

We monitor both the financial condition of individual reinsurers and risk concentration arising from similar activities and economic characteristics of reinsurers to attempt to reduce the risk of default by such reinsurers.

We believe that all amounts due from Aspida Re, Wilton Re, and Somerset for periodic treaty settlements are collectible as of December 31, 2022.

Intercompany Reinsurance Agreements

Effective December 31, 2022, Fidelity & Guaranty Life Insurance Company (“FGL Insurance”) entered into a Coinsurance Agreement with F&G Life Re, an affiliated Bermuda reinsurer to issue a quota share of PRT 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).

The cession from FGL Insurance to the Reinsurer is on a 80 % quota share basis.

Reinsurance of the separate account contracts are maintained on a modified coinsurance basis and reinsurance of the general account contracts are maintained on a funds withheld basis.

On the funds withheld portion of the transaction, FGL Insurance ceded approximately $ 380 million, in certain PRT Statutory Reserves and Interest Maintenance Reserve.

FGL Insurance also established a modified coinsurance reserve of approximately $ 1.7 billion associated with the PRT Separate Account Insurance Liabilities.

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.

Effective October 1, 2022, the treaty was amended and restated to cover additional FIA, DA and MYGA policy issue years.

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 reimbursement agreement associated with the facility was amended and restated

on September 30, 2022.

As a result, the financing facility now has $ 200 million available to draw on as of December 31, 2022.

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

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, 2020, FGL Insurance executed a Coinsurance Agreement with F&G Life Re Ltd.

(“F&G Life Re” or "Reinsurer"), an affiliated Bermuda reinsurer, to reinsure a quota share of FIA policies to the Reinsurer.

Concurrently, the Reinsurer and F&G Cayman Re Ltd.

(“F&G Cayman Re”), an affiliated reinsurer of both FGL Insurance and the Reinsurer, entered into a Retrocession Agreement.

The cession from FGL Insurance to the Reinsurer is on a 100 % quota share basis, net of applicable existing reinsurance and the retrocession to F&G Cayman Re from the Reinsurer is on a 45 % quota share basis.

Additionally, both treaties are maintained on a funds withheld basis.

FGL Insurance ceded and the Reinsurer retroceded approximately $ 5.0 billion and $ 2.2 billion, respectively, in certain FIA Statutory Reserves and Interest Maintenance Reserve.

Since these agreements are intercompany, the financial impacts are eliminated in the preparation of the Consolidated Financial Statements included within this Annual Report.

Note K — Related Party Transactions

The Company has determined that related parties would fall into the following categories;

(i) affiliates of the entity, (ii) entities for which investments in their equity securities would be required to be accounted for by the equity method by the investing entity, (iii) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management, (iv) principal owners (>10% equity stake) of the entity and members of their immediate families, (v) management (including FNF’s BOD, CEO, and other persons responsible for achieving the objectives of the entity and who have the authority to establish policies and make decisions) of the entity and other members of their immediate families, (vi) other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests (vii) other parties that can significantly influence management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate business, (viii) attorney in fact of a reciprocal reporting entity or any affiliate of the attorney in fact, and (ix) a U.S.

manager of a U.S.

branch or any affiliate of the U.S.

manager of a U.S.

Prior to the FNF acquisition, the Company determined that for the period January 1 to May 31, 2020, the Blackstone Group LP ("Blackstone") and its affiliates, further discussed below, as well as the Company's directors and officers (along with their immediate family members) were related parties of the Company due to ownership in F&G.

Blackstone was a related party based on its equity stake in the Company.

Upon the closing of the FNF acquisition, the Company re-evaluated related parties.

Blackstone and its affiliates are no longer related parties due to no longer holding ownership in F&G.

It was determined that FNF as well as FNF's directors and officers (along with their immediate family members) would be related parties subsequent to June 1, 2020.

Separation Agreement

F&G has entered into the Separation Agreement with FNF to provide for, among other things, the principal corporate transactions required to effect the separation and distribution, certain conditions to the separation and distribution and provisions governing our relationship with FNF with respect to and resulting from the separation

and distribution.

Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report for additional information on the separation.

Notes Payable

For a description of our financing arrangements with FNF see Note E Notes Payable to the Consolidated Financial Statements included in this Annual Report.

Because FNF will initially own approximately 85 % of the shares of outstanding F&G common stock we are a controlled company within the meaning of the corporate governance standards of the NYSE.

A controlled company does not need its board of directors to have a majority of independent directors or to form an independent compensation committee or nominating and corporate governance committee.

Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report for additional information on management and governance.

Tax Sharing Agreement

Refer to Note N Income Taxes for a discussion of the tax matters agreement between FNF and the Company.

Stock Split, Increase to Authorized shares and Exchange Agreement with FNF

On June 24, 2022, the following actions previously approved by the F&G board of directors became effective:

(i) a stock split in a ratio of 105,000 for 1.

FNF, as the sole shareholder, received, in the form of a dividend, 104,999 additional shares of common stock for each share of common stock held.

Earnings per share has been retrospectively adjusted to reflect as if the split occurred as of June 1, 2020 in accordance with GAAP;

(ii) an increase in the number of authorized shares of common stock from one thousand ( 1,000 ) to five hundred million ( 500,000,000 );

(iii) an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired.

There was no gain or loss recorded with respect to the exchange agreement.

For the years ended December 31, 2022 and 2021, interest expense on the FNF Promissory Note was approximately $ 6 million and $ 3 million, respectively.

Corporate Services Agreement

FNF has entered into a C orporate S ervices A greement with F&G, which we refer to as the C orporate S ervices A greement.

Pursuant to such agreement, FNF will provide F&G with certain corporate services, including internal audit services, litigation and dispute management services, compliance services , corporate and transactional support services, SEC & reporting services, insurance and risk management services, human resources support services and real estate services.

The C orporate S ervices A greement terminates after the date upon which all corporate services or transition assistance have been terminated or upon the mutual agreement of the parties.

F&G may terminate corporate services by providing 90 days written notice to FNF.

Reverse Corporate Services Agreement

F&G has entered into a R everse C orporate S ervices A greement with FNF.

Pursuant to such agreement, F&G will provide FNF with certain services, including employee services.

The R everse C orporate S ervices A greement terminates after the date upon which all corporate services or transition assistance has been terminated or upon the mutual agreement of the parties.

FNF may terminate corporate services by providing 90 days written notice to F&G.

Shared Services

For the years ended December 31, 2022 and 2021, and for the period June 1, 2020 to December 31, 2020, FNF provided certain operational support services for F&G including tax, insurance, legal , risk management, information technology, employee benefits and accounting.

Expenses incurred by F&G for all services were approximately $ 4 million for the year ended December 31, 2022 and were insignificant for the year ended December 31, 2021 and for the period June 1, 2020 to December 31,

Blackstone ISG-I Advisors LLC ("BIS")

FGL Insurance and certain subsidiaries of the Company, entered into investment management agreements ("IMAs") with "BIS", a wholly owned subsidiary of The Blackstone Group LP on December 1, 2017.

On December 31, 2019, to be effective as of October 31, 2019, FGL Insurance and certain subsidiaries of the Company entered into amended and restated IMAs (the “Restated IMAs”) with BIS, pursuant to which BIS was appointed as investment manager of the Company’s general accounts (the “F&G Accounts”).

Pursuant to the terms of the Restated IMAs, BIS may delegate any or all of its discretionary investment, advisory and other rights, powers, functions and obligations under the Restated IMAs to one or more sub-managers, including its affiliates.

BIS delegated certain investment services to its affiliates, Blackstone Real Estate Special Situations Advisors L.L.C.

(“BRESSA”) and GSO Capital Advisors II LLC (“GSO Capital Advisors”), pursuant to sub-management agreements executed between BIS and each of BRESSA and GSO Capital Advisors.

The Restated IMAs were further amended and restated on June 1, 2020.

BIS appointed MVB Management, an entity owned by affiliates of FNF’s Chairman, as Sub-Adviser of the FGL Account pursuant to a sub-advisory agreement (the “Sub-Advisory Agreement”).

Under the Sub-Advisory Agreement, MVB Management will provide portfolio review, and consulting services, including such recommendations as the Investment Manager shall reasonably request.

Payment or reimbursement of the sub-advisory fee to MVB Management is solely the obligation of BIS and is not an obligation of FGL Insurance or F&G.

Subject to certain conditions, the Sub-Advisory Agreement cannot be terminated by BIS unless FGL Insurance terminates the FGL Insurance IMA.

The Company purchased $ 103 million of residential loans from Finance of America Holdings LLC, a Blackstone affiliate, during the period January 1 to May 31, 2020.

In addition, the Company purchased $ 67 million commercial mortgage loans from Blackstone Real Estate Debt Strategies, a Blackstone affiliate, during the period January 1 to May 31, 2020.

The Company earned $( 12 ) million of interest and investment income for the period January 1 to May 31, 2020 on affiliated investments.

Freedom Equity Group (“FEG”)

In October 2021, we purchased a 30 % minority ownership stake in FEG.

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

For the year ended December 31, 2022, we paid approximately $ 74 million in commissions to FEG, with the expense included in other operating expenses on the accompanying Consolidated Statement of Earnings.

Refer to Note S Subsequent Events , for discussion of a recent investment we made in Syncis.

Note L — Insurance Subsidiary Financial Information and Regulatory Matters

insurance subsidiaries, FGL Insurance, Fidelity & Guaranty Life Insurance Company of New York (“FGL NY Insurance”), and Raven Re, file financial statements with state insurance regulatory authorities and the National Association of Insurance Commissioners (“NAIC”) that are prepared in accordance with Statutory Accounting Principles (“SAP”) prescribed or permitted by such authorities, which may vary materially from GAAP.

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

Note O - Insurance Subsidiary Financial Information and Regulatory Matters

insurance subsidiaries, FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re file financial statements with state insurance regulatory authorities and, with the exception of Raven Re, with the National Association of Insurance Commissioners (“NAIC”) that are prepared in accordance with Statutory Accounting Principles (“SAP”) prescribed or permitted by such authorities, which may vary materially from GAAP.

Prescribed SAP includes the Accounting Practices and Procedures Manual of the NAIC as well as state laws, regulations and administrative rules.

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Accordingly, SAP operating results and SAP capital and surplus may differ substantially from amounts reported in the GAAP basis financial statements for comparable items.

F&G Cayman Re and F&G Life Re (Bermuda) file financial statements with their respective regulators that are based on U.S.

insurance subsidiaries, F&G Life Re Ltd (Bermuda) and F&G Cayman Re Ltd (“F&G Cayman Re”), file financial statements with their respective regulators.

Our principal insurance subsidiaries' statutory (SAP and GAAP) financial statements are based on a December 31 year end.

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Subsidiary (state of domicile) (a)

FGL Insurance (IA) FGL NY Insurance (NY) Raven Re (VT)

FGL Insurance (IA) FGL NY Insurance (NY) Raven Re (VT) Corbeau Re (VT)

Statutory Net income (loss):

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Year ended December 31, 2022

( 243 ) ( 15 ) ( 111 ) —

Year ended December 31, 2021

Statutory Capital and Surplus:

December 31, 2023

$ 2,009 $ 86 $ 140 $ 171

December 31, 2022

(a) FGL NY Insurance and Raven Re are subsidiaries of FGL Insurance, and the columns should not be added together.

1,877 82 121 —

(a) FGL NY Insurance, Raven Re and Corbeau Re are subsidiaries of FGL Insurance, and the columns should not be added together.

Corbeau Re was incorporated on September 1, 2023.

Regulation - U.S.

FGL Insurance, FGL NY Insurance and Raven Re's respective statutory capital and surplus satisfies the applicable minimum regulatory requirements.

FGL Insurance, FGL NY Insurance, Raven Re's and Corbeau Re’s respective statutory capital and surplus satisfy the applicable minimum regulatory requirements.

In order to enhance the regulation of insurers’ solvency, the NAIC adopted a model law to implement RBC requirements for life, health and property and casualty insurance companies.

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FGL Insurance may only pay dividends out of statutory earned surplus.

FGL Insurance paid extraordinary dividends to FGAL of $ 0 million, $ 38 million, and $ 151 million, in the 12-month periods ending December 31, 2022, 2021, and 2020, respectively.

FGL Insurance did not pay extraordinary dividends to FGAL for the years ended December 31, 2023 and 2022, and paid extraordinary dividends of $ 38 million during the year ended December 31, 2021.

Each year, FGL NY Insurance may pay a certain limited amount of ordinary dividends or other distributions without being required to obtain the prior consent of or the New York State Department of Financial Services (“NYDFS”).

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FGL NY Insurance has historically not paid dividends.

FGL Insurance applies Iowa-prescribed accounting practices that permit Iowa-domiciled insurers to report equity call options used to economically hedge FIA index credits at amortized cost for statutory accounting purposes

and to calculate FIA statutory reserves such that index credit returns will be included in the reserve only after crediting to the annuity contract.

Effective October 1, 2022, the Company incorporated IUL products under these Iowa-prescribed accounting practices.

This resulted in a $ 152 million and $ 106 million decrease to statutory capital and surplus at December 31, 2022 and December 31, 2021, respectively.

FGL Insurance’s statutory carrying value of Raven Re reflects the effect of permitted practices Raven Re received to treat the available amount of a letter of credit as an admitted asset, which increased Raven Re’s statutory capital and surplus by $ 200 million and $ 85 million at December 31, 2022 and December 31, 2021, respectively.

Raven Re is also permitted to follow Iowa prescribed statutory accounting practice for its reserves on reinsurance assumed from FGL Insurance which increased Raven Re’s statutory capital and surplus by $ 28 million at December 31, 2022 and by $ 0 million at December 31, 2021.

Without such permitted statutory accounting practices, Raven Re’s statutory capital and surplus (deficit) would be $( 107 ) million as of December 31, 2022 and would be $ 30 million as of December 31, 2021, and its risk-based capital would not fall below the minimum regulatory requirements.

Prescribed and permitted practices

FGL Insurance - FGL Insurance applies Iowa-prescribed accounting practices prescribed by 191 Iowa Administrative Code 97, “Accounting for Certain Derivative Instruments Used to Hedge the Growth in Interest Credited for Indexed Insurance Products and Accounting for the Indexed Insurance Products Reserve”, for its FIA products, and as of October 1, 2022, IUL products.

Under these alternative accounting practices, the call option derivative instruments that hedge the growth in interest credited on index products are accounted for at amortized cost with the corresponding amortization recorded as a decrease to net investment income and indexed annuity reserves are calculated based on Standard Valuation Law and Actuarial Guideline XXXV assuming the market value of the call options associated with the current index term is zero regardless of the observable market value for such options.

This resulted in a $ 178 million increase and a $ 152 million decrease to statutory capital and surplus at December 31, 2023 and 2022, respectively.

In addition, based on a permitted practice received from the Iowa Insurance Division, FGL Insurance carries one of its limited partnership interests which qualifies for accounting under SSAP No.

48, “Investments in Joint Ventures, Partnerships and Limited Liability Companies”, on a net asset value per share basis.

This is a departure from SSAP No.

48 which requires such investments to be carried based on the investees underlying U.S.

GAAP equity (prior to any impairment considerations).

This resulted in increases to statutory capital and surplus of $ 16 million and $ 13 million at December 31, 2023 and 2022, respectively.

In addition, FGL Insurance’s statutory carrying value of Corbeau Re reflects the effect of permitted practices Corbeau Re received to treat the excess of loss as an admitted asset, which increased Corbeau Re’s statutory capital and surplus by $ 765 million at December 31, 2023.

Raven Re - Raven Re is also permitted to follow Iowa prescribed statutory accounting practice for its reserves on reinsurance assumed from FGL Insurance and also has approval to include as an admitted asset the value of a letter of credit serving as collateral for reinsurance credit taken by FGL Insurance.

Without such permitted statutory accounting practices, Raven Re’s statutory capital and surplus (deficit) would be $( 89 ) million and $( 107 ) million as of December 31, 2023 and 2022, respectively, and its risk-based capital would fall below the minimum regulatory requirements.

The letter of credit facility is collateralized by NAIC 1 rated debt securities.

If the permitted practice was revoked, the letter of credit could be replaced by the collateral assets with Nomura’s consent as discussed in Note J Reinsurance .

FGL Insurance’s statutory carrying value of Raven Re was $ 121 million and $ 115 million at December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2022, FGL NY Insurance did not follow any prescribed or permitted statutory accounting practices that differ from the NAIC's statutory accounting practices.

Net income and capital and surplus of our wholly owned Bermuda and Cayman regulated insurance subsidiaries under U.S.

If the permitted practice was revoked, the letter of credit could be replaced by the collateral assets with Nomura’s consent (refer to discussion of letter of credit in Note E- Reinsurance ).

FGL Insurance’s statutory carrying value of Raven Re was $ 140 million and $ 121 million at December 31, 2023 and 2022, respectively.

Corbeau Re - Corbeau Re has four permitted practices pursuant to Vermont Statute, Title 8, Chapter 141 – (8 V.S.A.

§ 6048k(a)(2), whereby the Vermont Department authorizes the Company to (i) account for the amount equal to the excess of loss amount (“XOL Asset”) as an asset on its statutory financial statements;

(ii) calculate the reserves with respect to the Retirement Pro Contracts in accordance with the following reserving methodology:

the reserves are calculated as the present value of reinsured benefits when account value equals zero less the present value of reinsurance premiums from the winning integrated stream, floored at zero and capped as necessary to keep the net statutory reserve at the net cash surrender value.

For benefits associated with all other contracts (“the GMWB Riders”), the reserves are calculated as the statutory reserves for the entire contract (i.e., the base contracts plus the GMWB Riders) minus the statutory reserves for the base contracts only (“Reserve Calculation Permitted Practice”);

(iii) calculate its company action level risk-based capital as defined in Section 8301(13)(A) and, calculated using the risk-based capital factors and formulas prescribed by the NAIC, applying a factor of 0.62% to the XOL Asset Value;

and (iv) annually perform a total company solvency analysis in lieu of cash flow testing and actuarial opinion and memorandum under Section 2010-2 of the Vermont Administrative Code.

Without such permitted statutory accounting practices, the Company’s statutory capital and surplus (deficit) would be $( 594 ) million as of December 31, 2023, and its risk-based capital would fall below the minimum regulatory requirements.

FGL Insurance’s statutory carrying value of Corbeau Re was $ 171 million at December 31, 2023

FGL NY Insurance - As of December 31, 2023 and 2022, FGL NY Insurance did not follow any prescribed or permitted statutory accounting practices that differ from the NAIC's statutory accounting practices.

Net income and capital and surplus of our wholly owned Bermuda and Cayman Islands regulated insurance subsidiaries under U.S.

GAAP were as follows (in millions):

Subsidiary (country of domicile)

F&G Cayman Re (Cayman) F&G Life Re (Bermuda)

F&G Cayman Re (Cayman Islands) F&G Life Re (Bermuda)

Statutory Net income (loss):

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Year ended December 31, 2022

Statutory Capital and Surplus:

( 299 ) ( 339 )

Year ended December 31, 2021

Statutory Capital and Surplus (Deficit):

December 31, 2023

December 31, 2022

( 126 ) ( 138 )

Regulation - Bermuda

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 1978, as amended, and its related regulations (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”).

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.

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 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.

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.

The BMA utilizes a risk-based approach when it comes to licensing and supervising insurance and reinsurance companies.

1 unchanged sentence

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 on Bermuda insurance companies solvency and liquidity standards, 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:

2 unchanged sentences

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”).

1 unchanged sentence

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.

Regulation - Cayman

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

Regulation - Cayman Islands

F&G Cayman Re is a Cayman Islands exempted company incorporated under the Companies Act, as amended (2023 Revision) (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 regulation (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.

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.

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.

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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The prescribed and permitted statutory accounting practices have no impact on our audited Consolidated Financial Statements, which are prepared in accordance with GAAP.

Note M — Accounts Payable and Accrued liabilities

Accounts payable and other accrued liabilities consist of the following:

(In millions)

Salaries and incentives $ 72 $ 60

Accrued benefits 58 74

Deferred revenue 203 35

Trade accounts payable 114 72

Accrued premium taxes 5 3

Liability for policy and contract claims 109 109

Retained asset account 117 148

Remittances and items not allocated 225 39

Option collateral liabilities 178 576

Funds withheld embedded derivative — 73

Other accrued liabilities 193 108

$ 1,273 $ 1,297

Note N — Income Taxes

Income tax expense (benefit) on continuing operations consists of the following (in millions):

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

2022 2021 2020 2020

Current $ ( 31 ) $ 27 $ 18 $ ( 1 )

Deferred 148 193 ( 93 ) ( 13 )

$ 117 $ 220 $ ( 75 ) $ ( 14 )

Total income tax expense (benefit) was allocated as follows:

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

2022 2021 2020 2020

Taxes on net earnings (loss) from continuing operations $ 117 $ 220 $ ( 75 ) $ ( 14 )

Tax expense on net earnings (loss) from discontinued operations — — — —

Other comprehensive (loss) earnings:

Unrealized (loss) gain on investments and other financial instruments ( 935 ) ( 123 ) 315 ( 185 )

Unrealized gain on foreign currency translation and cash flow hedging ( 1 ) ( 1 ) 2 —

Total income tax (benefit) expense allocated to other comprehensive earnings ( 936 ) ( 124 ) 317 ( 185 )

Total income taxes $ ( 819 ) $ 96 $ 242 $ ( 199 )

A reconciliation of the federal statutory rate to our effective tax rate is as follows:

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

2022 2021 2020 2020

Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

State income taxes, net of federal benefit 0.1 0.4 1.8 ( 0.4 )

Benefit for Capital Loss Carryback ( 4.0 ) — —

Stock compensation — ( 0.1 ) 0.1 —

Tax credits ( 1.4 ) ( 0.4 ) ( 3.2 ) 0.1

Dividends received deduction ( 0.6 ) ( 0.3 ) ( 2.5 ) 0.4

Benefit on outside of United States income taxed at 0% — — — ( 1.8 )

Withholding tax on 0% taxed jurisdiction — — ( 2.5 ) ( 0.3 )

Valuation allowance for deferred tax assets 4.5 ( 1.3 ) ( 63.5 ) ( 12.1 )

Change in tax status benefit — — ( 41.0 ) —

Adjustment of DTAs on sale of subsidiary — 1.4 — —

Non-deductible expenses and other, net — ( 0.2 ) 1.5 ( 0.4 )

Effective tax rate 19.6 % 20.5 % ( 88.3 ) % 6.5 %

For the year ended December 31, 2022, the Company’s effective tax rate was 19.6 %.

The effective tax rate was positively impacted by favorable permanent adjustments, including low income housing tax credits (“LIHTC”), the dividends received deduction (“DRD”), and company owned life insurance (“ICOLI”).

The effective tax rate was also impacted by the benefit of the capital loss carryback.

This benefit is offset by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards.

For the year ended December 31, 2021, the Company’s effective tax rate was 20.5 %.

The effective tax rate was positively impacted by favorable permanent adjustments, including LIHTC, DRD, and ICOLI.

For the period from June 1, 2020 to December 31, 2020, the Company’s effective tax rate was ( 88.3 )%.

The effective tax rate was positively impacted by the valuation allowance release on the current period activity in FSRC included in continuing operations and the valuation allowance release on the US non-life companies’ deferred tax assets.

The effective tax rate was also positively impacted by the change in tax status benefit recorded at December 31, 2020, reversal of withholding taxes, and favorable permanent adjustments, including LIHTC and the DRD.

For the Predecessor period from January 1, 2020 to May 31, 2020, the Company’s effective tax rate was 6.5 %.

The effective tax rate was impacted by the valuation allowance recorded on the ordinary deferred tax assets in FSRC

included in continuing operations.

The effective tax rate was also impacted by the impact of low taxed international losses and withholding taxes.

The significant components of deferred tax assets and liabilities consist of the following:

(In millions)

Deferred Tax Assets:

Employee benefit accruals $ 21 $ 22

Net operating loss carryforwards 28 16

Accrued liabilities 1 —

Tax credits 30 32

Investment securities 853 —

Capital loss carryover 8 41

Derivatives 67 —

Life insurance and claim related adjustments 669 854

Funds held under reinsurance agreements 37 52

Total gross deferred tax asset 1,733 1,029

valuation allowance 30 —

Total deferred tax asset $ 1,703 $ 1,029

Deferred Tax Liabilities:

Amortization of goodwill and intangible assets ( 29 ) ( 33 )

Other ( 2 ) ( 1 )

Investment securities — ( 355 )

Depreciation ( 14 ) ( 11 )

Partnerships ( 93 ) ( 126 )

Value of business acquired ( 350 ) ( 249 )

Derivatives — ( 68 )

Deferred acquisition costs ( 243 ) ( 102 )

Transition reserve on new reserve method ( 25 ) ( 34 )

Funds held under reinsurance agreements ( 183 ) ( 74 )

Total deferred tax liability $ ( 939 ) $ ( 1,053 )

Net deferred tax asset (liability) $ 764 $ ( 24 )

Our net deferred tax asset (liability) was $ 764 million as of December 31, 2022 and a net deferred tax asset (liability) of $( 24 ) million as of December 31, 2021.

The significant changes in the deferred taxes are as follows:

the deferred tax for investment securities changed by $ 1,208 million primarily due to unrealized losses recorded on investment securities.

The deferred tax liability relating to partnerships decreased by $ 33 million primarily due to provision to return true-ups that increased the overall tax basis of the partnership investments.

life insurance business’ deferred tax liability relating to VOBA increased by $ 101 million due to unrealized losses on the VOBA assets.

The deferred tax liability related to deferred acquisition costs increased by $ 141 million, which is consistent with the growth in sales in our U.S.

The deferred tax liability relating to derivatives decreased by $ 135 million due to unrealized losses on call options.

The life insurance reserves and claim related adjustments deferred tax asset decreased by $ 185 million primarily due to the tax reserves for the year increasing by more than the GAAP reserves.

The reinsurance receivable deferred tax asset decreased by $ 15 million and the reinsurance receivable deferred tax liability increased by $ 109 million, both due to unrealized gains in the funds withheld portfolios.

As of December 31, 2022, we have net operating losses ("NOLs") on a pretax basis of $ 133 million, which are available to carryforward and offset future federal taxable income subject to the 80% taxable income limitation.

The life losses are U.S.

federal net operating losses and consist of $ 133 million of Internal Revenue Code Section 382 limited net operating losses.

These losses do not expire.

As of December 31, 2022 and 2021, we had $ 30 million and $ 32 million of tax credits, respectively, which expire between 2038 and 2042.

The tax credits consist of $ 11 million of Internal Revenue Code Section 382 limited losses and $ 19 million of tax credits with no limitation.

As of December 31, 2022, the valuation allowance of $ 30 million consisted of a full valuation allowance of $ 4 million on the unrealized capital loss deferred tax assets for F&G Life Re, F&G Cayman Re, and the US Non-life Companies, a full valuation allowance of $ 4 million on the remaining capital loss carryforwards for the US Non-life Companies, and a partial valuation allowance of $ 22 million on the US Life Companies’ unrealized capital loss deferred tax assets.

Life insurance group is subject to a Tax Sharing Agreement within the members of the life insurance tax return group.

The agreement provides for an allocation based on separate return calculations and allows for reimbursement of company tax benefits absorbed by other members of the group.

non-life group is subject to a Tax Sharing Agreement with its parent, Fidelity National Financial, Inc (“FNF”), with which it files a consolidated federal income tax return.

The Company’s non-life group Tax Sharing Agreement allows for reimbursement of company tax benefits absorbed by FNF.

If, during the year ended December 31, 2022, the Company had computed taxes using the separate return method, the pro-forma provision for income taxes would remain unchanged.

Federal income tax returns of the Company for years prior to 2018 are no longer subject to examination by the taxing authorities.

The Company does no t have any unrecognized tax benefits (“UTBs”) at December 31, 2022, but did have a UTB of $ 58 million at December 31, 2021.

The Company had a UTB related to a capital loss carryback claim that did not meet the threshold to recognize the benefit.

In the current year the benefit was recognized as the carryback claim was effectively settled and the UTB was removed.

In the event the Company has UTBs, interest and penalties related to uncertain tax positions would be recorded as part of income tax expense in the financial statements.

The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its tax reserves based on new information or developments.

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

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

The effective date of these provisions will be January 1, 2023.

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

As a result, the Company has assessed that there is no material impact on the 2022 financial statements.

On March 27, 2020 H.R.

748, the Coronavirus Aid, Relief, and Economic Security Act, (“the CARES Act”), was signed into legislation which includes tax provisions relevant to businesses that during 2020 will impact taxes related to 2018 and 2019.

Some of the significant changes are reducing the interest expense disallowance for 2019 and 2020, allowing the five-year carryback of net operating losses for 2018-2020, suspension of the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, and the acceleration of depreciation expense from 2018 and forward on qualified improvement property.

The Company is required to recognize the effect in the period the law was enacted and recorded total tax benefits of $ 7 million for the Predecessor period from January 1, 2020 to May 31, 2020 for the U.S.

$ 1 million of the related tax benefit was for the NOL carryback from 2018 to 2017, of which, a small amount was for the tax rate differential.

The remaining tax benefit of $ 6 million was on the use of 100% of NOLs versus the 80% limitation under the Tax Cuts and Jobs Act (or “TCJA”).

The NOL carryback and the temporary lifting of the 80% of taxable income limitation on the use of NOLs are timing in nature with an offsetting reduction in deferred taxes.

The tax rate differential is a permanent tax benefit.

Note O - Employee Benefit Plans

Note P - ASU 2018-12 Transition

F&G adopted ASU 2018-12 on January 1, 2023 with a transition date of January 1, 2021, which is the earliest period presented in the annual December 31, 2023 Consolidated Financial Statements.

We elected to adopt ASU 2018-12 using the full retrospective transition method and balances for FPB, DAC and balances amortized on a basis consistent with DAC (VOBA, DSI, and URL), and MRBs were adjusted to conform to ASU 2018-12 starting as of the FNF Acquisition Date.

No hindsight was used for the full retrospective adoption of MRBs.

As a result of adoption, the Company recorded a cumulative-effect adjustment, which increased opening 2021 retained earnings by $ 75 million, net of tax.

The following table summarizes the balance of and changes in the FPB on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

Immediate annuities Traditional Life Total (3)

Balance, December 31, 2020 $ 1,861 $ 2,144 $ 4,005

Cumulative effect of retrospective adoption (1) 201 ( 279 ) ( 78 )

Effect of remeasurement of liability at current discount rate (2) 113 88 201

Balance, January 1, 2021 $ 2,175 $ 1,953 $ 4,128

Reinsurance Recoverable 322 793 1,115

Balance, January 1, 2021, net of reinsurance $ 1,853 $ 1,160 $ 3,013

(1) Adjustments for the cumulative effect of adoption of the new measurement guidance under the full retrospective method for contract issue years from the FNF Acquisition Date through December 31, 2020, net of the effects of any change in the DPL.

(2) The remeasurement of the liability at the current discount rate is reflected as an adjustment to opening AOCI upon the adoption of ASU 2018-12.

(3) PRT was not written as of the transition date, January 1, 2021, and as a result is not presented in the transition adjustment roll forward.

The following table summarizes the balance of and changes in VOBA on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

FIA Fixed rate annuities Immediate annuities Universal Life Traditional Life Total

Balance, December 31, 2020 $ 1,208 $ 15 $ 86 $ 139 $ 18 $ 1,466

Adjustment for reversal of AOCI adjustments (1) 208 24 — 29 ( 29 ) 232

Cumulative effect of retrospective adoption (2) ( 14 ) 7 ( 5 ) ( 9 ) ( 1 ) ( 22 )

Transition opening balance adjustment (3) 69 2 145 5 43 264

Balance, January 1, 2021 $ 1,471 $ 48 $ 226 $ 164 $ 31 $ 1,940

(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.

(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method from the FNF Acquisition Date through December 31, 2020.

(3) Adjustments for the change in VOBA due to the full retrospective adjustment of carrying amounts of acquired contracts as of the FNF Acquisition Date due to the adoption of ASU 2018-12.

The following table summarizes the balance of and changes in DAC on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

FIA Fixed rate annuities Universal Life Total

Balance, December 31, 2020 $ 167 $ 14 $ 41 $ 222

Adjustment for reversal of AOCI adjustments (1) 15 2 8 25

Cumulative effect of retrospective adoption (2) ( 1 ) — ( 1 ) ( 2 )

Balance, January 1, 2021 $ 181 $ 16 $ 48 $ 245

(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.

(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method for contract issue years from the FNF Acquisition Date through December 31, 2020.

The following table summarizes the balance of and changes in DSI on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

Balance, December 31, 2020 $ 36 $ 36

Adjustment for reversal of AOCI adjustments (1) 5 5

Cumulative effect of retrospective adoption (2) 4 4

Balance, January 1, 2021 $ 45 $ 45

(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.

The following table summarizes the balance of and changes in URL on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

Universal Life Total

Balance, December 31, 2020 $ 2 $ 2

Adjustment for reversal of AOCI adjustments (1) 25 25

Cumulative effect of retrospective adoption (2) 2 2

Balance, January 1, 2021 $ 29 $ 29

(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.

The following table summarizes the balance of and changes in the asset and liability position of MRBs on January 1, 2021 due to adoption of ASU 2018-12 (in millions):

FIA Fixed rate annuities Total

Balance, December 31, 2020 - Carrying amount of MRBs under prior guidance (1) $ 531 $ — $ 531

Adjustment for reversal of AOCI adjustments (2) ( 116 ) — ( 116 )

Cumulative effect of the changes in the instrument-specific credit risk between the original contract issuance date and the transition date (3) 159 — 159

Remaining cumulative difference (exclusive of the instrument specific credit risk change) between December 31, 2020 carrying amount and fair value measurement for the MRBs (4) ( 96 ) 1 ( 95 )

Balance, January 1, 2021 - Market risk benefits at fair value $ 478 $ 1 $ 479

Reinsurance Recoverable — — —

Balance, January 1, 2021, net of reinsurance $ 478 $ 1 $ 479

(1) The pre-adoption balance as of December 31, 2020 balance for MRBs represents the contract features that meet the definition of an MRB under ASU 2018-12 and the related carrying amount of those features prior to the ASU.

Those contract features were previously accounted for at fair value as a derivative or embedded derivative under ASC 815 or as an additional liability for annuitization benefits or death or other insurance benefits under ASC 944.

(2) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.

(3) The cumulative effective of the change in instrument-specific credit risk between the FNF Acquisition Date or, if later, the original contract issuance date and the transition date to ASU 2018-12, which is recorded as an adjustment to opening AOCI.

(4) The cumulative difference (exclusive of instrument-specific credit risk change) between the pre-adoption carrying amount and the fair value measurement for MRBs is recorded as an adjustment to opening retained earnings.

The following table presents the effect of transition adjustments on Equity on January 1, 2021 due to the adoption of ASU 2018-12 (in millions):

January 1, 2021

Retained Earnings AOCI

Contractholder funds $ 101 $ 115

MRB 30 ( 160 )

FPB ( 14 ) ( 159 )

VOBA ( 21 ) 233

Increase to Equity, gross of tax $ 95 $ 34

Tax impact 20 9

Increase to Equity, net of tax $ 75 $ 25

For MRBs, the transition adjustment reflected within the Consolidated Statements of Comprehensive Earnings relates to the cumulative effect of changes in the instrument-specific credit risk between contract issue date and transition date.

The remaining difference between the fair value and carrying amount of the MRBs at transition, excluding the amounts recorded in the Consolidated Statements of Comprehensive Earnings, was recorded as an adjustment to Retained Earnings as of the transition date.

For the FPB, the net transition adjustment is primarily related to the difference in the discount rate used pre-transition and the discount rate at January 1, 2021, partially offset by the removal of provisions for adverse deviation from the cash flow assumptions used in the FPB calculation.

At transition, we did not identify any instances, at the cohort level, where net premiums exceeded gross premiums.

Before the adoption of ASU 2018-12, VOBA was amortized consistent with DAC, which was amortized over the lives of the policies in relation to the expected emergence of estimated gross profits (“EGPs”).

Based on our historical practice of using consistent amortization methods for VOBA and DAC, we elected to change the amortization method for VOBA associated with fixed rate annuities, FIAs, and IUL/Universal Life (“UL”) products to maintain consistency with the amortization method for DAC.

At transition, VOBA associated with these product types is amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization.

Additionally, at transition, shadow adjustments previously recorded in the Consolidated Statements of Comprehensive Earnings, consistent with the historic amortization of DAC, have been removed.

For DAC, DSI and URL, we removed shadow adjustments previously recorded in the Consolidated Statements of Comprehensive Earnings for the impact of unrealized gains and losses that were included in the pre-transition expected gross profits amortization calculation as of the transition date.

Note Q - Related Party Transactions

The Company has determined that related parties would fall into the following categories;

(i) affiliates of the entity, (ii) entities for which investments in their equity securities would be required to be accounted for by the equity method by the investing entity, (iii) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management, (iv) principal owners (>10% equity stake) of the entity and members of their immediate families, (v) management (including FNF’s Board of Directors, CEO, and other persons responsible for achieving the objectives of the entity and who have the authority to establish policies and make decisions) of the entity and other members of their immediate families, (vi) other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests (vii) other parties that can significantly influence management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate business, (viii) attorney in fact of a reciprocal reporting entity or any affiliate of the attorney in fact, and (ix) a U.S.

manager of a U.S.

branch or any affiliate of the U.S.

manager of a U.S.

The Company has determined that FNF as well as FNF's directors and officers (along with their immediate family members) are related parties.

Separation Agreement

Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report on Form 10-K for additional information on the separation.

Notes Payable

For a description of our financing arrangements with FNF see Note L - Notes Payable to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Because FNF owns approximately 85 % of the shares of outstanding F&G common stock, we are a controlled company within the meaning of the corporate governance standards of the NYSE.

Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report on Form 10-K for additional information on management and governance.

FNF $ 250 million Preferred Stock Investment

On January 12, 2024 we completed a $ 250 million preferred stock investment from FNF.

F&G will use net proceeds from the investment to support the growth of its assets under management.

Under the terms of the agreement, FNF agreed to invest $ 250 million in exchange for 5,000,000 shares of F&G’s 6.875 % Series A Mandatory Convertible Preferred Stock, par value $ .001 per share, liquidation preference of $ 50.00 per share (the “FNF Preferred Stock”).

Unless earlier converted at the option of the holder, each outstanding share of the FNF Preferred Stock will automatically convert into shares of F&G common stock on January 15, 2027.

Tax Sharing Agreement

Refer to Note H - Income Taxes for a discussion of the tax matters agreement between FNF and the Company.

Stock Split, Increase to Authorized shares and Exchange Agreement with FNF

On June 24, 2022, the following actions previously approved by the F&G board of directors became effective:

(i) a stock split in a ratio of 105,000 for 1.

FNF, as the sole shareholder, received, in the form of a dividend, 104,999 additional shares of common stock for each share of common stock held.

Earnings per share has been retrospectively adjusted to reflect as if the split occurred as of June 1, 2020 in accordance with GAAP;

(ii) an increase in the number of authorized shares of common stock from one thousand ( 1,000 ) to five hundred million ( 500,000,000 );

(iii) an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired.

There was no gain or loss recorded with respect to the exchange agreement.

For the years ended December 31, 2023 and 2022, interest expense on the FNF Promissory Note was $ 0 and approximately $ 6 million, respectively.

Corporate Services Agreement

FNF has entered into a Corporate Services Agreement with F&G, which we refer to as the Corporate Services Agreement.

Pursuant to such agreement, FNF will provide F&G with certain corporate services, including internal audit services, litigation and dispute management services, compliance services, corporate and transactional support services, SEC & reporting services, insurance and risk management services, human resources support services and real estate services.

The Corporate Services Agreement terminates after the date upon which all corporate services or

transition assistance have been terminated or upon the mutual agreement of the parties.

F&G may terminate corporate services by providing 90 days written notice to FNF.

Reverse Corporate Services Agreement

F&G has entered into a Reverse Corporate Services Agreement with FNF.

Pursuant to such agreement, F&G will provide FNF with certain services, including employee services.

The Reverse Corporate Services Agreement terminates after the date upon which all corporate services or transition assistance has been terminated or upon the mutual agreement of the parties.

FNF may terminate corporate services by providing 90 days written notice to F&G.

Shared Services

For the three-year period ended December 31, 2023, FNF provided certain operational support services for F&G including tax, insurance, legal, risk management, information technology, employee benefits and accounting.

Expenses incurred by F&G for all services were insignificant for the years ended December 31, 2023, 2022 and 2021.

Owned Distribution Investments

In 2023, we purchased a 30 % minority ownership stake in Quility, a 40 % minority ownership stake in DCMT, and a 49 % minority ownership stake in Syncis.

Refer to FN A - Business and Summary of Significant Accounting Policies - Owned Distribution Investments for more information regarding these investments.

We also have a 30 % minority ownership stake in Freedom Equity Group (“FEG”).

FEG is a Network Marketing Group that focuses on cultural markets including Mexican-American, Hmong, Laotian, Filipino, Burmese, Congolese-American, Samoan, African-American, Thai and Vietnamese.

We have elected the fair value option to account for these investments and have included them in Investments in unconsolidated affiliates on the accompanying Consolidated Balance Sheets.

For the years ended December 31, 2023 and 2022, we expensed approximately $ 154 million and $ 74 million in commissions on sales through our funded owned distribution investments and their affiliates.

Acquisition expenses are deferred and amortized in Depreciation and amortization on the accompanying Consolidated Statements of Operations.

Refer to Note A - Business and Summary of Significant Accounting Policies - Recent Developments , for discussion of a recent investment we made in Roar Joint Venture, LLC.

Specialty Lending Company LLC (“Specialty Lending”)

The Company has a 10 % ownership stake in Specialty Lending with a 50 % voting interest.

Specialty Lending is a specialty finance company focused on consumer credit.

Specialty Lending is accounted for using the equity method of accounting and is included in Investments in unconsolidated affiliates on the accompanying Consolidated Balance Sheets.

Note R - Employee Benefit Plans

FNF Stock Purchase Plan

During the years ended December 31, 2022 and December 31, 2021, and for the period from June 1, 2020 to December 31, 2020, our eligible employees could voluntarily participate in FNF's employee stock purchase plan

(“ESPP”) sponsored by FNF.

During the years ended December 31, 2022 and 2021, our eligible employees could voluntarily participate in FNF's employee stock purchase plan (“ESPP”) sponsored by FNF.

Pursuant to the ESPP, employees may contribute an amount between 3 % and 15 % of their base salary and certain commissions.

Company matching contributions are funded one year after employee contributions are made pursuant to the ESPP.

We provided FNF an insignificant amount with respect to our matching contributions to the ESPP in the years ended December 31, 2022 and December 31, 2021, and for the period from June 1, 2020 to December 31, 2020.

We provided FNF an insignificant amount with respect to our matching contributions to the ESPP in the years ended December 31, 2023, 2022 and 2021.

Effective January 1, 2023, our employees were no longer eligible to participate in the ESPP.

F&G Stock Purchase Plan

On January 1, 2023, the Company adopted an Employee Stock Purchase Plan (“F&G ESPP”), enabling employees to purchase the Company stock in an amount between 3 % and 15 % of their base salary and certain commissions.

Based on employee contributions the company will match between 30 % and 50 % one year after initial employee contributions are made pursuant to the F&G ESPP.

The first year F&G will have match amounts is 2024.

401(k) Profit Sharing Plan

During the years ended December 31, 2022 and December 31, 2021 , for the period from June 1, 2020 to December 31, 2020, and for the Predecessor period from January 1, 2020 to May 31, 2020, we have offered our employees the opportunity to participate in our 401(k) profit sharing plan (the “401(k) Plan”), a qualified voluntary contributory savings plan that is available to substantially all of our employees.

Based on employee contributions the company will match either 33.3 % or 50 % one year after initial employee contributions are made pursuant to the F&G ESPP.

Our matching expense related to the F&G ESPP was immaterial for the year ended December 31, 2023.

During the three-year period ended December 31, 2023, we have offered our employees the opportunity to participate in our 401(k) plan (the “401(k) Plan”), a qualified voluntary contributory savings plan that is available to substantially all of our employees.

Eligible employees may contribute up to 75 % of their pre-tax annual compensation, up to the amount allowed pursuant to the Internal Revenue Code.

We make an employer match on the 401(k) Plan of $ 1.00 on each $1.00 contributed up to the first 5 % of eligible earnings contributed to the 401(k) Plan by employees.

The employer match was $ 5 million, $ 3 million, $ 1 million and $ 2 million for the years ended December 31, 2022 and December 31, 2021, for the period from June 1, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to May 31, 2020, respectively, and was credited based on the participant's individual investment elections in the 401(k) Plan.

The employer match recorded in personnel costs in the Consolidated Statement of Operations was $ 7 million, $ 5 million, $ 3 million in for the years ended December 31, 2023, 2022 and 2021, respectively, and was credited based on the participant's individual investment elections in the 401(k) Plan.

Stock-Based Compensation

We account for stock-based compensation plans in accordance with GAAP on share-based payments, which requires that compensation cost relating to share-based payments be recognized in the consolidated financial statements based on the fair value of each award.

Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period.

Total compensation costs recorded in personnel costs in the Consolidated Statement of Operations for the years ended December 31, 2023, 2022 , and 2021 wer e $ 23 million, $ 12 million and $ 9 million, respectively.

2022 F&G Omnibus Incentive Plan

On December 1, 2022, we established the F&G Annuities & Life, Inc.

2022 Omnibus Incentive Plan (the “2022 F&G Omnibus Plan”), authorizing the issuance of up to 6 million shares of common stock, subject to the terms of the 2022 F&G Omnibus Plan.

2022 Omnibus Incentive Plan (the “2022 F&G Omnibus Plan”), authorizing the issuance of up to 6 million shares of F&G common stock, subject to the terms of the 2022 F&G Omnibus Plan.

The 2022 F&G Omnibus Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance shares, performance units, other cash and stock-based awards and dividend equivalents.

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Awards granted are approved by the Compensation Committee of the Board of Directors.

Awards vest over a 3-year period and have a performance restriction that must be met for shares awarded to vest.

Awards vest over a 3-year period and have a performance restricti on that must be met for shares awarded to vest.

If the performance restriction is not satisfied during the measurement period, all of the shares that do not satisfy the performance criteria will be forfeited to the Company for no consideration.

F&G restricted stock transactions under the 2022 F&G Omnibus Plan in 2022 are as follows:

Shares Weighted Average Grant Date Fair Value

F&G restricted stock transactions under the 2022 F&G Omnibus Plan during the years ended December 31, 2023 and 2022 are as follows:

Shares Weighted Average

Balance, January 1, 2023

1,409,904 $ 21.80

Granted 876,736 40.28

Canceled ( 48,900 ) 21.80

Vested ( 453,598 ) 21.80

Balance, December 31, 2023

1,784,142 $ 30.88

Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period.

Shares Weighted Average

Balance, January 1, 2022

Granted 1,411,369 21.80

Canceled ( 1,465 ) 21.80

Balance, December 31, 2022

1,409,904 $ 21.80

Fair value of restricted stock awards and units is based on the grant date value of the underlying stock derived from quoted market prices.

The total fair value of restricted stock awards granted in the year ended December 31, 2022 was $ 31 million.

There were no restricted stock awards which vested in the year ended December 31, 2022.

Net earnings attributable to F&G Shareholders reflects stock-based compensation expense amounts of $ 1 million for the year ended December 31, 2022 , which are included in personnel costs in the reported financial results for the period.

The total fair value of restricted stock awards granted in the years ended December 31, 2023 and December 31, 2022 was $ 35 million and $ 31 million, respectively.

There were 453,598 and 0 restricted stock awards which vested in the years ended December 31, 2023 and 2022.

Net earnings (loss) reflects stock-based compensation expense amounts of $ 19 million and $ 1 million for the years ended December 31, 2023 and 2022, respectively, which are recorded in personnel costs i n the Consolidated Statement of Operations.

For the period ended December 31, 2023, the total unrecognized compensation costs related to non-vested restricted stock grants pursuant to the 2022 F&G Omnibus Plan are $ 45 million, which is expected to be recognized in pre-tax income over a weighted average period of 2.67 years.

FGL Incentive Plan and 2020 F&G Omnibus Incentive Plan

On August 8, 2017, the Company adopted a stock-based incentive plan (the “FGL Incentive Plan”) that permitted the granting of awards in the form of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, unrestricted stock, performance-based awards, dividend equivalents, cash awards and any combination of the foregoing.

On June 1, 2020, in connection with the acquisition of F&G, FNF assumed the shares that remained available for future awards under the FGL Holdings 2017 Omnibus Incentive Plan, as amended and restated (the “ 2020 F&G Omnibus Plan”) and cancelled and converted such shares into 2,096,429 shares of FNF common stock that may be issued pursuant to future awards granted under the 2020 F&G Omnibus Plan and 2,411,585 sh ares of FNF common stock that may be issued pursuant to outstanding stock options under the 2020 F&G Omnibus Plan.

Each unvested stock option assumed under the 2020 F&G Omnibus Plan was converted into an FNF stock option and vests solely on the passage of time without any ongoing performance-vesting conditions.

The options vest over a 3 year period, based on the option's initial grant date, and have a contractual life of 7 years.

We have outstanding restricted stock grants and stock options under the FGL Holdings 2017 Omnibus Incentive Plan, as amended and restated (the “2020 F&G Omnibus Plan”), which was assumed by FNF.

The outstanding awards and options are settled by issuance of FNF common stock.

All of the outstanding options are vested and expire at various dates through August 2026.

As of December 31, 2023, there were 181,479 shares of restricted stock and 643,623 stock options outstanding under the 2020 F&G Omnibus Plan.

Stock option transactions under the 2020 F&G Omnibus Plan for the years ended December 31, 2022 and 2021 and for the period June 1, 2020 to December 31, 2020, and the FGL Incentive Plan for the Predecessor period January 1, 2020 to May 31, 2020, are as follows:

Options Weighted Average Exercise Price Exercisable

Predecessor balance, January 1, 2020 15,213,959 $ 9.30 1,008,780

Granted — $ —

Exercised ( 1,672,330 ) $ 9.51

Canceled ( 96,604 ) $ 10.00

Predecessor balance, May 31, 2020 13,445,025 $ 9.30 640,000

FGL options canceled and converted into options to purchase FNF common shares in connection with the F&G acquisition 2,411,585 36.04

Stock option transactions under the 2020 F&G Omnibus Plan for the three-year period ended December 31, 2023 , are as follows:

Options Weighted Average

Exercise Price Exercisable

Balance, December 31, 2020 2,002,690 $ 36.14 1,021,671

Exercised ( 474,754 ) 36.68

Canceled ( 299,736 ) 38.41

Balance, December 31, 2021 1,527,936 35.97 1,072,584

Exercised ( 352,614 ) 38.79

Canceled ( 2,715 ) 28.00

Balance, December 31, 2022 1,172,607 35.15 1,172,607

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643,623 $ 8 643,623 $ 8

770,078 2.62 39.10 — 770,078 2.62 39.10 —

1,172,607 4 1,172,607 4

Restricted stock transactions under the 2020 F&G Omnibus Plan for the years ended December 31, 2022 and 2021 and for the period June 1, 2020 to December 31, 2020, and the FGL Incentive Plan for the predecessor period January 1, 2020 to May 31, 2020, are as follows:

Shares Weighted Average Grant Date Fair Value

Predecessor balance, January 1, 2020 — —

Granted 95,416 $ 10.48

Predecessor balance, May 31, 2020 95,416 $ 10.48

FGL shares vested in connection with the F&G acquisition ( 95,416 ) 10.48

Option awards are measured at fair value on the grant date using the Black Scholes Option Pricing Model.

The intrinsic value of options exercised in the year ended December 31, 2023 was $ 8 million and was insignificant for the years ended December 31, 2022 and December 31, 2021.

Restricted stock transactions under the 2020 F&G Omnibus Plan for the three-year period ended December 31, 2023 , are as follows:

Shares Weighted Average

Balance, December 31, 2020 449,870 $ 34.11

Granted 311,081 48.28

Canceled ( 12,437 ) 33.40

Vested ( 29,873 ) 34.59

Balance, December 31, 2021 718,641 40.24

Granted 311,081 48.28

Canceled ( 78,551 ) 37.79

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181,479 $ 41.08

Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period.

The total fair value of restricted stock awards granted in the years ended December 31, 2022 and December 31, 2021 , and for the period from June 1, 2020 to December 31, 2020 was $ 0 million , $ 15 million and $ 16 million, respectively and was insignificant for prior periods.

The total fair value of restricted stock awards, which vested in the year ended December 31, 2022 was $ 5 million and was insignificant for prior periods.

Option awards are measured at fair value on the grant date using the Black Scholes Option Pricing Model.

The intrinsic value of options exercised in the years ended December 31, 2022 and December 31, 2021 , for the period from June 1, 2020 to December 31, 2020, and for the Predecessor period from January 1, 2020 to May 31, 2020 was insignificant for all periods.

Net earnings attributable to F&G Shareholders reflects stock-based compensation expense amounts of $ 12 million, $ 9 million, $ 4 million and $ 3 million for the years ended December 31, 2022 and December 31, 2021,

for the period June 1, 2020 to December 31, 2020, and for the P redecessor period from January 1, 2020 to May 31, 2020, respectively, which are included in personnel costs in the reported financial results of each period.

At December 31, 2022, the total unrecognized compensation costs related to non-vested stock option grants and restricted stock grants pursuant to the FGL Incentive Plan and the 2020 F&G Omnibus Plan are $ 6 million, which is expected to be recognized in pre-tax income over a weighted average period of 1.34 years.

Note P - Earnings Per Share

The total fair value of restricted stock awards granted in the years ended December 31, 2023, 2022 and 2021 was $ 0 , $ 0 and $ 15 million, respectively.

The total fair value of restricted stock awards, which vested in the years ended December 31, 2023, 2022, and 2021 was $ 13 million, $ 5 million and $ 1 million, respectively.

Net earnings (loss) reflects stock-based compensation expense amounts of $ 3 million, $ 12 million and $ 9 million for the years ended December 31, 2023, 2022 and 2021, respectively, which are included in p ersonnel costs in the Consolidated Statement of Operations.

At December 31, 2023, the total unrecognized compensation cost related to restricted stock grants pursuant to the FGL Incentive Plan and the 2020 F&G Omnibus Plan is $ 1 million, all of which is expected to be recognized in pre-tax income in 2024.

Non-Qualified Deferred Compensation Plan

We have established the F&G Annuities & Life, Inc.

Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows eligible employees and directors to make voluntary contributions to the Deferred Compensation Plan.

Employer contributions to the Deferred Compensation Plan are discretionary.

For the year ended December 31, 2023, we did not make any discretionary contributions.

At December 31, 2023 and 2022, the total liability for the Deferred Compensation Plan was $ 11 million and $ 12 million, respectively.

Note S - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (share amounts in thousands):

Year Ended December 31, Period from

June 1 to December 31, Period from January 1 to May 31,

Year Ended December 31,

2023 2022 2021

2 unchanged sentences

Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

Preferred stock dividend — — — 8

Net earnings (loss) attributable to common shares $ 481 $ 865 $ 136 $ ( 322 )

Weighted-average common shares outstanding - basic 124 115 105

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Diluted - net $ ( 0.47 ) $ 5.52 $ 11.81

Under applicable accounting guidance, companies in a loss position are required to use basic weighted average common shares outstanding in the calculation of diluted loss per share.

Therefore, as a result of our net loss for the year ended December 31, 2023, we were required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share, as the inclusion of 593 thousand restricted shares would have been antidilutive to the calculation.

If we had not incurred a net loss for the year ended December 31, 2023, dilutive potential common shares would have been 125 million.

Restricted stock, options or other instruments, which provide the ability to acquire shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share.

For the years ended December 31, 2023 and 2022, the diluted earnings per share calculation excluded the weighted average effect of 111 thousand and 120 thousand restricted stock units, respectively, issued under the 2022 F&G Omnibus Plan due to their antidilutive effect.

For the year ended December 31, 2021, the Company did not have any share-based plans involving the issuance of the Company's equity and, therefore, no impact to the diluted earnings per share calculation.

On June 24, 2022, the following actions previously approved by the F&G board of directors became effective:

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(ii) a resolution to enter an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired.

Restricted stock, options or other instruments, which provide the ability to acquire shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share.

For the year ended December 31, 2022, the diluted earnings per share calculation excluded the weighted average effect of 120 thousand restricted stock units issued under the 2022 F&G Omnibus Plan due to their antidilutive effect.

For the year ended December 31, 2021 and for the period from June 1, 2020 to December 31, 2020, the Company did not have any share-based plans involving the issuance of the Company's equity and, therefore, no impact to the diluted earnings per share calculation.

Under applicable accounting guidance, companies in a loss position are required to use basic weighted average common shares outstanding in the calculation of diluted loss per share.

Therefore, as a result of our net loss for the Predecessor period from January 1, 2020 to May 31, 2020, we were required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share, as the inclusion of 19 thousand restricted shares and 456 thousand stock options would have been antidilutive to the calculation.

If we had not incurred a net loss in the

Predecessor period from January 1, 2020 to May 31, 2020, dilutive potential common shares would have been 213,721 thousand.

This calculation also excluded the potential dilutive effect of the 438 thousand preferred stock shares outstanding for the Predecessor period from January 1, 2020 to May 31, 2020, as the contingency that would allow for the preferred shares to be converted to common shares has not yet been met.

The calculation of diluted earnings per share for the Predecessor period from January 1, 2020 to May 31, 2020 would have also excluded the incremental effect of 447 thousand weighted average equivalent shares related to certain outstanding stock options due to their antidilutive effect.

Note Q - Recent Accounting Pronouncements

Note T - Recent Accounting Pronouncements

Adopted Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13 Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments (Topic 326).

The amendments in this ASU introduce broad changes to accounting for credit impairment of financial instruments.

The primary updates include the introduction of a new current expected credit loss ("CECL") model that is based on expected rather than incurred losses and amendments to the accounting for impairment of fixed maturity securities available for sale.

The method used to measure estimated credit losses for fixed maturity available-for-sale securities will be unchanged;

however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those securities.

We adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost.

We adopted this standard using a modified-retrospective approach, as required.

As a result of the adoption, the Company recorded a cumulative-effect adjustment, which decreased opening 2020 retained earnings by $ 27 million, net of tax.

We recorded offsetting increases to the allowance for expected credit losses for mortgage loans and reinsurance recoverables and a decrease for deferred tax impacts.

Refer to Note C Investments and Note J Reinsurance for additional information.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

The amendments in this update defer the sunset provision within Topic 848 that provides a temporary, optional expedient and exception for contracts affected by reference rate reform by not applying certain modification accounting requirements and instead accounting for the modified contract as a continuation of the existing contract.

This guidance eases the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting through December 31, 2024.

We adopted this standard upon issuance and this standard had no impact on our Consolidated Financial Statements and related disclosures upon adoption.

Pronouncements Not Yet Adopted

In August 2018, the FASB issued 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:

In August 2018, the FASB issued ASU 2018-12, as clarified and amended by ASU 2019-09, Financial Services-Insurance:

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

1 unchanged sentence

This update introduced the following requirements:

assumptions used to measure cash flows for traditional and limited-payment contracts must be reviewed at least annually with the effect of changes in those assumptions being recognized in the statement of operations;

the discount rate applied to measure the liability for future policy benefits and limited-payment contracts must be updated at each reporting date with the effect of changes in the rate being recognized in other comprehensive income (“OCI”);

market risk benefits ("MRBs") associated with deposit contracts must be measured at fair value, with the effect of the change in the fair value recognized in earnings, except for the change attributable to instrument-specific credit risk which is recognized in OCI;

assumptions used to measure cash flows for traditional and limited-payment contracts must be reviewed at least annually with the effect of changes in those assumptions being

recognized in the statement of operations;

MRBs associated with deposit contracts must be measured at fair value, with the effect of the change in the fair value recognized in earnings, except for the change attributable to instrument-specific credit risk which is recognized in AOCI;

deferred acquisition costs are no longer required to be amortized in proportion to premiums, gross profits, or gross margins;

1 unchanged sentence

deferred acquisition costs must be written off for unexpected contract terminations;

and disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, MRBs, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions, and methods used in measurement are required to be disclosed.

amendments in this ASU may be early adopted as of the beginning of an annual reporting period for which financial statements have not yet been issued, including interim financial statements.

We have identified specific areas that will be impacted by the new guidance.

This guidance will bring significant changes to how we account for certain insurance and annuity products within our business and expand disclosures.

As part of the implementation process, to date our progress includes, but is not limited to the following:

identifying and documenting contracts and contract features in scope of the guidance;

identifying actuarial models, systems, and processes to be updated;

building and running models;

generating and analyzing preliminary output;

evaluating and finalizing key accounting policies;

evaluating transition requirements and impacts;

and establishing, documenting, and executing appropriate internal controls.

We will not early adopt this standard and have selected the full retrospective transition method, which requires the new guidance be applied as of the beginning of the earliest period presented or January 1, 2021, referred to as the transition date.

Adoption of this standard is expected to increase total stockholders’ equity as of the transition date, January 1, 2021, up to approximately $ 200 million, net of tax.

This transition adjustment is expected to primarily increase Retained Earnings, as well as OCI.

The most significant driver of this transition adjustment expected to increase Retained Earnings is the measurement of certain benefits historically recorded as insurance liabilities which will now be classified and measured as MRBs, along with their subsequent changes in fair value, excluding changes attributable to instrument-specific credit risk, which are recorded as a component of OCI.

The most significant drivers of this transition adjustment expected to increase OCI are the reversal of intangible balances previously recorded as an adjustment to unrealized gains (losses) on available for sale securities, the remeasurement of the liability for future policyholder benefits using a discount rate assumption that reflects upper-medium grade fixed-income instruments, and the effect of changes in the fair value of MRBs attributable to changes in the instrument-specific credit risk.

As of December 31, 2022, the Company continues to expect the measurement drivers above, in relation to the current market conditions, to support a favorable impact to total stockholders’ equity at or greater than the transition impact, contingent upon the completion of our ongoing implementation process.

Further, the specific impacts on Retained Earnings and OCI upon adoption of this standard on January 1, 2023 may also differ materially from the transition impact based on the performance of the Company’s business and macroeconomic conditions, including changes in interest rates.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

The amendments in this update affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction and clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

Additionally, the amendments require the following disclosures for equity securities subject to contractual sale restrictions:

the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restriction(s), and the circumstances that could cause a lapse in the restriction(s).

The amendments in this update do not change the principles of fair value measurement, rather, they clarify those principles when measuring the fair value of an equity security subject to a contractual sale restriction and improve current GAAP by reducing diversity in practice, reducing the cost and complexity in measuring fair value, and increasing comparability of financial information across reporting entities that hold those investments.

The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, though early adoption is permitted.

We do not currently expect to early adopt this standard and are in the process of assessing this standard and its impact on our accounting and disclosures upon adoption.

Note R - Discontinued Operations

On December 18, 2020, we sold F&G Reinsurance Ltd (“F&G Re”) to Aspida Holdings Ltd (“Aspida”).

On May 31, 2021, we sold Front Street Re Cayman Ltd (“FSRC”) to Archipelago Lexa (C) Limited.

The transactions did not have a material impact to our GAAP financial results.

There were no discontinued operations for the year ended December 31, 2022.

A summary of the major components of discontinued operations reported in the Consolidated Statements of Earnings are as follows:

Year Ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

2021 2020 2020

Life insurance premiums and other fees $ — $ — $ 1

Interest and investment income 3 42 24

Recognized gains and (losses), net — 196 ( 95 )

Total revenues 3 238 ( 70 )

Other operating expenses — 19 ( 41 )

Benefits and other changes in policy reserves ( 5 ) 244 ( 5 )

Other expenses — — 2

Total expenses ( 5 ) 263 ( 44 )

Earnings (loss) from discontinued operations before income taxes 8 ( 25 ) ( 114 )

Income tax (expense) benefit — — —

Net earnings (loss) from discontinued operations, net of tax $ 8 $ ( 25 ) $ ( 114 )

Cash flow from discontinued operations data:

Net cash provided by (used in) operating activities ( 26 ) 121 ( 39 )

Note S — Subsequent Events

Refer to Note A Business and Summary of Significant Accounting Policies - Recent Events for information about certain subsequent events.

In addition to what is disclosed in Note A, we had the following additional subsequent event.

Syncis Investment

On January 30, 2023, we purchased a 49 % minority ownership stake in Syncis Holdings, LLC.

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

and disaggregated roll forwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, MRBs, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions, and methods used in measurement are required to be disclosed.

We adopted this standard, which required the new guidance be applied as of the beginning of the earliest period that will be presented in our annual December 31, 2023 Consolidated Financial Statements or January 1, 2021, referred to as the transition date, and elected the full retrospective transition method.

As a result of adoption, the Company recorded a cumulative-effect adjustment, which increased opening 2021 retained earnings by $ 75 million, net of tax.

Refer to Note P - Transition for more information.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

This guidance eases the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting through December 31, 2024.

We adopted this standard upon issuance and this standard had no impact on our Consolidated Financial Statements and related disclosures to date.

Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker (“CODM”) and included in each reported measure of a segment’s profit or loss.

In addition, the amendments enhance interim disclosure requirements that are currently required annually, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements.

Additionally, the amendments require that entities with a single reportable segment must now provide all the disclosures previously required under Topic 280.

The amendments in this update are incremental to the current requirements of Topic 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The enhanced segment disclosure requirements apply retrospectively to all prior periods presented in the financial statements.

The significant segment expense and other segment item amounts disclosed in prior periods shall be based on the significant segment expense categories identified and disclosed in the period of adoption.

The amendments in this update are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

Early adoption is permitted, and the updates must be applied retrospectively to all periods presented in the financial statements.

We do not currently expect to early adopt this standard and are in the process of assessing its impact on our disclosures upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this update enhance the transparency of the income tax disclosures by expanding on the disclosures required annually.

The amendments require entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes, in addition to providing details about the reconciling items in some categories if above a quantitative threshold.

Additionally, the amendments require annual disclosure of income taxes paid (net of refunds received) disaggregated by jurisdiction based on a quantitative threshold.

The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The amendments should be applied on a prospective basis, and retrospective application is permitted.

We do not currently expect to early adopt this standard and are in the process of assessing its impact on our disclosures upon adoption.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

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 8. Financial Statements and Supplementary Data