What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-09-20 · 859 added, 644 removed, 1267 unchanged (54% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(In millions, except per share data)

Debt Securities, available for sale, net of allowance for credit losses of $ 6.8 and $ 13.6 at June 30, 2021 and

December 31, 2020, respectively (amortized cost:

(Unaudited, in millions)

September 30, December 31,

Assets (Unaudited)

Debt Securities, available for sale, net of allowance for credit losses of $ 9.4 and $ 13.6 at September 30, 2021 and December 31, 2020, respectively (amortized cost:

2021 $ 49,564.9 ;

2020 $ 54,141.0 )

$ 52,123.0 $ 59,075.0

Debt Securities, at fair value under fair value option 1,516.6 1,276.7

1 unchanged sentence

Equity securities, at fair value 290.1 193.1

Mortgage loans, net of allowance for credit losses of $ 135.3 and $ 179.2 at June 30, 2021 and December 31, 2020, respectively

Policy loans (including $ 3,537.8 and $ 3,454.2 at fair value under the fair value option at June 30, 2021 and December 31, 2020, respectively)

Mortgage loans, net of allowance for credit losses of $ 96.4 and $ 179.2 at September 30, 2021 and December 31, 2020, respectively

11,731.4 10,727.5

Policy loans (including $ 3,487.5 and $ 3,454.2 at fair value under the fair value option at September 30, 2021 and December 31, 2020, respectively)

4,511.9 4,523.5

Freestanding derivative instruments 1,141.9 2,219.8

4 unchanged sentences

Deferred acquisition costs 14,016.8 13,897.0

Reinsurance recoverable, net of allowance for credit losses of $ 12.5 and $ 12.6 at June 30, 2021 and December 31, 2020, respectively

Reinsurance recoverable, net of allowance for credit losses of $ 12.3 and $ 12.6 at September 30, 2021 and December 31, 2020, respectively

33,752.5 35,269.5

Deferred income taxes, net 1,004.6 1,057.8

Other assets 1,306.0 1,103.7

Separate account assets 237,096.2 219,062.9

Total assets $ 364,372.5 $ 353,455.5

Liabilities and Equity

1 unchanged sentence

Other contract holder funds 60,465.9 64,538.4

Funds withheld payable under reinsurance treaties (including $ 3,708.6 and $ 3,626.5 at fair value under the fair value option at June 30, 2021 and December 31, 2020, respectively)

Funds withheld payable under reinsurance treaties (including $ 3,659.9 and $ 3,626.5 at fair value under the fair value option at September 30, 2021 and December 31, 2020, respectively)

29,771.4 31,971.5

Short-term debt 1,601.7 —

Long-term debt 1,068.5 322.0

Securities lending payable 20.7 13.3

4 unchanged sentences

Commitments, Contingencies, and Guarantees (Note 14)

Common stock, (i) Class A common stock 900,000,000 shares authorized, $ 0.01 par value per share and 93,099,859 shares issued and outstanding at both June 30, 2021 and December 31, 2020, respectively and (ii) Class B common stock 100,000,000 shares authorized, $ 0.01 par value per share and 1,364,484 shares issued and outstanding at both June 30, 2021 and December 31, 2020, respectively

(See Note 18)

Additional paid-in

Common stock, (i) Class A common stock 900,000,000 shares authorized, $ 0.01 par value per share and 93,099,859 shares issued and outstanding at both September 30, 2021 and December 31, 2020, respectively and (ii) Class B common stock 100,000,000 shares authorized, $ 0.01 par value per share and 1,364,484 shares issued and outstanding at both September 30, 2021 and December 31, 2020, respectively (See Note 18)

Additional paid-in capital 5,927.5 5,926.9

Shares held in trust — ( 4.3 )

1 unchanged sentence

Accumulated other comprehensive income, net of tax expense of $ 275.4 in 2021 and $ 765.9 in 2020

2,045.2 3,820.6

Retained earnings 2,274.5 ( 323.2 )

1 unchanged sentence

Noncontrolling interests 597.9 493.6

Total equity 10,856.1 9,922.2

Total liabilities and equity $ 364,372.5 $ 353,455.5

3 unchanged sentences

(Unaudited, in millions, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Fee income $ 1,961.9 $ 1,666.5 $ 5,673.5 $ 4,847.9

Premium 35.1 46.5 100.3 134.0

Net investment income 852.0 881.4 2,575.6 2,105.6

Net gains (losses) on derivatives and investments ( 1,379.3 ) ( 2,504.8 ) ( 1,194.4 ) ( 4,517.7 )

Other income 16.6 21.5 70.2 35.6

Total revenues 1,486.3 111.1 7,225.2 2,605.4

12 unchanged sentences

Net income (loss) attributable to Jackson Financial Inc.

$ 206.2 $ ( 396.6 ) $ 2,597.7 $ ( 1,709.2 )

Earnings per share

Basic $ 2.18 $ ( 4.28 ) $ 27.50 $ ( 29.15 )

Diluted $ 2.18 $ ( 4.28 ) $ 27.50 $ ( 29.15 )

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in millions)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net income (loss) $ 268.1 $ ( 374.9 ) $ 2,784.0 $ ( 1,747.0 )

1 unchanged sentence

Change in net unrealized gains (losses) on securities not impaired (net of tax expense (benefit) of:

$ 292.4 and $ 528.3 for the three months ended June 30, 2021 and 2020, respectively, and $( 343.7 ) and $ 423.4 for the six months ended June 30, 2021 and 2020, respectively

$( 86.1 ) and $ 129.9 for the three months ended September 30, 2021 and 2020, respectively, and $( 429.8 ) and $ 553.3 for the nine months ended September 30, 2021 and 2020, respectively)

( 313.9 ) 488.6 ( 1,554.7 ) 2,081.4

Change in unrealized gains (losses) on securities for which an allowance for credit losses has been recorded (net of tax expense (benefit) of:

nil and $ 0.2 for the three months ended June 30, 2021 and 2020, respectively, and $ 0.6 and $ 1.0 for the six months ended June 30, 2021 and 2020, respectively)

$ 0.1 and $ 0.2 for the three months ended September 30, 2021 and 2020, respectively, and $ 0.7 and $ 1.2 for the nine months ended September 30, 2021 and 2020, respectively)

0.3 0.4 2.5 4.3

Reclassification adjustment for gains (losses) included in net income (loss) (net of tax expense (benefit) of:

$( 32.4 ) and $( 138.7 ) for the three months ended June 30, 2021, respectively, and 2020, and $( 52.8 ) and $( 149.9 ) for the six months ended June 30, 2021 and 2020, respectively)

$( 8.6 ) and $( 18.1 ) for the three months ended September 30, 2021 and 2020, respectively, and $( 61.4 ) and $( 168.0 ) for the nine months ended September 30, 2021 and 2020, respectively)

( 31.4 ) ( 67.8 ) ( 223.2 ) ( 631.8 )

Total other comprehensive income (loss) ( 345.0 ) 421.2 ( 1,775.4 ) 1,453.9

2 unchanged sentences

Comprehensive income (loss) attributable to Jackson Financial Inc.

$ ( 138.8 ) $ 24.6 $ 822.3 $ ( 255.3 )

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in millions)

Comprehensive

Stockholders’

Balances as of

March 31, 2021

Additional Shares Equity Other Total Non-

Common Paid-In Held Compensation Comprehensive Retained Stockholders' Controlling Total

Stock Capital In Trust Reserve Income Earnings Equity Interests Equity

Balances as of June 30, 2021 $ 0.9 $ 5,926.9 $ ( 4.3 ) $ 8.5 $ 2,390.2 $ 2,068.3 $ 10,390.5 $ 599.1 $ 10,989.6

Net income (loss) — — — — — 206.2 206.2 61.9 268.1

Change in unrealized

investment gains and losses, net of tax

Change in unrealized investment gains and losses, net of tax — — — — ( 345.0 ) — ( 345.0 ) — ( 345.0 )

Change in equity of noncontrolling interests — — — — — — — ( 63.1 ) ( 63.1 )

Shares sold in connection with demerger — 0.6 4.3 — — — 4.9 — 4.9

Reserve for equity compensation plans — — — 1.6 — — 1.6 — 1.6

Balances as of September 30, 2021 $ 0.9 $ 5,927.5 $ — $ 10.1 $ 2,045.2 $ 2,274.5 $ 10,258.2 $ 597.9 $ 10,856.1

Additional Shares Equity Other Total Non-

Common Paid-In Held Compensation Comprehensive Retained Stockholder's Controlling Total

Stock Capital In Trust Reserve Income Earnings Equity Interests Equity

Balances as of June 30, 2020 $ 0.8 $ 5,427.0 $ ( 4.3 ) $ 0.5 $ 3,429.4 $ 5.2 $ 8,858.6 $ 438.3 $ 9,296.9

Comprehensive

Stockholder’s

Balances as of

March 31, 2020

Net income (loss) — — — — — ( 396.6 ) ( 396.6 ) 21.7 ( 374.9 )

Change in unrealized

investment gains and

losses, net of tax

Change in unrealized investment gains and losses, net of tax — — — — 421.2 — 421.2 — 421.2

Change in equity of noncontrolling interests — — — — — — — 11.6 11.6

Common stock issuance

debt restructure

Common stock issuance - debt restructure — — — — — — — — —

Common stock issuance - Athene 0.1 499.9 — — — — 500.0 — 500.0

Change in accounting principle, net of tax — — — — — ( 7.4 ) ( 7.4 ) — ( 7.4 )

Balances as of June 30, 2020

Comprehensive

Stockholders’

Balances as of

December 31, 2020

Balances as of September 30, 2020 $ 0.9 $ 5,926.9 $ ( 4.3 ) $ 0.5 $ 3,850.6 $ ( 398.8 ) $ 9,375.8 $ 471.6 $ 9,847.4

Additional Shares Equity Other Total Non-

Common Paid-In Held Compensation Comprehensive Retained Stockholders' Controlling Total

Stock Capital In Trust Reserve Income Earnings Equity Interests Equity

Balances as of December 31, 2020 $ 0.9 $ 5,926.9 $ ( 4.3 ) $ 7.7 $ 3,820.6 $ ( 323.2 ) $ 9,428.6 $ 493.6 $ 9,922.2

Net income (loss) — — — — — 2,597.7 2,597.7 186.3 2,784.0

Change in unrealized

investment gains and

losses, net of tax

Change in unrealized investment gains and losses, net of tax — — — — ( 1,775.4 ) — ( 1,775.4 ) — ( 1,775.4 )

Change in equity of noncontrolling interests — — — — — — — ( 82.0 ) ( 82.0 )

Reserve for equity

compensation plans

Balances as of June 30, 2021

Comprehensive

Stockholder’s

Balances as of

December 31, 2019

Shares sold in connection with demerger — 0.6 4.3 — — — 4.9 — 4.9

Reserve for equity compensation plans — — — 2.4 — — 2.4 — 2.4

Balances as of September 30, 2021 $ 0.9 $ 5,927.5 $ — $ 10.1 $ 2,045.2 $ 2,274.5 $ 10,258.2 $ 597.9 $ 10,856.1

Additional Shares Equity Other Total Non-

Common Paid-In Held Compensation Comprehensive Retained Stockholder's Controlling Total

Stock Capital In Trust Reserve Income Earnings Equity Interests Equity

Balances as of December 31, 2019 $ 0.4 $ 3,077.4 $ ( 4.3 ) $ 0.5 $ 2,396.7 $ 1,365.8 $ 6,836.5 $ 484.1 $ 7,320.6

Net income (loss) — — — — — ( 1,709.2 ) ( 1,709.2 ) ( 37.8 ) ( 1,747.0 )

Change in unrealized

investment gains and

losses, net of tax

Change in unrealized investment gains and losses, net of tax — — — — 1,453.9 — 1,453.9 — 1,453.9

Change in equity of noncontrolling interests — — — — — — — 25.3 25.3

Common stock issuance - debt restructure 0.4 2,349.6 — — — — 2,350.0 — 2,350.0

Change in accounting

principle, net of tax

Balances as of June 30, 2020

Common stock issuance - Athene 0.1 499.9 — — — — 500.0 — 500.0

Change in accounting principle, net of tax — — — — — ( 55.4 ) ( 55.4 ) — ( 55.4 )

Balances as of September 30, 2020 $ 0.9 $ 5,926.9 $ ( 4.3 ) $ 0.5 $ 3,850.6 $ ( 398.8 ) $ 9,375.8 $ 471.6 $ 9,847.4

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

8 unchanged sentences

Deferred income tax expense (benefit) 543.7 ( 454.5 )

Share-based compensation

Cash received (paid to) from reinsurance transaction — ( 31.7 )

17 unchanged sentences

Policyholders' account balances:

Deposits 14,664.3 14,618.9

Withdrawals ( 21,646.8 ) ( 16,230.7 )

Net transfers to separate accounts 2,068.3 2,245.2

Net proceeds from (payments on) borrowings

Proceeds from (payments on) repurchase agreements ( 794.0 ) —

Net proceeds from (payments on) Federal Home Loan Bank notes ( 380.0 ) ( 300.1 )

Net proceeds from

(payments on) borrowings

Net proceeds from (payments on) long-term and short-term debt 2,345.7 ( 64.5 )

Disposition of shares held in trust at cost, net 4.9 —

Common stock issuance - Athene — 500.0

Net cash provided by (used in) financing activities ( 3,737.6 ) 768.8

3 unchanged sentences

Supplemental cash flow information

Income taxes paid

Income taxes paid (received) $ 36.1 $ ( 1.3 )

Interest paid $ 15.3 $ 75.7

2 unchanged sentences

Other invested assets acquired from stock splits and stock distributions $ 98.9 $ 4.1

Non-cash financing activities

Non-cash debt restructuring transactions (1)

$ — $ ( 2,350.0 )

Shares issued in settlement of the debt restructuring (1)

$ — $ 2,350.0

(1) See Note 18 for further description of the debt restructuring transactions.

See notes to condensed consolidated financial statements.

4 unchanged sentences

(“Jackson Financial”) along with its subsidiaries (collectively, the “Company,” which also may be referred to as “we,” “our” or “us”), is a financial services company focused on helping Americans grow and protect their retirement savings and income to enable them to pursue financial freedom for life in the United States (“U.S.”).

Jackson Financial, domiciled in the U.S., was, as of June 30, 2021, a majority-owned subsidiary of Prudential plc (“Prudential”), London, England and was the holding company for Prudential’s U.S.

Jackson Financial, domiciled in the U.S., was a majority-owned subsidiary of Prudential plc (“Prudential”), London, England and was the holding company for Prudential’s U.S.

As described below under "Other," the Company's demerger from Prudential was completed on September 13, 2021 ("Demerger"), and the Company is no longer a majority-owned subsidiary of Prudential.

4 unchanged sentences

(“PPM”), is the Company’s investment management operation that manages the life insurance companies’ general account investment funds.

PPM also provides investment services to other affiliated and unaffiliated institutional clients.

PPM also provides investment services to other former affiliated and unaffiliated institutional clients.

• Brooke Life Insurance Company (“Brooke Life”), Jackson’s direct parent, is a life insurance company licensed to sell life insurance and annuity products in the state of Michigan.

6 unchanged sentences

Jackson National Asset Management, LLC ("JNAM");

PGDS (US One) LLC (“PGDS”), which provides certain services to the Company and certain affiliates;

• PGDS (US One) LLC (“PGDS”), which provides certain services to the Company and certain former affiliates;

• Other insignificant wholly owned subsidiaries.

The condensed consolidated financial statements also include other insignificant partnerships, limited liability companies (“LLCs”) and variable interest entities (“VIEs”) in which the Company is deemed the primary beneficiary.

On August 6, 2021, the registration statement on Form 10 of the Company’s Class A common stock, par value

$ 0.01 per share, filed with the U.S.

The condensed consolidated financial statements also include other insignificant partnerships, limited liability companies (“LLCs”) and other variable interest entities (“VIEs”) in which the Company is deemed the primary beneficiary.

On August 6, 2021, the registration statement on Form 10 of the Company's Class A common stock, par value $ 0.01 per share, filed with the U.S.

Securities and Exchange Commission (the "SEC"), became effective under the Securities Exchange Act of 1934, as amended.

We refer to that effective Form 10 registration as the "Form 10." The Demerger transaction described in the Form 10 was consummated on September 13, 2021.

Post-demerger, Prudential retained a

19.9 percent remaining interest in the Company.

On September 9, 2021, the Company effected a

60.3836276-for-1

stock split of its Class A common stock and Class B common stock by way of a reclassification of its Class A common stock and Class B common stock (the “stock split”).

The incremental par value of the newly issued shares was recorded with the offset to additional paid-in

All share and earnings per share information presented herein have been retroactively adjusted to reflect the stock

18, 2020, the Company’s subsidiary, Jackson, announced that it had entered into a funds withheld coinsurance agreement with Athene Life Re Ltd.

(“Athene”) effective June 1, 2020 to reinsure on 100 % quota share basis, a block of Jackson’s in-force

fixed and fixed-index annuity product liabilities in exchange for a $ 1.2 billion ceding commission.

In addition, we entered into an investment agreement with Athene Life Re Ltd., pursuant to which Athene would invest $ 500.0 million of capital into the Company in return for a 9.9 % voting interest corresponding to a 11.1

% economic interest in the Company.

The transaction was completed on July 17, 2020.

In August 2020, the Company made a

million capital contribution to its subsidiary, Jackson.

We continue to closely monitor developments related to the COVID-19

pandemic has caused significant economic and financial turmoil both in the United States and around the world.

Post-demerger, Prudential retained a 19.9 percent remaining interest in the Company.

On September 9, 2021, the Company effected a 104,960.3836276 -for-1 stock split of its Class A common stock and Class B common stock by way of a reclassification of its Class A common stock and Class B common stock (the “stock split”).

The incremental par value of the newly issued shares was recorded with the offset to additional paid-in capital.

All share and earnings per share information presented herein have been retroactively adjusted to reflect the stock split.

On June 18, 2020, the Company’s subsidiary, Jackson, announced that it had entered into a funds withheld coinsurance agreement with Athene Life Re Ltd.

(“Athene”) effective June 1, 2020 to reinsure on 100 % quota share basis, a block of Jackson’s in-force fixed and fixed-index annuity product liabilities in exchange for a $ 1.2 billion ceding commission.

In addition, we entered into an investment agreement with Athene Life Re Ltd., pursuant to which Athene invested $ 500.0 million of capital into the Company in return for a 9.9 % voting interest corresponding to a 11.1 % economic interest in the Company.

That investment was completed on July 17, 2020.

In August 2020, the Company made a $ 500.0 million capital contribution to its subsidiary, Jackson.

We continue to closely monitor developments related to the COVID-19 pandemic.

The COVID-19 pandemic has caused significant economic and financial turmoil both in the United States and around the world.

These conditions could continue and could worsen in the future.

The extent to which the COVID-19

pandemic impacts our business, results of operations, financial condition and cash flows will depend on future developments which are highly uncertain and cannot be predicted.

The extent to which the COVID-19 pandemic impacts our business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted.

The Company implemented business continuity plans that were already in place to ensure the availability of services for our customers, work at home capabilities for our employees, where appropriate, and other ongoing risk management activities.

The Company has had employees, as needed or voluntarily, in our offices during this time, as permitted by local and state restrictions.

Starting in the third quarter of 2021, the Company is rolling out a broader return to office plan for all employees in waves over the remainder of 2021.

During the third quarter of 2021, the Company rolled out a broader return to office plan for all employees in waves over the remainder of 2021.

Basis of Presentation

5 unchanged sentences

In the opinion of management, these financial statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.

Operating results for the three and six months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

Operating results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

All material inter-company accounts and transactions have been eliminated in consolidation.

18 unchanged sentences

Changes in Accounting Principles – Adopted in Current Year

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04,

“Reference Rate Reform (Topic 848):

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The new guidance provides optional expedients for applying GAAP to contracts and other transactions affected by reference rate reform and is effective for contract modifications made between March 12, 2020 and December 31, 2022.

1 unchanged sentence

The practical expedient allowed by this standard was elected and will be applied prospectively by the Company as reference rate reform unfolds.

The contracts modified met the criteria for the practical expedient and therefore had no material impact on the Company’s consolidated financial statements.

The contracts modified to date met the criteria for the practical expedient and therefore had no material impact on the Company’s consolidated financial statements.

The Company will continue to evaluate the impacts of reference rate reform on contract modifications and other transactions through December 31, 2022.

In October 2020, the FASB issued ASU No.

“Codification Improvements to Subtopic 310-20,

Receivables—Nonrefundable Fees and Other Costs,” which clarifies an entity’s accounting responsibilities related to callable debt securities.

Effective January 1, 2021, the Company adopted ASU 2020-08,

which did not have a material impact on the Company’s consolidated financial statements.

On December 18, 2019, FASB issued ASU No.

2020-08, “Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs,” which clarifies an entity’s accounting responsibilities related to callable debt securities.

Effective January 1, 2021, the Company adopted ASU 2020-08, which did not have a material impact on the Company’s consolidated financial statements.

In December 2019, FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes,” which includes changes to the accounting for income taxes by eliminating certain exceptions to the approach for intra-period allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

The amendments also simplified other areas including the accounting for franchise taxes and enacted tax laws or rates and clarified the accounting for transactions that result in the step-up

in the tax basis of goodwill.

Effective January 1, 2021, the Company adopted ASU 2019-12,

which did not have a material impact on the Company’s consolidated financial statements.

The amendments also simplified other areas including the accounting for franchise taxes and enacted tax laws or rates and clarified the accounting for transactions that result in the step-up in the tax basis of goodwill.

Effective January 1, 2021, the Company adopted ASU 2019-12, which did not have a material impact on the Company’s consolidated financial statements.

Changes in Accounting Principles – Issued but Not Yet Adopted

In August 2018, the FASB issued ASU 2018-12,

“Targeted Improvements to the Accounting for Long Duration Contracts,” which includes changes to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity.

The amendments in ASU 2018-12

contain four significant changes:

In August 2018, the FASB issued ASU 2018-12, “Targeted Improvements to the Accounting for Long Duration Contracts,” which includes changes to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity.

The amendments in ASU 2018-12 contain four significant changes:

1) for the calculation of the liability for future policy benefits of nonparticipating traditional and limited-payment insurance and reinsurance contracts, cash flow assumptions and discount rates will be required to be updated at least annually;

7 unchanged sentences

the initial balance sheet impact upon adoption, the Company also expects a change in the pattern of future profit emergence.

Subsequent Events

The Company has evaluated events through September 20, 2021, which is the date the condensed consolidated financial statements were available to be issued.

Investments are comprised primarily of fixed-income securities and loans, primarily publicly-traded corporate and government bonds, asset-backed securities and mortgage loans.

Asset-backed securities include mortgage-backed and other structured securities.

The Company generates the majority of its general account deposits from interest-sensitive individual annuity contracts, life insurance products and guaranteed investment contracts on which it has committed to pay a declared rate of interest.

The Company generates the majority of its general account deposits from interest-sensitive individual annuity contracts, life insurance products and institutional products on which it has committed to pay a declared rate of interest.

The Company's strategy of investing in fixed-income securities and loans aims to ensure matching of the asset yield with the amounts credited to the interest-sensitive liabilities and to earn a stable return on its investments.

Debt Securities

The following table sets forth the composition of the fair value of debt securities at June 30, 2021, classified by rating categories as assigned by nationally recognized statistical rating organizations (“NRSRO”), the National Association of Insurance Commissioners (“NAIC”), or if not rated by such organizations, the Company’s consolidated investment advisor, PPM.

The following table sets forth the composition of the fair value of debt securities at September 30, 2021, classified by rating categories as assigned by nationally recognized statistical rating organizations (“NRSRO”), the National Association of Insurance Commissioners (“NAIC”), or if not rated by such organizations, the Company’s consolidated investment advisor, PPM.

The Company uses the second lowest rating by an NRSRO when NRSRO ratings are not equivalent and, for purposes of the table, if not otherwise rated by a NRSRO, the NAIC rating of a security is converted to an equivalent NRSRO-style rating.

At June 30, 2021, the carrying value of investments rated by the Company’s consolidated investment advisor totaled $ 128.2 million.

Investment Rating

At September 30, 2021, the carrying value of investments rated by the Company’s consolidated investment advisor totaled $ 141.9 million.

Percent of Total

1 unchanged sentence

Carrying Value

June 30, 2021

Investment Rating

September 30, 2021

Investment grade

1 unchanged sentence

Total debt securities

At June 30, 2021, based on ratings by NRSROs, of the total carrying value of debt securities in an unrealized loss position, 75 % were investment grade, 5 % were below investment grade and 20 % were not rated.

At September 30, 2021, based on ratings by NRSROs, of the total carrying value of debt securities in an unrealized loss position, 74 % were investment grade, 11 % were below investment grade and 15 % were not rated.

Unrealized losses on debt securities that were below investment grade or not rated were approximately 11 % of the aggregate gross unrealized losses on available for sale debt securities.

Corporate securities in an unrealized loss position were diversified across industries.

As of June 30, 2021, the industries accounting for the largest percentage of unrealized losses included financial services ( 18 % of corporate gross unrealized losses) and consumer goods ( 16 %).

The largest unrealized loss related to a single corporate obligor was $ 16.8 million at June 30, 2021.

At June 30, 2021 and December 31, 2020, the amortized cost, gross unrealized gains and losses, fair value, and allowance for credit loss (“ACL”) of debt securities, including trading securities and securities carried at fair value under the fair value option, were as follows (in millions):

June 30, 2021

As of September 30, 2021, the industries accounting for the largest percentage of unrealized losses included financial services ( 15 % of corporate gross unrealized losses) and consumer goods ( 15 %).

The largest unrealized loss related to a single corporate obligor was $ 20.3 million at September 30, 2021.

At September 30, 2021 and December 31, 2020, the amortized cost, gross unrealized gains and losses, fair value, and allowance for credit loss (“ACL”) of debt securities, including trading securities and securities carried at fair value under the fair value option, were as follows (in millions):

Allowance Gross Gross

Amortized for Unrealized Unrealized Fair

September 30, 2021 Cost (1)

Credit Loss Gains Losses Value

government securities $ 4,792.9 $ — $ 83.0 $ 412.9 $ 4,463.0

6 unchanged sentences

Total debt securities $ 51,199.4 $ 9.4 $ 3,285.2 $ 717.7 $ 53,757.5

December 31, 2020

Allowance Gross Gross

Amortized for Unrealized Unrealized Fair

December 31, 2020 Cost (1)

Credit Loss Gains Losses Value

government securities $ 5,078.9 $ — $ 162.0 $ 114.9 $ 5,126.0

7 unchanged sentences

(1) Amortized cost, apart from the carrying value for securities carried at fair value under the fair value option and trading securities.

The amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair value of debt securities at June 30, 2021, by contractual maturity, are shown below (in millions).

The amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair value of debt securities at September 30, 2021, by contractual maturity, are shown below (in millions).

Actual maturities may differ from contractual maturities where securities can be called or prepaid with or without early redemption penalties.

Allowance Gross Gross

Amortized (1)

for Unrealized Unrealized Fair

Cost Credit Loss Gains Losses

Due in 1 year or less $ 1,069.8 $ — $ 18.7 $ — $ 1,088.5

6 unchanged sentences

Other asset-backed securities 5,731.2 7.4 92.6 18.6 5,797.8

Total $ 51,199.4 $ 9.4 $ 3,285.2 $ 717.7 $ 53,757.5

(1) Amortized cost, apart from the carrying value for securities carried at fair value under the fair value option and trading securities.

Securities with a carrying value of $ 115.7 million and $ 123.4 million at June 30, 2021 and December 31, 2020, respectively, were on deposit with regulatory authorities, as required by law in various states in which business is conducted.

Securities with a carrying value of $ 115.2 million and $ 123.4 million at September 30, 2021 and December 31, 2020, respectively, were on deposit with regulatory authorities, as required by law in various states in which business is conducted.

Residential mortgage-backed securities (“RMBS”) include certain RMBS that are collateralized by residential mortgage loans and are neither explicitly nor implicitly guaranteed by U.S.

government agencies (“non-agency

The Company’s non-agency

RMBS include investments in securities backed by prime, Alt-A,

and subprime loans as follows (in millions):

June 30, 2021

Total non-agency

December 31, 2020

Total non-agency

government agencies (“non-agency RMBS”).

The Company’s non-agency RMBS include investments in securities backed by prime, Alt-A, and subprime loans as follows (in millions):

Allowance Gross Gross

Amortized for Unrealized Unrealized Fair

September 30, 2021 Cost (1)

Credit Loss Gains Losses Value

Prime $ 255.6 $ 1.6 $ 12.5 $ 1.0 $ 265.5

Alt-A 101.4 0.4 22.8 0.2 123.6

Subprime 43.2 — 13.4 — 56.6

Total non-agency RMBS $ 400.2 $ 2.0 $ 48.7 $ 1.2 $ 445.7

Allowance Gross Gross

Amortized for Unrealized Unrealized Fair

December 31, 2020 Cost (1)

Credit Loss Gains Losses Value

Prime $ 287.4 $ — $ 17.1 $ 0.7 $ 303.8

Alt-A 122.9 — 25.6 0.3 148.2

Subprime 61.0 — 13.9 0.2 74.7

Total non-agency RMBS $ 471.3 $ — $ 56.6 $ 1.2 $ 526.7

(1) Amortized cost, apart from carrying value for securities carried at fair value under the fair value option and trading securities.

The Company defines its exposure to non-agency

residential mortgage loans as follows:

The Company defines its exposure to non-agency residential mortgage loans as follows:

• Prime loan-backed securities are collateralized by mortgage loans made to the highest rated borrowers.

loan-backed securities are collateralized by mortgage loans made to borrowers who lack credit documentation or necessary requirements to obtain prime borrower rates.

• Alt-A loan-backed securities are collateralized by mortgage loans made to borrowers who lack credit documentation or necessary requirements to obtain prime borrower rates.

• Subprime loan-backed securities are collateralized by mortgage loans made to borrowers that have a FICO score of 680 or lower.

The following table summarizes the number of securities, fair value and the gross unrealized losses of debt securities, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position (dollars in millions):

June 30, 2021

December 31, 2020

Less than 12 months

September 30, 2021 December 31, 2020

Less than 12 months Less than 12 months

Value Gross Fair

Unrealized # of Unrealized # of

Losses securities Losses securities

government securities $ 1.3 $ 134.5 20 $ 114.9 $ 3,944.7 7

6 unchanged sentences

Total temporarily impaired securities $ 235.5 $ 8,703.7 1,125 $ 164.8 $ 6,555.4 315

12 months or longer

12 months or longer 12 months or longer

Value Gross Fair

Unrealized # of Unrealized # of

Losses securities Losses securities

government securities $ 411.5 $ 3,335.3 6 $ — $ — —

6 unchanged sentences

Total temporarily impaired securities $ 482.2 $ 4,111.1 100 $ 4.1 $ 44.2 12

Value Gross Fair

Unrealized # of Unrealized # of

Losses securities Losses securities

government securities $ 412.8 $ 3,469.8 26 $ 114.9 $ 3,944.7 7

2 unchanged sentences

Corporate securities (1)

239.0 6,131.0 690 42.0 1,394.0 164

Residential mortgage-backed 1.9 190.1 108 1.2 37.2 32

3 unchanged sentences

(1) Certain corporate securities contain multiple lots and fit the criteria of both aging groups.

Debt securities in an unrealized loss position as of June 30, 2021 did no t require an impairment recognized in earnings as the Company did not intend to sell these debt securities, as it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis and the difference in the fair value compared to the amortized cost was due to factors other than credit loss.

Debt securities in an unrealized loss position as of September 30, 2021 did not require an impairment recognized in earnings as the Company did not intend to sell these debt securities, it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis and the difference in the fair value compared to the amortized cost was due to factors other than credit loss.

Based upon this evaluation, the Company believes it has the ability to generate adequate amounts of cash from normal operations to meet cash requirements with a reasonable margin of safety without requiring the sale of impaired securities.

As of June 30, 2021, unrealized losses associated with debt securities are primarily due to widening credit spreads or rising risk free rates since purchase.

As of September 30, 2021, unrealized losses associated with debt securities are primarily due to widening credit spreads or rising risk-free rates since purchase.

The Company performed a detailed analysis of the financial performance of the underlying issues in an unrealized loss position and determined that recovery of the entire amortized cost of each impaired security is expected.

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For debt securities in an unrealized loss position, management first assesses whether the Company has the intent to sell, or whether it is more likely than not it will be required to sell the security before the amortized cost basis is fully recovered.

If either criteria is met, the amortized cost is written down to fair value through net gains on derivatives and investments as an impairment.

If either criteria is met, the amortized cost is written down to fair value through net gains (losses) on derivatives and investments as an impairment.

Debt securities in an unrealized loss position for which the Company does not have the intent to sell or is not more likely than not to sell the security before recovery to amortized cost are further evaluated to determine if the cause of the decline in fair value resulted from credit losses or other factors, which includes estimates about the operations of the issuer and future earnings potential.

14 unchanged sentences

The cash flow model incorporates actual cash flows on the mortgage-backed securities through the current period and then projects the remaining cash flows using a number of assumptions, including prepayment timing, default rates and loss severity.

Specifically, for prime and Alt-A

RMBS, the assumed default percentage is dependent on the severity of delinquency status, with foreclosures and real estate owned receiving higher rates, but also includes the currently performing loans.

Specifically, for prime and Alt-A RMBS, the assumed default percentage is dependent on the severity of delinquency status, with foreclosures and real estate owned receiving higher rates, but also includes the currently performing loans.

These estimates reflect a combination of data derived by third parties and internally developed assumptions.

2 unchanged sentences

When a credit loss is determined to exist and the present value of cash flows expected to be collected is less than the amortized cost of the security, an allowance for credit loss is recorded along with a charge to net gains (losses) on derivatives and investments, limited by the amount that the fair value is less than amortized cost.

Any remaining unrealized loss after recording the allowance for credit loss is the non-credit

amount and is recorded to other comprehensive income.

Any remaining unrealized loss after recording the allowance for credit loss is the non-credit amount and is recorded to other comprehensive income.

The allowance for credit loss for specific debt securities may be increased or reversed in subsequent periods due to changes in the assessment of the present value of cash flows that are expected to be collected.

Any changes to the allowance for credit loss is recorded as a provision for (or reversal of) credit loss expense in net gains (losses) on derivatives and investments.

When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off

with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses.

When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses.

Accrued interest receivables are presented separate from the amortized cost basis of debt securities.

Accrued interest receivables that are determined to be uncollectible are written off with a corresponding reduction to net investment income.

No accrued interest was written off during the three and six months ended June 30, 2021 and 2020.

No accrued interest was written off during the three and nine months ended September 30, 2021 and 2020.

The rollforward of the allowance for credit loss for available for sale securities by sector is as follows (in millions):

Three Months Ended June 30, 2021

Balance at April 1, 2021

Three Months Ended September 30, 2021 US

securities Other government securities Public

utilities Corporate securities Residential mortgage-backed Commercial mortgage-backed Other

asset-backed securities Total

Balance at July 1, 2021 $ — $ — $ — $ — $ 0.8 $ — $ 6.0 $ 6.8

Additions for which credit loss was not previously recorded — — — — 0.7 — — 0.7

1 unchanged sentence

Additions for purchases of PCD debt securities (1)

— — — — — — — —

Reductions from charge-offs — — — — — — — —

1 unchanged sentence

Securities intended/required to be sold before recovery of amortized cost basis — — — — — — — —

Balance at June 30, 2021

Three Months Ended June 30, 2020

Balance at April 1, 2020

Balance at September 30, 2021 (2)

$ — $ — $ — $ — $ 2.0 $ — $ 7.4 $ 9.4

Three Months Ended September 30, 2020 US

securities Other government securities Public

utilities Corporate securities Residential mortgage-backed Commercial mortgage-backed Other

asset-backed securities Total

Balance at July 1, 2020 $ — $ — $ — $ — $ 0.3 $ — $ 17.2 $ 17.5

Additions for which credit loss was not previously recorded — — — — — — — —

1 unchanged sentence

Additions for purchases of PCD debt securities (1)

— — — — — — — —

Reductions from charge-offs — — — — — — — —

1 unchanged sentence

Securities intended/required to be sold before recovery of amortized cost basis — — — — — — — —

Balance at June 30, 2020

Six Months Ended June 30, 2021

Balance at September 30, 2020 (2)

$ — $ — $ — $ — $ — $ — $ 17.4 $ 17.4

Nine Months Ended September 30, 2021 US

securities Other government securities Public

utilities Corporate securities Residential mortgage-backed Commercial mortgage-backed Other

asset-backed securities Total

Balance at January 1, 2021 $ — $ — $ — $ — $ — $ — $ 13.6 $ 13.6

2 unchanged sentences

Additions for purchases of PCD debt securities (1)

— — — — — — — —

Reductions from charge-offs — — — — — — — —

1 unchanged sentence

Securities intended/required to be sold before recovery of amortized cost basis — — — — — — — —

Balance at June 30, 2021 (2)

Six Months Ended June 30, 2020

Balance at September 30, 2021 (2)

$ — $ — $ — $ — $ 2.0 $ — $ 7.4 $ 9.4

Nine Months Ended September 30, 2020 US

securities Other government securities Public

utilities Corporate securities Residential mortgage-backed Commercial mortgage-backed Other

asset-backed securities Total

Balance at January 1, 2020 $ — $ — $ — $ — $ — $ — $ — $ —

2 unchanged sentences

Additions for purchases of PCD debt securities (1)

— — — — — — — —

Reductions from charge-offs — — — — — — — —

1 unchanged sentence

Securities intended/required to be sold before recovery of amortized cost basis — — — — — — — —

Balance at June 30, 2020 (2)

presents purchased credit-deteriorated (“PCD”) fixed maturity AFS securities.

Accrued interest receivable on debt securities totaled $ 397.2 million and $ 454.9 million as of June 30, 2021 and 2020, respectively, and was excluded from the estimate of credit losses for the three and six months ended June 30, 2021 and 2020.

Balance at September 30, 2020 (2)

$ — $ — $ — $ — $ — $ — $ 17.4 $ 17.4

(1) Represents purchased credit-deteriorated ("PCD") fixed maturity AFS securities.

(2) Accrued interest receivable on debt securities totaled $ 396.6 million and $ 492.3 million as of September 30, 2021 and 2020, respectively, and was excluded from the estimate of credit losses for the three and nine months ended September 30, 2021 and 2020.

Net Investment Income

The sources of net investment income were as follows (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Debt securities $ 271.7 $ 416.8 $ 872.2 $ 1,338.7

1 unchanged sentence

Mortgage loans 79.4 83.6 241.5 285.3

Policy loans 19.8 21.8 55.5 59.7

Limited partnerships 192.7 113.3 585.6 ( 26.0 )

6 unchanged sentences

Expenses related to consolidated entities (1)

( 7.5 ) ( 9.1 ) ( 24.1 ) ( 29.4 )

Other investment expenses (2)

( 0.8 ) ( 22.6 ) ( 45.3 ) ( 24.6 )

Total investment expenses ( 12.8 ) ( 35.5 ) ( 80.0 ) ( 66.4 )

5 unchanged sentences

and other expenses.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $ 10.3 million and $ 15.4 million for the three and six months ended June 30, 2021, respectively.

Investment income (expense) of $( 2.4 ) million and $ 36.9 million was recognized on securities carried at fair value recorded through income for the three and six months ended June 30, 2021, respectively.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $( 13.7 ) million and $( 43.6 ) million for the three and six months ended June 30, 2020, respectively.

Investment income (expense) of $( 67.0 ) million and $( 91.2 ) million was recognized on securities carried at fair value recorded through income for the three and six months ended June 30, 2020, respectively.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $ 5.9 million and $ 21.3 million for the three and nine months ended September 30, 2021, respectively.

Investment income (expense) of $( 2.2 ) million and $ 34.7 million was recognized on securities carried at fair value recorded through income for the three and nine months ended September 30, 2021, respectively.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $ 2.3 million and $( 41.3 ) million for the three and nine months ended September 30, 2020, respectively.

Investment income (expense) of $ 94.7 million and $ 3.5 million was recognized on securities carried at fair value recorded through income for the three and nine months ended September 30, 2020, respectively.

Net Gains (Losses) on Derivatives and Investments

The following table summarizes net gains (losses) on derivatives and investments (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Available-for-sale

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Available-for-sale securities

Realized gains on sale $ 28.3 $ 99.2 $ 149.1 $ 519.2

3 unchanged sentences

Credit loss income (expense) on mortgage loans 13.5 ( 31.9 ) 61.9 ( 65.8 )

13.4 ( 41.1 ) 62.2 ( 38.8 )

Net gains (losses) excluding derivatives and funds withheld assets 36.4 23.0 203.9 184.2

4 unchanged sentences

Net gains (losses) on funds withheld reinsurance treaties represents income (loss) from the sale of investments held in segregated funds withheld accounts in support of reinsurance agreements for which Jackson retains legal ownership of the underlying investments.

These gains (losses) are increased or decreased by changes in the embedded derivative liability related to the Athene Reinsurance Agreement and also includes (i) changes in the related funds withheld payable, as all economic performance of the investments held in the segregated accounts inure to the benefit of the reinsurers under the respective reinsurance agreements with each reinsurer, and (ii) amortization of the difference between book value and fair value of the investments as of the effective date of the reinsurance agreements with each reinsurer.

The aggregate fair value of securities sold at a loss for the three and six months ended June 30, 2021 was $ 887.5 million and $ 1,184.4 million, respectively, which was approximately 94 % of book value in both periods, respectively.

The aggregate fair value of securities sold at a loss for the three and six months ended June 30, 2020 was $ 568.7 million and $ 7,138.7 million, respectively, which was approximately 98 % of book value in both periods, respectively.

Proceeds from sales of available-for-sale

debt securities were $ 2.8 billion and $ 13.9 billion during the three months ended June 30, 2021 and 2020, respectively.

Proceeds from sales of available-for-sale

debt securities were $ 5.6 billion and $ 15.5 billion during the six months ended June 30, 2021 and 2020, respectively.

These gains (losses) are increased or decreased by changes in the embedded derivative liability related to the Athene Reinsurance Agreement and also include (i) changes in the related funds withheld payable, as all economic performance of the investments held in the segregated accounts inure to the benefit of the reinsurers under the respective reinsurance agreements with each reinsurer, and (ii) amortization of the difference between book value and fair value of the investments as of the effective date of the reinsurance agreements with each reinsurer.

The aggregate fair value of securities sold at a loss for the three and nine months ended September 30, 2021 was $ 160.7 million and $ 1,345.1 million, which was approximately 98 % and 95 % of book value, respectively.

The aggregate fair value of securities sold at a loss for the three and nine months ended September 30, 2020 was $ 107.0 million and $ 7,245.7 million, which was approximately 93 % and 97 % of book value, respectively.

Proceeds from sales of available-for-sale debt securities were $ 1.0 billion and $ 1.9 billion during the three months ended September 30, 2021 and 2020, respectively.

Proceeds from sales of available-for-sale debt securities were $ 6.6 billion and $ 17.4 billion during the nine months ended September 30, 2021 and 2020, respectively.

There are inherent uncertainties in assessing the fair values assigned to the Company’s investments and in determining whether a decline in fair value is other-than-temporary.

7 unchanged sentences

In 2017, the Company funded PPM Loan Holding Management Company, LLC, an affiliated investment entity facilitating the issuance of collateralized loan obligations.

The Company concluded that PPM Loan Management Holding Company,

LLC is a VIE and that the Company is the primary beneficiary as it has the power to direct the most significant activities affecting the performance of the fund as well as the obligation to absorb losses or the right to receive benefits that could potentially be significant to the fund.

The Company concluded that PPM Loan Management Holding Company, LLC is a VIE and that the Company is the primary beneficiary as it has the power to direct the most significant activities affecting the performance of the fund as well as the obligation to absorb losses or the right to receive benefits that could potentially be significant to the fund.

In 2020, PPM Loan Holding Management Company, LLC sold the interest in one of the four CLO issuances resulting in the reduction of consolidated assets and liabilities.

2 unchanged sentences

The Company concluded that the Private Equity Funds are VIEs and that the Company is the primary beneficiary as it has the power to direct the most significant activities affecting the performance of the funds as well as the obligation to absorb losses or the right to receive benefits that could potentially be significant to the funds.

In the fourth quarter of 2021, the Company entered into a commitment to invest up to $ 300 million in the newly formed Private Equity Fund VIII.

The Company’s exposure to loss is limited to the capital invested and unfunded capital commitments related to Private Equity Funds III – VII.

4 unchanged sentences

Asset and liability information for the consolidated VIEs included on the condensed consolidated balance sheets are as follows (in millions):

June 30, 2021

December 31, 2020

September 30, 2021 December 31, 2020

Debt securities, available for sale $ 1,350.7 $ 1,108.9

2 unchanged sentences

Limited partnerships 1,118.2 958.7

Debt owed to non-controlling

Cash 46.3 57.1

Other assets 23.8 10.2

Total assets $ 2,785.8 $ 2,366.4

Debt owed to non-controlling interests $ 1,006.4 $ 943.7

Other liabilities 355.2 200.5

4 unchanged sentences

Unconsolidated VIEs

The Company invests in certain LPs and LLCs that they have concluded are VIEs.

The Company invests in certain LPs and LLCs that it has concluded are VIEs.

Based on the analysis of these entities, the Company is not the primary beneficiary of the VIEs as it does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance.

1 unchanged sentence

Therefore the Company does not consolidate these VIEs and the carrying amounts of the Company’s investments in these LPs and LLCs are recognized in other invested assets on the consolidated balance sheets.

Unfunded capital commitments for these

investments are detailed in Note 14.

The Company’s exposure to loss is limited to the capital invested and unfunded capital commitments related to the LPs/LLCs, which was $ 3,317.8 million and $ 2,976.4 million as of June 30, 2021 and December 31, 2020, respectively.

Unfunded capital commitments for these investments are detailed in Note 14.

The Company’s exposure to loss is limited to the capital invested and unfunded capital commitments related to the LPs/LLCs, for both consolidated and unconsolidated VIEs, which was $ 3,338.0 million and $ 2,976.4 million as of September 30, 2021 and December 31, 2020, respectively.

The capital invested in an LP or LLC equals the original capital contributed, increased for additional capital contributed after the initial investment, and reduced for any returns of capital from the LP or LLC.

2 unchanged sentences

Based on the analysis of these entities, the Company is not the primary beneficiary of the VIEs.

Mutual funds for which the Company does not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entities are recognized in equity securities on the consolidated balance sheets and were $ 31.3 million and $ 23.6 million as of June 30, 2021 and December 31, 2020, respectively.

Mutual funds for which the Company does not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entities are recognized in equity securities on the consolidated balance sheets and were $ 31.1 million and $ 23.6 million as of September 30, 2021 and December 31, 2020, respectively.

The Company’s maximum exposure to loss on these mutual funds is limited to the amortized cost for these investments.

7 unchanged sentences

Commercial Mortgage Loans

Commercial mortgage loans of $ 11.1 billion and $ 10.2 billion at June 30, 2021 and December 31, 2020, respectively, are reported net of an allowance for credit losses of $ 113.9 million and $ 164.7 million at each date, respectively.

At June 30, 2021, commercial mortgage loans were collateralized by properties located in 38 states, the District of Columbia, and Europe.

Accrued interest receivable on commercial mortgage loans was $ 36.7 million and $ 32.3 million at June 30, 2021 and December 31, 2020, respectively.

Commercial mortgage loans of $ 10.8 billion and $ 10.2 billion at September 30, 2021 and December 31, 2020, respectively, are reported net of an allowance for credit losses of $ 86.0 million and $ 164.7 million at each date, respectively.

At September 30, 2021, commercial mortgage loans were collateralized by properties located in 38 states, the District of Columbia, and Europe.

Accrued interest receivable on commercial mortgage loans was $ 34.8 million and $ 32.3 million at September 30, 2021 and December 31, 2020, respectively.

Residential Mortgage Loans

Residential mortgage loans of $ 571.8 million and $ 448.6 million at June 30, 2021 and December 31, 2020, respectively, are reported net of an allowance for credit losses of $ 21.4 million and $ 14.5 million at each date, respectively.

Loans were collateralized by properties located in 48 states, the District of Columbia, and Europe.

Accrued interest receivable on residential mortgage loans was $ 3.1 million and $ 2.9 million at June 30, 2021 and December 31, 2020, respectively.

Residential mortgage loans of $ 942.1 million and $ 448.6 million at September 30, 2021 and December 31, 2020, respectively, are reported net of an allowance for credit losses of $ 10.4 million and $ 14.5 million at each date, respectively.

Loans were collateralized by properties located in 50 states, the District of Columbia, Mexico, and Europe.

Accrued interest receivable on residential mortgage loans was $ 13.6 million and $ 2.9 million at September 30, 2021 and December 31, 2020, respectively.

Mortgage Loan Concessions

In response to the adverse economic impact of the COVID-19

pandemic, the Company granted concessions to certain of its commercial mortgage loan borrowers, including payment deferrals and other loan modifications.

In response to the adverse economic impact of the COVID-19 pandemic, the Company granted concessions to certain of its commercial mortgage loan borrowers, including payment deferrals and other loan modifications.

The Company has elected the option under the Coronavirus Aid, Relief, and Economic Security Act, the Consolidated Appropriations Act of 2021, and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by bank regulatory agencies, not to account for or report qualifying concessions as troubled debt restructurings and does not classify such loans as past due during the payment deferral period.

Additionally, in accordance with the FASB’s published response to a COVID-19

Pandemic technical inquiry, the Company continues to accrue interest income on such loans that have deferred payment.

Additionally, in accordance with the FASB’s published response to a COVID-19 Pandemic technical inquiry, the Company

continues to accrue interest income on such loans that have deferred payment.

For some commercial mortgage loan borrowers (principally in the hotel and retail sectors), the Company granted concessions which were primarily interest and/or principal payment deferrals generally ranging from 6 to 14 months and, to a much lesser extent, maturity date extensions.

Repayment periods are generally within one year but may extend until maturity date.

Deferred commercial mortgage loan interest and principal payments were $ 18.6 million at June 30, 2021.

Deferred commercial mortgage loan interest and principal payments were $ 12.7 million at September 30, 2021.

The concessions granted had no impact on the Company’s results of operations or financial position as the Company has not granted concessions that would have been disclosed and accounted for as troubled debt restructurings.

7 unchanged sentences

The Company determined the forecastable period to be reasonable and supportable for a period of two years beyond the end of the reporting period.

Over the following one-year

period, the model reverts to the historical performance of the portfolio for the remainder of the contractual term of the loans.

Over the following one-year period, the model reverts to the historical performance of the portfolio for the remainder of the contractual term of the loans.

In cases where the Company does not have an appropriate length of historical performance, the relevant historical rate from an index or the lifetime expected credit loss calculated from the model may be used.

2 unchanged sentences

For individual loans or for types of loans for which the third-party model is deemed not suitable, the Company utilizes relevant current market data, industry data, and publicly available historical loss rates to calculate an estimate of the lifetime expected credit loss.

Mortgage loans on real estate deemed uncollectible are charged against the ACL, and subsequent recoveries, if any, are credited to the ACL, limited to the aggregate of amounts previously charged-off

and expected to be charged-off.

Mortgage loans on real estate deemed uncollectible are charged against the ACL, and subsequent recoveries, if any, are credited to the ACL, limited to the aggregate of amounts previously charged-off and expected to be charged-off.

Mortgage loans on real estate are presented net of the allowance for credit losses on the condensed consolidated balance sheets.

The following table provides a summary of the allowance for credit losses in the Company’s mortgage loan portfolios (in millions):

Three Months Ended June 30, 2021

Balance at April 1, 2021

Three Months Ended September 30, 2021 Apartment Hotel Office Retail Warehouse Residential Mortgage (2)

Balance at July 1, 2021 $ 26.7 $ 33.0 $ 19.7 $ 22.7 $ 11.8 $ 21.4 $ 135.3

Charge offs, net of recoveries — — — — — — —

1 unchanged sentence

mortgage loans — — — — — — —

Balance at June 30, 2021 (1)

Three Months Ended June 30, 2020

Balance at April 1, 2020

Cumulative effect of change in accounting principle

Provision ( 5.4 ) ( 17.5 ) 3.0 ( 6.8 ) ( 1.2 ) ( 11.0 ) ( 38.9 )

Balance at September 30, 2021 (1)

$ 21.3 $ 15.5 $ 22.7 $ 15.9 $ 10.6 $ 10.4 $ 96.4

Three Months Ended September 30, 2020 Apartment Hotel Office Retail Warehouse Total

Balance at July 1, 2020 $ 34.1 $ 11.4 $ 22.0 $ 18.0 $ 19.3 $ 104.8

Cumulative effect of change in

accounting principle —

Charge offs, net of recoveries — — — — — —

1 unchanged sentence

mortgage loans — — — — — —

Balance at June 30, 2020 (1)

Six Months Ended June 30, 2021

Provision 20.0 19.8 0.2 6.1 8.1 54.2

Balance at September 30, 2020 (1)

$ 54.1 $ 31.2 $ 22.2 $ 24.1 $ 27.4 $ 159.0

Nine Months Ended September 30, 2021 Apartment Hotel Office Retail Warehouse Residential Mortgage (2)

Balance at January 1, 2021 $ 57.9 $ 33.9 $ 24.9 $ 24.2 $ 23.8 $ 14.5 $ 179.2

2 unchanged sentences

mortgage loans — — — — — — —

Balance at June 30, 2021 (1)

Six Months Ended June 30, 2020

Provision ( 36.6 ) ( 18.4 ) ( 2.2 ) ( 8.3 ) ( 13.2 ) ( 4.1 ) ( 82.8 )

Balance at September 30, 2021 (1)

$ 21.3 $ 15.5 $ 22.7 $ 15.9 $ 10.6 $ 10.4 $ 96.4

Nine Months Ended September 30, 2020 Apartment Hotel Office Retail Warehouse Total

Balance at January 1, 2020 $ 3.7 $ 0.8 $ 1.1 $ 2.0 $ 1.3 $ 8.9

Cumulative effect of change in accounting principle

Cumulative effect of change in

accounting principle 23.6 5.0 7.8 10.3 15.3 62.0

Charge offs, net of recoveries — — — — — —

1 unchanged sentence

mortgage loans — — — — — —

Balance at June 30, 2020 (1)

Accrued interest receivable totaled $ 39.8 million and $ 29.9 million as of June 30, 2021 and 2020, respectively, and was excluded from the estimate of credit losses.

During the three and six months ended June 30, 2021, $ 136 thousand of accrued interest was written off relating to loans that were greater than 90

days delinquent or in the process of foreclosure.

Provision 26.8 25.4 13.3 11.8 10.8 88.1

Balance at September 30, 2020 (1)

$ 54.1 $ 31.2 $ 22.2 $ 24.1 $ 27.4 $ 159.0

(1) Accrued interest receivable totaled $ 48.4 million and $ 29.9 million as of September 30, 2021 and 2020, respectively, and was excluded from the estimate of credit losses.

(2) During the three and nine months ended September 30, 2021, $ 178 thousand of accrued interest was written off relating to loans that were greater than 90 days delinquent or in the process of foreclosure.

The Company’s mortgage loans that are current and in good standing are accruing interest.

Interest is not accrued on loans greater than 90 days delinquent and in process of foreclosure.

Interest is not accrued on loans greater than 90 days delinquent and in process of foreclosure, when deemed uncollectible.

Delinquency status is determined from the date of the first missed contractual payment.

At June 30, 2021 there was $ 1.0 million of recorded investment, $ 1.0 million of unpaid principal balance, no related loan allowance, $ 0.4 million of average recorded investment, and no investment income recognized on impaired residential mortgage loans without a valuation allowance.

At December 31, 2020, there was no recorded investment, no unpaid principal balance, no related loan allowance, no average recorded investment, and no investment income recognized on impaired loans.

At September 30, 2021, there was $ 2.7 million of recorded investment, $ 2.9 million of unpaid principal balance, no related loan allowance, $ 1.0 million of average recorded investment, and no investment income recognized on impaired residential mortgage loans.

At December 31, 2020, there were no impaired mortgages.

The following tables provide information about the credit quality and vintage year of commercial mortgage loans (in millions):

June 30, 2021

September 30, 2021

2021 2020 2019 2018 2017 Prior Revolving

Loans Total % of

Loan to value ratios:

Less than 70% $ 1,167.0 $ 1,324.8 $ 1,347.2 $ 1,635.7 $ 1,412.7 $ 2,764.1 $ 4.1 $ 9,655.6 89 %

70% - 80% 319.6 53.7 312.5 119.6 49.0 179.9 — 1,034.3 10 %

80% - 100% — — 42.9 4.8 27.4 9.6 — 84.7 1 %

Greater than 100% — — 14.7 — — — — 14.7 — %

Total $ 1,486.6 $ 1,378.5 $ 1,717.3 $ 1,760.1 $ 1,489.1 $ 2,953.6 $ 4.1 $ 10,789.3 100 %

Debt service coverage ratios:

Greater than 1.20x $ 932.5 $ 903.0 $ 1,601.9 $ 1,395.9 $ 1,355.4 $ 2,689.6 $ 4.1 $ 8,882.4 82 %

1.00x - 1.20x 554.1 346.7 96.9 90.9 11.0 69.1 — 1,168.7 11 %

Less than 1.00x — 128.8 18.5 273.3 122.7 194.9 — 738.2 7 %

Total $ 1,486.6 $ 1,378.5 $ 1,717.3 $ 1,760.1 $ 1,489.1 $ 2,953.6 $ 4.1 $ 10,789.3 100 %

December 31, 2020

2020 2019 2018 2017 2016 Prior Revolving

Loans Total % of

Loan to value ratios:

Less than 70% $ 1,346.5 $ 1,315.0 $ 1,752.8 $ 1,678.7 $ 1,320.5 $ 1,846.3 $ 4.0 $ 9,263.8 90 %

70% - 80% 66.2 348.1 127.9 80.0 94.3 128.5 — 845.0 8 %

80% - 100% — 91.7 4.9 46.8 — 26.7 — 170.1 2 %

Greater than 100% — — — — — — — — — %

Total $ 1,412.7 $ 1,754.8 $ 1,885.6 $ 1,805.5 $ 1,414.8 $ 2,001.5 $ 4.0 $ 10,278.9 100 %

Debt service coverage ratios:

Greater than 1.20x $ 1,078.4 $ 1,601.7 $ 1,738.0 $ 1,794.4 $ 1,408.8 $ 1,880.6 $ 4.0 $ 9,505.9 93 %

1.00x - 1.20x 334.3 137.9 89.7 11.1 — 88.8 — 661.8 6 %

Less than 1.00x — 15.2 57.9 — 6.0 32.1 — 111.2 1 %

June 30, 2021

Greater than 90 Days

In the Process of

Total Carrying

Total $ 1,412.7 $ 1,754.8 $ 1,885.6 $ 1,805.5 $ 1,414.8 $ 2,001.5 $ 4.0 $ 10,278.9 100 %

September 30, 2021

In Good Standing (1)

Restructured Greater than 90 Days Delinquent In the Process of Foreclosure Total Carrying Value

Apartment $ 3,807.8 $ — $ — $ — $ 3,807.8

Hotel 1,052.3 — — — 1,052.3

Office 1,942.4 — — — 1,942.4

Retail 2,130.8 — — — 2,130.8

Warehouse 1,856.0 — — — 1,856.0

Total commercial 10,789.3 — — — 10,789.3

Residential (2)

648.2 — 291.2 2.7 942.1

Total $ 11,437.5 $ — $ 291.2 $ 2.7 $ 11,731.4

December 31, 2020

Greater than 90 Days

In the Process of

Total Carrying

In Good Standing (1)

Restructured Greater than 90 Days Delinquent In the Process of Foreclosure Total Carrying Value

Apartment $ 3,905.3 $ — $ — $ — $ 3,905.3

Hotel 882.7 — — — 882.7

Office 1,569.7 — — — 1,569.7

Retail 1,942.4 — — — 1,942.4

Warehouse 1,978.8 — — — 1,978.8

Total commercial 10,278.9 — — — 10,278.9

Residential 448.6 — — — 448.6

At June 30, 2021 and December 31, 2020, includes mezzanine loans of $ 73.3 million and $ 44.6 million in the Apartment category, $ 207.7 million and $ 116.8 million in the Office category, $ 38.9 million and $ 33.4 million in the Hotel category, and $ 49.6 million and $ 48.1 million in the Warehouse category, respectively.

Includes $ 69.1 million of loans purchased when the loans were greater than 90 days delinquent and are supported with insurance or other guarantees provided by various governmental programs.

As of June 30, 2021 and December 31, 2020, there were no commercial mortgage loans involved in troubled debt restructuring, and there were no stressed loans for which the Company is dependent, or expects to be dependent, on the underlying property to satisfy repayment.

As of June 30, 2021 and December 31, 2020, $ 1.0 million and nil of residential mortgage loans, respectively, were in the process of foreclosure.

Total $ 10,727.5 $ — $ — $ — $ 10,727.5

(1) At September 30, 2021 and December 31, 2020, includes mezzanine loans of $ 206.1 million and $ 44.6 million in the Apartment category, $ 67.7 million and $ 33.4 million in the Hotel category, $ 249.3 million and $ 116.8 million in the Office category, $ 26.7 million and nil in the Retail category, and $ 32.2 million and $ 48.1 million in the Warehouse category, respectively.

(2) Includes $ 286.3 million of loans purchased when the loans were greater than 90 days delinquent and are supported with insurance or other guarantees provided by various governmental programs, and $ 0.7 million of loans in process of foreclosure.

As of September 30, 2021 and December 31, 2020, there were no commercial mortgage loans involved in troubled debt restructuring, and there were no stressed loans for which the Company is dependent, or expects to be dependent, on the underlying property to satisfy repayment.

Other Invested Assets

Other invested assets primarily includes investments in limited partnerships (“LPs”), Federal Home Loan Bank capital stock, and real estate.

At June 30, 2021 and December 31, 2020, investments in limited partnerships had carrying values of $ 2,391.6 million and $ 1,991.3 million, respectively.

At both June 30, 2021 and December 31, 2020, Federal Home Loan Bank capital stock had carrying value of $ 125.4 million.

At June 30, 2021 and December 31, 2020, real estate totaling $ 246.2 million and $ 250.0 million, respectively, included foreclosed properties with a book value of $ 0.7 million at both June 30, 2021 and December 31, 2020.

In June 2021, the Company entered into an arrangement to sell $ 420.4 million of limited partnership investments, of which $ 235.8 million was sold in second quarter of 2021, $ 168.0

million is expected to be sold in third quarter of 2021, and the remainder is to be sold by January 2022.

Other invested assets primarily includes investments in limited partnerships (“LPs”), Federal Home Loan Bank ("FHLB") capital stock, and real estate.

At September 30, 2021 and December 31, 2020, investments in limited partnerships had carrying values of $ 2,400.7 million and $ 1,991.3 million, respectively.

At both September 30, 2021 and December 31, 2020, FHLB capital stock had carrying value of $ 125.4 million.

At September 30, 2021 and December 31, 2020, real estate totaling $ 244.3 million and $ 250.0 million, respectively, included foreclosed properties with a book value of $ 0.7 million at both September 30, 2021 and December 31, 2020.

In June 2021, the Company entered into an arrangement to sell $ 420.4 million of limited partnership investments, of which $ 235.8 million and $ 168.0 million was sold in second and third quarter of 2021, respectively, and the remainder is to be sold by January 2022.

The limited partnerships that are expected to be sold are carried at estimated sales price.

The Company will reinvest in new limited partnerships as attractive opportunities become available.

Securities Lendin g

The Company expects to reinvest in new limited partnerships as attractive opportunities become available.

Securities Lending

The Company has entered into securities lending agreements with agent banks whereby blocks of securities are loaned to third parties, primarily major brokerage firms.

As of June 30, 2021 and December 31, 2020, the estimated fair value of loaned securities was $ 22.9 million and $ 12.9 million, respectively.

As of September 30, 2021 and December 31, 2020, the estimated fair value of loaned securities was $ 20.2 million and $ 12.9 million, respectively.

The agreements require a minimum of 102 percent of the fair value of the loaned securities to be held as collateral, calculated on a daily basis.

To further minimize the credit risks related to these programs, the financial condition of counterparties is monitored on a regular basis.

At June 30, 2021 and December 31, 2020, cash collateral received in the amount of $ 23.5 million and $ 13.3 million, respectively, was invested by the agent banks and included in cash and cash equivalents of the Company.

At September 30, 2021 and December 31, 2020, cash collateral received in the amount of $ 20.7 million and $ 13.3 million, respectively, was invested by the agent banks and included in cash and cash equivalents of the Company.

A securities lending payable for the overnight and continuous loans is included in liabilities in the amount of cash collateral received.

4 unchanged sentences

These agreements are accounted for as financing transactions, with the assets and associated liabilities included in the condensed consolidated balance sheets.

As of June 30, 2021 and December 31, 2020, short-term borrowings under such agreements averaged $ 1,785.3 million and $ 454.9 million, respectively, with weighted average interest rates of 0.07 % and 0.16 %, respectively.

At June 30, 2021 and December 31, 2020, the outstanding repurchase agreement balance was $ 2,257.1 million and $ 1,100.0 million, respectively, collateralized with U.S.

As of September 30, 2021 and December 31, 2020, short-term borrowings under such agreements averaged $ 1,734.3 million and $ 454.9 million, respectively, with weighted average interest rates of 0.08 %

and 0.16 %, respectively.

At September 30, 2021 and December 31, 2020, the outstanding repurchase agreement balance was $ 306.0 million and $ 1,100.0 million, respectively, collateralized with U.S.

Treasury notes and maturing within 30 days, and was included within other liabilities in the consolidated balance sheets.

In the event of a decline in the fair value of the pledged collateral under these agreements, the Company may be required to transfer cash or additional securities as pledged collateral.

Interest expense totaled $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2021, respectively, and nil and $ 0.2 million for the three and six months ended June 30, 2020.

The highest level of short-term borrowings at any month end was $ 2,257.2 million and nil million for the six months ended June 30, 2021 and 2020, respectively.

Interest expense totaled $ 0.4 million and $ 1.0 million for the three and nine months ended September 30, 2021, respectively, and $ 0.2 million and $ 0.4 million for the three and nine months ended September 30, 2020.

The highest level of short-term borrowings at any month end was $ 2,349.1 million and $ 1,485.6 million for the nine months ended September 30, 2021 and 2020, respectively.

Derivative Instruments

5 unchanged sentences

A summary of the aggregate contractual or notional amounts and fair values of the Company’s freestanding and embedded derivative instruments are as follows (in millions):

June 30, 2021

September 30, 2021

Assets Liabilities

Contractual/ Contractual/ Net

Notional Fair Notional Fair Fair

Value Amount (1)

Freestanding derivatives

2 unchanged sentences

Equity index futures (2)

— — 17,329.8 — —

Equity index put options 25,000.0 339.0 — — 339.0

1 unchanged sentence

Interest rate swaps - cleared (2)

1,500.0 — — — —

Put-swaptions 15,500.0 104.8 2,500.0 4.9 99.9

Treasury futures (2)

3,986.6 — 13.9 — —

Total freestanding derivatives 74,473.5 1,102.5 20,852.3 39.5 1,063.0

Embedded derivatives-product liabilities

Embedded derivatives

VA embedded derivatives (3)

N/A — N/A 3,091.6 ( 3,091.6 )

FIA embedded derivatives (4)

Total embedded derivatives

N/A — N/A 1,439.7 ( 1,439.7 )

Total embedded derivatives N/A — N/A 4,531.3 ( 4,531.3 )

Derivatives related to funds withheld under reinsurance treaties

2 unchanged sentences

Funds withheld embedded derivative (5)

N/A — N/A 271.7 ( 271.7 )

Total derivatives related to funds withheld under reinsurance treaties 1,009.4 39.4 68.9 272.6 ( 233.2 )

Total $ 75,482.9 $ 1,141.9 $ 20,921.2 $ 4,843.4 $ ( 3,701.5 )

(1) The notional amount for swaps and swaptions represents the stated principal balance used as a basis for calculating payments.

7 unchanged sentences

December 31, 2020

Assets Liabilities

Contractual/ Contractual/ Net

Notional Fair Notional Fair Fair

Value Amount (1)

Freestanding derivatives

2 unchanged sentences

Equity index futures (2)

— — 27,651.0 — —

Equity index put options 27,000.0 178.0 — — 178.0

1 unchanged sentence

Interest rate swaps - cleared (2)

— — 1,500.0 8.2 ( 8.2 )

Put-swaptions 1,000.0 99.5 — — 99.5

Treasury futures (2)

8,520.5 — 3.8 — —

Credit default swaps 0.5 — — — —

2 unchanged sentences

VA embedded derivatives (3)

N/A — N/A 5,592.1 ( 5,592.1 )

FIA embedded derivatives (4)

Total embedded derivatives

N/A — N/A 1,483.9 ( 1,483.9 )

Total embedded derivatives N/A — N/A 7,076.0 ( 7,076.0 )

Derivatives related to funds withheld under reinsurance treaties

2 unchanged sentences

Funds withheld embedded derivative (5)

N/A — N/A 826.6 ( 826.6 )

Total derivatives related to funds withheld under reinsurance treaties 82.7 0.2 769.0 839.9 ( 839.7 )

Total $ 68,381.8 $ 2,219.8 $ 30,939.8 $ 7,959.0 $ ( 5,739.2 )

(1) The notional amount for swaps and swaptions represents the stated principal balance used as a basis for calculating payments.

7 unchanged sentences

The following table reflects the results of the Company’s derivatives, including gains (losses) and change in fair value of freestanding derivative instruments and embedded derivatives (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Derivatives excluding funds withheld under reinsurance treaties

4 unchanged sentences

Interest rate swaps — ( 29.2 ) ( 148.2 ) 661.6

Interest rate swaps -

Interest rate swaps - cleared ( 9.6 ) — ( 59.9 ) —

Put-swaptions ( 61.6 ) ( 18.4 ) 41.6 246.7

10 unchanged sentences

Total net gains (losses) on derivative instruments including derivative instruments related to funds withheld under reinsurance treaties $ ( 1,165.3 ) $ ( 2,339.0 ) $ ( 805.2 ) $ ( 6,165.0 )

Company’s trade agreements for freestanding, over-the-counter

derivatives, contain credit downgrade provisions that allow a party to assign or terminate derivative transactions if the counterparty’s credit rating declines below an established limit.

At June 30, 2021 and December 31, 2020, the fair value of the Company’s net non-cleared,

over-the-counter

derivative assets by counterparty were $ 1,427.8 million and $ 2,184.7 million, respectively, and held collateral was $ 1,465.1 million and $ 2,124.2 million, respectively, related to these agreements.

At June 30, 2021 and December 31, 2020, the fair value of the Company’s net non-cleared,

over-the-counter

derivative liabilities by counterparty were nil and $ 13.1 million, respectively, and provided collateral was $ 0.1 million and $ 25.7 million, respectively, related to these agreements.

If all of the downgrade provisions had been triggered at June 30, 2021 and December 31, 2020, in aggregate, the Company would have had to disburse $ 37.3 million and nil , respectively, to counterparties, representing the net fair values of derivatives by counterparty, less collateral held.

All of the Company’s trade agreements for freestanding, over-the-counter derivatives, contain credit downgrade provisions that allow a party to assign or terminate derivative transactions if the counterparty’s credit rating declines below an established limit.

At September 30, 2021 and December 31, 2020, the fair value of the Company’s net non-cleared, over-the-counter derivative assets by counterparty were $ 1,101.4 million and $ 2,184.7 million, respectively, and held collateral was $ 1,125.3 million and $ 2,124.2 million, respectively, related to these agreements.

At September 30, 2021 and December 31, 2020, the fair value of the Company’s net non-cleared, over-the-counter derivative liabilities by counterparty were nil and $ 13.1 million, respectively, and provided collateral was $ 0.9 million and $ 25.7 million, respectively, related to these agreements.

If all of the downgrade provisions had been triggered at September 30, 2021 and December 31, 2020, in aggregate, the Company would have had to disburse $ 23.0 million and nil , respectively, to counterparties, representing the net fair values of derivatives by counterparty, less collateral held.

Offsetting Assets and Liabilities

he Company’s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and collateral arrangements.

The Company’s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and collateral arrangements.

A master netting arrangement with a counterparty creates a right of offset for amounts due to and due from that same counterparty that is enforceable in the event of a default or bankruptcy.

1 unchanged sentence

The following tables present the gross and net information about the Company’s financial instruments subject to master netting arrangements (in millions):

June 30, 2021

Offset in the

Balance Sheets

the Condensed

September 30, 2021

Recognized Gross

Offset in the Condensed

Balance Sheets Net Amounts

the Condensed Consolidated

Balance Sheets

2 unchanged sentences

Instruments (1)

Collateral Securities

Collateral (2)

Financial Assets:

Freestanding derivative assets

Freestanding derivative

assets $ 1,141.9 $ — $ 1,141.9 $ 40.4 $ 583.0 $ 470.5 $ 48.0

Financial Liabilities:

Freestanding derivative liabilities

Freestanding derivative

liabilities $ 40.4 $ — $ 40.4 $ 40.4 $ — $ — $ —

Securities loaned 20.7 — 20.7 — 20.7 — —

1 unchanged sentence

Total financial liabilities $ 367.1 $ — $ 367.1 $ 40.4 $ 20.7 $ 306.0 $ —

Represents the amount that could be offset under master netting or similar arrangements that management elects not to offset on the condensed consolidated balance sheet s

(1) Represents the amount that could be offset under master netting or similar arrangements that management elects not to offset on the condensed consolidated balance sheets.

(2) Excludes initial margin amounts for exchange-traded derivatives.

December 31, 2020

Offset in the

Balance Sheets

the Condensed

Recognized Gross

Offset in the Condensed

Balance Sheets Net Amounts

the Condensed Consolidated

Balance Sheets

2 unchanged sentences

Instruments (1)

Collateral Securities

Collateral (2)

Financial Assets:

Freestanding derivative assets

Freestanding derivative

assets $ 2,219.8 $ — $ 2,219.8 $ 35.1 $ 1,097.9 $ 890.0 $ 196.8

Financial Liabilities:

Freestanding derivative liabilities

Freestanding derivative

liabilities $ 56.4 $ — $ 56.4 $ 35.1 $ 13.1 $ — $ 8.2

Securities loaned 13.3 — 13.3 — 13.3 — —

1 unchanged sentence

Total financial liabilities $ 1,169.7 $ — $ 1,169.7 $ 35.1 $ 26.4 $ 1,100.0 $ 8.2

epresents the amount that could be offset under master netting or similar arrangements that management elects not to offset on the condensed consolidated balance sheets.

(1) Represents the amount that could be offset under master netting or similar arrangements that management elects not to offset on the condensed consolidated balance sheets.

(2) Excludes initial margin amounts for exchange-traded derivatives.

1 unchanged sentence

The actual amount of collateral may be greater than amounts presented in the tables.

The above tables exclude net embedded derivative liabilities of $ 3,725.6 million and $ 7,076.0 million as of June 30, 2021 and December 31, 2020, respectively, as these derivatives are not subject to master netting arrangements.

The above tables also exclude the funds withheld embedded derivative liability of $ 372.9 million and $ 826.6 million at June 30, 2021 and December 31, 2020.

The above tables exclude net embedded derivative liabilities of $ 4,531.3 million and $ 7,076.0 million as of September 30, 2021 and December 31, 2020, respectively, as these derivatives are not subject to master netting arrangements.

The above tables also exclude the funds withheld embedded derivative liability of $ 271.7 million and $ 826.6 million at September 30, 2021 and December 31, 2020.

In addition, repurchase agreements are presented within other liabilities in the condensed consolidated balance sheets.

Fair Value Measurements

he following table summarizes the fair value and carrying value of the Company’s financial instruments (in millions):

June 30, 2021

December 31, 2020

The following table summarizes the fair value and carrying value of the Company’s financial instruments (in millions):

September 30, 2021 December 31, 2020

Value Carrying

Debt securities (1)

$ 53,757.5 $ 53,757.5 $ 60,457.4 $ 60,457.4

Equity securities 290.1 290.1 193.1 193.1

1 unchanged sentence

Limited partnerships 2,400.7 2,400.7 1,991.3 1,991.3

Policy loans (1)

4,511.9 4,511.9 4,523.5 4,523.5

Freestanding derivative instruments 1,141.9 1,141.9 2,219.8 2,219.8

4 unchanged sentences

Annuity reserves (2)

41,543.6 49,092.1 45,638.8 54,005.7

Reserves for guaranteed investment contracts (3)

994.4 1,032.8 1,275.5 1,332.1

Trust instruments supported by funding agreements (3)

Federal Home Loan Bank funding agreements

6,322.3 6,564.2 8,383.9 8,701.8

FHLB funding agreements (3)

1,521.8 1,550.9 1,478.4 1,421.3

Funds withheld payable under reinsurance treaties (1)

29,771.4 29,771.4 31,971.5 31,971.5

Debt 2,670.2 2,746.9 322.0 412.3

Securities lending payable 20.7 20.7 13.3 13.3

1 unchanged sentence

Repurchase agreements 306.0 306.0 1,100.0 1,100.0

Federal Home Loan Bank advances

FHLB advances — — 380.0 380.0

Separate account liabilities 237,096.2 237,096.2 219,062.9 219,062.9

3 unchanged sentences

The following is a discussion of the methodologies used to determine fair values of the financial instruments measured on both a recurring and nonrecurring basis reported in the following tables.

ebt and Equity Securities

Debt and Equity Securities

The fair values for debt and equity securities are determined using information available from independent pricing services, broker-dealer quotes, or internally derived estimates.

18 unchanged sentences

As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the available market data, the price received from the third party may be adjusted accordingly.

For those securities that were internally valued at June 30, 2021 and December 31, 2020, the pricing model used by the Company utilizes current spread levels of similarly rated securities to determine the market discount rate for the security.

Furthermore, appropriate risk premiums for illiquidity and non-performance

are incorporated in the discount rate.

For those securities that were internally valued at September 30, 2021 and December 31, 2020, the pricing model used by the Company utilizes current spread levels of similarly rated securities to determine the market discount rate for the security.

Furthermore, appropriate risk premiums for illiquidity and non-performance are incorporated in the discount rate.

Cash flows, as estimated by the Company using issuer-specific default statistics and prepayment assumptions, are discounted to determine an estimated fair value.

4 unchanged sentences

Fair values for limited partnership interests, which are included in other invested assets, is generally determined using the proportion of the Company’s investment in the value of the net assets of each fund (“NAV equivalent”) as a practical expedient for fair value, and generally, are recorded on a three-month lag.

No adjustments to these amounts were deemed necessary at June 30, 2021 and December 31, 2020.

No adjustments to these amounts were deemed necessary at September 30, 2021 and December 31, 2020.

As a result of using the net asset value per share practical expedient, limited partnership interests are not classified in the fair value hierarchy.

5 unchanged sentences

These investments are classified as Level 3 in the fair value hierarchy.

ortgage Loans

Mortgage Loans

Fair values are generally determined by discounting expected future cash flows at current market interest rates, inclusive of a credit spread, for similar quality loans.

17 unchanged sentences

Freestanding derivative instruments classified as Level 3 include interest rate contingent options that are valued by third-party pricing services utilizing significant unobservable inputs.

HLBI Capital Stock

FHLBI Capital Stock

FHLBI capital stock, which is included in other invested assets, can only be sold to FHLBI at a constant price of $ 100 per share.

4 unchanged sentences

Funds Withheld Payable Under Reinsurance Treaties

he funds withheld payable under reinsurance treaties includes both the funds withheld payable and the funds withheld embedded derivative.

The funds withheld payable under reinsurance treaties includes both the funds withheld payable and the funds withheld embedded derivative.

Certain funds withheld payable are held at fair value under the fair value option.

2 unchanged sentences

The funds withheld payable are considered Level 2, while certain funds withheld payable at fair value under the fair value option and the funds withheld embedded derivative are considered Level 3, respectively, in the fair value hierarchy.

The fair value of

embedded derivatives associated with funds withheld reinsurance contracts is determined based upon a total return swap technique referencing the fair value of the investments held under the reinsurance contract and included in the Company’s condensed consolidated balance sheet.

The fair value of embedded derivatives associated with funds withheld reinsurance contracts is determined based upon a total return swap

technique referencing the fair value of the investments held under the reinsurance contract and included in the Company’s condensed consolidated balance sheet.

Separate Account Assets and Liabilities

11 unchanged sentences

Variable annuity contracts issued by the Company offer various guaranteed minimum death, withdrawal, income and accumulation benefits.

Certain benefits, including non-life

contingent components of guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum withdrawal benefits for life (“GMWB for Life”), guaranteed minimum accumulation benefits (“GMAB”), and the reinsurance recoverable on the Company’s guaranteed minimum income benefits (“GMIB”), are recorded at fair value.

Certain benefits, including non-life contingent components of guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum withdrawal benefits for life (“GMWB for Life”), guaranteed minimum accumulation benefits (“GMAB”), and the reinsurance recoverable on the Company’s guaranteed minimum income benefits (“GMIB”), are recorded at fair value.

Guaranteed benefits that are not subject to fair value accounting are accounted for as insurance benefits.

The Company discontinued offering the GMIB in 2009 and GMAB in 2011.

GMABs and non-life

contingent components of GMWB and GMWB for Life contracts are recorded at fair value with changes in fair value recorded in net gains (losses) on derivatives and investments.

GMABs and non-life contingent components of GMWB and GMWB for Life contracts are recorded at fair value with changes in fair value recorded in net gains (losses) on derivatives and investments.

The fair value of the reserve is based on the expectations of future benefit payments and certain future fees associated with the benefits.

6 unchanged sentences

Accordingly, the GMIB reinsurance agreement is recorded at fair value, with changes in fair value recorded in net gains (losses) on derivatives and investments.

inability to economically reinsure or hedge new issues of the GMIB, the Company discontinued offering the benefit in 2009.

Due to the inability to economically reinsure or hedge new issues of the GMIB, the Company discontinued offering the benefit in 2009.

Fair values for GMWB, GMWB for Life, and GMAB embedded derivatives, as well as GMIB reinsurance recoverables, are calculated using internally developed models because active, observable markets do not exist for those guaranteed benefits.

6 unchanged sentences

Volatility assumptions are based on a weighting of available market data for implied market volatility for durations up to 10 years, grading to a historical volatility level by year 15, where such long-term historical volatility levels contain an explicit risk margin.

Additionally, non-performance

risk is incorporated into the calculation through the use of discount rates based on a blend of observed market yields on debt for life insurers with similar credit ratings to the Company and matrix pricing data for expected yields on Jackson Financial debt (either actual debt issuance or indicative quotes) adjusted to operating company levels.

Additionally, non-performance risk is incorporated into the calculation through the use of discount rates based on a blend of observed market yields on debt for life insurers with similar credit ratings to the Company and matrix pricing data for expected yields on Jackson Financial debt (either actual debt issuance or indicative quotes) adjusted to operating company levels.

Risk margins are also incorporated into the model assumptions, particularly for policyholder behavior.

4 unchanged sentences

However, the ultimate settlement amount of the asset or liability, which is currently unknown, could likely be significantly different than this fair value.

Fair values for the Company’s surplus notes and other long-term debt are generally determined by prices obtained from independent broker dealers or discounted cash flow models.

Fair values for the Company’s surplus notes and short-term and long-term debt are generally determined by prices obtained from independent broker dealers or discounted cash flow models.

Such prices are derived from market observable inputs and are classified as Level 2.

4 unchanged sentences

Carrying value of the Company’s repurchase agreements, which are included in other liabilities, is considered a reasonable estimate of fair value due to their short-term maturities and are classified as Level 2.

Federal Home Loan Bank Advances

Carrying value of the Company’s Federal Home Loan Bank advances, which are included in other liabilities, is considered a reasonable estimate of fair value due to their short-term maturities and are classified as Level 2.

FHLB Advances

Carrying value of the Company’s FHLB advances, which are included in other liabilities, is considered a reasonable estimate of fair value due to their short-term maturities and are classified as Level 2.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize the Company’s assets and liabilities that are carried at fair value by hierarchy levels (in millions):

June 30, 2021

September 30, 2021

Total Level 1 Level 2 Level 3

Debt securities

8 unchanged sentences

Limited partnerships 11.3 10.6 0.7

Policy loans 3,487.5 — — 3,487.5

Freestanding derivative instruments 1,141.9 — 1,141.9 —

2 unchanged sentences

Separate account assets 237,096.2 — 237,096.2 —

Total $ 298,544.9 $ 7,081.1 $ 287,579.6 $ 3,884.2

Embedded derivative liabilities (1)

$ 4,531.3 $ — $ 1,439.7 $ 3,091.6

Funds withheld payable under reinsurance treaties (2)

3,931.6 — — 3,931.6

Freestanding derivative instruments 40.4 — 40.4 —

$ 8,503.3 $ — $ 1,480.1 $ 7,023.2

(1) Includes the embedded derivative liabilities of $ 3,091.6 million related to GMWB reserves included in reserves for future policy benefits and claims payable and $ 1,439.7 million of fixed index annuities included in other contract holder funds on the condensed consolidated balance sheets.

1 unchanged sentence

December 31, 2020

Total Level 1 Level 2 Level 3

Debt securities

8 unchanged sentences

Limited partnerships 0.8 — — 0.8

Policy loans 3,454.2 — — 3,454.2

Freestanding derivative instruments 2,219.8 — 2,219.8 —

2 unchanged sentences

Separate account assets 219,062.9 — 219,062.9 —

Total $ 287,747.3 $ 7,210.1 $ 276,609.4 $ 3,927.8

Embedded derivative liabilities (1)

$ 7,076.0 $ — $ 1,483.9 $ 5,592.1

Funds withheld payable under reinsurance treaties (2)

4,453.1 — — 4,453.1

Freestanding derivative instruments 56.4 — 56.4 —

$ 11,585.5 $ — $ 1,540.3 $ 10,045.2

(1) Includes the embedded derivative liabilities of $ 5,592.1 million related to GMWB reserves included in reserves for future policy benefits and claims payable and $ 1,483.9 million of fixed index annuities included in other contract holder funds on the condensed consolidated balance sheets.

2 unchanged sentences

Level 3 Assets and Liabilities by Price Source

able below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources (in millions):

June 30, 2021

The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources (in millions):

September 30, 2021

Assets Total Internal External

Debt securities:

$ 7.5 $ — $ 7.5

Other asset-backed securities

Equity securities

109.8 1.2 108.6

Limited partnerships

3,487.5 3,487.5 —

GMIB reinsurance recoverable

278.6 278.6 —

$ 3,884.2 $ 3,768.1 $ 116.1

Embedded derivative liabilities (1)

$ 3,091.6 $ 3,091.6 $ —

Funds withheld payable under reinsurance treaties (2)

3,931.6 3,931.6 —

$ 7,023.2 $ 7,023.2 $ —

(1) Includes the embedded derivative related to GMWB reserves.

(2) Includes the Athene embedded derivative liability.

December 31, 2020

Assets Total Internal External

Debt securities:

$ 28.7 $ — $ 28.7

Other asset-backed securities

Equity securities

103.6 1.2 102.4

Limited partnerships

3,454.2 3,454.2 —

GMIB reinsurance recoverable

340.4 340.4 —

$ 3,927.8 $ 3,796.6 $ 131.2

Embedded derivative liabilities (1)

$ 5,592.1 $ 5,592.1 $ —

Funds withheld payable under reinsurance treaties (2)

4,453.1 4,453.1 —

$ 10,045.2 $ 10,045.2 $ —

(1) Includes the embedded derivative related to GMWB reserves.

(2) Includes the Athene embedded derivative liability.

External pricing sources for securities represent unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

1 unchanged sentence

The table below presents quantitative information on significant internally-priced Level 3 assets and liabilities (in millions):

As of June 30, 2021

Significant Unobservable

Assumption or

Impact of Increase in

Input on Fair Value

GMIB reinsurance recoverable

Discounted cash flow

Mortality (1)

As of September 30, 2021

Value Valuation Technique(s) Significant Unobservable Input(s) Assumption or Input Range Impact of Increase in Input on Fair Value

GMIB reinsurance recoverable $ 278.6 Discounted cash flow Mortality (1)

0.01 % - 23.52 %

7 unchanged sentences

Long-term Equity Volatility (6)

Embedded derivative liabilities

Discounted cash flow

Mortality (1)

18.50 % - 22.86 %

Embedded derivative liabilities $ 3,091.6 Discounted cash flow Mortality (1)

0.04 % - 21.53 %

0.16 % - 30.26 %

Utilization (3)

10 unchanged sentences

(2) Base lapse rates vary by contract-level factors, such as product type, surrender charge schedule and optional benefits election.

Lapse rates are further adjusted based on the degree to which a guaranteed benefit is in-the-money,

with lower lapse applying when contracts are more in-the-money.

Lapse rates are further adjusted based on the degree to which a guaranteed benefit is in-the-money, with lower lapse applying when contracts are more in-the-money.

Lapse rates are also adjusted to reflect lower lapse expectations when GMWB benefits are utilized.

7 unchanged sentences

As of December 31, 2020

Significant Unobservable

Assumption or

Impact of Increase in

Input on Fair Value

GMIB reinsurance recoverable

Discounted cash flow

Mortality (1)

Value Valuation Technique(s) Significant Unobservable Input(s) Assumption or Input Range Impact of Increase in Input on Fair Value

GMIB reinsurance recoverable $ 340.4 Discounted cash flow Mortality (1)

0.01 % - 23.52 %

8 unchanged sentences

18.50 % - 22.47 %

Embedded derivative liabilities

Discounted cash flow

Mortality (1)

Embedded derivative liabilities $ 5,592.1 Discounted cash flow Mortality (1)

0.04 % - 21.53 %

6 unchanged sentences

0.33 % - 1.57 %

Long-term Equity

Volatility (6)

Long-term Equity Volatility (6)

18.50 % - 22.47 %

3 unchanged sentences

(2) Base lapse rates vary by contract-level factors, such as product type, surrender charge schedule and optional benefits election.

Lapse rates are further adjusted based on the degree to which a guaranteed benefit is in-the-money,

with lower lapse applying when contracts are more in-the-money.

Lapse rates are further adjusted based on the degree to which a guaranteed benefit is in-the-money, with lower lapse applying when contracts are more in-the-money.

Lapse rates are also adjusted to reflect lower lapse expectations when GMWB benefits are utilized.

7 unchanged sentences

Sensitivity to Changes in Unobservable Inputs

The following is a general description of sensitivities of significant unobservable inputs and their impact on the fair value measurement for the assets and liabilities reflected in the table above.

June 30, 2021 and December 31, 2020, securities of $ 2.0 million are fair valued using techniques incorporating unobservable inputs and are classified in Level 3 of the fair value hierarchy.

For these assets, their unobservable inputs and ranges of possible inputs do not materially affect their fair valuations and have been excluded from the quantitative information in the table above.

Policy loans that support funds withheld reinsurance agreements that are held at fair value under the fair value option on the Company’s condensed consolidated balance sheet are excluded from the table above.

The following is a general description of sensitivities of significant unobservable inputs and their impact on the fair value measurement for the assets and liabilities reflected in the tables above.

At both September 30, 2021 and December 31, 2020, securities of $ 2.0 million are fair valued using techniques incorporating unobservable inputs and are classified in Level 3 of the fair value hierarchy.

For these assets, their unobservable inputs and ranges of possible inputs do not materially affect their fair valuations and have been excluded from the quantitative information in the tables above.

These policy loans do not have a stated maturity and the balances, plus accrued investment income, are repaid either by the policyholder or with proceeds from the policy.

Due to the collateralized nature of policy loans and unpredictable timing of payments, the Company believes the carrying value of policy loans, which includes accrued investment income, approximates fair value and have been classified as Level 3 within the fair value hierarchy.

Funds withheld payable under reinsurance treaties, for funds withheld payable held at fair value under the fair value option and the Athene embedded derivative, are excluded from the table above.

Funds withheld payable under reinsurance treaties, for funds withheld payable held at fair value under the fair value option and the Athene embedded derivative, are excluded from the tables above.

The fair value of Funds withheld payable under reinsurance treaties, excluding the Athene embedded derivative, is determined based upon the fair value of the investments held by the Company related to the Company’s funds withheld payable under reinsurance treaties.

9 unchanged sentences

The more significant policyholder behavior actuarial assumptions include benefit utilization, fund allocation, lapse, and mortality.

The tables below provide rollforwards for the three and six months ended June 30, 2021 and 2020 of the financial instruments for which significant unobservable inputs (Level 3) are used in the fair value measurement.

Gains and losses in the table below include changes in fair value due partly to observable and unobservable factors.

The tables below provide rollforwards for the three and nine months ended September 30, 2021 and 2020 of the financial instruments for which significant unobservable inputs (Level 3) are used in the fair value measurement.

Gains and losses in the tables below include changes in fair value due partly to observable and unobservable factors.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities.

1 unchanged sentence

Therefore, the impact of the derivative instruments reported in Level 3 may vary significantly from the total income effect of the hedged instruments.

Total Realized/Unrealized

Gains (Losses) Included in

Three Months Ended June 30, 2021

Comprehensive

Issuances and

Fair Value as

Total Realized/Unrealized Gains (Losses) Included in

Three Months Ended September 30, 2021 Fair Value as of July 1, 2021

Net Income Other Comprehensive Income Purchases, Sales, Issuances and Settlements Transfers in and/or (out of) Level 3 Fair Value as of September 30, 2021

Debt securities

4 unchanged sentences

GMIB reinsurance recoverable 267.2 11.4 — — — 278.6

Policy Loans 3,537.8 ( 135.9 ) — 85.6 — 3,487.5

Embedded derivative liabilities $ ( 2,235.7 ) $ ( 855.9 ) $ — $ — $ — $ ( 3,091.6 )

Funds withheld payable under reinsurance treaties ( 4,081.5 ) 235.6 0.5 ( 86.2 ) — ( 3,931.6 )

Total Realized/Unrealized

Gains (Losses) Included in

Three Months Ended June 30, 2020

Fair Value as

Comprehensive

Issuances and

Fair Value as

Total Realized/Unrealized Gains (Losses) Included in

Three Months Ended September 30, 2020 Fair Value as of July 1, 2020

Net Income Other Comprehensive Income Purchases, Sales, Issuances and Settlements Transfers in and/or (out of) Level 3 Fair Value as of September 30, 2020

Debt securities

3 unchanged sentences

GMIB reinsurance recoverable 435.5 ( 27.6 ) — — — 407.9

Policy loans 3,605.0 ( 140.2 ) — ( 17.1 ) — 3,447.7

Embedded derivative liabilities $ ( 9,067.8 ) $ 1,370.8 $ — $ — $ — $ ( 7,697.0 )

Funds withheld payable under reinsurance

Total Realized/Unrealized

Gains (Losses) Included in

Six Months Ended June 30, 2021

Fair Value as

of January 1,

Comprehensive

Issuances and

Fair Value as

Funds withheld payable under reinsurance treaties ( 4,055.3 ) 885.6 1.3 16.4 — ( 3,152.0 )

Total Realized/Unrealized Gains (Losses) Included in

Nine Months Ended September 30, 2021 Fair Value as of January 1, 2021

Net Income Other Comprehensive Income Purchases, Sales, Issuances and Settlements Transfers in and/or (out of) Level 3 Fair Value as of September 30, 2021

Debt securities

4 unchanged sentences

GMIB reinsurance recoverable 340.4 ( 61.8 ) — — — 278.6

Policy loans 3,454.2 ( 10.8 ) — 44.1 — 3,487.5

Embedded derivative liabilities $ ( 5,592.1 ) $ 2,500.5 $ — $ — $ — $ ( 3,091.6 )

Funds withheld payable under reinsurance treaties ( 4,453.1 ) 565.3 2.3 ( 46.1 ) — ( 3,931.6 )

Total Realized/Unrealized

Gains (Losses) Included in

Six Months Ended June 30, 2020

Fair Value as

of January 1,

Comprehensive

Issuances and

Fair Value as

Total Realized/Unrealized Gains (Losses) Included in

Nine Months Ended September 30, 2020 Fair Value as of January 1, 2020

Net Income Other Comprehensive Income Purchases, Sales, Issuances and Settlements Transfers in and/or (out of) Level 3 Fair Value as of September 30, 2020

Debt securities

3 unchanged sentences

GMIB reinsurance recoverable 302.8 105.1 — — — 407.9

Policy loans 3,585.8 ( 19.3 ) — ( 118.8 ) — 3,447.7

Embedded derivative liabilities $ ( 2,790.4 ) $ ( 4,906.6 ) $ — $ — $ — $ ( 7,697.0 )

Funds withheld payable under reinsurance treaties ( 3,760.3 ) 483.4 ( 0.1 ) 125.0 — ( 3,152.0 )

The components of the amounts included in purchases, sales, issuances and settlements for the three and six months ended June 30, 2021 and 2020 shown above are as follows (in millions):

Three Months Ended June 30, 2021

The components of the amounts included in purchases, sales, issuances and settlements for the three and nine months ended September 30, 2021 and 2020 shown above are as follows (in millions):

Three Months Ended September 30, 2021 Purchases Sales Issuances Settlements Total

Debt securities

2 unchanged sentences

Limited partnerships — — — — —

Policy loans — — 155.4 ( 69.8 ) 85.6

Total $ 3.5 $ ( 0.2 ) $ 155.4 $ ( 69.8 ) $ 88.9

Funds withheld payable under reinsurance treaties $ — $ — $ ( 187.0 ) $ 100.8 $ ( 86.2 )

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020 Purchases Sales Issuances Settlements Total

Debt securities

1 unchanged sentence

Equity securities — ( 0.3 ) — — ( 0.3 )

Limited partnerships — ( 0.1 ) — — ( 0.1 )

Policy loans — — 153.6 ( 170.7 ) ( 17.1 )

Total $ 30.3 $ ( 17.3 ) $ 153.6 $ ( 170.7 ) $ ( 4.1 )

Funds withheld payable under reinsurance treaties $ — $ — $ ( 158.4 ) $ 174.8 $ 16.4

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021 Purchases Sales Issuances Settlements Total

Debt securities

2 unchanged sentences

Limited partnerships — ( 0.1 ) — — ( 0.1 )

Policy loans — — 191.6 ( 147.5 ) 44.1

Total $ 9.6 $ ( 8.2 ) $ 191.6 $ ( 147.5 ) $ 45.5

Funds withheld payable under reinsurance treaties $ — $ — $ ( 398.2 ) $ 352.1 $ ( 46.1 )

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020 Purchases Sales Issuances Settlements Total

Debt securities

1 unchanged sentence

Equity securities 1.6 ( 32.8 ) — — ( 31.2 )

Limited partnerships — ( 0.1 ) — — ( 0.1 )

Policy loans — — 205.3 ( 324.1 ) ( 118.8 )

Total $ 51.5 $ ( 52.1 ) $ 205.3 $ ( 324.1 ) $ ( 119.4 )

Funds withheld payable under reinsurance treaties $ — $ — $ ( 211.2 ) $ 336.2 $ 125.0

For the three and six months ended June 30, 2021 and 2020, there were no transfers from Level 3 to NAV equivalent.

For the three and six months ended June 30, 2021, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 13.4 million and $ 22.9 million, respectively, and transfers from Level 2 to Level 3 were $ 21.1

million and $ 18.2 million, respectively.

For the three and six months ended June 30, 2020, transfers from Level 3 to Level 2 of the fair value hierarchy were

$ 27.7 million and

$ 0.1 million, respectively, and transfers from Level 2 to Level 3 were nil and $ 38.9 million, respectively.

For the three and nine months ended September 30, 2021 and 2020, there were no transfers from Level 3 to NAV equivalent.

For the three and nine months ended September 30, 2021, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 28.9 million and $ 51.8 million, respectively, and transfers from Level 2 to Level 3 were $ 2.5 million and $ 20.7 million, respectively.

For the three and nine months ended September 30, 2020, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 36.3 million and $ 36.4 million, respectively, and transfers from Level 2 to Level 3 were $ 7.9 million and $ 46.8 million, respectively.

The portion of gains (losses) included in net income or other comprehensive income ("OCI") attributable to the change in unrealized gains and losses on Level 3 financial instruments still held was as follows (in millions):

Three Months Ended June 30,

Three Months Ended September 30,

Net Income Included in OCI Included in

Net Income Included in OCI

Debt securities

Corporate securities $ 0.1 $ — $ 4.8 $ —

Other asset-backed securities

Equity securities 6.0 — 1.0 —

4 unchanged sentences

Funds withheld payable under reinsurance treaties 109.8 — 763.9 —

Six Months Ended June 30,

Nine Months Ended September 30,

Net Income Included in OCI Included in

Net Income Included in OCI

Debt securities

Corporate securities $ 1.8 $ — $ ( 0.5 ) $ —

Other asset-backed securities

Equity securities 12.8 — ( 32.1 ) —

6 unchanged sentences

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value (in millions).

June 30, 2021

December 31, 2020

Mortgage loans

FHLB capital stock

September 30, 2021 December 31, 2020

Fair Value Hierarchy Level Carrying

Value Carrying

Mortgage loans Level 3 $ 11,731.4 $ 12,211.7 $ 10,727.5 $ 11,348.9

Policy loans Level 3 1,024.4 1,024.4 1,069.3 1,069.3

FHLBI capital stock Level 1 125.4 125.4 125.4 125.4

Annuity reserves (1)

Level 3 $ 37,012.3 $ 44,560.8 $ 38,562.8 $ 46,929.7

Reserves for guaranteed investment contracts (2)

Level 3 994.4 1,032.8 1,275.5 1,332.1

Trust instruments supported by funding agreements (2)

Federal Home Loan Bank funding agreements (2)

Funds withheld payable under reinsurance treaties

Debt- all other

Securities lending payable

Federal Home Loan Bank advances

Repurchase agreements

Level 3 6,322.3 6,564.2 8,383.9 8,701.8

FHLB funding agreements (2)

Level 3 1,521.8 1,550.9 1,478.4 1,421.3

Funds held under reinsurance treaties Level 2 25,839.7 25,839.7 27,518.4 27,518.4

Debt Level 2 2,670.2 2,746.9 322.0 412.3

Securities lending payable Level 2 20.7 20.7 13.3 13.3

FHLB advances Level 2 — — 380.0 380.0

Repurchase agreements Level 2 306.0 306.0 1,100.0 1,100.0

Separate Account Liabilities (3)

Level 2 237,096.2 237,096.2 219,062.9 219,062.9

(1) Annuity reserves represent only the components of other contract holder funds that are considered to be financial instruments.

2 unchanged sentences

Fair Value Option

The Company has elected the fair value option for funds withheld assets, which are held as collateral for reinsurance, totaling $ 3,703.6 million and $ 3,622.0 million at June 30, 2021 and December 31, 2020, respectively, as previously discussed above.

The Company has elected the fair value option for certain funds withheld assets, which are held as collateral for reinsurance, totaling $ 3,654.3 million and $ 3,622.0 million at September 30, 2021 and December 31, 2020, respectively, as discussed above.

PPM America is a related-party of Jackson.

2 unchanged sentences

The Company concluded that these funds are VIEs and that the Company is the primary beneficiary as they have both the power to direct the most significant activities of the VIE as well as the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

As such, the assets within these funds are consolidated into Jackson’s statement of financial position.

PPM elected the fair value option for debt securities within these funds, totaling $ 1,267.6 million and $ 1,108.9 million at June 30, 2021 and December 31, 2020, respectively.

As such, the assets within these funds are consolidated into the Company’s statement of financial position.

The Company elected the fair value option for debt securities within these funds, totaling $ 1,350.7 million and $ 1,108.9 million at September 30, 2021 and December 31, 2020, respectively.

These debt securities are reflected on the Company’s condensed consolidated balance sheet as debt securities, at fair value under the fair value option.

2 unchanged sentences

The balances of, and changes, in deferred acquisition costs were as follows (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Balance, beginning of period $ 13,897.0 $ 12,336.8

Deferrals of acquisition costs 592.1 537.7

Amortization related to:

Operating amortization

Non-operating amortization

related to Athene transaction

Total amortization (expense) benefit

Unrealized investment (gains)

Amortization ( 551.1 ) 854.4

Write-off of amortization related to Athene transaction — ( 625.8 )

Unrealized investment (gains) losses 78.8 271.2

Balance, end of period $ 14,016.8 $ 13,374.3

5 unchanged sentences

These include both direct and assumed accident and health business, direct and assumed life insurance business, and certain institutional annuities.

fixed and fixed-index annuity product liabilities in exchange for a $ 1.2 billion ceding commission, which was subject to a post-closing adjustment.

As indicated in Note 1, on June 18, 2020, the Company’s subsidiary, Jackson, entered into a funds withheld coinsurance agreement with Athene effective June 1, 2020 to reinsure on 100 % quota share basis, a block of Jackson’s in-force fixed and fixed-index annuity product liabilities in exchange for a $ 1.2 billion ceding commission, which was subject to a post-closing adjustment.

Jackson allocated investments with a statutory book value of approximately $ 25.6 billion in support of reserves associated with the transaction to a segregated custody account, which investments are subject to an investment management agreement between Jackson and Apollo Insurance Solutions Group, LP ("Apollo"), an Athene affiliate.

To further support its obligations under the coinsurance agreement, Athene procured $ 1.2 billion in letters of credit for Jackson’s benefit and has established a trust account for Jackson’s benefit funded with assets with a book value of approximately $ 69.5 million.

In September 2020, the post-closing settlement resulted in ceded premium of $ 6.3 million and a decrease of $ 28.5 million in ceding commission.

Pursuant to the Athene coinsurance agreement, the Company holds certain assets as collateral.

At June 30, 2021 and December 31, 2020, assets held as collateral in the segregated custody account were $ 26.6 billion and $ 28.3 billion, respectively.

At September 30, 2021 and December 31, 2020, assets held as collateral in the segregated custody account were $ 29.8 billion and $ 28.3 billion, respectively.

The Company’s GMIBs are reinsured with an unrelated party and due to the net settlement provisions of the reinsurance agreement, meet the definition of a derivative.

3 unchanged sentences

The Company has three retro treaties with Swiss Reinsurance Company Ltd.

Pursuant to these retro treaties, the Company ceded to SRZ on a 100 % coinsurance basis, subject to pre-existing

reinsurance with other parties, certain blocks of business.

Pursuant to these retro treaties, the Company ceded to SRZ on a 100 % coinsurance basis, subject to pre-existing reinsurance with other parties, certain blocks of business.

These blocks of business include disability income and accident and health business, a mix of life and annuity insurance business, and corporate owned life insurance business.

The following assets and liabilities were held in support of reserves associated with the Company’s funds withheld reinsurance agreements and were reported in the respective financial statement line items in the condensed consolidated balance sheets (in millions):

June 30, 2021

December 31, 2020

September 30, 2021 December 31, 2020

Debt securities $ 20,617.7 $ 24,642.4

1 unchanged sentence

Mortgage loans 4,713.1 2,985.5

Policy loans 3,503.9 3,470.8

Derivative instruments, net 38.4 ( 13.1 )

4 unchanged sentences

Total assets (2)

$ 29,638.7 $ 31,859.9

Funds held under reinsurance treaties (1)

$ 29,771.4 $ 31,971.5

Total liabilities $ 29,771.4 $ 31,971.5

Includes funds withheld embedded derivative of $ 372.9 million and $ 826.6 million at June 30, 2021 and December 31, 2020, respectively.

Certain assets are reported at amortized cost while the fair value of those assets are reported in the embedded derivative in the funds withheld liability.

(1) Includes funds withheld embedded derivative of $ 271.7 million and 826.6 million at September 30, 2021 and December 31, 2020, respectively.

(2) Certain assets are reported at amortized cost while the fair value of those assets is reported in the embedded derivative in the funds withheld liability.

The sources of income related to funds withheld under reinsurance treaties reported in net investment income in the consolidated income statements were as follows (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Debt securities $ 183.5 $ 210.2 $ 581.0 $ 282.1

1 unchanged sentence

Mortgage loans 49.3 14.1 127.3 24.6

Policy loans 76.0 79.3 237.7 233.8

Limited partnerships 16.1 — 16.7 —

2 unchanged sentences

Other investment expenses on funds withheld assets (1)

( 26.3 ) ( 28.6 ) ( 81.8 ) ( 36.7 )

Total net investment income on funds withheld reinsurance treaties $ 299.6 $ 277.1 $ 884.5 $ 506.0

1 unchanged sentence

The gains and losses on funds withheld reinsurance treaties as a component of net gains (losses) on derivatives and investments in the condensed consolidated income statements were as follows (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Available-for-sale

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Available-for-sale securities

Realized gains on sale $ 80.7 $ 52.6 $ 339.0 $ 1,650.7

3 unchanged sentences

Credit loss expense on mortgage loans 25.5 ( 4.7 ) 20.9 ( 22.4 )

Net gains (losses) on non-derivative

Other ( 19.8 ) — ( 31.9 ) —

Net gains (losses) on non-derivative investments 84.0 44.3 312.3 1,620.9

Net gains (losses) on derivative instruments 34.0 — 53.3 ( 204.2 )

Net gains (losses) on funds withheld payable under reinsurance treaties (1)

( 233.2 ) ( 422.7 ) ( 350.5 ) ( 626.4 )

Total net gains (losses) on derivatives and investments $ ( 115.2 ) $ ( 378.4 ) $ 15.1 $ 790.3

Includes the Athene embedded derivative gain (loss) of $( 544.3 ) million and $ 453.7 million for the three and six months ended June 30, 2021, respectively, and $( 279.0 ) million for both the three and six months ended June 30, 2020.

(1) Includes the Athene embedded derivative gain (loss) of $ 101.2 million and $ 554.9 million for the three and nine months ended September 30, 2021, respectively, and $( 189.6 ) million and $( 468.6 ) million for the three and nine months ended September 30, 2020, respectively.

While the economic benefits of the funds withheld assets flow to the respective reinsurers, Jackson retains physical possession and legal ownership of the investments supporting the reserves.

2 unchanged sentences

Components of the Company’s reinsurance recoverable were as follows (in millions):

September 30, December 31,

Life $ 5,878.4 $ 5,963.9

Accident and health 554.0 568.7

1 unchanged sentence

Other annuity benefits (1)

26,176.9 27,535.8

Claims liability and other 864.6 860.8

Total $ 33,752.5 $ 35,269.5

(1) Other annuity benefits primarily attributable to fixed and fixed index annuities reinsured with Athene.

Reserves for Future Policy Benefits and Claims Payable and Other Contract Holder Funds

he following table sets forth the Company’s reserves for future policy benefits and claims payable balances (in millions):

The following table sets forth the Company’s reserves for future policy benefits and claims payable balances (in millions):

September 30, December 31,

Traditional life $ 4,276.0 $ 4,535.3

Guaranteed benefits (1)

6,039.0 8,508.5

Claims payable 1,042.0 1,109.5

1 unchanged sentence

Group payout annuities 4,971.4 5,220.3

Primarily includes the embedded derivative liabilities related to the GMWB reserve.

Other 828.7 859.3

Total $ 18,399.3 $ 21,490.1

(1) Primarily i ncludes the embedded derivative liabilities related to the GMWB reserve.

For traditional life insurance contracts, which include term and whole life, reserves are determined using the net level premium method and assumptions as of the issue date or acquisition date as to mortality, interest rates, lapse and expenses plus provisions for adverse deviation.

2 unchanged sentences

The following table sets forth the Company’s liabilities for other contract holder funds balances (in millions):

September 30, December 31,

Interest-sensitive life $ 11,651.8 $ 11,835.5

2 unchanged sentences

Fixed index annuity (1)

13,547.4 14,209.2

GICs, funding agreements and FHLB advances 8,838.5 11,137.8

Includes the embedded derivative liabilities related to fixed index annuity of $ 1,489.9 million and $ 1,483.9 million at June 30, 2021 and December 31, 2020, respectively.

Total $ 60,465.9 $ 64,538.4

(1) Includes the embedded derivative liabilities related to fixed index annuity of $ 1,439.7 million and $ 1,483.9 million at September 30, 2021 and December 31, 2020, respectively.

For interest-sensitive life contracts, liabilities approximate the policyholder’s account value, plus the remaining balance of the fair value adjustment related to previously acquired business, which is further discussed below.

The liability for fixed index annuities is based on three components, 1) the imputed value of the underlying guaranteed host contract, 2) the fair value of the embedded option component of the contract, and 3) the liability for guaranteed benefits related to the optional lifetime income rider.

For fixed annuities, variable annuity fixed option, and other investment contracts, as detailed in the above table, the liability is the policyholder’s account value, plus the unamortized balance of the fair value adjustment related to previously acquired business.

At June 30, 2021, the Company had interest sensitive life business with minimum guaranteed interest rates ranging from 2.5 % to 6.0 % with a 4.68 % average guaranteed rate and fixed interest rate annuities with minimum guaranteed rates ranging from 1.0 % to 5.5 % and a 2.03 % average guaranteed rate.

liabilities, based on the difference between the guaranteed interest rate and an assumed new money guaranteed interest rate at acquisition.

For fixed annuities, variable annuity fixed option, and other investment contracts, as included in the above table, the liability is the policyholder’s account value, plus the unamortized balance of the fair value adjustment related to previously acquired business.

For payout annuities, as included in the above table, reserves are determined under the methodology for limited-payment contracts (for those with significant life contingencies) or using a constant yield method and assumptions as of the issue date for mortality, interest rates, lapse and expenses plus provisions for adverse deviations.

At September 30, 2021, the Company had interest sensitive life business with minimum guaranteed interest rates ranging from 2.5 % to 6.0 % with a 4.68 % average guaranteed rate and fixed interest rate annuities with minimum guaranteed rates ranging from 1.0 % to 5.5 % and a 2.01 % average guaranteed rate.

The Company recorded a fair value adjustment at acquisition related to certain annuity and interest sensitive liability blocks of business to reflect the cost of the interest guarantees within the in-force liabilities, based on the difference between the guaranteed interest rate and an assumed new money guaranteed interest rate at acquisition.

This adjustment was recorded in reserves for future policy benefits and claims payable.

This reserve is reassessed at the end of each period, taking into account changes in the in-force

This reserve is reassessed at the end of each period, taking into

account changes in the in-force block.

Any resulting change in the reserve is recorded as a change in reserve through the condensed consolidated income statements.

At both June 30, 2021 and December 31, 2020, approximately 95 % of the Company’s annuity account values correspond to crediting rates that are at the minimum guaranteed interest rates.

The following tables show the distribution of th e fixed int

erest rate annuities’ account values within the presented ranges of minimum guaranteed interest rates (in millions):

June 30, 2021

Account Value

Guaranteed Interest Rate

At both September 30, 2021 and December 31, 2020, approximately 95 % of the Company’s annuity account values correspond to crediting rates that are at the minimum guaranteed interest rates.

The following tables show the distribution of the fixed interest rate annuities’ account values within the presented ranges of minimum guaranteed interest rates (in millions):

September 30, 2021

Guaranteed Interest Rate Account Value

Fixed Fixed Index Variable Total

1.0% $ 140.0 $ 253.9 $ 6,241.7 $ 6,635.6

>1.0% - 2.0% 58.1 1.4 224.2 283.7

>2.0% - 3.0% 1,131.3 183.0 3,310.4 4,624.7

>3.0% - 4.0% 602.5 — — 602.5

>4.0% - 5.0% 277.7 — — 277.7

>5.0% - 5.5% 72.0 — — 72.0

Subtotal 2,281.6 438.3 9,776.3 12,496.2

Ceded reinsurance 12,330.0 13,109.3 — 25,439.3

Total $ 14,611.6 $ 13,547.6 $ 9,776.3 $ 37,935.5

December 31, 2020

Account Value

Guaranteed Interest Rate

Guaranteed Interest Rate Account Value

Fixed Fixed Index Variable Total

1.0% $ 92.1 $ 164.5 $ 6,501.6 $ 6,758.2

>1.0% - 2.0% 63.3 2.7 235.7 301.7

>2.0% - 3.0% 1,162.1 189.9 3,356.6 4,708.6

>3.0% - 4.0% 622.5 — — 622.5

>4.0% - 5.0% 280.3 — — 280.3

>5.0% - 5.5% 73.2 — — 73.2

Subtotal 2,293.5 357.1 10,093.9 12,744.5

Ceded reinsurance 12,923.7 13,852.1 — 26,775.8

At June 30, 2021 and December 31, 2020, approximately 81 % and 80 %, respectively, of the Company’s interest sensitive life business account values correspond to crediting rates that are at the minimum guaranteed interest rates.

Total $ 15,217.2 $ 14,209.2 $ 10,093.9 $ 39,520.3

At September 30, 2021 and December 31, 2020, approximately 80 % of the Company’s interest sensitive life business account values correspond to crediting rates that are at the minimum guaranteed interest rates.

The following table shows the distribution of the interest sensitive life business account values within the presented ranges of minimum guaranteed interest rates, excluding the business that is subject to the previously mentioned retro treaties (in millions):

June 30, 2021

December 31, 2020

Guaranteed Interest Rate

Guaranteed Interest Rate September 30, 2021 December 31, 2020

Account Value - Interest Sensitive Life

>2.0% - 3.0% $ 254.8 $ 269.6

>3.0% - 4.0% 2,753.8 2,819.5

>4.0% - 5.0% 2,412.1 2,488.2

>5.0% - 6.0% 1,984.9 2,044.6

Subtotal 7,405.6 7,621.9

Retro treaties 4,246.2 4,213.6

Total $ 11,651.8 $ 11,835.5

The Company has established a $ 23.0 billion aggregate Global Medium Term Note program.

Jackson National Life Global Funding was formed as a statutory business trust, solely for the purpose of issuing Medium Term Note instruments to institutional investors, the proceeds of which are deposited with the Company and secured by the issuance of funding agreements.

The carrying values at June 30, 2021 and December 31, 2020 totaled $ 6.3 billion and $ 8.4 billion, respectively.

The carrying values at September 30, 2021 and December 31, 2020 totaled $ 6.3 billion and $ 8.4 billion, respectively.

Those Medium Term Note instruments issued in a foreign currency have been hedged for changes in exchange rates using cross-currency swaps.

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Advances are in the form of short-term or long-term notes or funding agreements issued to FHLBI.

At both June 30, 2021 and December 31, 2020, the Company held $ 125.4 million of FHLBI capital stock, supporting $ 1.8 billion and $ 1.9 billion in funding agreements, short-term and long-term borrowing capacity at June 30, 2021 and December 31, 2020, respectively.

At both September 30, 2021 and December 31, 2020, the Company held $ 125.4 million of FHLBI capital stock, supporting $ 1.6 billion and $ 1.9 billion in funding agreements, short-term and long-term borrowings at September 30, 2021 and December 31, 2020, respectively.

Certain Nontraditional Long-Duration Contracts and Variable Annuity Guarantees

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Separate account net investment income, net investment realized and unrealized gains and losses, and the related liability changes are offset within the same line item in the condensed consolidated income statements.

At June 30, 2021 and December 31, 2020, the Company provided variable annuity contracts with guarantees, for which the net amount at risk is defined as the amount of guaranteed benefit in excess of current account value, as follows (dollars in millions):

June 30, 2021

Net Amount at

Average Period

until Expected

Annuitization

At September 30, 2021 and December 31, 2020, the Company provided variable annuity contracts with guarantees, for which the net amount at risk is defined as the amount of guaranteed benefit in excess of current account value, as follows (dollars in millions):

Minimum Return Account

Value Net Amount at Risk Weighted Average Attained Age Average Period until Expected Annuitization

September 30, 2021

Return of net deposits plus a minimum return

$ 184,766.9 $ 2,286.5 68.6 years

GMWB - Premium only 0 % 2,883.1 9.9

GMWB 0 - 5 %*

GMAB - Premium only 0 % — —

Highest specified anniversary account value minus withdrawals post-anniversary

Highest specified anniversary account value

minus withdrawals post-anniversary

GMDB 14,223.6 301.1 69.7 years

GMWB - Highest anniversary only 3,728.2 69.8

Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary

GMWB 633.5 47.8

Combination net deposits plus minimum return,

highest specified anniversary account value

minus withdrawals post-anniversary

9,475.4 695.6 71.8 years

1,638.3 496.6 0.5 years

GMWB 0 - 8 %*

172,918.5 5,775.1

Weighted Average Attained Age Average Period until Expected Annuitization

Minimum Return Account

Value Net Amount at Risk

December 31, 2020

Net Amount at

Average Period

until Expected

Annuitization

Return of net deposits plus a minimum return

$ 170,510.2 $ 2,339.5 67.3 years

GMWB - Premium only 0 % 2,858.1 11.7

GMWB 0 - 5 %*

GMAB - Premium only 0 % 39.4 —

Highest specified anniversary account value minus withdrawals post-anniversary

Highest specified anniversary account value

minus withdrawals post-anniversary

GMDB 13,511.9 86.1 68.3 years

GMWB - Highest anniversary only 3,459.2 41.1

Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary

nges shown based on simple interest.

The upper limits of 5

% simple interest are approximately equal to 4.1 % and 6 %, respectively, on a compound interest basis over a typical

bonus period.

The combination GMWB category also includes benefits with a defined increase in the withdrawal percentage under

mounts shown as GMWB above include a ‘not-for-life’

component up to the point at which the guaranteed withdrawal benefit is exhausted, after which benefits paid are considered to be ‘for-life’

The liability related to this ‘not-for-life’

portion is valued as an embedded derivative, while the ‘for-life’

benefits are valued as an insurance liability (see below).

For this table, the net amount at risk of the ‘not-for-life’

component is the undiscounted excess of the guaranteed withdrawal benefit over the account value, and that of the ‘for-life’

component is the estimated value of additional life contingent benefits paid after the guaranteed withdrawal benefit is exhausted.

GMWB 646.0 55.4

Combination net deposits plus minimum return,

highest specified anniversary account value

minus withdrawals post-anniversary

8,890.8 614.8 70.5 years

1,675.3 555.5 0.5 years

GMWB 0 - 8 %*

159,856.9 5,655.7

* Ranges shown based on simple interest.

The upper limits of 5% or 8% simple interest are approximately equal to 4.1 % and 6.0 %, respectively, on a compound interest basis over a typical 10-year bonus period.

The combination GMWB category also includes benefits with a defined increase in the withdrawal percentage under pre-defined non-market conditions.

Amounts shown as GMWB above include a ‘not-for-life’ component up to the point at which the guaranteed withdrawal benefit is exhausted, after which benefits paid are considered to be ‘for-life’ benefits.

The liability related to this ‘not-for-life’ portion is valued as an embedded derivative, while the ‘for-life’ benefits are valued as an insurance liability (see below).

For this table, the net amount at risk of the ‘not-for-life’ component is the undiscounted excess of the guaranteed withdrawal benefit over the account value, and that of the ‘for-life’ component is the estimated value of additional life contingent benefits paid after the guaranteed withdrawal benefit is exhausted.

Account balances of contracts with guarantees were invested in variable separate accounts as follows (in millions):

September 30, December 31,

$ 145,386.1 $ 132,213.0

20,211.3 20,202.9

41,708.4 39,626.1

1,830.0 1,861.6

$ 209,135.8 $ 193,903.6

GMDB liabilities reflected in the general account were as follows (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Balance as of beginning of period

$ 1,418.3 $ 1,282.9

Incurred guaranteed benefits

Paid guaranteed benefits

( 78.3 ) ( 110.0 )

Balance as of end of period

$ 1,513.4 $ 1,487.9

The GMDB liability is determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments.

The Company regularly evaluates estimates used and adjusts the liability balance through the condensed consolidated income statement, within death, other policy benefits and change in policy reserves, if actual experience or other evidence suggests that earlier assumptions should be revised.

The following assumptions and methodology were used to determine the GMDB liability at both June 30, 2021 and December 31, 2020 (except where otherwise noted):

The following assumptions and methodology were used to determine the GMDB liability at both September 30, 2021 and December 31, 2020 (except where otherwise noted):

• Use of a series of stochastic investment performance scenarios, based on historical average market volatility.

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• Mortality equal to 38 % to 100 % of the IAM 2012 basic table improved using Scale G through 2019.

Lapse rates varying by contract type, duration and degree the benefit is in-the-money

and ranging from 0.3 % to 27.9 % (before application of dynamic adjustments).

• Lapse rates varying by contract type, duration and degree the benefit is in-the-money and ranging from 0.3 % to 27.9 % (before application of dynamic adjustments).

• Discount rates:

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The fair value of these liabilities is determined using stochastic modeling and inputs as further described in Note 5.

The fair valued GMWB had a reserve liability of $ 2,235.7 million and $ 5,592.1 million at June 30, 2021 and December 31, 2020, respectively, and was reported in reserves for future policy benefits and claims payable.

he Company has also issued certain GMWB products that guarantee payments over a lifetime.

The fair valued GMWB had a reserve liability of $ 3,091.6 million and $ 5,592.1 million at September 30, 2021 and December 31, 2020, respectively, and was reported in reserves for future policy benefits and claims payable.

The Company has also issued certain GMWB products that guarantee payments over a lifetime.

Reserves for the portion of these benefits after the point where the guaranteed withdrawal balance is exhausted are calculated using assumptions and methodology similar to the GMDB liability.

At June 30, 2021 and December 31, 2020, these GMWB reserves totaled

At September 30, 2021 and December 31, 2020, these GMWB reserves totaled

$ 196.6 million and $ 181.3 million, respectively, and were reported in reserves for future policy benefits and claims payable.

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The assumptions used for calculating the direct GMIB liability are consistent with those used for calculating the GMDB liability.

At June 30, 2021 and December 31, 2020, GMIB reserves before reinsurance totaled $ 76.4 million and $ 86.9 million, respectively.

At September 30, 2021 and December 31, 2020, GMIB reserves before reinsurance totaled $ 82.3 million and $ 86.9 million, respectively.

Other Liabilities – Insurance and Annuitization Benefits

The Company has established additional reserves for life insurance business for universal life plans with secondary guarantees, interest-sensitive life plans that exhibit “profits followed by loss” patterns and account balance adjustments to tabular guaranteed cash values on one interest-sensitive life plan.

Liabilities for these benefits have been established according to the methodologies described below:

June 30, 2021

December 31, 2020

(in millions)

Insurance benefits *

Account balance adjustments

Amounts for the universal life benefits are for the total of the plans containing any policies having projected non-zero

excess benefits, and thus may include some policies with zero projected excess benefits.

Liabilities for these benefits, as established according to the methodologies described below, are as follows:

September 30, 2021 December 31, 2020

Benefit Type Liability

(in millions) Net Amount

(in millions) Weighted Average Attained Age Liability

(in millions) Net Amount

(in millions) Weighted Average Attained Age

Insurance benefits * $ 939.6 $ 18,641.4 63.9 years $ 939.6 $ 19,483.0 63.5 years

Account balance adjustments 138.7 N/A N/A 133.6 N/A N/A

* Amounts for the universal life benefits are for the total of the plans containing any policies having projected non-zero excess benefits, and thus may include some policies with zero projected excess benefits.

The following assumptions and methodology were used to determine the universal life insurance benefit liability for the periods referenced in the table above:

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• Other experience assumptions similar to those used in amortization of deferred acquisition costs.

Discount rates equal to credited interest rates, approximately 3.0 % to 5.5 % at both June 30, 2021 and December 31, 2020.

The Company also has a small closed block of two-tier

annuities, where different crediting rates are used for annuitization and surrender benefit calculations.

A liability is established to cover future annuitization benefits in excess of surrender values, and was immaterial to the condensed consolidated financial statements at both June 30, 2021 and December 31, 2020.

• Discount rates equal to credited interest rates, approximately 3.0 % to 5.5 % at both September 30, 2021 and December 31, 2020.

The Company also has a small closed block of two-tier annuities, where different crediting rates are used for annuitization and surrender benefit calculations.

A liability is established to cover future annuitization benefits in excess of surrender values and was immaterial to the condensed consolidated financial statements at both September 30, 2021 and December 31, 2020.

The Company also offers an optional lifetime income rider with certain of its fixed index annuities.

The liability established for this rider before reinsurance was $ 26.2 million and $ 18.1

million at June 30, 2021 and December 31, 2020, respectively.

The aggregate carrying value of borrowings was as follows (in millions):

Surplus note s

The liability established for this rider before reinsurance was $ 30.4 million and $ 18.1 million at September 30, 2021 and December 31, 2020, respectively.

Short-Term and Long-Term Debt

The aggregate carrying value of short-term and long-term debt were as follows (in millions):

September 30, December 31,

Short-Term Debt

Term loan due 2022 1,601.7 —

Long-Term Debt

Term loan due 2023 $ 750.8 $ —

Surplus notes 249.7 249.7

FHLBI bank loans 68.0 72.3

t June 30, 2021, the above borrowings were all due after five years.

On February 22, 2021, the Company entered into loan facilities including a $ 1.0

billion revolving credit facility (the “Revolving Facility”), a $ 1.7 billion senior unsecured delayed draw term loan facility that matures in May 2022 (the “2022 DDTL Facility”) and the $ 1.0 billion senior unsecured delayed draw term loan facility that matures in February 2023 (the “2023 DDTL Facility”, and together with the Revolving Facility and the 2022 DDTL Facility, the “Credit Facilities”) with a syndicate of banks.

The Revolving Facility provides liquidity backstop after separation from Prudential, and the delayed draw term loans will be used for general corporate purposes, including liquidity at the holding company and capitalization of the insurance subsidiaries.

On September 10, 2021, we borrowed an aggregate principal amount of $

Total long-term debt $ 1,068.5 $ 322.0

Scheduled Maturities of Debt

Due in less than 1 year $ 1,601.7

Due in more than 1 to 5 years 750.8

Due after 5 years 317.7

Total $ 2,670.2

On February 22, 2021, the Company entered into loan facilities including a $ 1.0 billion revolving credit facility (the “Revolving Facility”), a $ 1.7 billion senior unsecured delayed draw term loan facility that matures in May 2022 (the “2022 DDTL Facility”) and a $ 1.0 billion senior unsecured delayed draw term loan facility that matures in February 2023 (the “2023 DDTL Facility”, and together with the Revolving Facility and the 2022 DDTL Facility, the “Credit Facilities”) with a syndicate of banks.

The Revolving Facility provides liquidity backstop.

On September 10, 2021, the Company borrowed an aggregate principal amount of $ 2.35 billion under the term loan facilities as follows:

$ 1.6 billion under the 2022 DDTL Facility and $ 750.0 million under the 2023 DDTL Facility.

Under the terms of the credit agreement for the DDTL Facilities, subject to certain exceptions, 100% of the net cash proceeds from any debt issuance, preferred equity issuance or hybrid instrument issuance by us or our subsidiaries is required to be applied (i) first to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2022 DDTL Facility (ii) thereafter, to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2023 DDTL Facility.

The proceeds of those borrowings were used for general corporate purposes, including liquidity at the holding company and capitalization of the insurance subsidiaries.

Under the terms of the credit agreement for the DDTL Facilities, subject to certain exceptions, 100% of the net cash proceeds from any debt issuance, preferred equity issuance or hybrid instrument issuance by the Company or its subsidiaries is required to be applied (i) first to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2022 DDTL Facility and (ii) thereafter, to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2023 DDTL Facility.

Surplus Notes

2 unchanged sentences

On March 15, 1997, the Company, through its subsidiary, Jackson, issued 8.15 % surplus notes in the principal amount of $ 250.0 million due March 15, 2027.

These surplus notes were issued pursuant to Rule 144A under the Securities Act of 1933, and are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims and may not be redeemed at the option of the Company or any holder prior to maturity.

These surplus notes were issued pursuant to Rule 144A under the Securities Act of 1933, as amended, and are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims and may not be redeemed at the option of the Company or any holder prior to maturity.

Interest is payable semi-annually on March 15th and September 15th of each year.

Interest expense on the notes was $ 5.1 million and $ 10.2 million for both the three and six months ended June 30, 2021 and 2020, respectively.

Interest expense on the notes was $ 5.1 million and $ 15.3 million for the three and nine months ended September 30, 2021, respectively.

Interest expense on the notes was $ 5.2 million and $ 15.4 million for the three and nine months ended September 30, 2020, respectively.

On November 6, 2019, the Company, through its subsidiary, Brooke Life, issued a 4.5 % surplus note payable to its ultimate parent, Prudential plc, in the principal amount of $ 2.0 billion due November 6, 2059.

In exchange, the Company remitted a return of capital of $ 2.0 billion to Prudential, plc.

In June 2020, Prudential transferred this note to the Company’s newly formed subsidiary, Jackson Finance, LLC (“Jackson Finance”).

In June 2020, Prudential transferred this note to the Company’s newly

formed subsidiary, Jackson Finance, LLC (“Jackson Finance”).

As settlement, the Company issued shares as further described in Note 18.

As a result of the transfer, this note is considered intercompany and is eliminated in consolidation.

This surplus note was issued pursuant to Rule 144A under the Securities Act of 1933, and is unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims.

This surplus note was issued pursuant to Rule 144A under the Securities Act of 1933, as amended, and is unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims.

This note may be redeemed subject to prior approval of the Michigan Department of Insurance and Financial Services and at the mutual agreement of the Company and the holder after the thirtieth anniversary of the note’s issuance.

Interest is payable semi-annually on March 15th and September 15th of each year.

Interest expense on the notes was $ 18.5 million and $ 41.0 million for the three and six months ended June 30, 2020.

Federal Home Loan Bank Loans

Interest expense on the notes was nil and $ 41.0 million for the three and nine months ended September 30, 2020.

The Company received loans of $ 50.0 million from the FHLBI under its community investment program in both 2015 and 2014, which amortize on a straight-line basis over the loan term.

The weighted average interest rate on these loans was 0.10 % and 0.80 % for the for the six months ended June 30, 2021 and 2020.

The outstanding balance on these loans was $ 68.1 million and $ 72.3 million at June 30, 2021 and December 31, 2020, respectively.

At June 30, 2021, the loans were collateralized by mortgage-related securities and commercial mortgage loans with a carrying value of $ 92.9 million.

The weighted average interest rate on these loans was 0.10 % and 0.58 % for the for the nine months ended September 30, 2021 and 2020.

The outstanding balance on these loans was $ 68.1 million and $ 72.3 million at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021, the loans were collateralized by mortgage-related securities and commercial mortgage loans with a carrying value of $ 92.7 million.

On November 7, 2019, the Company, issued a $ 350.0 million short-term note payable to Standard Chartered Bank, which was guaranteed by the Company’s ultimate parent, Prudential plc.

In exchange, the Company paid a dividend of $ 350.0

million to Prudential.

This note accrued interest at LIBOR plus 0.20

% per annum and was due November 7, 2020 .

In exchange, the Company paid a dividend of $ 350.0 million to Prudential.

This note accrued interest at LIBOR plus 0.20 % per annum and was due November 7, 2020.

In 2020, the Company transferred this note, plus all outstanding interest due, to Prudential and in turn the Company issued shares as further described in Note 18.

Interest expense on the notes was $ 1.7 million and $ 3.6 million for the three and six months ended June 30, 2020, respectively.

Interest expense on the notes was nil and $ 3.6 million for the three and nine months ended September 30, 2020, respectively.

Federal Home Loan Bank Advances

The Company, through its subsidiary, Jackson, entered into a short-term advance program with the FHLBI in which interest rates were either fixed or variable based on the FHLBI cost of funds or market rates.

Advances of $ 250.0 million and $ 380.0 million were outstanding at June 30, 2021 and December 31, 2020, respectively, and were recorded in other liabilities.

Advances of nil and $ 380.0 million were outstanding at September 30, 2021 and December 31, 2020, respectively, and were recorded in other liabilities.

On March 27, 2020, H.R.

748, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act”) was signed into law and included a tax provision allowing a five-year carryback of net operating losses for years 2018 through 2020.

As a result of this provision, the Company recognized a tax expense of $ 33.0 million and a benefit of $ 16.3 million for the three and six months ended June 30, 2020, respectively.

On June 18, 2020, the Company’s subsidiary announced the funds withheld coinsurance agreement with Athene effective June 1, 2020.

As a result of the impact on forecasted taxable earnings the Company recorded a $ 33.0 million reduction to the impact of the CARES Act during the three months ended June 30, 2020.

As a result of this provision, the Company recognized a tax benefit of $ 19.0 million and $ 35.3 million during the three and nine months ended September 30, 2020, respectively.

The Company uses the estimated annual effective tax rate (“ETR”) method in computing the interim tax provision.

3 unchanged sentences

The estimated annual ETR is revised, as necessary, at the end of successive interim reporting periods.

The Company’s effective income tax rate

was 9.2 % for the three months ended June 30, 2021, compared with 12.8 % for the same period in 2020.

The Company’s effective income tax rate

was 18.2 % for the six months ended June 30, 2021, compared with 24.4 %

for the same period in 2020.

The reduction in the effective tax rate for the three and six months ended June 30, 2021 was due to the relationship of income subject to tax compared to consolidated income before taxes and the impact of the CARES Act.

The Company’s effective income tax rate was ( 8.6 )% and 16.5 % for the three and nine months ended September 30, 2021, compared with 28.3 % and 25.4 % for the same periods in 2020.

The effective tax rate differs from the statutory rate of 21% primarily due to the dividends received deduction and utilization of tax credits.

The effective tax rate of 18.2 % for the six months ended June 30, 2021 differs from the effective tax rate of 34.3 % for the full year-ended December 31, 2020 due to the relationship of income subject to tax compared to consolidated income and losses before taxes, and for 2020, the impact of the CARES Act and tax true-ups related to prior years.

The reduction in the effective tax rate for the three months ended September 30, 2021 was due to the relationship of taxable income to consolidated pre-tax income and the impact of the provision-to-return adjustments recorded in the current quarter.

The reduction in the effective tax rate for the nine months ended September 30, 2021 was due to the relationship of taxable income to consolidated pre-tax income, the impact of the CARES Act recorded in 2020, offset by the impact of the provision-to-return adjustments recorded in the current quarter.

The Company's effective income tax rate of 16.5 % for the nine months ended

September 30, 2021 differs from the effective tax rate of 34.3 % for the full year-ended December 31, 2020 due to the relationship of taxable income to consolidated pre-tax income, the provision-to-return adjustments recorded in the current quarter compared to the provision-to-return adjustments recorded in 2020, true-ups related to prior years, and the impact of the CARES Act recorded in 2020.

Segment Information

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These products are distributed through various wirehouses, insurance brokers and independent broker-dealers, as well as through banks and financial institutions, primarily to high net worth investors and the mass and affluent markets.

The Company’s variable annuities, represent an attractive option for retirees and soon-to-be

retirees, providing access to equity market appreciation and add-on

benefits, including guaranteed lifetime income.

A fixed index annuity is designed

for investors who desire principal protection with the opportunity to participate in capped upside investment returns linked to a reference market index.

The Company also provides access to guaranteed lifetime income as an add-on

The Company’s variable annuities represent an attractive option for retirees and soon-to-be retirees, providing access to equity market appreciation and add-on benefits, including guaranteed lifetime income.

A fixed index annuity is designed for investors who desire principal protection with the opportunity to participate in capped upside investment returns linked to a reference market index.

The Company also provides access to guaranteed lifetime income as an add-on benefit.

A fixed annuity is a guaranteed product designed to build wealth without market exposure, through a crediting rate that is likely to be superior to interest rates offered from banks or money market funds.

3 unchanged sentences

The Company’s Institutional Products consist of traditional GICs, funding agreements (including agreements issued in conjunction with the Company’s participation in the U.S.

Federal Home Loan Bank of Indianapolis program) and medium-term note funding agreements.

FHLBI program) and medium-term note funding agreements.

The Company’s GIC products are marketed to defined contribution pension and profit sharing retirement plans.

Funding agreements are marketed to institutional investors, including corporate cash accounts and securities lending funds, as well as money market funds, and are issued to the FHLBI in connection with its program.

The financial results of the Company’s institutional products business are primarily dependent on the Company’s ability to earn

spreads on general account assets.

The financial results of the Company’s institutional products business are primarily dependent on the Company’s ability to earn spreads on general account assets.

Closed Life and Annuity Blocks

7 unchanged sentences

This segment also includes acquired closed blocks consisting primarily of life insurance.

The Company’s Closed Life and Annuity Blocks segment also includes group pay-out

annuities, consisting of a closed block of defined benefit annuity plans assumed from John Hancock USA and John Hancock Life Insurance Company of New York through a reinsurance agreement.

A single premium payment from an employer (contract holder) funds the pension benefits for its employees (participants).

The Company’s Closed Life and Annuity Blocks segment also includes group pay-out annuities, consisting of a closed block of defined benefit annuity plans assumed from John Hancock USA and John Hancock Life Insurance Company of New York through a reinsurance agreement.

A single premium payment from an employer (contract holder) funds the

pension benefits for its employees (participants).

The contracts are tailored to meet the requirements of the specific pension plan being covered.

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Segment Performance Measurement

Segment operating revenues and pretax adjusted operating earnings are non-GAAP

financial measures that management believes are critical to the evaluation of the financial performance of the Company’s segments.

Segment operating revenues and pretax adjusted operating earnings are non-GAAP financial measures that management believes are critical to the evaluation of the financial performance of the Company’s segments.

The Company uses the same accounting policies and procedures to measure segment pretax adjusted operating earnings as used in its reporting of consolidated net income.

accounting treatment under GAAP, or that are non-recurring

in nature, as well as certain other revenues and expenses which are not considered to drive underlying profitability.

Its primary measure is pretax adjusted operating earnings, which is defined as net income recorded in accordance with GAAP, excluding certain items that may be highly variable from period to period due to accounting treatment under GAAP, or that are non-recurring in nature, as well as certain other revenues and expenses which are not considered to drive underlying profitability.

Operating revenues and pretax adjusted operating earnings should not be used as a substitute for net income as calculated in accordance with GAAP.

18 unchanged sentences

Includes net investment income on funds withheld assets related to the reinsurance transaction;

or other non-recurring

items, such as costs relating to the Company’s separation from its parent, Prudential, the impact of discontinued operations and investments that are consolidated on the financial statements due to U.S.

• Other items:

one-time or other non-recurring items, such as costs relating to the Company’s separation from its former parent, Prudential, the impact of discontinued operations and investments that are consolidated on the financial statements due to U.S.

GAAP accounting requirements, such as investments in collateralized loan obligations, but for which the consolidation effects are not aligned with the Company’s economic interest or exposure to those entities;

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Set forth in the tables below is certain information with respect to the Company’s segments, as described above (in millions):

Three Months Ended June 30, 2021

Institutional

Three Months Ended September 30, 2021 Retail Annuities Closed Life

Blocks Institutional

Products Corporate

Other Intersegment Eliminations Total

Operating Revenues

Fee income $ 1,089.9 $ 122.5 $ — $ 32.4 $ ( 14.1 ) $ 1,230.7

Premium — 38.2 — — — 38.2

Net investment income 180.7 244.4 68.7 ( 55.2 ) 48.8 487.4

Income on operating derivatives 13.3 18.4 ( 1.1 ) 7.9 — 38.5

Other income 11.8 7.6 — ( 2.8 ) — 16.6

Total Operating Revenues 1,295.7 431.1 67.6 ( 17.7 ) 34.7 1,811.4

Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves, net of deferrals

Interest credited on other contract holder funds, net of deferrals

Death, other policy benefits and change in policy

reserves, net of deferrals 24.6 218.2 — — — 242.8

Interest credited on other contract holder funds, net

of deferrals (1)

66.3 103.0 47.3 — — 216.6

Interest expense (1)

5.7 — ( 1.9 ) 2.5 — 6.3

Operating costs and other expenses, net of deferrals 512.5 37.6 1.1 49.9 — 601.1

Deferred acquisition and sales inducements amortization

Deferred acquisition and sales inducements

amortization 159.4 4.0 — — 10.0 173.4

Total Operating Benefits and Expenses 768.5 362.8 46.5 52.4 10.0 1,240.2

Pretax Adjusted Operating Earnings $ 527.2 $ 68.3 $ 21.1 $ ( 70.1 ) $ 24.7 $ 571.2

Three Months Ended June 30, 2020

Institutional

Three Months Ended September 30, 2020 Retail Annuities Closed Life

Blocks Institutional

Products Corporate

Other Intersegment Eliminations Total

Operating Revenues

Fee income $ 881.0 $ 127.3 $ — $ 39.2 $ ( 17.8 ) $ 1,029.7

Premium — 49.7 — — — 49.7

Net investment income 135.3 245.6 87.6 ( 26.4 ) 49.8 491.9

Income on operating derivatives 10.2 21.4 — 6.6 — 38.2

Other income 12.9 7.6 — 1.0 — 21.5

Total Operating Revenues 1,039.4 451.6 87.6 20.4 32.0 1,631.0

Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves, net of deferrals

Interest credited on other contract holder funds, net of deferrals

Death, other policy benefits and change in policy

reserves, net of deferrals 22.4 237.0 — — — 259.4

Interest credited on other contract holder funds, net

of deferrals 65.1 107.2 58.0 — — 230.3

Interest expense 5.8 — 2.0 — — 7.8

Operating costs and other expenses, net of deferrals 464.2 39.3 1.3 32.7 — 537.5

Deferred acquisition and sales inducements amortization

Deferred acquisition and sales inducements

amortization ( 61.0 ) 3.2 — — 8.1 ( 49.7 )

Total Operating Benefits and Expenses 496.5 386.7 61.3 32.7 8.1 985.3

Pretax Adjusted Operating Earnings $ 542.9 $ 64.9 $ 26.3 $ ( 12.3 ) $ 23.9 $ 645.7

Six Months Ended June 30, 2021

Institutional

Nine Months Ended September 30, 2021 Retail Annuities Closed Life

Blocks Institutional

Products Corporate

Other Intersegment Eliminations Total

Operating Revenues

Fee income $ 3,135.6 $ 370.5 $ — $ 101.3 $ ( 43.8 ) $ 3,563.6

Premium — 109.5 — — — 109.5

Net investment income 529.4 705.8 189.1 ( 99.8 ) 145.9 1,470.4

Income on operating derivatives 41.9 56.1 ( 1.1 ) 20.3 — 117.2

Other income 35.4 29.3 — 5.5 — 70.2

Total Operating Revenues 3,742.3 1,271.2 188.0 27.3 102.1 5,330.9

Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves, net of deferrals

Interest credited on other contract holder funds, net of deferrals

Death, other policy benefits and change in policy

reserves, net of deferrals 42.1 630.9 — — — 673.0

Interest credited on other contract holder funds, net

of deferrals (1)

199.9 309.6 147.1 — — 656.6

Interest expense (1)

16.5 — — 2.5 — 19.0

Operating costs and other expenses, net of deferrals 1,472.5 116.1 3.6 156.3 — 1,748.5

Deferred acquisition and sales inducements amortization

Deferred acquisition and sales inducements

amortization 232.6 11.0 — — 24.9 268.5

Total Operating Benefits and Expenses 1,963.6 1,067.6 150.7 158.8 24.9 3,365.6

Pretax Adjusted Operating Earnings $ 1,778.7 $ 203.6 $ 37.3 $ ( 131.5 ) $ 77.2 $ 1,965.3

Six Months Ended June 30, 2020

Institutional

Nine Months Ended September 30, 2020 Retail Annuities Closed Life

Blocks Institutional

Products Corporate

Other Intersegment Eliminations Total

Operating Revenues

Fee income $ 2,530.7 $ 385.8 $ — $ 126.3 $ ( 62.8 ) $ 2,980.0

Premium — 143.6 — — — 143.6

Net investment income 762.1 543.9 284.4 ( 103.8 ) 127.0 1,613.6

Income on operating derivatives 35.9 39.2 — 15.1 — 90.2

Other income 17.3 13.4 1.6 3.3 — 35.6

Total Operating Revenues 3,346.0 1,125.9 286.0 40.9 64.2 4,863.0

Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves, net of deferrals

Interest credited on other contract holder funds, net of deferrals

Death, other policy benefits and change in policy

reserves, net of deferrals 40.2 642.5 — — — 682.7

Interest credited on other contract holder funds,

net of deferrals 463.1 321.8 194.4 — — 979.3

Interest expense 21.5 — 14.9 44.6 — 81.0

Operating costs and other expenses, net of deferrals

Deferred acquisition and sales inducements amortization

Operating costs and other expenses,

net of deferrals 1,313.5 115.7 3.9 125.5 — 1,558.6

Deferred acquisition and sales inducements

amortization 102.8 10.9 — — 17.2 130.9

Total Operating Benefits and Expenses 1,941.1 1,090.9 213.2 170.1 17.2 3,432.5

Pretax Adjusted Operating Earnings $ 1,404.9 $ 35.0 $ 72.8 $ ( 129.2 ) $ 47.0 $ 1,430.5

(1) At September 30, 2021, interest expense recorded for certain funding agreements has been reclassified to interest credited on other contract holder funds for Institutional Products, prospectively.

Included in the intersegment eliminations in the above tables, is the elimination from fee income and investment income of investment fees paid by Jackson to PPM, and the elimination of investment income between Retail Annuities and the Corporate and Other segments.

The following table summarizes the reconciling items from the non-GAAP

measure of operating revenues to the GAAP measure of total revenues attributable to the Company (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the reconciling items from the non-GAAP measure of operating revenues to the GAAP measure of total revenues attributable to the Company (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Total operating revenues $ 1,811.4 $ 1,631.0 $ 5,330.9 $ 4,863.0

5 unchanged sentences

Total revenues $ 1,486.3 $ 111.1 $ 7,225.2 $ 2,605.4

The following table summarizes the reconciling items from the non-GAAP

measure of operating benefits and expenses to the GAAP measure of total benefits and expenses attributable to the Company (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the reconciling items from the non-GAAP measure of operating benefits and expenses to the GAAP measure of total benefits and expenses attributable to the Company (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Total operating benefits and expenses $ 1,240.2 $ 985.3 $ 3,365.6 $ 3,432.5

Benefits attributed to variable annuity benefit reserves 25.0 32.0 91.4 121.9

Amortization of DAC and DSI related to non-operating

revenues and expenses

reserve movements

Amortization of DAC and DSI related to non-operating revenues and expenses ( 169.4 ) ( 349.0 ) 283.7 ( 980.7 )

SOP 03-1 reserve movements 126.4 ( 67.4 ) 122.8 266.7

Athene reinsurance transaction — 34.9 — 2,081.6

Other items 12.4 7.2 63.0 11.2

Total benefits and expenses $ 1,234.6 $ 643.0 $ 3,926.5 $ 4,933.2

The following table summarizes the reconciling items, net of deferred acquisition costs and deferred sales inducements, from the non-GAAP

measure of pretax adjusted operating earnings to the GAAP measure of net income attributable to the Company (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the reconciling items, net of deferred acquisition costs and deferred sales inducements, from the non-GAAP measure of pretax adjusted operating earnings to the GAAP measure of net income attributable to the Company (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Pretax adjusted operating earnings $ 571.2 $ 645.7 $ 1,965.3 $ 1,430.5

Non-operating

adjustments (income) loss:

Non-operating adjustments (income) loss:

Fees attributable to guarantee benefit reserves 728.1 633.7 2,100.7 1,858.3

5 unchanged sentences

Net investment income on funds withheld assets 299.6 277.1 884.5 506.0

Other items ( 9.3 ) 83.3 ( 28.5 ) 12.4

Pretax income (loss) attributable to Jackson Financial Inc.

189.8 ( 553.6 ) 3,112.4 ( 2,290.0 )

Income tax expense (benefit) ( 16.4 ) ( 157.0 ) 514.7 ( 580.8 )

Net income (loss) attributable to Jackson Financial, Inc.

$ 206.2 $ ( 396.6 ) $ 2,597.7 $ ( 1,709.2 )

Commitments, Contingencies, and Guarantees

The Company and its subsidiaries are involved in litigation arising in the ordinary course of business.

It is the opinion of management that the ultimate disposition of such litigation will not have a material adverse effect on the Company’s financial condition.

Jackson has been named in civil litigation proceedings, which appear to be substantially similar to other class action litigation brought against many life insurers including allegations of misconduct in the sale of insurance

It is the opinion of management that the ultimate disposition of such litigation will not have a material adverse effect on the Company's

financial condition.

The Company accrues for legal contingencies once the contingency is deemed to be probable and reasonably estimable.

At June 30, 2021 and December 31, 2020, the Company recorded accruals totaling $ 6.4 million and $ 13.1 million, respectively.

At June 30, 2021, the Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $ 1,451.5 million.

At June 30, 2021, unfunded commitments related to fixed-rate commercial mortgage loans and other debt securities totaled $ 1,335.6 million.

At September 30, 2021, the Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $ 1,489.1 million.

At September 30, 2021, unfunded commitments related to fixed-rate commercial mortgage loans and other debt securities totaled $ 1,555.3 million.

Other Related Party Transactions

The Company’s investment management operation, PPM, provides investment services to other non-consolidated

Prudential affiliated entities.

The Company recognized $ 8.9 million and $ 8.8 million of revenue during the three months ended June 30, 2021 and 2020, and $ 18.7 million and $ 17.1 million of revenue during the six months ended June 30, 2021 and 2020, associated with these investment services.

The Company's investment management operation, PPM, provides investment services to certain Prudential affiliated entities.

The Company recognized $ 9.4 million and $ 9.8 million of revenue during the three months ended September 30, 2021 and 2020, and $ 28.1 million and $ 26.9 million of revenue during the nine months ended September 30, 2021 and 2020, associated with these investment services.

This revenue is included in fee income in the accompanying consolidated income statements.

The Company, through its PGDS subsidiary, provides various information security and technology services to certain non-consolidated

Prudential affiliates.

The Company recognized $ 1.1 million and $ 0.4 million of revenue during the three months ended June 30, 2021 and 2020, and $ 2.3 million and $ 0.7 million of revenue during the six months ended June 30, 2021 and 2020, associated with these services.

The Company, through its PGDS subsidiary, provides various information security and technology services to certain Prudential affiliated entities.

The Company recognized $ 0.8 million and $ 0.4 million of revenue during the three months ended September 30, 2021 and 2020, and $ 3.4 million and $ 1.1 million of revenue during the nine months ended September 30, 2021 and 2020, associated with these services.

This revenue is included in other income in the accompanying consolidated income statements and is substantially equal to the costs incurred to provide the services, which are reported in operating costs and other expenses in the consolidated income statements.

As a result of the previously mentioned investment management agreement between Jackson and Apollo, an affiliate of Athene, the Company pays Apollo management fees which are calculated and paid monthly in arrears.

The Company incurred $ 25.8 million and $ 4.1 million during the three months ended June 30, 2021 and 2020, and $ 53.9 million and $ 4.1 million during the six months ended June 30, 2021 and 2020, associated with these services.

The Company incurred $ 25.7 million and $ 27.4 million during the three months ended September 30, 2021 and 2020, and $ 79.6 million and $ 31.5 million during the nine months ended September 30, 2021 and 2020, associated with these services.

Operating Costs and Other Expenses

The following table is a summary of the Company’s operating costs and other expenses (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Asset-based commission expenses $ 285.9 $ 233.2 $ 834.1 $ 658.7

Other commission expenses

262.9 261.4 792.4 744.8

Athene ceding commission (1)

— 28.5 — ( 1,202.6 )

General and administrative expenses 256.5 235.7 777.1 702.1

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Accumulated Other Comprehensive Income

The following table represents changes in the balance of accumulated other comprehensive income (“

AOCI”), net of income tax, related to unrealized investment gains (losses) (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The following table represents changes in the balance of accumulated other comprehensive income (" AOCI"), net of income tax, related to unrealized investment gains (losses) (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Balance, beginning of period (1)

$ 2,390.2 $ 3,429.4 $ 3,820.6 $ 2,396.7

OCI before reclassifications ( 313.6 ) 489.0 ( 1,552.2 ) 2,085.7

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Balance, end of period (1)

Includes $ 632.1 million, $ 1,212.8 million, and $ 1,107.9 million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of June 30, 2021, December 31, 2020, and June 30, 2020, respectively.

$ 2,045.2 $ 3,850.6 $ 2,045.2 $ 3,850.6

(1) Includes $ 481.3 million, $ 1,212.8 million, and $ 1,213.9 million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of September 30, 2021, December 31, 2020, and September 30, 2020, respectively.

The following table represents amounts reclassified out of AOCI (in millions):

AOCI Components

Reclassified from AOCI

Affected Line Item in the

AOCI Components Amounts

Reclassified from AOCI Affected Line Item in the

Consolidated Income Statement

Three Months Ended June 30,

Three Months Ended September 30,

Net unrealized investment gain (loss):

Net realized gain (loss) on investments

Net gains (losses) on derivatives and investments

Other impaired securities

Net gains (losses) on derivatives and investments

Net realized gain (loss) on investments $ ( 40.0 ) $ ( 87.2 ) Net gains (losses) on derivatives and investments

Other impaired securities — 1.3 Net gains (losses) on derivatives and investments

Net unrealized gain (loss), before income taxes ( 40.0 ) ( 85.9 )

1 unchanged sentence

Reclassifications, net of income taxes $ ( 31.4 ) $ ( 67.8 )

AOCI Components

Reclassified from AOCI

Affected Line Item in the

AOCI Components Amounts

Reclassified from AOCI Affected Line Item in the

Consolidated Income Statement

Six Months Ended June 30,

Nine Months Ended September 30,

Net unrealized investment gain (loss):

Net realized gain (loss) on investments

Net gains (losses) on derivatives and investments

Other impaired securities

Net gains (losses) on derivatives and investments

Net realized gain (loss) on investments $ ( 284.6 ) $ ( 808.6 ) Net gains (losses) on derivatives and investments

Other impaired securities — 8.8 Net gains (losses) on derivatives and investments

Net unrealized gain (loss), before income taxes ( 284.6 ) ( 799.8 )

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Both classes have a par value of $ 0.01 per share.

Each share of Class A common stock is entitled to one

vote per share.

Each share of Class A common stock is entitled to one vote per share.

Each share of Class B common stock is entitled to one-tenth of one vote per share.

Except for voting rights, the Company’s Class A common stock and Class B common stock have the same dividend rights, are equal in all respects, and are otherwise treated as if they were one class of shares.

At both June 30, 2021 and December 31, 2020, the Company was authorized to issue up to

900 million shares of Class A stock and 100 million shares of Class B stock.

On September 9, 2021, the Company effected a 104,960.3836276-for-1

stock split of its Class A common stock and Class B common stock by way of a reclassification of its Class A common stock and Class B common stock.

The incremental par value of the newly issued shares was recorded with the offset to additional paid-in

All share and earnings per share

information presented herein have been retroactively adjusted to reflect the stock split.

At both June 30, 2021 and December 31, 2020, there were 93,099,859 shares of Class A common stock and 1,364,484 shares of Class B common stock issued and outstanding, as all share information presented herein has been retroactively adjusted to reflect the stock split.

At both September 30, 2021 and December 31, 2020, the Company was authorized to issue up to 900 million shares of Class A stock and 100 million shares of Class B stock.

The incremental par value of the newly issued shares was recorded with the offset to additional paid-in capital.

All share and earnings per share information presented herein have been retroactively adjusted to reflect the stock split.

At both September 30, 2021 and December 31, 2020, there were 93,099,859 shares of Class A common stock and 1,364,484 shares of Class B common stock issued and outstanding, as all share information presented herein has been retroactively adjusted to reflect the stock split.

In June 2020, the Company formed a new subsidiary, Jackson Finance, LLC (“Jackson Finance”), a Michigan limited liability company.

3 unchanged sentences

The Company established a payable to Prudential for the $ 350.0 million, plus all outstanding interest due, and Prudential, in turn, set up a receivable, which was contributed to the Company’s parent.

Subsequently, the Company issued 6,927,385

shares of Class A common stock to Prudential, adjusted for the effect of the stock split, pursuant to a subscription agreement and accepted the receivable in settlement of the share subscription under a deed of assignment and settlement, ultimately resulting in a cashless transaction.

On June 18, 2020, the Company entered into an investment agreement with Athene Life Re Ltd., pursuant to which Athene would invest $ 500.0 million of capital into the Company in return for a 9.9 percent voting interest corresponding to a 11.1 percent economic interest in the Company.

The agreement was completed on July 17, 2020 and the Company issued 9,131,553 shares of Class A common stock and 1,364,484

shares of Class B common stock to Athene, adjusted for the effect of the stock split.

Subsequently, in August 2020, the Company ultimately made a

million capital contribution to its insurance company subsidiary, Jackson.

Subsequently, the Company issued 6,927,385 shares of Class A common stock to Prudential, adjusted for the effect of the stock split, pursuant to a subscription agreement and accepted the receivable in settlement of the share subscription under a deed of assignment and settlement, ultimately resulting in a cashless transaction.

On June 18, 2020, the Company entered into an investment agreement with Athene Life Re Ltd., pursuant to which Athene invested $ 500.0 million of capital into the Company in return for a 9.9 percent voting interest corresponding to a 11.1 percent economic interest in the Company.

The investment was completed on July 17, 2020 and the Company issued 9,131,553 shares of Class A common stock and 1,364,484 shares of Class B common stock to Athene, adjusted for the effect of the stock split.

Subsequently, in August 2020, the Company ultimately made a $ 500.0 million capital contribution to its insurance company subsidiary, Jackson.

Effective July 17, 2020, the 83,968,306 split-adjusted shares of Class A common stock issued to the Company’s parent, Prudential, with a par value of $ 125.00 per share, were reclassified and converted into Class A common stock with a par value of $ 0.01 per share.

Dividends to Shareholders

There were no dividends declared or paid to the Company’s stockholders for three and six months ended June 30, 2021 and 2020, respectively.

There were no dividends declared or paid to the Company’s stockholders for three and nine months ended September 30, 2021 and 2020, respectively.

Incentive Stock Plan

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2021 Omnibus Incentive Plan (the “Incentive Plan”).

This Incentive Plan became effective following the completion of the Demerger, and will replace the Prudential PLTIP and Retention Share Plans.

This Incentive Plan became effective following the completion of the Demerger, and replaces the Prudential PLTIP and Retention Share Plans.

The outstanding unvested awards previously issued under the Prudential PLTIP and Retention Share Plans were exchanged for equivalent awards over shares of JFI’s Class A common stock under the Incentive Plan, with a grant date of October 4, 2021.

Additionally on October 4, 2021, the Company granted awards for the 2021 plan year which were delayed pending completion of the Demerger.

The incremental compensation cost resulting from the modifications will be recognized ratably over the remaining requisite service period of each award.

Cumulative Effect of Changes in Accounting Principles

In 2020, the Company adopted ASU No.

and all related amendments with a cumulative effect pre-tax

adjustment at June 30, 2020 of $ 60.7 million to reduce retained earnings primarily related to the Company’s commercial mortgage loans.

2016-13 and all related amendments with a cumulative effect pre-tax adjustment at September 30, 2020 of $ 70.2 million to reduce retained earnings primarily related to the Company’s commercial mortgage loans.

Earnings Per Share

Basic earnings per share is calculated by dividing net income (loss) attributable to Jackson Financial Inc.

shareholders by the weighted-average number of Class A and Class B common shares outstanding during the period.

stockholders by the weighted-average number of Class A and Class B common shares outstanding during the period.

Diluted earnings per share would be calculated by dividing the net income (loss) attributable to Jackson Financial Inc.

shareholders, by the weighted-average number of shares of Class A common stock and Class B common stock outstanding for the period, plus shares representing the dilutive effect of share-based awards.

For the three and six months ended June 30, 2021 and 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.

Following the completion of the Demerger, the Company expects to have dilutive shares as a result of the conversion of existing Prudential share-based incentive plans and issuance of new awards as described above.

stockholders, by the weighted-average number of shares of Class A common stock and Class B common stock outstanding for the period, plus shares representing the dilutive effect of share-based awards.

For the three and nine months ended September 30, 2021 and 2020, the Company did not have any outstanding share-based awards involving the issuance of the Company’s equity and, therefore, no impact to the diluted earnings per share calculation.

On October 4, 2021, the Company granted share-based awards totaling approximately 7.2 million shares subject to vesting provisions of the Incentive Plan, which will have a dilutive effect.

The following table sets forth the calculation of earnings per common share:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

(in millions, except share and per share data)

Net income (loss) attributable to Jackson Financial Inc.

$ 206.2 $ ( 396.6 ) $ 2,597.7 $ ( 1,709.2 )

Weighted average shares of common stock outstanding - basic 94,464,343 92,638,945 94,464,343 58,625,564

1 unchanged sentence

Earnings per share—common stock

Basic $ 2.18 $ ( 4.28 ) $ 27.50 $ ( 29.15 )

Diluted $ 2.18 $ ( 4.28 ) $ 27.50 $ ( 29.15 )

Subsequent Events

The Company has evaluated events through November 10, 2021, which is the date the condensed consolidated financial statements were available to be issued.

Dividends Declared to Shareholders

On November 8, 2021, our Board of Directors approved the commencement of a regular quarterly cash dividend and declared a fourth quarter cash dividend on JFI's Class A and Class B common stock of $ 0.50 per share, payable on December 9, 2021 to shareholders of record on November 19, 2021.

Share Repurchase Authorization

On November 8, 2021, our Board of Directors authorized a share repurchase authorization of JFI's Class A common stock of $ 300 million.

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-Q

Item 1. Financial Statements