What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 487 added, 254 removed, 2319 unchanged (24% of the section changed)

3 unchanged sentences

(in millions, except share data)

March 31, December 31,

June 30, December 31,

Assets (Unaudited)

Debt Securities, available-for-sale, net of allowance for credit losses of $ 20 and $ 21 at March 31, 2024 and December 31, 2023, respectively (amortized cost:

Debt Securities, available-for-sale, net of allowance for credit losses of $ 27 and $ 21 at June 30, 2024 and December 31, 2023, respectively (amortized cost:

2024 $ 45,300 ;

4 unchanged sentences

Equity securities, at fair value 212 394

Mortgage loans, net of allowance for credit losses of $ 162 and $ 165 at March 31, 2024 and December 31, 2023, respectively

Mortgage loans, net of allowance for credit losses of $ 160 and $ 165 at June 30, 2024 and December 31, 2023, respectively

Mortgage loans, at fair value under fair value option 430 481

Policy loans (including $ 3,448 and $ 3,457 at fair value under the fair value option at March 31, 2024 and December 31, 2023, respectively)

Policy loans (including $ 3,511 and $ 3,457 at fair value under the fair value option at June 30, 2024 and December 31, 2023, respectively)

Freestanding derivative instruments 226 390

4 unchanged sentences

Deferred acquisition costs 12,066 12,302

Reinsurance recoverable, net of allowance for credit losses of $ 30 and $ 29 at March 31, 2024 and December 31, 2023, respectively

Reinsurance recoverable, net of allowance for credit losses of $ 27 and $ 29 at June 30, 2024 and December 31, 2023, respectively

23,699 25,422

9 unchanged sentences

Market risk benefit liabilities, at fair value 3,890 4,785

Funds withheld payable under reinsurance treaties (including $ 3,618 and $ 3,626 at fair value under the fair value option at March 31, 2024 and December 31, 2023, respectively)

Funds withheld payable under reinsurance treaties (including $ 3,683 and $ 3,626 at fair value under the fair value option at June 30, 2024 and December 31, 2023, respectively)

18,465 19,952

10 unchanged sentences

24,000 shares authorized;

22,000 shares issued and outstanding at March 31, 2024 and December 31, 2023;

22,000 shares issued and outstanding at June 30, 2024 and December 31, 2023;

liquidation preference $ 25,000 per share (See Note 19)

Common stock;

1,000,000,000 shares authorized, $ 0.01 par value per share and 76,621,374 and 78,660,221 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively (See Note 19)

1,000,000,000 shares authorized, $ 0.01 par value per share and 75,700,457 and 78,660,221 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively (See Note 19)

Additional paid-in capital 6,007 6,005

Treasury stock, at cost;

17,859,632 and 15,820,785 shares at March 31, 2024 and December 31, 2023, respectively

18,780,549 and 15,820,785 shares at June 30, 2024 and December 31, 2023, respectively

( 796 ) ( 599 )

Accumulated other comprehensive income (loss), net of tax expense (benefit) of $( 274 ) and $( 178 ) at March 31, 2024 and December 31, 2023, respectively

Accumulated other comprehensive income (loss), net of tax expense (benefit) of $( 277 ) and $( 178 ) at June 30, 2024 and December 31, 2023, respectively

( 3,626 ) ( 2,808 )

8 unchanged sentences

(Unaudited, in millions, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Fee income $ 2,008 $ 1,913 $ 4,006 $ 3,801

35 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income (loss) $ 282 $ 1,220 $ 1,084 $ ( 276 )

1 unchanged sentence

Change in unrealized gains (losses) on securities with no credit impairment, net of tax expense (benefit) of:

$( 3 ) and $ 92 , for the three months ended March 31, 2024 and 2023, respectively.

$( 11 ) and $( 34 ), for the three months ended June 30, 2024 and 2023, respectively, and $( 14 ) and $ 58 , for the six months ended June 30, 2024 and 2023, respectively.

( 231 ) ( 532 ) ( 509 ) 436

Change in unrealized gains (losses) on securities with credit impairment, net of tax expense (benefit) of:

nil and $( 2 ) million for the three months ended March 31, 2024 and 2023, respectively.

Change in current discount rate related to reserve for future policy benefits, net of tax expense (benefit) of $ 18 and $( 32 ) for the three months ended March 31, 2024 and 2023, respectively.

Change in non-performance risk on market risk benefits, net of tax expense (benefit) of $( 111 ) and $ 60 for the three months ended March 31, 2024 and 2023, respectively.

$ 1 and $( 1 ) for the three months ended June 30, 2024 and 2023, respectively, and $ 1 and $( 3 ), for the six months ended June 30, 2024 and 2023, respectively.

5 ( 1 ) 5 ( 9 )

Change in current discount rate related to reserve for future policy benefits, net of tax expense (benefit) of $ 14 and $ 21 for the three months ended June 30, 2024 and 2023, respectively, and $ 32 and $( 11 ), for the six months ended June 30, 2024 and 2023, respectively.

53 75 116 ( 39 )

Change in non-performance risk on market risk benefits, net of tax expense (benefit) of $( 7 ) and $( 165 ) for the three months ended June 30, 2024 and 2023, respectively, and $( 118 ) and $( 105 ), for the six months ended June 30, 2024 and 2023, respectively.

( 30 ) ( 599 ) ( 430 ) ( 375 )

Total other comprehensive income (loss) ( 203 ) ( 1,057 ) ( 818 ) 13

10 unchanged sentences

Stock Stock Capital at Cost Income Earnings Equity Interests Equity

Balances as of December 31, 2023 $ 533 $ 1 $ 6,005 $ ( 599 ) $ ( 2,808 ) $ 7,038 $ 10,170 $ 164 $ 10,334

Balances as of March 31, 2024 $ 533 $ 1 $ 6,005 $ ( 713 ) $ ( 3,423 ) $ 7,766 $ 10,169 $ 187 $ 10,356

Net income (loss) — — — — — 275 275 7 282

4 unchanged sentences

Purchase of treasury stock — — — ( 109 ) — — ( 109 ) — ( 109 )

Issuance of preferred stock — — — — — — — — —

Share based compensation — — 2 26 — ( 11 ) 17 — 17

Balances as of June 30, 2024 $ 533 $ 1 $ 6,007 $ ( 796 ) $ ( 3,626 ) $ 7,965 $ 10,084 $ 200 $ 10,284

Additional Treasury Other Total Non-

Preferred Common Paid-In Stock Comprehensive Retained Shareholders' Controlling Total

Stock Stock Capital at Cost Income Earnings Equity Interests Equity

Balances as of March 31, 2023 $ 533 $ 1 $ 6,070 $ ( 510 ) $ ( 2,308 ) $ 4,852 $ 8,638 $ 829 $ 9,467

Net income (loss) — — — — — 1,217 1,217 3 1,220

Other comprehensive income (loss) — — — — ( 1,057 ) — ( 1,057 ) — ( 1,057 )

Change in equity of noncontrolling interests — — — — — — — ( 61 ) ( 61 )

Dividends on preferred stock — — — — — ( 13 ) ( 13 ) — ( 13 )

Dividends on common stock — — — — — ( 53 ) ( 53 ) — ( 53 )

Purchase of treasury stock — — — ( 94 ) — — ( 94 ) — ( 94 )

Issuance of preferred stock — — — — — — — — —

Share based compensation — — ( 73 ) 138 — ( 51 ) 14 — 14

Balances as of June 30, 2023 $ 533 $ 1 $ 5,997 $ ( 466 ) $ ( 3,365 ) $ 5,952 $ 8,652 $ 771 $ 9,423

Additional Treasury Other Total Non-

5 unchanged sentences

Change in equity of noncontrolling interests — — — — — — — 22 22

Dividends on preferred stock — — — — — ( 22 ) ( 22 ) — ( 22 )

Dividends on common stock — — — — — ( 110 ) ( 110 ) — ( 110 )

2 unchanged sentences

Share based compensation — — 2 32 — ( 11 ) 23 — 23

Balances as of March 31, 2023 $ 533 $ 1 $ 6,070 $ ( 510 ) $ ( 2,308 ) $ 4,852 $ 8,638 $ 829 $ 9,467

Balances as of June 30, 2024 $ 1 $ 533 $ 1 $ 6,007 $ ( 796 ) $ ( 3,626 ) $ 7,965 $ 10,084 $ 200 $ 10,284

Additional Treasury Other Total Non-

Preferred Common Paid-In Stock Comprehensive Retained Shareholders' Controlling Total

Stock Stock Capital at Cost Income Earnings Equity Interests Equity

Balances as of December 31, 2022 $ — $ 1 $ 6,063 $ ( 443 ) $ ( 3,378 ) $ 6,403 $ 8,646 $ 732 $ 9,378

Net income (loss) — — — — — ( 280 ) ( 280 ) 4 ( 276 )

Other comprehensive income (loss) — — — — 13 — 13 — 13

Change in equity of noncontrolling interests — — — — — — — 35 35

Dividends on preferred stock — — — — — ( 13 ) ( 13 ) — ( 13 )

Dividends on common stock — — — — — ( 107 ) ( 107 ) — ( 107 )

Purchase of treasury stock — — — ( 164 ) — — ( 164 ) — ( 164 )

Issuance of preferred stock 533 — — — — — 533 — 533

Share based compensation — — ( 66 ) 141 — ( 51 ) 24 — 24

Balances as of June 30, 2023 $ 533 $ 1 $ 5,997 $ ( 466 ) $ ( 3,365 ) $ 5,952 $ 8,652 $ 771 $ 9,423

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

33 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

81 unchanged sentences

In the opinion of management, these Condensed Consolidated Financial Statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.

Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

All material intercompany accounts and transactions have been eliminated in consolidation.

All prior period amounts have been conformed to the current period presentation, unless otherwise indicated below.

With the establishment of Brooke Re in the first quarter of 2024, the Company’s hedging program was enhanced to align hedging instruments more closely with market risk benefit reserves, which resulted in higher levels of interest rate hedging consistent with the economics of our business.

In connection with this enhanced hedging approach, the Company reviewed its existing interest rate hedging instruments and determined that interest rate swaps that were historically used for duration management purposes should be recharacterized as supporting our hedging of variable annuity market risk benefits.

Accordingly, effective January 1, 2024, the periodic settlements and change in settlement accruals on interest rate swaps will now be classified as non-operating and excluded from pretax adjusted operating earnings.

Accordingly, effective January 1, 2024, the periodic settlements and change in settlement accruals on interest rate swaps are now classified as non-operating and excluded from pretax adjusted operating earnings.

Prior period amounts have not been adjusted for this prospective recharacterization with respect to interest rate swaps.

4 unchanged sentences

This reclassification only applies to pretax adjusted operating earnings (non-GAAP).

• Interest costs related to portfolio leverage transactions (repurchase agreements, Federal Home Loan Bank short-term advances, and cash collateral costs) were reclassified from Interest Expense to Net Investment Income.

This reclassification applies to Net Income (GAAP) and pretax adjusted operating earnings (non-GAAP).

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 1.

Business and Basis of Presentation

All prior period amounts have been conformed to the current period presentation for the reclassifications discussed above.

This reclassification applies to Net Income (GAAP) and pretax adjusted operating earnings (non-GAAP).

Use of Estimates

3 unchanged sentences

• Valuation of investments and derivative instruments, including fair values of securities deemed to be in an illiquid market and the determination of when an impairment is necessary;

• Assessments as to whether certain entities are VIEs, the existence of reconsideration events and the determination of which party, if any, should consolidate the entity;

• Assumptions used in calculating policy reserves and liabilities including policyholder behavior, mortality rates, expenses, investment returns and policy crediting rates;

27 unchanged sentences

New Accounting Standards

amendments in this ASU will be effective for the Company for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and are to be applied retrospectively.

The amendments in this ASU will be effective for the Company for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and are to be applied retrospectively.

The Company is in the process of evaluating the impact of the new guidance and does not plan to early adopt.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which enhances annual income tax disclosures by requiring disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The new requirements in this ASU will be effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted, and are to be applied on a prospective basis with the option to apply retrospectively.

3 unchanged sentences

Retail Annuities, Institutional Products, and Closed Life and Annuity Block.

The Company reports certain activities and items that are not included in these reportable segments, including the results of PPM Holdings, Inc., the holding company of PPM, which manages the majority of the Company’s general account investment portfolio, in Corporate and Other.

The Company reports in Corporate and Other, certain activities and items that are not included in these reportable segments, including the results of PPM Holdings, Inc., the holding company of PPM, which manages the majority of the Company’s general account investment portfolio.

The reportable segments reflect how the Company’s chief operating decision maker views and manages the business.

1 unchanged sentence

Retail Annuities

The Company’s Retail Annuities segment offers a variety of retirement income and savings products through its diverse suite of products, consisting primarily of variable annuities, fixed index annuities, fixed annuities, payout annuities, and registered index-linked annuities ("RILA").

The Company’s Retail Annuities segment offers a variety of retirement income and savings products through its diverse suite of products, consisting primarily of variable annuities, registered index-linked annuities ("RILA"), fixed index annuities, fixed annuities, and payout annuities.

These products are distributed through various wirehouses, insurance brokers and independent broker-dealers, as well as through banks and financial institutions.

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 RILA offers customers access to market returns through market index-linked investment options, subject to a cap, and offers a variety of features designed to modify or limit losses.

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.

1 unchanged sentence

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 by banks or money market funds.

A RILA offers customers access to market returns through market index-linked investment options, subject to a cap, and offers a variety of features designed to modify or limit losses.

The financial results of the variable annuity business within the Company’s Retail Annuities segment are largely dependent on the performance of the contract holder account value, which impacts both the level of fees collected and the benefits paid to the contract holder.

12 unchanged sentences

The Closed Life and Annuity Blocks segment also includes a block of group payout annuities that we assumed from John Hancock Life Insurance Company (USA) and John Hancock Life Insurance Company of New York through reinsurance transactions in 2018 and 2019, respectively.

The Company historically offered traditional and interest-sensitive life insurance products but discontinued new sales of life insurance products in 2012, as we believe opportunistically acquiring mature blocks of life insurance policies was a more efficient means of diversifying our in-force business than selling new life insurance products.

The Company historically offered traditional and interest-sensitive life insurance products but discontinued new sales of life insurance products in 2012, as we believe opportunistically acquiring mature blocks of life insurance policies is a more efficient means of diversifying our in-force business than selling new life insurance products.

The profitability of the Company’s Closed Life and Annuity Blocks segment is largely driven by its historical ability to appropriately price its products and purchase appropriately priced blocks of business, as realized through underwriting, expense and net gains (losses) on derivatives and investments, and the ability to earn an assumed rate of return on the assets supporting that business.

17 unchanged sentences

(iii) the movements in reserves, market risk benefits, guaranteed benefit features accounted for as embedded derivative instruments, and related claims and benefit payments;

(iv) amortization of the balance of unamortized deferred acquisition costs at the date of transition to current LDTI accounting guidance on January 1, 2021 associated with items excluded from pretax adjusted operating earnings prior to transition;

(iv) amortization of the balance of unamortized deferred acquisition costs, at January 1, 2021, the date of transition to current Long Duration Targeted Improvements ("LDTI") accounting guidance, associated with items excluded from pretax adjusted operating earnings prior to transition;

and (v) the impact on the valuation of Guaranteed Benefits and Net Hedging Results arising from changes in underlying actuarial assumptions.

15 unchanged sentences

Set forth in the tables below is certain information with respect to the Company’s segments (in millions):

Three Months Ended March 31, 2024 Retail Annuities Institutional

Three Months Ended June 30, 2024 Retail Annuities Institutional

Products Closed Life

20 unchanged sentences

Segment Information

Three Months Ended March 31, 2023 Retail Annuities Institutional

Three Months Ended June 30, 2023 Retail Annuities Institutional

Products Closed Life

17 unchanged sentences

Pretax Adjusted Operating Earnings $ 328 $ 17 $ 7 $ ( 47 ) $ 305

Six Months Ended June 30, 2024 Retail Annuities Institutional

Products Closed Life

Blocks Corporate and

Operating Revenues

Fee income $ 2,185 $ — $ 224 $ 24 $ 2,433

Premiums 22 — 58 — 80

Net investment income 318 231 331 3 883

Other income 17 — 14 ( 20 ) 11

Total Operating Revenues 2,542 231 627 7 3,407

Operating Benefits and Expenses

Death, other policy benefits and change in policy

reserves, net of deferrals 25 — 288 — 313

(Gain) loss from updating future policy benefits cash flow assumptions, net ( 14 ) — 6 — ( 8 )

Interest credited on other contract holder funds, net

of deferrals and amortization

172 169 205 — 546

Interest expense 12 — — 39 51

Operating costs and other expenses, net of deferrals 1,187 2 70 104 1,363

Amortization of deferred acquisition costs 276 — 4 — 280

Total Operating Benefits and Expenses 1,658 171 573 143 2,545

Pretax Adjusted Operating Earnings $ 884 $ 60 $ 54 $ ( 136 ) $ 862

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 3.

Segment Information

Six Months Ended June 30, 2023 Retail Annuities Institutional

Products Closed Life

Blocks Corporate and

Operating Revenues

Fee income $ 1,977 $ — $ 233 $ 26 $ 2,236

Premiums 10 — 72 — 82

Net investment income 207 188 328 25 748

Other income 19 — 10 5 34

Total Operating Revenues 2,213 188 643 56 3,100

Operating Benefits and Expenses

Death, other policy benefits and change in policy

reserves, net of deferrals ( 3 ) — 317 — 314

(Gain) loss from updating future policy benefits cash flow assumptions, net ( 2 ) — 27 — 25

Interest credited on other contract holder funds, net

of deferrals and amortization 194 160 226 — 580

Interest expense 12 — — 44 56

Operating costs and other expenses, net of deferrals 1,051 2 81 102 1,236

Amortization of deferred acquisition costs 277 — 5 — 282

Total Operating Benefits and Expenses 1,529 162 656 146 2,493

Pretax Adjusted Operating Earnings $ 684 $ 26 $ ( 13 ) $ ( 90 ) $ 607

Intersegment eliminations in the above tables are included in the Corporate and Other segment.

These include the elimination of investment income, between Retail Annuities and the Corporate and Other segments, as well as the elimination from fee income and investment income of investment fees paid by Jackson Financial and its subsidiaries to PPM, which were $ 19 million and $ 18 million for the three months ended March 31, 2024 and 2023, respectively .

These include the elimination of investment income, between Retail Annuities and the Corporate and Other segments, as well as the elimination from fee income and investment income of investment fees paid by Jackson Financial and its subsidiaries to PPM, which were $ 20 million and $ 19 million for the three months ended June 30, 2024 and 2023, respectively, and $ 39 million and $ 37 million for the six months ended June 30, 2024 and 2023, respectively .

The following table summarizes the reconciling items from the non-GAAP measure of total operating revenues to the U.S.

GAAP measure of total revenues attributable to the Company (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Total operating revenues $ 1,727 $ 1,567 $ 3,407 $ 3,100

8 unchanged sentences

There were no customers that, individually, generate revenues that exceeded 10% of total revenues.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 3.

Segment Information

The following table summarizes the reconciling items from the non-GAAP measure of total operating benefits and expenses to the U.S.

GAAP measure of total benefits and expenses attributable to the Company (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Total operating benefits and expenses $ 1,254 $ 1,262 $ 2,545 $ 2,493

3 unchanged sentences

Total benefits and expenses $ 929 $ ( 1,085 ) $ ( 296 ) $ 205

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 3.

Segment Information

The following table summarizes the reconciling items, from the non-GAAP measure of pretax adjusted operating earnings to the U.S.

GAAP measure of net income attributable to the Company (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Pretax adjusted operating earnings $ 473 $ 305 $ 862 $ 607

24 unchanged sentences

Debt Securities

The following table sets forth the composition of the fair value of debt securities at March 31, 2024 and December 31, 2023, classified by rating categories as assigned by a nationally recognized statistical rating organization (a “rating agency”), the National Association of Insurance Commissioners (“NAIC”), or if not rated by such organizations, the Company’s investment advisors.

The following table sets forth the composition of the fair value of debt securities at June 30, 2024, and December 31, 2023, classified by rating categories as assigned by a nationally recognized statistical rating organization (a “rating agency”), the National Association of Insurance Commissioners (the “NAIC”), or if not rated by such organizations, the Company’s investment advisors.

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

At March 31, 2024 and December 31, 2023, the carrying value of investments rated by the Company’s consolidated investment advisor totaled $ 389 million and $ 486 million, respectively.

At June 30, 2024 and December 31, 2023, the carrying value of investments rated by the Company’s consolidated investment advisor totaled $ 352 million and $ 486 million, respectively.

Percent of Total Debt

Securities Carrying Value

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Investment Rating

7 unchanged sentences

100.0 % 100.0 %

At March 31, 2024 and December 31, 2023, the total carrying value of debt securities in an unrealized loss position consisted of:

March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the total carrying value of debt securities in an unrealized loss position consisted of:

June 30, 2024 December 31, 2023

Investment grade securities 79 % 77 %

1 unchanged sentence

Not rated securities 19 % 21 %

Unrealized losses on debt securities that were below investment grade or not rated were approximately 21 % and 21 % of the aggregate gross unrealized losses on available-for-sale debt securities at March 31, 2024 and December 31, 2023, respectively.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

Corporate securities in an unrealized loss position were diversified across industries as follows (in millions, except percentages):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Industries accounting for the largest percentage of corporate gross unrealized losses:

2 unchanged sentences

Largest unrealized loss related to a single corporate obligor $ 53 $ 50

At March 31, 2024 and December 31, 2023, the amortized cost, allowance for credit loss ("ACL"), gross unrealized gains and losses, and fair value of debt securities, including trading securities and securities carried at fair value under the fair value option, were as follows (in millions):

At June 30, 2024 and December 31, 2023, the amortized cost, allowance for credit loss ("ACL"), gross unrealized gains and losses, and fair value 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

March 31, 2024 Cost (1)

June 30, 2024 Cost (1)

Credit Loss Gains Losses Value

21 unchanged sentences

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

The amortized cost, ACL, gross unrealized gains and losses, and fair value of debt securities at March 31, 2024, by contractual maturity, are shown below (in millions).

The amortized cost, ACL, gross unrealized gains and losses, and fair value of debt securities at June 30, 2024, 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.

12 unchanged sentences

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

As required by law in various states in which business is conducted, securities with a carrying value of $ 88 million and $ 91 million at March 31, 2024 and December 31, 2023, 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 $ 86 million and $ 91 million at June 30, 2024 and December 31, 2023, respectively, were on deposit with regulatory authorities.

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

3 unchanged sentences

Amortized for Unrealized Unrealized Fair

March 31, 2024 Cost (1)

June 30, 2024 Cost (1)

Credit Loss Gains Losses Value

18 unchanged sentences

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):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Less than 12 months Less than 12 months

35 unchanged sentences

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

Debt securities in an unrealized loss position as of March 31, 2024 did not require an impairment recognized in earnings as (i) the Company did not intend to sell these debt securities, (ii) 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 (iii) 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 June 30, 2024 did not require an impairment recognized in earnings as (i) the Company did not intend to sell these debt securities, (ii) 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 (iii) 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.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

As of March 31, 2024, unrealized losses associated with debt securities are primarily due to widening credit spreads or rising risk-free rates since purchase.

As of June 30, 2024, unrealized losses associated with debt securities are primarily due to widening credit spreads or rising risk-free rates since purchase.

As described below, the Company performed analyses 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.

34 unchanged sentences

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

Accrued interest of nil and nil was written off during the three months ended March 31, 2024, and 2023, respectively.

Accrued interest of nil and nil was written off during the three and six months ended June 30, 2024 and 2023, respectively.

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

Three Months Ended March 31, 2024 US

Three Months Ended June 30, 2024 US

securities Other government securities Public

1 unchanged sentence

asset-backed securities Total

Balance at April 1, 2024 $ — $ — $ — $ 13 $ 6 $ — $ 1 $ 20

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

Changes for securities with previously recorded credit loss — — — — — — 7 7

Additions for purchases of PCD debt securities (1)

— — — — — — — —

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

Reductions for securities disposed — — — — — — — —

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

Balance at June 30, 2024 (2)

$ — $ — $ — $ 13 $ 6 $ — $ 8 $ 27

Three Months Ended June 30, 2023 US

securities Other government securities Public

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

asset-backed securities Total

Balance at April 1, 2023 $ — $ 3 $ — $ 21 $ 5 $ — $ — $ 29

Additions for which credit loss was not previously recorded — — — 1 — — — 1

Changes for securities with previously recorded credit loss — — — ( 1 ) 2 — — 1

Additions for purchases of PCD debt securities (1)

— — — — — — — —

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

Reductions for securities disposed — — — ( 14 ) ( 1 ) — — ( 15 )

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

Balance at June 30, 2023 (2)

$ — $ 3 $ — $ 7 $ 6 $ — $ — $ 16

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

Six Months Ended June 30, 2024 US

securities Other government securities Public

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

asset-backed securities Total

Balance at January 1, 2024 $ — $ — $ — $ 15 $ 6 $ — $ — $ 21

6 unchanged sentences

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

Balance at March 31, 2024 (2)

Balance at June 30, 2024 (2)

$ — $ — $ — $ 13 $ 6 $ — $ 8 $ 27

Three Months Ended March 31, 2023 US

Six Months Ended June 30, 2023 US

securities Other government securities Public

9 unchanged sentences

Securities intended/required to be sold before recovery of amortized cost basis — — — ( 17 ) — — — ( 17 )

Balance at March 31, 2023 (2)

Balance at June 30, 2023 (2)

$ — $ 3 $ — $ 7 $ 6 $ — $ — $ 16

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

(1) Represents purchased credit-deteriorated ("PCD") fixed maturity available-for-sale securities.

(2) Accrued interest receivable on debt securities totaled $ 403 million and $ 413 million as of March 31, 2024 and 2023, respectively, and was excluded from the determination of credit losses for the three months ended March 31, 2024, and 2023.

(2) Accrued interest receivable on debt securities totaled $ 425 million and $ 429 million as of June 30, 2024 and 2023, respectively, and was excluded from the determination of credit losses for the three and six months ended June 30, 2024 and 2023.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

Net Investment Income

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Debt securities (1)

$ 394 $ 338 $ 798 $ 720

Equity securities 1 9 3 ( 1 )

9 unchanged sentences

Net investment income $ 748 $ 642 $ 1,482 $ 1,349

(1) Includes changes in fair value gains (losses) on trading securities and includes $ 25 million and $ 27 million for the three months ended March 31, 2024, and 2023, respectively, related to the change in fair value for securities carried under the fair value option.

(1) Includes changes in fair value gains (losses) on trading securities and includes $( 3 ) million and $ 22 million for the three and six months ended June 30, 2024, respectively, and $( 35 ) million and $( 8 ) million for the three and six months ended June 30, 2023, respectively, related to the change in fair value for securities carried under the fair value option.

(2) In the first quarter of 2024, interest costs principally associated with repurchase agreements and cash collateral were reclassified from interest expense to net investment income.

All prior period amounts have been conformed to current period presentation.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $ 7 million and $( 14 ) million, for the three months ended March 31, 2024 and 2023, respectively.

(3) Includes expenses from consolidated variable interest entities, which includes changes in fair value of notes issued by those entities, of $( 48 ) million and $( 106 ) million for the three and six months ended June 30, 2024, respectively, and $ 19 million and $( 72 ) million for the three and six months ended June 30, 2023, respectively.

Unrealized gains (losses) included in investment income that were recognized on equity securities held were $( 1 ) million and $( 8 ) million, for the three months ended June 30, 2024, and 2023, respectively, and $ 6 million and $( 22 ) million, for the six months ended June 30, 2024 and 2023, respectively.

Net Gains (Losses) on Derivatives and Investments

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Available-for-sale securities

3 unchanged sentences

Credit loss income (expense) on mortgage loans 2 ( 13 ) ( 2 ) ( 60 )

( 5 ) ( 11 ) 60 —

Net gains (losses) excluding derivatives and funds withheld assets ( 30 ) ( 40 ) ( 37 ) ( 108 )

7 unchanged sentences

These gains (losses) are increased or decreased by changes in the embedded derivative liability related to the Athene funds withheld coinsurance 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 months ended March 31, 2024 and 2023 was $ 1,270 million and $ 1,797 million, which was approximately 93 % and 97 % of book value, respectively.

Proceeds from sales of available-for-sale debt securities were $ 1.7 billion and $ 2.1 billion during the three months ended March 31, 2024 and 2023, respectively.

The aggregate fair value of securities sold at a loss for the three and six months ended June 30, 2024 was $ 625 million and $ 1,895 million, which was approximately 95 % and 93 % of book value, respectively.

The aggregate fair value of securities sold at a loss for the three and six months ended June 30, 2023 was $ 356 million and $ 2,153 million, which was approximately 93 % and 96 % of book value, respectively.

Proceeds from sales of available-for-sale debt securities were $ 1.2 billion and $ 2.9 billion during the three and six months ended June 30, 2024, respectively, and $ 1.3 billion and $ 3.3 billion during the three and six months ended June 30, 2023, respectively.

Consolidated Variable Interest Entities ("VIEs")

3 unchanged sentences

In December 2023, a consolidated CLO expanded its issuance by $ 97 million, net of the Company’s holding, which was not reflected in the Company's Consolidated Balance Sheet as of December 31, 2023 due to the reporting lag.

In March 2024, a new consolidated CLO was created.

It has total assets of $ 37 million net of the Company’s holding, which was not reflected in the Company’s Consolidated Balance Sheet as of March 31, 2024 due to the reporting lag.

The inclusion of these additional issuances would not materially impact the financial position of the Company due to the offsetting changes to assets and liabilities.

In June 2024, a consolidated VIE issued $ 369 million par, net of the Company's holding, of a collateralized loan obligation.

The Company's policy is to record the consolidation of VIEs on a one-month lag due to the timing of when information is available from the VIE.

Therefore, the VIE's issuance of this CLO is not reflected in the Company’s Consolidated Balance Sheet as of June 30, 2024, but would not materially impact the financial position of the Company as a result of the offsetting changes to assets and liabilities.

• Private Equity Funds III – VIII are limited partnership structures that invest the ownership capital in portfolios of various other limited partnership structures.

6 unchanged sentences

Asset and liability information for the consolidated VIEs included on the Condensed Consolidated Balance Sheets are as follows (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Debt securities, at fair value under fair value option $ 2,409 $ 2,037

17 unchanged sentences

Unfunded capital commitments for these investments are detailed in Note 16 of the Notes to Condensed Consolidated Financial Statements.

The Company’s exposure to loss is limited to the capital invested and unfunded capital commitments related to the LPs/LLCs, which was $ 2,578 million and $ 2,576 million as of March 31, 2024 and December 31, 2023, respectively.

The Company’s exposure to loss is limited to the capital invested and unfunded capital commitments related to the LPs/LLCs, which was $ 2,666 million and $ 2,576 million as of June 30, 2024 and December 31, 2023, 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.

1 unchanged sentence

• The Company invests in certain mutual funds.

Mutual funds are recognized in equity securities on the Condensed Consolidated Balance Sheets and were $ 22 million and $ 21 million as of March 31, 2024 and December 31, 2023, respectively.

Mutual funds are recognized in equity securities on the Condensed Consolidated Balance Sheets and were $ 22 million and $ 21 million as of June 30, 2024 and December 31, 2023, respectively.

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

8 unchanged sentences

Commercial and Residential Mortgage Loans

The following table shows commercial mortgage loans, residential mortgage loans, and the respective accrued interest thereon at March 31, 2024 and December 31, 2023 (in millions):

March 31, 2024 December 31, 2023

The following table shows commercial mortgage loans, residential mortgage loans, and the respective accrued interest thereon at June 30, 2024 and December 31, 2023 (in millions):

June 30, 2024 December 31, 2023

Commercial mortgage loans (1)

5 unchanged sentences

(2) Net of an allowance for credit losses of $ 5 million and $ 5 million at each date, respectively.

At March 31, 2024, commercial mortgage loans were collateralized by properties located in 36 states, the District of Columbia, and Europe, while residential mortgage loans were collateralized by properties located in 49 states, the District of Columbia, Mexico, and Europe.

At June 30, 2024, commercial mortgage loans were collateralized by properties located in 36 states, the District of Columbia, and Europe, while residential mortgage loans were collateralized by properties located in 49 states, the District of Columbia, Mexico, and Europe.

Evaluation for Credit Losses on Mortgage Loans

15 unchanged sentences

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

Three Months Ended March 31, 2024 Apartment Hotel Office Retail Warehouse Residential Mortgage Total

Three Months Ended June 30, 2024 Apartment Hotel Office Retail Warehouse Other Residential Mortgage Total

Balance at April 1, 2024 $ 30 $ 6 $ 73 $ 27 $ 17 $ 5 $ 4 $ 162

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

Additions from purchase of PCD mortgage loans — — — — — — — —

Provision (release) ( 3 ) ( 1 ) ( 3 ) — 2 2 1 ( 2 )

Balance at June 30, 2024 (1) (2)

$ 27 $ 5 $ 70 $ 27 $ 19 $ 7 $ 5 $ 160

Three Months Ended June 30, 2023 Apartment Hotel Office Retail Warehouse Other Residential Mortgage Total

Balance at April 1, 2023 $ 18 $ 19 $ 67 $ 21 $ 11 $ 3 $ 7 $ 146

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

Additions from purchase of PCD mortgage loans — — — — — — — —

Provision (release) ( 2 ) ( 12 ) 24 4 1 — 1 16

Balance at June 30, 2023 (1) (2)

$ 16 $ 7 $ 91 $ 25 $ 12 $ 3 $ 8 $ 162

Six Months Ended June 30, 2024 Apartment Hotel Office Retail Warehouse Other Residential Mortgage Total

Balance at January 1, 2024 $ 28 $ 4 $ 78 $ 27 $ 17 $ 6 $ 5 $ 165

2 unchanged sentences

Provision (release) ( 1 ) 1 ( 8 ) — 2 1 — ( 5 )

Balance at March 31, 2024 (1)

Balance at June 30, 2024 (1) (2)

$ 27 $ 5 $ 70 $ 27 $ 19 $ 7 $ 5 $ 160

Three Months Ended March 31, 2023 Apartment Hotel Office Retail Warehouse Residential Mortgage Total

Six Months Ended June 30, 2023 Apartment Hotel Office Retail Warehouse Other Residential Mortgage Total

Balance at January 1, 2023 $ 16 $ 20 $ 15 $ 21 $ 16 $ 3 $ 4 $ 95

2 unchanged sentences

Provision (release) — ( 13 ) 76 4 ( 4 ) — 4 67

Balance at March 31, 2023 (1)

Balance at June 30, 2023 (1) (2)

$ 16 $ 7 $ 91 $ 25 $ 12 $ 3 $ 8 $ 162

(1) Accrued interest receivable totaled $ 47 million and $ 47 million as of March 31, 2024 and 2023, respectively, and was excluded from the determination of credit losses.

(1) Accrued interest receivable totaled $ 44 million and $ 44 million as of June 30, 2024 and 2023, respectively, and was excluded from the determination of credit losses.

(2) Accrued interest amounting to $ 1 million and $ 2 million were written off as of June 30, 2024 and 2023, respectively, 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.

1 unchanged sentence

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

No accrued interest was written off as of March 31, 2024 and 2023, respectively, relating to loans that were greater than 90 days delinquent or in the process of foreclosure.

The following table provides information about our impaired residential mortgage loans (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Recorded investment $ 35 $ 24

5 unchanged sentences

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

March 31, 2024

June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving

38 unchanged sentences

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

March 31, 2024

June 30, 2024

In Good Standing (1)

5 unchanged sentences

Warehouse 1,966 — — — 1,966

Other 679 — — — 679

Total commercial 9,185 40 3 — 9,228

10 unchanged sentences

Warehouse 2,016 — — — 2,016

Other 695 — — — 695

Total commercial 9,562 — — — 9,562

2 unchanged sentences

Total $ 10,473 $ — $ 66 $ 24 $ 10,563

(1) At March 31, 2024 and December 31, 2023, includes mezzanine and bridge loans of $ 382 million and $ 391 million in the Apartment category, $ 22 million and $ 21 million in the Hotel category, $ 168 million and $ 171 million in the Office category, $ 32 million and $ 32 million in the Retail category, and $ 315 million and $ 312 million in the Warehouse category, respectively.

(2) At March 31, 2024 and December 31, 2023, includes $ 23 million and $ 22 million of loans purchased when the loans were greater than 90 days delinquent and $ 4 million and $ 5 million of loans in process of foreclosure, are supported with insurance or other guarantees provided by various governmental programs, respectively.

(1) At June 30, 2024 and December 31, 2023, includes mezzanine and bridge loans in good standing of $ 361 million and $ 368 million in the Apartment category, $ 27 million and $ 21 million in the Hotel category, $ 139 million and $ 171 million in the Office category, $ 32 million and $ 32 million in the Retail category, $ 295 million and $ 287 million in the Warehouse category, and $ 23 million and $ 48 million in the Other category, respectively.

At June 30, 2024 and December 31, 2023, includes restructured mezzanine and bridge loans of $ 23 million and nil in the Office category.

(2) At June 30, 2024 and December 31, 2023, includes $ 20 million and $ 22 million of loans purchased when the loans were greater than 90 days delinquent and $ 4 million and $ 5 million of loans in process of foreclosure, are supported with insurance or other guarantees provided by various governmental programs, respectively.

The following table provides information about the mortgage loans modified during the periods indicated to borrowers experiencing financial difficulty (dollars in millions):

1 unchanged sentence

Cost Basis Percent of

March 31, 2024

Three Months Ended June 30, 2024

Commercial mortgage loans $ — — %

March 31, 2023

Three Months Ended June 30, 2023

Commercial mortgage loans $ — — %

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

Term Extension

Cost Basis Percent of

Six Months Ended June 30, 2024

Commercial mortgage loans $ 23 0.25 %

Six Months Ended June 30, 2023

Commercial mortgage loans $ — — %

The following table describes the financial effect of the modifications made to the loans noted above:

1 unchanged sentence

Financial Effect

March 31, 2024

Six Months Ended June 30, 2024

Commercial mortgage loans Granted extension of term for three -years and rate converted from variable to 4 % fixed.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

2 unchanged sentences

Current 30-89 Days Past Due 90+ Days Past Due

March 31, 2024

June 30, 2024

Commercial mortgage loans $ 40 $ — $ —

March 31, 2023

June 30, 2023

Commercial mortgage loans $ — $ — $ —

As of March 31, 2024 and 2023, stressed mortgage loans for which the Company is dependent, or expects to be dependent, on the underlying property to satisfy repayment were $ 19 million and $ 4 million, respectively.

As of June 30, 2024 and 2023, stressed mortgage loans for which the Company is dependent, or expects to be dependent, on the underlying property to satisfy repayment were $ 31 million and $ 3 million, respectively.

Policy loans are loans the Company issues to contract holders that use the cash surrender value of their life insurance policy or annuity contract as collateral.

At March 31, 2024 and December 31, 2023, $ 3.4 billion and $ 3.5 billion of these loans were carried at fair value, which the Company believes is equal to unpaid principal balances, plus accrued investment income.

At March 31, 2024 and December 31, 2023, the Company had $ 0.9 billion and $ 0.9 billion, respectively, of policy loans not held as collateral for reinsurance, which were carried at the unpaid principal balances.

At June 30, 2024 and December 31, 2023, $ 3.5 billion and $ 3.5 billion of these loans were carried at fair value, which the Company believes is equal to unpaid principal balances, plus accrued investment income.

At June 30, 2024 and December 31, 2023, the Company had $ 0.9 billion and $ 0.9 billion, respectively, of policy loans not held as collateral for reinsurance, which were carried at the unpaid principal balances.

Other Invested Assets

1 unchanged sentence

FHLBI capital stock is carried at cost and adjusted for any impairment.

At March 31, 2024 and December 31, 2023, FHLB capital stock had a carrying value of $ 127 million and $ 108 million, respectively.

At June 30, 2024 and December 31, 2023, FHLB capital stock had a carrying value of $ 115 million and $ 108 million, respectively.

Real estate is carried at the lower of depreciated cost or fair value and real estate occupied by the Company is carried at depreciated cost.

At March 31, 2024 and December 31, 2023, real estate totaling $ 226 million and $ 226 million, respectively, included foreclosed properties with a book value of $ 7 million and $ 6 million at March 31, 2024 and December 31, 2023, respectively.

At June 30, 2024 and December 31, 2023, real estate totaling $ 225 million and $ 226 million, respectively, included foreclosed properties with a book value of $ 6 million and $ 6 million at June 30, 2024 and December 31, 2023, respectively.

Carrying values for LP investments are generally determined by using the proportion of the Company’s investment in each fund (Net Asset Value (“NAV”) equivalent) as a practical expedient for fair value, and generally are recorded on a three-month lag, with changes in value included in net investment income.

At March 31, 2024 and December 31, 2023, investments in LPs had carrying values of $ 2.2 billion and $ 2.1 billion, respectively.

At June 30, 2024 and December 31, 2023, investments in LPs had carrying values of $ 2.3 billion and $ 2.1 billion, respectively.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

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 March 31, 2024 and December 31, 2023, the estimated fair value of loaned securities was $ 20 million and $ 19 million, respectively.

As of June 30, 2024 and December 31, 2023, the estimated fair value of loaned securities was $ 15 million and $ 19 million, respectively.

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

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

At March 31, 2024 and December 31, 2023, cash collateral received in the amount of $ 21 million and $ 19 million, respectively, was invested by the agent banks and included in cash and cash equivalents of the Company.

At June 30, 2024 and December 31, 2023, cash collateral received in the amount of $ 15 million and $ 19 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.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 4.

At March 31, 2024 and December 31, 2023, the outstanding repurchase agreement balance was $ 1.8 billion and nil , collateralized with U.S.

Treasury securities and corporate securities of $ 1.8 billion and nil maturing within 30 days, and was included within repurchase agreements and securities lending payable in the Condensed Consolidated Balance Sheets.

At June 30, 2024 and December 31, 2023, the outstanding repurchase agreement balance was $ 1.8 billion and nil , collateralized with U.S.

Treasury securities and corporate securities, of which $ 1.8 billion and nil maturing within 30 days, and was included within repurchase agreements and securities lending payable in the Condensed 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 $ 19 million and $ 8 million for the three months ended March 31, 2024, and 2023, respectively, and is included within net investment income.

Interest expense totaled $ 22 million and $ 41 million for the three and six months ended June 30, 2024, respectively, and $ 17 million and $ 25 million for the three and six months ended June 30, 2023, respectively, and is included within net investment income.

Collateral Upgrade Transactions

During the three months ended March 31, 2024, Jackson executed certain paired repurchase and reverse repurchase transactions (“collateral upgrade” transactions) totaling $ 1.5 billion pursuant to master repurchase agreements with participating bank counterparties.

During the six months ended June 30, 2024, Jackson executed certain paired repurchase and reverse repurchase transactions (“collateral upgrade” transactions) totaling $ 1.5 billion pursuant to master repurchase agreements with participating bank counterparties.

Under these collateral upgrade transactions, the Company lends securities (e.g., corporate debt securities or other securities agreed upon between the parties) to bank counterparties in exchange for U.S.

3 unchanged sentences

The paired transactions are reported net within the Condensed Consolidated Balance Sheets.

These transactions do not have a stated maturity and require at least 150 -days' notice prior to termination of the transaction.

At March 31, 2024 and December 31, 2023, the fair value of the U.S.

These transactions do not have a stated maturity and require at least 150 -days' notice prior to termination.

At June 30, 2024 and December 31, 2023, the fair value of the U.S.

treasuries received was $ 1.5 billion and nil , collateralized with corporate securities with a fair value of $ 1.6 billion and nil .

2 unchanged sentences

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.

Gross interest income of $ 12 million and nil and gross interest expense of $ 13 million and nil for the three months ended March 31, 2024, and 2023, respectively, are included within net investment income.

Gross interest income of $ 21 million and nil and gross interest expense of $ 23 million and nil for the three months ended June 30, 2024, and 2023, respectively, and gross interest income of $ 33 million and nil and gross interest expense of $ 36 million and nil for the six months ended June 30, 2024 and 2023, respectively, are included within net investment income.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 5.

7 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):

March 31, 2024

June 30, 2024

Contractual/ Assets Liabilities Net

66 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Derivatives excluding funds withheld under reinsurance treaties

18 unchanged sentences

All 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 March 31, 2024 and December 31, 2023, the fair value of the Company’s net non-cleared, over-the-counter derivative assets by counterparty were $ 108 million and $ 117 million, respectively, and held collateral was $ 92 million and $ 841 million, respectively, related to these agreements.

At March 31, 2024 and December 31, 2023, the fair value of the Company’s net non-cleared, over-the-counter derivative liabilities by counterparty were $ 1,183 million and $ 937 million, respectively, and provided collateral was $ 1,382 million and $ 751 million, respectively, related to these agreements.

If all the downgrade provisions had been triggered at March 31, 2024 and December 31, 2023, in aggregate, the Company would have had to disburse nil and $ 910 million, respectively, and would have been allowed to claim $ 215 million and nil , respectively.

The Company pledged collateral of $ 2,294 million and $ 2,616 million as of March 31, 2024 and December 31, 2023, respectively, for initial margin related to uncleared margin for over-the-counter derivatives and exchange-traded futures.

At June 30, 2024 and December 31, 2023, the fair value of the Company’s net non-cleared, over-the-counter derivative assets by counterparty were $ 125 million and $ 117 million, respectively, and held collateral was $ 116 million and $ 841 million, respectively, related to these agreements.

At June 30, 2024 and December 31, 2023, the fair value of the Company’s net non-cleared, over-the-counter derivative liabilities by counterparty were $ 799 million and $ 937 million, respectively, and provided collateral was $ 924 million and $ 751 million, respectively, related to these agreements.

If all the downgrade provisions had been triggered at June 30, 2024 and December 31, 2023, in aggregate, the Company would have had to disburse nil and $ 910 million, respectively, and would have been allowed to claim $ 134 million and nil , respectively.

The Company pledged collateral of $ 2,149 million and $ 2,616 million as of June 30, 2024 and December 31, 2023, respectively, for initial margin related to uncleared margin for over-the-counter derivatives and exchange-traded futures.

Variation margin on exchange traded futures is settled through the netting of cash paid/received for variation margin against the fair value of the trades.

6 unchanged sentences

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

March 31, 2024

June 30, 2024

Recognized Gross

41 unchanged sentences

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

The above tables exclude net embedded derivative liabilities of $ 2,568 million and $ 2,090 million as of March 31, 2024 and December 31, 2023, respectively, as these derivatives are not subject to master netting arrangements.

The above tables also exclude the funds withheld embedded derivative asset (liability) of $ 2,496 million and $ 2,468 million at March 31, 2024 and December 31, 2023.

The above tables exclude net embedded derivative liabilities of $ 2,982 million and $ 2,090 million as of June 30, 2024 and December 31, 2023, respectively, as these derivatives are not subject to master netting arrangements.

The above tables also exclude the funds withheld embedded derivative asset (liability) of $ 2,522 million and $ 2,468 million at June 30, 2024 and December 31, 2023.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

2 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Value Carrying

40 unchanged sentences

Typical inputs used by these three pricing methods include reported trades, benchmark yields, credit spreads, liquidity premiums and/or estimated cash flows based on default and prepayment assumptions.

As a result of typical trading volumes and the lack of specific quoted market prices for most debt securities, independent pricing services will normally derive the security prices through recently reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable information as outlined above.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

there are no recently reported trades, the independent pricing services and broker-dealers may use matrix or pricing model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at relevant market rates.

If there are no recently reported trades, the independent pricing services and broker-dealers may use matrix or pricing model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at relevant market rates.

Certain securities are priced using broker-dealer quotes, which may utilize proprietary inputs and models.

13 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 March 31, 2024 and December 31, 2023, the pricing model used by the Company utilizes current spread levels of similarly rated securities to determine the market discount rate for the security.

For those securities that were internally valued at June 30, 2024 and December 31, 2023, 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.

5 unchanged sentences

Fair values for limited partnership interests, which are included in other invested assets, are 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 March 31, 2024 and December 31, 2023.

No adjustments to these amounts were deemed necessary at June 30, 2024 and December 31, 2023.

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

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

The Company’s limited partnership interests are not redeemable, and distributions received are generally the result of liquidation of the underlying assets of the partnerships.

2 unchanged sentences

Limited partnership interests expected to be sold are classified as Level 2 in the fair value hierarchy.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

In cases when a limited partnership’s financial statements are unavailable and a NAV equivalent is not available or practical, the fair value may be based on an internally developed model or provided by the general partner as determined using private transactions, information obtained from the primary co-investor or underlying company, or financial metrics provided by the lead sponsor.

20 unchanged sentences

Certain money market instruments are valued using unadjusted quoted prices in active markets and are classified as Level 1.

Funds Withheld Payable Under Reinsurance Treaties

The funds withheld payable under reinsurance treaties includes both the funds withheld payable that are held at fair value under the fair value option and the funds withheld embedded derivative and are both considered Level 3 in the fair value hierarchy.

• The fair value of the funds withheld payable that are held at fair value under the fair value option is equal to the fair value of the assets held as collateral, which primarily consists of policy loans using industry standard valuation techniques.

• The funds withheld embedded derivative is determined based upon a total return swap technique referencing the fair value of the investments held under the reinsurance contract and requires certain significant unobservable inputs.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

Funds Withheld Payable Under Reinsurance Treaties

The funds withheld payable under reinsurance treaties includes both the funds withheld payable that are held at fair value under the fair value option and the funds withheld embedded derivative.

Both are considered Level 3 in the fair value hierarchy.

• The fair value of the funds withheld payable that is held at fair value under the fair value option is equal to the fair value of the assets held as collateral, which primarily consists of policy loans using industry standard valuation techniques.

Separate Account Assets

11 unchanged sentences

This percentage of total projected fees is considered a fixed term of the MRB feature and is held static over the life of the contract.

This percentage may not exceed 100% of the total projected contract fees as of contract inception.

As the Company may issue contracts that have projected future liabilities greater than the projected future guaranteed benefit fees at issue, the Company may also attribute mortality and expense charges when performing this calculation.

7 unchanged sentences

Fair values for MRBs related to variable annuities, including the contract reinsuring GMIB features, are calculated using internally developed models because active, observable markets do not exist for those guaranteed benefits.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

The fair value calculation is based on the present value of future cash flows comprised of future expected benefit payments, less future attributed rider fees, over the lives of the contracts.

3 unchanged sentences

Best estimate assumptions plus risk margins are used as applicable.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

At each valuation date, the fair value calculation reflects expected returns based on treasury rates as of that date to determine the value of expected future cash flows produced in a stochastic process.

13 unchanged sentences

RILA guaranteed benefit features are classified as MRBs and measured at fair value.

Unlike variable or fixed index annuities, RILA products do not have explicit fees and are measured using an option-based method.

Unlike variable or fixed index annuities, a majority of RILA product features do not have explicit fees and are measured using an option-based method.

The fair value measurement represents the present value of future claims payable by the MRB feature.

4 unchanged sentences

Additionally, although not a significant input, assumed withdrawal rates are used to estimate the expected volume of embedded options that will be realized by policyholders.

The fair value of the index-linked crediting derivative feature embedded in RILAs, included in Annuity Reserves in the above table, is calculated using the closed form Black-Scholes Option Pricing model, incorporating such factors as the volatility of returns, the level of interest rates and the time remaining until the option expires.

Additionally, although not a significant input, assumed withdrawal rates are used to estimate the expected volume of embedded options that will be realized by policyholders.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

Additionally, although not a significant input, assumed withdrawal rates are used to estimate the expected volume of embedded options that will be realized by policyholders.

Notes Issued by Consolidated VIEs

3 unchanged sentences

Fair Value Option

The Company elected the fair value option for debt securities related to certain consolidated investments totaling $ 2,165 million and $ 2,037 million at March 31, 2024 and December 31, 2023, respectively.

The Company elected the fair value option for debt securities related to certain consolidated investments totaling $ 2,409 million and $ 2,037 million at June 30, 2024 and December 31, 2023, respectively.

These debt securities are reflected on the Company’s Condensed Consolidated Balance Sheets as debt securities, at fair value under the fair value option.

The Company has elected the fair value option for certain funds withheld assets, which are held as collateral for reinsurance, totaling $ 3,994 million and $ 4,054 million at March 31, 2024 and December 31, 2023, respectively, as discussed above, and includes mortgage loans as discussed below.

The Company has elected the fair value option for certain funds withheld assets, which are held as collateral for reinsurance, totaling $ 4,099 million and $ 4,054 million at June 30, 2024 and December 31, 2023, respectively, as discussed above, and includes mortgage loans as discussed below.

The Company elected the fair value option for certain mortgage loans held under the funds withheld reinsurance agreement with Athene.

2 unchanged sentences

The fair value and aggregate contractual principal for mortgage loans where the fair value option was elected after December 31, 2021, were as follows (in millions):

March 31, December 31,

June 30, December 31,

Fair value $ 430 $ 481

Aggregate contractual principal 443 491

As of March 31, 2024, no loans in good standing for which the fair value option was elected were in non-accrual status, and no loans were more than 90 days past due and still accruing interest.

The Company elected the fair value option for notes issued by consolidated VIEs totaling $ 2,068 million and $ 1,988 million at March 31, 2024 and December 31, 2023, respectively.

As of June 30, 2024, no loans in good standing for which the fair value option was elected were in non-accrual status, and no loans were more than 90 days past due and still accruing interest.

The Company elected the fair value option for notes issued by consolidated VIEs totaling $ 2,041 million and $ 1,988 million at June 30, 2024 and December 31, 2023, respectively.

Income and changes in unrealized gains and losses on other assets for which the Company has elected the fair value option are immaterial to the Company’s Condensed Consolidated Financial Statements.

3 unchanged sentences

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

March 31, 2024

June 30, 2024

Total Level 1 Level 2 Level 3

66 unchanged sentences

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

March 31, 2024

June 30, 2024

Assets Total Internal External

39 unchanged sentences

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

As of March 31, 2024

As of June 30, 2024

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

94 unchanged sentences

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 March 31, 2024 and December 31, 2023, securities of $ 90 million and $ 93 million, respectively, are fair valued using techniques incorporating unobservable inputs and are classified in Level 3 of the fair value hierarchy.

At June 30, 2024 and December 31, 2023, securities of $ 74 million and $ 93 million, respectively, 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.

15 unchanged sentences

Fair Value Measurements

The tables below provide roll-forwards for the three months ended March 31, 2024, and 2023 of the financial instruments for which significant unobservable inputs (Level 3) are used in the fair value measurement.

The tables below provide roll-forwards for the three and six months ended June 30, 2024 and 2023 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.

5 unchanged sentences

as of Net Other Issuances in and/or as of

January 1, Income Comprehensive and (out of) March 31,

Three Months Ended March 31, 2024 2024 (Loss) Income (Loss) Settlements Level 3 2024

April 1, Income Comprehensive and (out of) June 30,

Three Months Ended June 30, 2024 2024 (Loss) Income (Loss) Settlements Level 3 2024

Debt securities

14 unchanged sentences

as of Net Other Issuances in and/or as of

January 1, Income Comprehensive and (out of) March 31,

Three Months Ended March 31, 2023 2023 (Loss) Income (Loss) Settlements Level 3 2023

April 1, Income Comprehensive and (out of) June 30,

Three Months Ended June 30, 2023 2023 (Loss) Income (Loss) Settlements Level 3 2023

Debt securities

10 unchanged sentences

Fair Value Measurements

The components of the amounts included in purchases, sales, issuances and settlements for the three months ended March 31, 2024, and 2023 shown above are as follows (in millions):

Three Months Ended March 31, 2024 Purchases Sales Issuances Settlements Total

Total Realized/Unrealized Gains (Losses) Included in

Fair Value Sales, Transfers Fair Value

as of Net Other Issuances in and/or as of

January 1, Income Comprehensive and (out of) June 30,

Six Months Ended June 30, 2024 2024 (Loss) Income (Loss) Settlements Level 3 2024

Debt securities

Other government securities $ 150 $ — $ 1 $ — $ — $ 151

Public utilities 41 ( 1 ) 1 3 — 44

3 unchanged sentences

Mortgage loans 481 ( 3 ) — ( 48 ) — 430

Limited partnerships 135 7 — 10 — 152

Policy loans 3,457 111 — ( 57 ) — 3,511

Reinsurance recoverable on market risk benefits 149 ( 28 ) — — — 121

Market risk benefit assets 6,737 1,819 — — — 8,556

Funds withheld payable under reinsurance treaties ( 1,158 ) ( 56 ) — 53 — ( 1,161 )

Market risk benefit liabilities ( 4,785 ) 1,444 ( 549 ) — — ( 3,890 )

Total Realized/Unrealized Gains (Losses) Included in

Fair Value Sales, Transfers Fair Value

as of Net Other Issuances in and/or as of

January 1, Income Comprehensive and (out of) June 30,

Six Months Ended June 30, 2023 2023 (Loss) Income (Loss) Settlements Level 3 2023

Debt securities

Corporate securities $ 56 $ ( 9 ) $ — $ ( 4 ) $ ( 22 ) $ 21

Equity securities 122 ( 35 ) — — ( 1 ) 86

Mortgage loans 582 ( 2 ) — ( 71 ) — 509

Limited partnerships 440 ( 22 ) — 11 ( 7 ) 422

Policy loans 3,419 107 — ( 88 ) — 3,438

Reinsurance recoverable on market risk benefits 221 ( 27 ) — — — 194

Market risk benefit assets 4,865 1,092 — — — 5,957

Funds withheld payable under reinsurance treaties ( 424 ) ( 362 ) — 85 — ( 701 )

Market risk benefit liabilities ( 5,662 ) 1,679 ( 480 ) — — ( 4,463 )

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

The components of the amounts included in purchases, sales, issuances and settlements for the three and six months ended June 30, 2024 and 2023 shown above are as follows (in millions):

Three Months Ended June 30, 2024 Purchases Sales Issuances Settlements Total

Debt securities

Corporate securities $ — $ ( 7 ) $ — $ — $ ( 7 )

Other asset-backed securities 33 ( 103 ) — — ( 70 )

Mortgage loans 43 ( 67 ) — — ( 24 )

Limited partnerships 10 — — — 10

Policy loans — — — ( 19 ) ( 19 )

Total $ 86 $ ( 177 ) $ — $ ( 19 ) $ ( 110 )

Funds withheld payable under reinsurance treaties $ — $ — $ ( 184 ) $ 200 $ 16

Three Months Ended March 31, 2023 Purchases Sales Issuances Settlements Total

Three Months Ended June 30, 2023 Purchases Sales Issuances Settlements Total

Debt securities

2 unchanged sentences

Mortgage loans 99 ( 70 ) — — 29

Policy loans — — — ( 67 ) ( 67 )

Total $ 98 $ ( 69 ) $ — $ ( 67 ) $ ( 38 )

Funds withheld payable under reinsurance treaties $ — $ — $ ( 1 ) $ 66 $ 65

Six Months Ended June 30, 2024 Purchases Sales Issuances Settlements Total

Debt securities

Public utilities $ 3 $ — $ — $ — $ 3

Corporate securities 13 ( 15 ) — — ( 2 )

Other asset-backed securities 107 ( 163 ) — — ( 56 )

Mortgage loans 91 ( 139 ) — — ( 48 )

Limited partnerships 10 — — — 10

2 unchanged sentences

Funds withheld payable under reinsurance treaties $ — $ — $ ( 344 ) $ 397 $ 53

For the three months ended March 31, 2024, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 9 million, transfers from Level 2 to Level 3 were $ 15 million.

For the three months ended March 31, 2023, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 37 million, transfers from Level 2 to Level 3 were $ 11 million, and transfers from Level 3 to NAV were $ 7 million .

Six Months Ended June 30, 2023 Purchases Sales Issuances Settlements Total

Debt securities

Corporate securities $ — $ ( 4 ) $ — $ — $ ( 4 )

Mortgage loans 135 ( 206 ) — — ( 71 )

Limited partnerships 18 ( 7 ) — — 11

Policy loans — — 35 ( 123 ) ( 88 )

Total $ 153 $ ( 217 ) $ 35 $ ( 123 ) $ ( 152 )

Funds withheld payable under reinsurance treaties $ — $ — $ ( 36 ) $ 121 $ 85

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

Fair Value Measurements

For the three and six months ended June 30, 2024, transfers from Level 3 to Level 2 of the fair value hierarchy were $ 7 million and $ 16 million, respectively, transfers from Level 2 to Level 3 were $( 11 ) million and $ 4 million, respectively, and transfers from Level 3 to NAV were nil and nil , respectively.

For the three and six months ended June 30, 2023, transfers from Level 3 to Level 2 of the fair value hierarchy were $( 6 ) million and $ 31 million, respectively, transfers from Level 2 to Level 3 were $( 3 ) million and $ 8 million, respectively, and transfers from Level 3 to NAV were nil and $ 7 million, respectively.

During 2023, management determined that the fair value measurements for certain securities, primarily comprised of asset-backed and other debt securities included in funds withheld accounts, which were classified as Level 2 measurements within the fair value hierarchy in prior reporting periods, should be classified as Level 3 fair value measurements.

2 unchanged sentences

In the fourth quarter of 2023, securities totaling $ 1,336 million, that were previously reported as Level 3 were included in “Transfers in and/or (out of) Level 3”.

For the three months ended March 31, 2023, the Level 3 Rollforward table and the Level 3 Purchases, Sales, Issuances, and Settlements tables are shown as previously reported and do not reflect this change in classification.

For the three and six months ended June 30, 2023, the Level 3 Rollforward table and the Level 3 Purchases, Sales, Issuances, and Settlements tables are shown as previously reported and do not reflect this change in classification.

The change in classification did not change the fair value of these securities and did not impact the Condensed Consolidated Balance Sheets or Condensed Consolidated Income Statements.

2 unchanged sentences

The portion of gains (losses) included in net income (loss) or 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 March 31,

Three Months Ended June 30,

Net Income Included in OCI Included in

2 unchanged sentences

Other government securities $ — $ ( 1 ) $ — $ —

Public utilities ( 1 ) 1 — —

Corporate securities 2 ( 1 ) ( 9 ) 1

8 unchanged sentences

Market risk benefit liabilities ( 8 ) ( 39 ) 1,861 ( 764 )

Six Months Ended June 30,

Net Income Included in OCI Included in

Net Income Included in OCI

Debt securities

Other government securities $ — $ 1 $ — $ —

Public utilities ( 1 ) 1 — —

Corporate securities 1 ( 1 ) ( 9 ) —

Other asset-backed securities ( 1 ) — — —

Equity securities — — ( 35 ) —

Mortgage loans ( 3 ) — ( 2 ) —

Limited partnerships 1 — ( 22 ) —

Policy loans 111 — 107 —

Reinsurance recoverable on market risk benefits ( 28 ) — ( 27 ) —

Market risk benefit assets 1,819 — 1,092 —

Funds withheld payable under reinsurance treaties ( 56 ) — ( 362 ) —

Market risk benefit liabilities 1,444 ( 549 ) 1,679 ( 480 )

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6.

2 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):

March 31, 2024

June 30, 2024

Value Total Level 1 Level 2 Level 3

13 unchanged sentences

Securities lending payable (3)

FHLB advances (4)

500 500 — 500 —

Repurchase agreements (3)

84 unchanged sentences

Substantially unchanged contracts are treated as a continuation of the replaced contract, with no change to the unamortized DAC at the time of the replacement.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 7.

Deferred Acquisition Costs

The following table presents the roll-forward of the DAC (in millions).

1 unchanged sentence

The amortization pattern is revised on a prospective basis at the beginning of the period based on the period’s actual experience.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 7.

Deferred Acquisition Costs

Three Months Ended March 31, Year Ended December 31,

Six Months Ended June 30, Year Ended December 31,

Variable Annuities

17 unchanged sentences

The profit and loss with respect to obligations ceded to Athene are included in periodic net settlements pursuant to the coinsurance agreement.

To further support its obligations under the coinsurance agreement, Athene procured $ 1.2 billion in letters of credit for Jackson’s benefit and established a trust account for Jackson’s benefit, which had a book value of approximately $ 85 million at March 31, 2024.

Swiss Re Reinsurance

4 unchanged sentences

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

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 8.

GMIB Reinsurance

3 unchanged sentences

The Company discontinued offering the GMIB in 2009.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 8.

Reinsurance Recoverables and Reinsured Market Risk Benefits

3 unchanged sentences

The Company regularly monitors the financial strength ratings of its reinsurers.

At March 31, 2024 and December 31, 2023, the Company had an allowance for credit losses (“ACL”) of $ 30 million and $ 29 million, respectively, on its reinsurance recoverables, which are reported net of ACL on the Condensed Consolidated Balance Sheets.

At June 30, 2024 and December 31, 2023, the Company had an allowance for credit losses (“ACL”) of $ 27 million and $ 29 million, respectively, on its reinsurance recoverables, which are reported net of ACL on the Condensed Consolidated Balance Sheets.

The ACL considers the credit quality of the reinsurer and is generally determined based on probability of default and loss given default assumptions, after considering any applicable collateral arrangements.

For reinsurance recoverables that are collateralized, and the amount of collateral is expected to be adjusted as necessary as a result of fair value changes in the collateral, the Company determines that the expectation of nonpayment of the carrying value of the reinsurance recoverable is zero.

For reinsurance recoverables that are collateralized, the amount of collateral is expected to be adjusted as necessary as a result of fair value changes in that collateral.

If the fair value of the collateral at the reporting date is less than the carrying value of the reinsurance recoverable, the Company recognizes an ACL on the difference between the fair value of the collateral at the reporting date and the carrying value of the reinsurance recoverable.

11 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Life $ 5,261 $ 5,370

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Variable annuity $ 68 $ 90

19 unchanged sentences

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):

March 31, December 31,

June 30, December 31,

Debt securities, available-for-sale $ 10,520 $ 11,526

15 unchanged sentences

(1) 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.

(2) Includes funds withheld embedded derivative asset (liability) of $ 2,496 million and $ 2,468 million at March 31, 2024 and December 31, 2023, respectively.

(2) Includes funds withheld embedded derivative asset (liability) of $ 2,522 million and $ 2,468 million at June 30, 2024 and December 31, 2023, respectively.

The sources of income related to funds withheld under reinsurance treaties reported in net investment income in the Condensed Consolidated Income Statements were as follows (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Debt securities (1)

$ 137 $ 160 $ 282 $ 332

Equity securities — ( 37 ) 9 ( 38 )

7 unchanged sentences

Total net investment income on funds withheld reinsurance treaties $ 285 $ 252 $ 555 $ 559

(1) Includes $ 1 million and $ 2 million for the three months ended March 31, 2024 and 2023, respectively, related to the change in fair value for securities carried under the fair value option.

(2) Includes $( 2 ) million and $( 2 ) million for the three months ended March 31, 2024 and 2023, respectively, related to the change in fair value for mortgage loans carried under the fair value option.

(1) Includes nil and $ 1 million for the three and six months ended June 30, 2024, respectively, and nil and $ 2 million for the three and six months ended June 30, 2023, respectively, related to the change in fair value for securities carried under the fair value option.

(2) Includes $ 1 million and $( 3 ) million for the three and six months ended June 30, 2024, respectively, and nil and $( 2 ) million for the three and six months ended June 30, 2023, respectively, related to the change in fair value for mortgage loans carried under the fair value option.

(3) Includes management fees.

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Available-for-sale securities

9 unchanged sentences

Total net gains (losses) on derivatives and investments $ ( 214 ) $ ( 134 ) $ ( 415 ) $ ( 807 )

(1) Includes the Athene embedded derivative gain (loss) of $ 29 million and $( 370 ) million for the three months ended March 31, 2024 and 2023, respectively.

(1) Includes the Athene embedded derivative gain (loss) of $ 25 million and $ 54 million for the three and six months ended June 30, 2024, respectively, and $ 113 million and $( 257 ) million for the three and six months ended June 30, 2023, respectively.

Reserves for Future Policy Benefits and Claims Payable

43 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Reserves for future policy benefits

9 unchanged sentences

Present Value of Expected Net Premiums

Three Months Ended March 31, Year Ended December 31,

Six Months Ended June 30, Year Ended December 31,

Payout Closed Block Closed Block Payout Closed Block Closed Block

15 unchanged sentences

Present Value of Expected Future Policy Benefits

Three Months Ended March 31, Year Ended December 31,

Six Months Ended June 30, Year Ended December 31,

Payout Closed Block Closed Block Payout Closed Block Closed Block

2 unchanged sentences

Beginning of period cumulative effect of changes in discount rate assumptions 99 767 185 132 958 275

Beginning balance at original discount rate (including DPL of $ 42 , $ 0 and $ 626 in March 31, 2024, and $ 40 , $ 0 and $ 671 in December 31, 2023 for payout annuities, closed block life and closed block annuity, respectively)

Beginning balance at original discount rate (including DPL of $ 42 , $ 0 and $ 626 in June 30, 2024, and $ 40 , $ 0 and $ 671 in December 31, 2023 for payout annuities, closed block life and closed block annuity, respectively)

1,189 5,901 4,400 1,174 6,406 4,709

5 unchanged sentences

Benefits payments ( 67 ) ( 323 ) ( 240 ) ( 129 ) ( 685 ) ( 493 )

Ending balance of original discount rate (including DPL of $ 42 , $ 0 and $ 614 in March 31, 2024, and $ 42 , $ 0 and $ 626 in December 31, 2023 for payout annuities, closed block life and closed block annuity, respectively)

Ending balance of original discount rate (including DPL of $ 52 , $ 0 and $ 602 in June 30, 2024, and $ 42 , $ 0 and $ 626 in December 31, 2023 for payout annuities, closed block life and closed block annuity, respectively)

1,210 5,677 4,252 1,189 5,901 4,400

8 unchanged sentences

Annuities Life Annuity

March 31, 2024

June 30, 2024

Weighted average duration (years) 6.9 7.0 6.8

2 unchanged sentences

The discount rate assumption was updated based on current market data.

Discount rates increased in the first quarter of 2024 compared to the fourth quarter of 2023.

Discount rates were higher in the second quarter of 2024 compared to the fourth quarter of 2023.

Discount rates increased primarily due to increases in risk-free rates, which resulted in a decrease in the liability for future policy benefits.

4 unchanged sentences

The discounted premiums are calculated using the current discount rate, while the undiscounted cash flows represent the gross cash flows before any discounting is applied:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Undiscounted Discounted Undiscounted Discounted

10 unchanged sentences

Gross Premiums Interest Expense

Three Months Ended March 31, 2024 Year Ended December 31, 2023 Three Months Ended March 31, 2024 Year Ended December 31, 2023

Six Months Ended June 30, 2024 Year Ended December 31, 2023 Six Months Ended June 30, 2024 Year Ended December 31, 2023

Payout Annuities $ 23 $ 22 $ 22 $ 43

3 unchanged sentences

The following table presents the weighted average interest rate for the reserves for future policy benefits at the cohort's level for the locked-in discount rate (interest accretion rate), and current discount rate, weighted by the cohort's benefit reserve amount:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Payout Annuities

10 unchanged sentences

The following table presents a roll-forward of Closed Block Life additional liabilities for annuitization, death and other insurance benefits (in millions):

Three Months Ended March 31, 2024 Year Ended December 31, 2023

Six Months Ended June 30, 2024 Year Ended December 31, 2023

Balance, beginning of period $ 1,153 $ 1,131

10 unchanged sentences

The weighted average duration represents average cohort-level duration weighted by the benefit reserves amount:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Weighted average duration (years) 9.6 9.7

1 unchanged sentence

Assessments Interest Expense

Three Months Ended March 31, 2024 Year Ended December 31, 2023 Three Months Ended March 31, 2024 Year Ended December 31, 2023

Six Months Ended June 30, 2024 Year Ended December 31, 2023 Six Months Ended June 30, 2024 Year Ended December 31, 2023

Additional liability for annuitization, death and other insurance benefits $ ( 66 ) $ ( 148 ) $ 28 $ 56

The following table presents the weighted average current discount rate of Closed Block Life additional liabilities for annuitization, death and other insurance benefits, applied at the cohort level weighted by reserve benefit amount:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Weighted average current discount rate 4.98 % 4.97 %

26 unchanged sentences

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 March 31, 2024 and December 31, 2023 totaled $ 5.2 billion and $ 5.8 billion, respectively.

The carrying values at June 30, 2024 and December 31, 2023 totaled $ 4.6 billion and $ 5.8 billion, respectively.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 10.

6 unchanged sentences

Advances are in the form of funding agreements, short-term and long-term borrowings issued to FHLBI.

At March 31, 2024 and December 31, 2023, the Company held $ 127 million and $ 108 million of FHLBI capital stock, respectively, supporting $ 2.0 billion and $ 2.3 billion in funding agreements and short-term and long-term borrowings at March 31, 2024 and December 31, 2023, respectively.

At March 31, 2024 and December 31, 2023, the funding agreements and short-term and long-term borrowings were collateralized by mortgage-related securities and commercial mortgage loans with a carrying value of $ 3.1 billion and $ 3.5 billion, respectively.

At June 30, 2024 and December 31, 2023, the Company held $ 115 million and $ 108 million of FHLBI capital stock, respectively, supporting $ 2.6 billion and $ 2.3 billion in funding agreements and short-term and long-term borrowings at June 30, 2024 and December 31, 2023, respectively.

At June 30, 2024 and December 31, 2023, the funding agreements and short-term and long-term borrowings were collateralized by mortgage-related securities and commercial mortgage loans with a carrying value of $ 4.0 billion and $ 3.5 billion, respectively.

The following table presents the liabilities for other contract holder funds (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Payout Annuity $ 853 $ 860

19 unchanged sentences

Policy charges and other — ( 41 ) ( 78 ) ( 9 ) — ( 243 ) — ( 371 )

Balance as of March 31, 2024 $ 851 $ 7,991 $ 9,350 $ 9,923 $ 6,644 $ 10,926 $ 1,220 $ 46,905

Balance as of June 30, 2024 $ 853 $ 7,622 $ 8,971 $ 9,515 $ 8,253 $ 10,849 $ 1,194 $ 47,257

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 10.

15 unchanged sentences

Annuity Annuity Annuity Annuities RILA Life Annuity

March 31, 2024

June 30, 2024

Weighted-average crediting rate (1)

15 unchanged sentences

(3) Cash surrender value represents the amount of the contract holder’s account balance distributable at the balance sheet date less the applicable surrender charges.

At March 31, 2024 and December 31, 2023, excluding reinsurance business, approximately 94 % and 92 % of the Company’s annuity account values correspond to crediting rates that are at the minimum guaranteed interest rates, respectively.

At March 31, 2024 and December 31, 2023, excluding reinsurance business, approximately 83 % and 64 % of the Company’s closed block life account values correspond to crediting rates that are at the minimum guaranteed interest rates, respectively.

At June 30, 2024 and December 31, 2023, excluding reinsurance business, approximately 94 % and 92 % of the Company’s annuity account values correspond to crediting rates that are at the minimum guaranteed interest rates, respectively.

At June 30, 2024 and December 31, 2023, excluding reinsurance business, approximately 83 % and 64 % of the Company’s closed block life account values correspond to crediting rates that are at the minimum guaranteed interest rates, respectively.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 10.

1 unchanged sentence

The following table presents contract holder account balances invested in fixed account funds by range of guaranteed minimum crediting rates and the related range of the difference between rates being credited to other contract holder funds and the respective guaranteed minimums (in millions):

March 31, 2024

June 30, 2024

At Guaranteed 1 Basis Point-50 51 Basis Points-150 Greater Than 150

96 unchanged sentences

The separate account assets supporting the variable portion of both traditional variable annuities and variable contracts with guarantees are carried at fair value and reported as summary total separate account assets with an equivalent summary total reported for separate account liabilities.

At March 31, 2024 and December 31, 2023, the assets and liabilities associated with variable life and annuity contracts were $ 231 billion and $ 220 billion, respectively.

At June 30, 2024 and December 31, 2023, the assets and liabilities associated with variable life and annuity contracts were $ 229 billion and $ 220 billion, respectively.

Investment risks associated with market value changes are borne by the contract holders, except to the extent of minimum guarantees made by the Company.

2 unchanged sentences

Included in the separate account assets and liabilities described above is a Jackson issued group variable annuity contract designed for use in connection with and issued to the Company’s Defined Contribution Retirement Plan.

These deposits are allocated to the Jackson National Separate Account - II, which had balances of $ 213 million and $ 198 million at March 31, 2024 and December 31, 2023, respectively.

These deposits are allocated to the Jackson National Separate Account - II, which had balances of $ 205 million and $ 198 million at June 30, 2024 and December 31, 2023, respectively.

The Company receives administrative fees for managing the funds.

1 unchanged sentence

The following table presents the roll-forward of the separate account balance for variable annuities (in millions):

Three Months Ended March 31, 2024 Year Ended December 31, 2023

Six Months Ended June 30, 2024 Year Ended December 31, 2023

Balance as of beginning of period $ 219,381 $ 195,550

9 unchanged sentences

The following table presents the reconciliation of the separate account balance in the Condensed Consolidated Balance Sheets (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Variable Annuities $ 228,802 $ 219,381

4 unchanged sentences

The following table presents aggregate fair value of assets, by major investment asset category, supporting separate accounts (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Variable Annuities By Fund Type

45 unchanged sentences

RILA guaranteed benefit features are classified as MRBs and measured at fair value.

Unlike variable or fixed index annuities, RILA products do not have explicit fees and are measured using an option-based method.

Unlike variable or fixed index annuities, a majority of RILA product features do not have explicit fees and are measured using an option-based method.

The fair value measurement represents the present value of future claims payable by the MRB feature.

1 unchanged sentence

The following table presents the reconciliation of the market risk benefits balance in the Condensed Consolidated Balance Sheets (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Variable Other Variable Other

6 unchanged sentences

The following table presents the roll-forward of the net MRB (assets) liabilities for variable annuities (dollars in millions):

Three Months Ended March 31, 2024 Year Ended December 31, 2023

Six Months Ended June 30, 2024 Year Ended December 31, 2023

Net MRB balance, beginning of period $ ( 2,000 ) $ 767

23 unchanged sentences

The significant assumptions used in the MRB fair value calculations are discussed in Note 6 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 13.

Long-Term Debt

Liabilities for the Company’s debt are primarily carried at an amount equal to the principal balance net of any unamortized original issuance discount or premium.

Original issuance discount or premium and any debt issue costs, if applicable, are recognized as a component of interest expense over the period the debt is expected to be outstanding.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 13.

Long-Term Debt

The aggregate carrying value of long-term debt was as follows (in millions):

March 31, December 31,

June 30, December 31,

Long-Term Debt

3 unchanged sentences

Senior Notes due 2051 490 490

Surplus notes 250 250

FHLBI bank loans 53 57

Surplus notes due 2027 250 250

FHLBI bank loans due 2034 & 2035 53 57

Total long-term debt $ 2,034 $ 2,037

The following table presents the contractual maturities of the Company's long-term debt as of March 31, 2024 (in millions):

The following table presents the contractual maturities of the Company's long-term debt as of June 30, 2024 (in millions):

Calendar Year

9 unchanged sentences

Commitments under the 2023 Revolving Credit Facility terminate on February 24, 2028.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 13.

Long-Term Debt

Line of Credit Agreement

4 unchanged sentences

Jackson and Jackson Financial are jointly and severally liable to repay any advance under the agreement, which must be repaid prior to the last day of the quarter in which the advance was drawn.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 14.

Federal Home Loan Bank Advances

The Company, through its subsidiary, Jackson, entered into an 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 nil and $ 250 million were outstanding at March 31, 2024 and December 31, 2023, respectively, and were recorded in other liabilities.

Interest expense, included as a component of net investment income, on such advances was nil and nil for the three months ended March 31, 2024 and 2023, respectively.

Advances of $ 500 million and $ 250 million were outstanding at June 30, 2024 and December 31, 2023, respectively, and were recorded in other liabilities.

Interest expense on such advances was $ 3 million and $ 6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3 million and $ 6 million for the six months ended June 30, 2024 and 2023, respectively.

See Note 10 - Other Contract Holder Funds of the Notes Condensed Consolidated Financial Statements for the carrying value of total collateralization of our FHLB obligations .

4 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 11.3 % for the three months ended March 31, 2024, compared with 27.2 % for the same period in 2023.

The ETR differs from the statutory rate of 21% primarily due to the dividends received deduction and utilization of foreign tax credits.

The change in the ETR for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was due to the relationship of taxable income to consolidated pre-tax income (loss).

The ETR differs for the three months ended March 31, 2024 from the full year-ended December 31, 2023 ETR of 0.5 % due to the relationship of taxable income to consolidated pre-tax income.

For the three months ended March 31, 2024 and 2023, the Company recorded an estimate of $ 111 million and nil , respectively, for the provision of the Federal corporate alternative minimum tax ("CAMT") based on the Company’s interpretation of available guidance.

This was offset with an increase to the deferred tax asset for the credit carryover, resulting in no impact to total tax expense.

The estimate is based on interpretations and assumptions we have made regarding the CAMT provisions of the Inflation Reduction Act of 2022.

The Company’s effective income tax rate was 11.4 % and 11.3 % for the three and six months ended June 30, 2024, compared with 16.8 % and 52.8 % for the same period in 2023.

The ETR differs from the statutory rate of 21% primarily due to the dividends received deduction, utilization of foreign tax credits, and valuation allowance.

The change in the ETR for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was due to the relationship of taxable income to consolidated pre-tax income (loss).

The ETR differs for the six months ended June 30, 2024 from the full year-ended December 31, 2023 ETR of 0.5 % due to the relationship of taxable income to consolidated pre-tax income.

For the six months ended June 30, 2024 and 2023, the Company recorded an estimate of $ 165 million and nil , respectively, for the provision of the CAMT based on the Company's interpretation of available guidance with an offsetting increase to the deferred tax asset for the credit carryover resulting in no impact to total tax expense.

The estimate is based on interpretations and assumptions we have made regarding the CAMT provisions of the Inflation Reduction Act of 2022 ("IRA").

Department of the Treasury is expected to issue additional regulatory guidance in 2024 that may materially change the estimated provision of the CAMT.

8 unchanged sentences

The Company has adopted an accounting policy to analyze the ability to recover the CAMT credit carryover deferred tax asset separately from the deferred tax assets generated under the regular tax system.

For the three months ended March 31, 2024, changes in market conditions and interest rates impacted the unrealized tax gains and losses in the available for sale securities portfolio resulting in deferred tax assets related to net unrealized tax capital losses.

The deferred tax asset relates to the unrealized losses for which the carryforward period has not yet begun, and as such, when assessing its recoverability, we consider our ability and intent to hold the underlying securities to recovery.

As of March 31, 2024, based on all available evidence, we concluded that a valuation allowance should be established on a portion of the deferred tax asset related to unrealized losses that are not more likely than not to be realized.

For the three months ended March 31, 2024 the Company recorded an increase of $ 46 million to the valuation allowance associated with the unrealized tax losses in the Company's available for sale securities portfolio and a change of nil related to both realized and unrealized losses on capital assets of the Non-life Companies.

The $ 46 million increase for the three months ended March 31, 2024 to the valuation allowance consists of $ 58 million tax expense recorded to other comprehensive income

For the six months ended June 30, 2024, changes in market conditions and interest rates impacted the unrealized tax gains

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 15.

and $ 12 million tax benefit recorded in the income tax expense.

At March 31, 2024 and December 31, 2023, the Company has recorded a total valuation allowance for $ 735 million and $ 688 million, respectively, associated with the unrealized tax losses in the Company's available for sale securities portfolio.

At March 31, 2024 and December 31, 2023, the Company has recorded a total valuation allowance for $ 1 million and $ 1 million, respectively, against the deferred tax assets associated with both realized and unrealized losses on capital assets in the Non-life Companies where it is not more likely than not that the full tax benefit of the losses will be realized.

and losses in the available for sale securities portfolio resulting in deferred tax assets related to net unrealized tax capital losses.

As of June 30, 2024, based on all available evidence, we concluded that a valuation allowance should be established on a portion of the deferred tax asset related to unrealized losses that are not more likely than not to be realized.

For the three and six months ended June 30, 2024 and 2023 the Company recorded an increase of $ 30 million and an increase of $ 76 million, respectively, to the valuation allowance associated with the unrealized tax losses in the Company's available for sale securities portfolio and a change of nil related to both realized and unrealized losses on capital assets of the Non-life Companies.

The $ 30 million increase for the three months ended June 30, 2024, to the valuation allowance consists of $ 42 million tax expense recorded to other comprehensive income and $ 12 million tax benefit recorded in the income tax expense.

The $ 76 million increase for the six months ended June 30, 2024 to the valuation allowance consists of $ 100 million tax expense recorded to other comprehensive income and $ 24 million tax benefit recorded in the income tax expense.

At June 30, 2024 and December 31, 2023, the Company has recorded a total valuation allowance for $ 764 million and $ 688 million, respectively, associated with the unrealized tax losses in the Company's available for sale securities portfolio.

At June 30, 2024 and December 31, 2023, the Company has recorded a total valuation allowance for $ 1 million and $ 1 million, respectively, against the deferred tax assets associated with both realized and unrealized losses on capital assets in the Non-life Companies where it is not more likely than not that the full tax benefit of the losses will be realized.

Commitments and Contingencies

1 unchanged sentence

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 products.

The Company accrues for legal contingencies once the contingency is deemed to be probable and reasonably estimable.

At March 31, 2024, the Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $ 751 million.

At March 31, 2024, unfunded commitments related to fixed-rate mortgage loans and other debt securities totaled $ 804 million.

At June 30, 2024, the Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $ 774 million.

At June 30, 2024, unfunded commitments related to fixed-rate mortgage loans and other debt securities totaled $ 941 million.

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Asset-based commission expenses $ 279 $ 255 $ 558 $ 505

8 unchanged sentences

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Balance, beginning of period (1)

2 unchanged sentences

Change in current discount rate - reserve for future policy benefits (2)

67 96 148 ( 50 )

Change in non-performance risk on market risk benefits ( 37 ) ( 764 ) ( 548 ) ( 480 )

6 unchanged sentences

$ ( 3,626 ) $ ( 3,365 ) $ ( 3,626 ) $ ( 3,365 )

(1) Includes $( 1,661 ) million and $( 1,612 ) million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of March 31, 2024 and December 31, 2023, respectively.

(1) Includes $( 1,712 ) million and $( 1,612 ) million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of June 30, 2024 and December 31, 2023, respectively.

(2) Represents the impact of changes in the discount rate used in the remeasurement of our direct reserves for future policy benefits and claims payable, net of the remeasurement of ceded reserves for future policy benefits and claims payable.

3 unchanged sentences

Consolidated Income Statement

Three Months Ended March 31,

Three Months Ended June 30,

Net unrealized investment gain (loss):

4 unchanged sentences

Reclassifications, net of income taxes $ 67 $ 7

AOCI Components Amounts

Reclassified from AOCI Affected Line Item in the Condensed

Consolidated Income Statement

Six Months Ended June 30,

Net unrealized investment gain (loss):

Net realized gain (loss) on investments $ 76 $ 76 Net gains (losses) on derivatives and investments

Other impaired securities 5 ( 30 ) Net gains (losses) on derivatives and investments

Net unrealized gain (loss), before income taxes 81 46

Income tax expense (benefit) 16 10

Reclassifications, net of income taxes $ 65 $ 36

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 19.

7 unchanged sentences

Dividends on the Series A Preferred Stock are not cumulative.

Under the terms of the Series A Preferred Stock, if the Company has not declared and paid, or declared and set aside a sum sufficient for the payment of, dividends on the Series A Preferred Stock for the immediately preceding dividend period (for the avoidance of doubt, there is no preceding dividend period for the initial dividend period), then the Company’s ability to pay dividends or make distributions with respect to its common stock, or to repurchase or otherwise acquire its common stock, is subject to certain restrictions.

Under the terms of the Series A Preferred Stock, if the Company has not declared and paid, or declared and set aside a sum sufficient for the payment of, dividends on the Series A Preferred Stock for the immediately preceding dividend period, then the Company’s ability to pay dividends or make distributions with respect to its common stock, or to repurchase or otherwise acquire its common stock, is subject to certain restrictions.

Similar restrictions would apply in respect of any preferred stock ranking on parity with, or junior to, the Series A Preferred Stock, if any such preferred stock were to be issued by the Company.

8 unchanged sentences

03/31/2024 February 20, 2024 March 12, 2024 April 1, 2024 $ 500 $ 0.50

06/30/2024 May 2, 2024 June 6, 2024 July 1, 2024 $ 500 $ 0.50

Quarter Ended

03/31/2023 None

06/30/2023 May 8, 2023 June 1, 2023 June 30, 2023 $ 594.44 $ 0.59444

At the time of the Demerger, the Company had two classes of common stock:

4 unchanged sentences

Except for voting rights, the Company’s Class A Common Stock and Class B Common Stock had the same dividend rights, were equal in all other respects, and were otherwise treated as if they were one class of shares.

On June 9, 2022, our shareholders approved the Third Amended and Restated Certificate of Incorporation, which amended and restated the Second Amended and Restated Certificate of Incorporation to eliminate the Class B Common Stock.

At March 31, 2024 and December 31, 2023,

On June 9, 2022, our shareholders approved changes to our certificate of incorporation that eliminated the Class B Common Stock.

At June 30, 2024 and December 31, 2023, the Company was authorized to issue up to 1 billion shares of common stock (formerly known as the Class A

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 19.

the Company was authorized to issue up to 1 billion shares of common stock (formerly known as the Class A Common Stock at December 31, 2021).

Common Stock at December 31, 2021).

Share Repurchase Program

On February 27, 2023, our Board of Directors authorized an increase of $ 450 million in our existing authorization to repurchase shares of our outstanding common stock as part of the Company's share repurchase program.

On August 1, 2024, our Board of Directors authorized an increase of $ 750 million in our existing authorization to repurchase shares of our outstanding common stock as part of the Company's share repurchase program.

The Company expects to repurchase common shares from time to time in the open market or in privately negotiated transactions.

3 unchanged sentences

There can be no assurance that we will continue share repurchases or approve any increase to, or approve any new, stock repurchase program, or the amount of any repurchases made pursuant to such programs.

The Inflation Reduction Act of 2022 creates a 1% excise tax on net stock buybacks of publicly-traded U.S.

corporations.

Starting in 2023, such excise tax generally applies if a company repurchases in excess of $1 million of its stock in any given calendar year.

The impact of this provision depends on the extent to which net share repurchases are made.

Any excise tax incurred on corporate stock repurchases will generally be recognized as part of the cost basis of the treasury stock acquired and not reported as income tax expense.

Through March 31, 2024, we have not incurred any excise tax as stock issuances (including preferred stock) were greater than stock repurchases.

Through June 30, 2024, we have incurred $ 2 million of excise tax in connection with share repurchases which were greater than stock issuances.

The excise tax incurred was recognized as part of the cost basis of the treasury stock acquired and not reported as income tax expense.

The following table represents share repurchase activities as part of this share repurchase program:

7 unchanged sentences

2024 (January 1- March 31) 2,157,372 116 53.76

2024 (April 1- May 2) 718,812 48 66.80

2024 (April 1- June 30) 1,294,473 90 69.16

2024 (July 1- August 1) 459,441 39 84.90

Total 2024 3,911,286 $ 245 $ 62.51

4 unchanged sentences

Shares repurchased under repurchase program — ( 3,451,845 ) ( 3,451,845 )

Shares at March 31, 2024 94,481,006 ( 17,859,632 ) 76,621,374

Shares at June 30, 2024 94,481,006 ( 18,780,549 ) 75,700,457

(1) Represents net shares issued from treasury stock pursuant to the Company’s share-based compensation programs.

7 unchanged sentences

03/31/2024 February 20, 2024 March 12, 2024 March 21, 2024 $ 0.70

06/30/2024 May 2, 2024 June 6, 2024 June 20, 2024 $ 0.70

Quarter Ended

03/31/2023 February 27, 2023 March 14, 2023 March 23, 2023 $ 0.62

06/30/2023 May 8, 2023 June 1, 2023 June 15, 2023 $ 0.62

Earnings Per Share

4 unchanged sentences

The following table sets forth the calculation of earnings per common share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

(in millions, except share and per share data)

12 unchanged sentences

(1) If we reported a net loss attributable to Jackson Financial Inc., all common stock equivalents are anti-dilutive and are therefore excluded from the calculation of diluted shares and diluted per share amounts.

The shares excluded from the diluted EPS calculation were 3,436,857 shares for the three months ended March 31, 2023.

The shares excluded from the diluted EPS calculation were 2,794,562 shares for the six months ended June 30, 2023.

Item 1 | Notes to Condensed Consolidated Financial Statements (Unaudited) | 21.

Subsequent Events

The Company has evaluated subsequent events through the date these Condensed Consolidated Financial Statements were issued.

Dividends Declared to Shareholders

On May 2, 2024, our Board of Directors approved a cash dividend on JFI's common stock, $ 0.70 per share for the second quarter 2024, payable on June 20, 2024, to shareholders of record on June 6, 2024.

On August 1, 2024, our Board of Directors approved a cash dividend on JFI's common stock, $ 0.70 per share for the third quarter 2024, payable on September 19, 2024, to common shareholders of record on September 5, 2024.

The Company also announced the declaration of a cash dividend of $ 0.50 per depositary share, each representing a 1/1,000th interest in a share of Fixed-Rate Reset Noncumulative Perpetual Preferred Stock, Series A.

The dividend will be payable on July 1, 2024, to shareholders of record at the close of business on June 6, 2024.

The dividend will be payable on September 30, 2024, to preferred shareholders of record at the close of business on September 5, 2024.

Share Repurchase Authorization

On August 1, 2024, our Board of Directors authorized an increase of $ 750 million to JFI's existing common share repurchase authorization.

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