20
23
Annual
Report
Our mission
To help our clients secure their
financial well-being so they can
pursue long and fulfilling lives
Our business principles
We have a passion
for our business
We work to the
highest standards
We are a trusted
partner to our clients
We treat everyone with
respect and dignity
We are stronger
as a team
Mark Pearson
President and Chief
Executive Officer,
Equitable Holdings
Even more important, we continue to
make a difference in the lives of millions of
Americans. More than 11,000 Americans are
retiring every day, and the products, solutions
and advice we provide enable them to pursue
long and fulfilling lives. Following the passage
of the SECURE Act, alongside favorable
demographics and higher interest rates, we
have a tremendous growth opportunity in
front of us. And as we have proven through
various market cycles, our consistency of
execution, risk discipline and performance
culture will ensure we can continue to deliver
for our stakeholders for generations to come.
Dear fellow
shareholders,
2023 was a special year in Equitable’s
storied history. In our first five years as a
publicly listed company, we met every target
we laid out at the time of our IPO, held our
first Investor Day, honored our commitments
to clients and shared our growth strategy
alongside new five-year financial targets.
It was also a year of continued volatility and
uncertainty in the markets with fluctuating
interest rates, falling yet still stubborn
inflation and recovering equity markets.
Amidst this backdrop, our businesses
performed well, and we head into 2024
from a position of strength, backed by our
unique, integrated business model across
Retirement, Wealth Management and
Asset Management.
1
2023 Equitable Holdings Annual Report Solid results
amidst headwinds
This past year we delivered solid business results and cash generation,
despite headwinds. Full year Non-GAAP operating earnings were $1.7 billion,1
and we reported $930 billion in assets under management and administration,
an increase of 13% over the prior year, driven by strong organic growth in our
Retirement and Wealth Management businesses. We delivered $1.3 billion of
cash flow,2 in-line with guidance, and more than half of our cash flows now come
from non-insurance subsidiaries, which is up from 17% at our IPO in 2018.
Equitable had record net inflows of over $5 billion across our Retirement
businesses3 and $3 billion of advisory net inflows in our Wealth Management
business as we continue to benefit from Americans’ need and desire for
financial advice. AllianceBernstein (AB) was not immune to industry-wide
pressures on net flows but closed the year with AUM up 12% to $725 billion,
driven by market tailwinds.
$1.7bn
$930bn
$1.7bn
$826bn
$1.3bn
$1.6bn
2022
2023
2022
2023
2022
2023
Non-GAAP
operating earnings
Assets under
management and
administration
Cash
flow
1 This is a Non-GAAP financial measure. For a reconciliation of this to the most directly comparable GAAP measure, see the section titled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Key Operating Measures” on Form 10-K for the year ended December 31, 2023.
2 Cash flow is net dividends and distributions to Equitable Holdings from its subsidiaries.
3
Includes Individual Retirement and Group Retirement.
2
Continued
financial strength
During our Investor Day in May, we shared our growth
strategy and five-year guidance with the market,
including new targets for cash generation, earnings
per share growth and payout ratio, all driven by
our advice, retirement and asset management
businesses. We made good progress against our
strategic initiatives — in our General Account, we
added $52m of incremental net investment income
through the fourth quarter, on track to meet or
exceed our $110m target by 2027. We also secured
$38 million in productivity savings and in 2025
expect to capture the remainder of the $75m of
annual run rate savings from AB’s move to Nashville.
Equitable Holdings closed the year with a combined
NAIC risk-based capital ratio of c.425%, above our
target range. In addition, the holding company
continues to have strong liquidity with a $2 billion
cash position. Our financial strength was also
recognized by S&P Global Ratings upgrading our
credit rating to A-, acknowledging our strong balance
sheet and growth of non-regulated cash flows. We
returned $1.2 billion of capital to shareholders, above
our target payout ratio of 60-70% of Non-GAAP
operating earnings. In December, Equitable Holdings
joined the S&P Midcap 400 Index, which tracks the
leading mid-cap companies in the U.S., increasing
our passive shareholder base as well as exposure to
active investors who use the index as a benchmark.
Strategy to drive long-term value
Defend & grow
core businesses
Scale adjacent
businesses
Seed future
growth
Be a force
for good
Key financial goals to 2027
Cash generation
Payout ratio
EPS growth
$2bn
of annual cash
generation by 2027
60-70%
of Non-GAAP
operating earnings
12-15%
Non-GAAP operating
EPS CAGR through 2027
Strategic targets support growth
$110m
Incremental GA
income by 2027
$150m
Productivity
savings by 2027
$20bn
Cummulative capital
commitment to AB
+350-500bps
Incremental adjusted
operating margin at AB by 2027
3
2023 Equitable Holdings Annual Report Wealth
Management
AllianceBernstein
Protection
Solutions
Legacy4
Individual
Retirement
Diverse
earnings mix
Non-GAAP
operating earnings
Group
Retirement
Delivering
for our clients
We paid out $4.3 billion in benefits in 2023, being there
for individuals and families when they needed us most.
We remained the leading retirement plan provider for
K-12 educators, as well as the leader in sales of registered
index-linked annuities, driven by the success of our
buffered annuity products.
4 Our Legacy business primarily consists of the capital-intensive fixed-rate GMxB business written in the Individual Retirement market prior to 2011. This business is running
off at $2-3bn of net outflows per year.
4
We continued to see good momentum across all of our businesses:
Individual Retirement had record sales last year, up 24% year-over-year, and strong value
of new businesses, leading to our total Retirement business generating $460 million
as of December 31, 2023, ahead of the $400 million projected at Investor Day. This
highlights the growing consumer demand for protected equity and secure income
solutions with more Baby Boomers reaching retirement age.
Group Retirement delivered strong sales results in our core tax-exempt market, with
first-year premiums up 11% year-over-year. The business is positioned to capitalize on
the opportunities provided by the SECURE Act to include annuities within 401(k) target
date funds through its relationships with BlackRock and AllianceBernstein.
In our Protection Solutions segment, our Life business faced elevated levels of mortality
during the first three quarters of the year but returned to more normal levels in the fourth
quarter. The business delivered strong sales during the second half of 2023, with first-year
premiums up 10% year-over-year, driven by strong Variable Universal Life sales. Our
Employee Benefits business saw annualized premiums up 27% year-over-year and now
covers over 800,000 lives.
AllianceBernstein grew organically by 2% on average over the last five years, well
outpacing its peer group. AB continues to focus on its higher fee Private Markets business,
with AUM up 9% year-over-year to $61 billion, supported by capital deployed from
Equitable’s General Account, and continues to target $90-100 billion of AUM by 2027.
Wealth Management earnings increased 57% year-over-year to nearly $160 million,
putting the business ahead of plan to reach $200 million of earnings by 2027. Assets
under administration grew 20% to $87 billion. We also increased our number of Wealth
Planners, those advisors focused on recurring fee-based investment accounts, by 7% in
the year to 750.
Demand for our products and trusted advice has never been higher, and we continue to be
supported by our diversified distribution model with 4,400 Equitable Advisors and over 500
strategic partnerships, giving us access to over 150,000 financial professionals nationwide.
Through our valued advice model, Holistic Life Planning, our financial professionals provide
their clients with personalized strategies that meet them where they are in their life journey
and consider their physical health and emotional wellness as well as financial goals.
5
2023 Equitable Holdings Annual Report $1.6bn
impact investment
goal achieved
7,000+
students supported through
Equitable Excellence®
Since its inception in 2003, the Equitable Excellence
Scholarship® has supported more than 7,000
students in their pursuit of higher education. Over
the last several years, we have evolved this program
to ensure it reaches students who need support the
most. We are seeing the results of our deliberate
efforts as this year’s class of Equitable Excellence
Scholarship® recipients was our most diverse in the
history of the program, with 100% of our scholarships
going to those with financial need and 55% to
first-generation college students.
Building
stronger
communities
We know that our mission to help our clients secure
their financial well-being so they can pursue long and
fulfilling lives builds stronger communities through
the investments we make into the economy. In
running our business, we leverage our big systems
to meet our promises to policyholders and be an
enduring force for good for generations to come.
One of our largest systems, our $99 billion General
Account, has supported our impact investing
program. As of year-end 2023, we have achieved our
impact investment goal by committing $1.6 billion to
initiatives that promote sustainability, energy
efficiency and reducing societal inequities whilst
generating attractive returns.
6
Investing in our people
A key priority for us in 2023 has been the wellness of
our people and creating an environment where they
can truly thrive. This ensures our people can continue
to perform at their best and we can attract and retain
top talent across the organization. In 2023, we
invested in energy management and resilience
training as part of our holistic wellness strategy to
create a stronger and more resilient Equitable. I’m
proud that in the year, Equitable was recognized as
a Great Place To Work® for the 8th year in a row and
we received a perfect score as a “Best Place to Work
for Disability Inclusion,” with participation in the
Disability Equality Index.
Further, we are near completion of a multi-year
transformation called Equitable’s New Ways of
Working, with over 55,000 hours of training invested.
This journey has fundamentally changed the way we
think, work and lead as a company, ensuring we are
better positioned to grow, meet our clients’ needs
and attract the best talent. We continue to see the
benefits of this transformation, applying this mindset
to identify opportunities and solve problems.
Regarding our workspaces, “building the house
we want to live in” is no longer a metaphor, but a
reality. In 2023, we upgraded our Charlotte and
Syracuse offices and opened our new headquarters
in New York City in early 2024 to provide technology-
enabled collaborative workspaces that inspire
creativity and connection.
New York City
Charlotte
Syracuse
SEP 2023-SEP 2024
SEP 2023-SEP 2024
USA
USA
Appreciation
Looking ahead, we are focused on executing and
delivering on our growth strategy and financial targets
we set out at our Investor Day. We will continue to
leverage our strong foundation and big systems so
that we can continue to serve our stakeholders for
generations to come.
future as I have ever been. I’d like to thank our
clients, shareholders and the more than 12,000
people of Equitable Holdings who are dedicated
to our mission: to help our clients secure their
financial well-being so they can pursue long and
fulfilling lives.
I am so proud of our journey in our first five years
as a publicly listed company. With strong demand
for our advice and solutions and a favorable
macroenvironment, I’m as confident in Equitable’s
7
2023 Equitable Holdings Annual Report Management Committee
Mark Pearson
President and Chief
Executive Officer,
Equitable Holdings
Seth Bernstein
Onur Erzan
José Ramón González
Jeffrey J. Hurd
President and Chief
Executive Officer,
AllianceBernstein
Corporation
Head of Global
Client Group,
AllianceBernstein
Corporation
Chief Legal Officer and
Corporate Secretary,
Equitable Holdings
Chief Operating
Officer, Equitable
Holdings
Nick Lane
President, Equitable
Robin M. Raju
Aaron Sarfatti
Stephanie Withers
Julia Zhang
Chief Financial
Officer, Equitable
Holdings
Chief Strategy
Officer, Equitable
Holdings
Chief Auditor,
Equitable Holdings
Chief Risk Officer,
Equitable Holdings
Board of Directors
Joan Lamm-Tennant
Mark Pearson
Francis A. Hondal
Arlene Isaacs-Lowe
Daniel Kaye
Chair of the Board
President and Chief
Executive Officer,
Equitable Holdings
Director
Director
Director
Craig MacKay
Director
8
Bertram L. Scott
George Stansfield
Charles G.T. Stonehill
Director
Director
Director
Shareholder information
Headquarters
Investor relations
Equitable Holdings, Inc.
1345 Avenue of the Americas
New York, NY 10105
Website
ir.equitableholdings.com
Email
ir@equitable.com
Stock listing
NYSE: EQH
Transfer agent
Computershare is the transfer agent for Equitable Holdings, Inc. Registered
stockholders may contact Computershare for assistance with their account.
Email
web.queries@computershare.com
Investor center website
computershare.com/investor
Telephone inquiries
(877) 373-6374 (U.S., Canada, Puerto Rico)
(781) 575-3100 (non-U.S.)
Standard mail
Computershare
PO Box 505000
Louisville, KY 40233-5000
Shareholder online inquiries
www-us.computershare.com/investor/contact
Overnight mail
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
9
2023 Equitable Holdings Annual Report Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————————————
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-38469
————————————————
Equitable Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
90-0226248
(I.R.S. Employer Identification No.)
1345 Avenue of the Americas, New York, New York
10105
(Address of principal executive offices) (Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
(212) 554-1234
(Registrant’s telephone number, including area code)
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock
Depositary Shares, each representing a 1/1,000th interest
in a share of Fixed Rate Noncumulative Perpetual
Preferred Stock, Series A
Depositary Shares, each representing a 1/1,000th interest
in a share of Fixed Rate Noncumulative Perpetual
Preferred Stock, Series C
Securities registered pursuant to Section 12(g) of the Act: None
EQH
EQH PR A
EQH PR C
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an
“emerging growth company”. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
No ☒
No ☒
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Table of Contents
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at June 30, 2023 was approximately $9.5
billion.
As of February 22, 2024, 329,710,752 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement relating to the 2024 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year
ended December 31, 2023 (the “2024 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K.
Table of Contents
TABLE OF CONTENTS
Part I
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Part II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits, Financial Statement Schedules
Form 10-K Summary
Part IV
Item 15.
Item 16.
Glossary
Acronyms
Index to Exhibits
Signatures
Page
5
47
62
62
64
64
64
64
66
66
115
119
251
251
251
252
252
252
252
253
253
254
254
254
257
261
265
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
Certain of the statements included or incorporated by reference in this Annual Report on Form 10-K constitute forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,”
“believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,”
“may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements
are made based on management’s current expectations and beliefs concerning future developments and their potential effects
upon Equitable Holdings, Inc. (“Holdings”) and its consolidated subsidiaries. These forward-looking statements include, but are
not limited to, statements regarding projections, estimates, forecasts and other financial and performance metrics and
projections of market expectations.“We,” “us” and “our” refer to Holdings and its consolidated subsidiaries, unless the context
refers only to Holdings as a corporate entity. There can be no assurance that future developments affecting Holdings will be
those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical
facts.
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there
are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates
reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy,
including the impact of plateauing or decreasing economic growth and geopolitical conflicts and related economic conditions,
equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to
and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries,
protection of confidential customer information or proprietary business information, operational failures by us or our service
providers, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of
pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on
derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults
and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and
product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in
statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our
insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations,
including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing
expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research
segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment
services to passive services; (viii) recruitment and retention of key employees and experienced and productive financial
professionals; (ix) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (x)
legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax
reform; (xi) risks related to our common stock and (xii) general risks, including strong industry competition, information
systems failing or being compromised and protecting our intellectual property.
You should read this Annual Report on Form 10-K completely and with the understanding that actual future results may be
materially different from expectations. All forward-looking statements made in this Annual Report on Form 10-K are qualified
by these cautionary statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we
undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.
Other risks, uncertainties and factors, including those discussed under “Risk Factors,” could cause our actual results to
differ materially from those projected in any forward-looking statements we make. Readers should read carefully the factors
described in “Risk Factors” to better understand the risks and uncertainties inherent in our business and underlying any
forward-looking statements.
Throughout this Annual Report on Form 10-K we use certain defined terms and abbreviations, which are defined or
summarized in the “Glossary” and “Acronyms” sections.
4
Part I, Item 1.
Overview
BUSINESS
We are one of America’s leading financial services companies and have helped clients prepare for their financial future
with confidence since 1859. We have three primary business lines — retirement, asset management and affiliated distribution
— that we run through our two complementary and well-established principal franchises, Equitable and AllianceBernstein. Our
approximately 12,900 employees and advisors manage more than $840 billion of AUM across these, providing:
•
•
Advice and solutions for helping Americans to set and meet their retirement goals and protect and transfer their wealth
across generations; and
A wide range of investment management insights, expertise and innovations to drive better investment decisions and
outcomes for clients and institutional investors worldwide.
Within our three business lines, we have six segments: Individual Retirement, Group Retirement, Investment Management
and Research, Protection Solutions, Wealth Management, and Legacy. We continue to maintain market-leading positions in
Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions while our Wealth
Management segment continues to grow in prominence.
We distribute our products through a premier affiliated and third-party distribution platform, consisting of:
Affiliated Distribution:
•
Our affiliated retail sales force, Equitable Advisors, which has approximately 4,400 licensed financial professionals
who advise on retirement, protection and investment advisory solutions; and
• More than 200 Bernstein Financial Advisors, who are responsible for the sale of investment products and solutions to
Private Wealth clients.
Third-Party Distribution:
•
•
Approximately 1,000 distribution agreements with banks, broker dealers, insurance carriers, brokerage general
agencies, independent marketing organizations and wires giving us access to more than 150,000 financial professionals
to market our retirement, protection and investment solutions; and
An AB global distribution team of more than 500 professionals, who engage with more than 5,000 retail distribution
partners and more than 700 institutional clients.
We aim to be a trusted service provider to our clients by providing advice, products and services that help them navigate
complex financial decisions. Our financial strength and the quality of our people, their ingenuity and the service they provide
help us build relationships of trust with our clients.
5
Our Organizational Structure
We are a holding company that operates our business through a number of direct and indirect subsidiaries. The following
organizational chart presents the ownership of our principal subsidiaries as of December 31, 2023.
(1) We own an approximate 61% economic interest in AB through various wholly-owned subsidiaries. Our economic interest consists of
approximately 60% of the AB Units, approximately 4% of the AB Holding Units (representing an approximate 1% economic interest in ABLP), and 1%
of the AB Units held by the General Partner. Our indirect, wholly-owned subsidiary, AllianceBernstein Corporation, is the General Partner of AB with the
authority to manage and control AB, and accordingly, AB is consolidated in our financial statements. ABLP is the operating partnership for the AB
business, and AB Holding’s activities consist of owning AB Units and engaging in related activities. AB Holding Units trade on the NYSE under the
ticker symbol “AB”. AB Units do not trade publicly.
6
Segment Information
We are organized into six segments: Individual Retirement, Group Retirement, Investment Management and Research,
Protection Solutions, Wealth Management, and Legacy. We report certain activities and items that are not included in our
segments in Corporate and Other.
•
Individual Retirement—We are a leading provider of variable annuity products, which primarily meet the needs of
individuals saving for retirement or seeking retirement income by allowing them to invest in various markets through
underlying investment options.
• Group Retirement—We offer tax-deferred investment and retirement services or products to plans sponsored by
educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.
•
•
Investment Management and Research—We are a leading provider of diversified investment management, research
and related services to a broad range of clients globally.
Protection Solutions—We focus our life insurance products on attractive protection segments such as VUL insurance
and IUL insurance and our employee benefits business on small and medium-sized businesses.
• Wealth Management—We are an emerging leader in the wealth management space with a differentiated advice value
proposition, that offers discretionary and non-discretionary investment advisory accounts, financial planning and
advice, insurance, and annuity products.
•
Legacy—This segment primarily consists of the capital intensive fixed-rate GMxB business written in the Individual
Retirement market prior to 2011. This business offered GMDB features in isolation or together with GMLB features.
This business also historically offered variable annuities with four types of guaranteed living benefit riders: GMIB,
GWBL/GMWB and GMAB.
For financial information on segments, see “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Results of Operations by Segment” and Notes 1 and 21 of the Notes to the Consolidated Financial Statements.
Individual Retirement
Our Individual Retirement segment is a leading provider of individual variable annuity products. We have a long history of
innovation, as one of the first companies, in 1968, to enter the variable annuity market, as the first company, in 1996, to provide
variable annuities with living benefits, and as the first company, in 2010, to bring to market a registered index-linked variable
annuity product. Our Individual Retirement business is an important source of earnings and cash flow for our company, and we
believe our hedging strategy preserves a substantial portion of these cash flows across a wide range of risk scenarios. The
primary sources of revenue for our Individual Retirement segment include fee revenue and investment income.
Products
Our products are primarily sold to affluent and high net worth individuals saving for retirement or seeking guaranteed
retirement income. Our current product offerings primarily include:
•
•
•
Structured Capital Strategies (“SCS”). SCS is a registered index-linked variable annuity product which allows the
policyholder to invest in various investment options, whose performance is tied to one or more securities indices,
commodities indices or ETFs, subject to a performance cap, over a set period of time. The risks associated with such
investment options are borne entirely by the policyholder, except the portion of any negative performance that we
absorb (a buffer) upon investment maturity. Prior to 2021, this product did not offer GMxB features, other than an
optional return of premium death benefit that we had introduced on some versions. In 2021, we introduced SCS
Income, a new version of SCS, offering a GMxB feature. SCS Income is also a registered index-linked annuity that
combines lifetime income options with some protection from market volatility in the equities or other financial market
or markets to which the annuity is linked.
Retirement Cornerstone (“RC”). Our Retirement Cornerstone variable annuity product offers two platforms: (i) RC
Performance, which offers access to a broad selection of funds with annuitization benefits based solely on non-
guaranteed account investment performance and (ii) RC Protection, which offers access to a focused selection of funds
and an optional floating-rate GMxB feature providing guaranteed income for life.
Investment Edge. Our investment-only variable annuity is designed to be a wealth accumulation product that defers
current taxes during accumulation and provides tax-efficient distributions on non-qualified assets through scheduled
payments over a set period of time with a portion of each payment being a return of cost basis, which is thus
7
excludable from taxes. An optional SIO feature allows a policyholder to invest in various investment options whose
performance is tied to one or more securities indices, subject to a performance cap, with some downside protection
over a set period of time. This optional SIO feature leverages our innovative SCS offering. Investment Edge does not
offer any GMxB feature other than an optional return of premium death benefit.
The following table presents the relative contribution to FYP of each of the above products for the years ended
December 31, 2023, 2022 and 2021.
FYP by Product
SCS
SCS Income
Retirement Cornerstone
Investment Edge
Other
Total FYP
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
10,401 $
933
1,806
844
161
14,145 $
7,953 $
581
1,626
1,036
167
11,363 $
7,627
6
1,951
1,048
216
10,848
Our Individual Retirement segment works with EIMG to identify and include appropriate underlying investment options in
its products, as well as to control the costs of these options and increase profitability of the products. For a discussion of EIMG,
see below “—Equitable Investment Management.”
Variable Annuities Policy Feature Overview
Variable annuities allow the policyholder to make deposits into accounts offering variable investment options. For deposits
allocated to Separate Accounts, the risks associated with the investment options are borne entirely by the policyholder, except
where the policyholder elects GMxB features in certain variable annuities, for which additional fees are charged. Additionally,
certain variable annuity products permit policyholders to allocate a portion of their account to investment options backed by the
General Account and are credited with interest rates that we determine, subject to certain limitations.
Certain variable annuity products offer one or more GMxB features in addition to the standard return of premium death
benefit guarantee. GMxB features (other than the return of premium death benefit guarantee) provide the policyholder a
minimum return based on their initial deposit adjusted for withdrawals (i.e., the benefit base), thus guarding against a downturn
in the markets. The rate of this return may increase the specified benefit base at a guaranteed minimum rate (i.e., a fixed roll-up
rate) or may increase the benefit base at a rate tied to interest rates (i.e., a floating roll-up rate). GMxB riders must be chosen by
the policyholder no later than at the issuance of the contract.
Markets
For our Individual Retirement segment, we target sales of our products to both retirees seeking retirement income and a
broader class of investors, including affluent, high net worth individuals and families saving for retirement, registered
investment advisers and their clients, as well as younger investors who have maxed out contributions to other retirement
accounts but are seeking tax-deferred growth opportunities.
Our customers can prioritize certain features based on their life-stage and investment needs. In addition, our products offer
features designed to serve different market conditions. SCS serves clients with investable assets who want exposure to equity
markets but also want to guard against a market correction. SCS Income serves clients who want exposure to equity markets but
also want to protect against market correction while seeking guaranteed income. Retirement Cornerstone serves clients who
want growth potential and guaranteed income with increases in a rising interest rate environment. Investment Edge serves
clients concerned about rising taxes.
Distribution
We distribute our variable annuity products through Equitable Advisors, our affiliate which is registered both as a broker-
dealer and as an investment adviser and whose retail sales force sells both proprietary and third-party variable annuity, life
insurance, employee benefits and investment products and services. We also distribute our variable annuity products through
8
third-party distribution channels, which include banks, broker-dealers and insurance partners. For the year ended December 31,
2023, Equitable Advisors represented 32% of our variable annuity FYP in this segment, while our third-party distribution
channel represented 67% of our variable annuity FYP in this segment. We employ over 180 external and internal wholesalers
who distribute our variable annuity products across both channels.
The table below presents the contributions to and percentage of FYP of our variable annuity products by distribution
channel for the year ended December 31, 2023.
FYP by Distribution
The only single distribution firm other than Equitable Advisors that contributed more than 10% of our sales in 2023 was JP
Morgan Securities, LLC contributing 11.0%.
Competition
Our Individual Retirement business competes with traditional life insurers, as well as banks, mutual fund companies and
other investment managers. The variable annuities market is highly competitive, with no single provider dominating the market
across products. The main factors that distinguish competitors to clients include product features, access to capital, access to
diversified sources of distribution, financial and claims-paying ratings, investment options, brand recognition, quality of
service, technological capabilities and tax-favored status of certain products. It is difficult to provide unique variable annuities
products because, once such products are made available to the public, they often are reproduced and offered by our
competitors. Competition may affect, among other matters, both the growth of our business and the pricing and features of our
products.
Underwriting and Pricing
We generally do not underwrite our variable annuity products on an individual-by-individual basis. Instead, we price our
products based upon our expected investment returns and assumptions regarding mortality, longevity and persistency for our
policyholders collectively, while taking into account historical experience, volatility of expected earnings on our AV, and the
expected time to retirement. Our product pricing models also take into account capital requirements, hedging costs and
operating expenses. Investment-oriented products are priced based on various factors, which may include investment return,
expenses, persistency and optionality.
Our variable annuity products generally include penalties for early withdrawals. From time to time, we reevaluate the type
and level of GMxB and other features we offer. We have previously changed the nature and pricing of the features we offer and
will likely do so from time to time in the future as the needs of our clients, the economic environment and our risk appetite
evolve.
9
Year Ended December 31, 2023Equitable Advisors31%Broker Dealers38%Banks22%Insurance Partners8% Fees
We earn various types of fee revenue based on AV, fund assets and benefit base. In general, fees from GMxB features that
are calculated based on the benefit base are more stable compared to fees calculated based on the AV. Fees that we collect
include mortality & expense; administrative charges and distribution charges; withdrawal charges; investment management
fees; 12b-1 fees; death benefit rider charges; living benefit rider charges and investment income.
Group Retirement
Our Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by
educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses. We operate in the
403(b), 457(b) and 401(k) markets where we sell variable annuity and mutual fund-based products. RBG, a dedicated subset of
over 1,000 Equitable Advisors (which include both broker-dealer representatives and investment advisory personnel), is the
primary distributor of our products and related solutions to individuals in the K-12 education market.
The tax-exempt 403(b)/457(b) market, which includes our 403(b) K–12 education market business, accounted for 74% of
gross premiums within the Group Retirement business for the year ended December 31, 2023. The institutional lifetime income
market accounts for 3%, the corporate 401(k) market accounts for 19% and the remaining 4% is Other as of December 31,
2023.
The recurring nature of the revenues from our Group Retirement business makes this segment an important and stable
contributor of earnings and cash flow to our business. The primary sources of revenue for the Group Retirement business
include fee revenue and investment income.
Products
Our products offer educators, municipal employees and corporate employees a savings opportunity that provides tax-
deferred wealth accumulation. Our innovative product offerings address all retirement phases with diverse investment options.
Variable Annuities
Our variable annuities offer defined contribution plan record-keeping, as well as administrative and participant services
combined with a variety of proprietary and non-proprietary investment options. Our variable annuity investment lineup mostly
consists of proprietary variable investment options that are managed by EIMG, which provides discretionary investment
management services for these investment options that include developing and executing asset allocation strategies and
providing rigorous oversight of sub-advisors for the investment options. This helps to ensure that we retain high quality
managers and that we leverage our scale across both the Individual Retirement and Group Retirement products. In addition, our
variable annuity products offer the following features:
•
•
•
Guaranteed Investment Option (GIO)—Provides a fixed interest rate and guarantee of principal.
Structured Investment Option (SIO)—Provides upside market participation that tracks certain available indices subject
to a performance cap, with some downside protection against losses in the investment over a one, three or five-year
period. This option leverages our innovative SCS individual annuity offering.
Personal Income Benefit—An optional GMxB feature that enables participants to obtain a guaranteed withdrawal
benefit for life for an additional fee.
While GMxB features and Institutional products with guaranteed benefits provide differentiation in the market, this
accounts for approximately 1.3% of our total AV (other than ROP death benefits) as of December 31, 2023.
Open Architecture Mutual Fund Platform
We also offer a mutual fund-based product to complement our variable annuity products. This platform provides a similar
service offering to our variable annuities. The program allows plan sponsors to select from thousands of proprietary and third
party-sponsored mutual funds. The platform also offers a group fixed annuity that operates very similarly to the GIO as an
available investment option on this platform.
Services
10
Both our variable annuity and open architecture mutual fund products offer a suite of tools and services to enable plan
participants to obtain education and guidance on their contributions and investment decisions and plan fiduciary services.
Education and guidance are available online or in person from a team of plan relationship and enrollment specialists and/or the
advisor that sold the product. Our clients’ retirement contributions come through payroll deductions, which contribute
significantly to stable and recurring sources of renewals.
The chart below illustrates our net flows for the years ended December 31, 2023, 2022 and 2021.
Net Flows
Gross premiums
Surrenders, withdrawals and benefits
Net flows (2)
______________
2023
Year Ended December 31,
2022
(in millions)
2021 (1)
$
$
3,806 $
(4,062)
(256) $
4,448 $
(3,814)
634 $
3,839
(4,016)
(177)
(1) Prior period amounts related to the AV and AUA roll-forward were updated to include Mutual Fund AUA. The impact of the revision to
net flows for the year ended December 31, 2021 was $129 million.
(2) For the years ended December 31, 2023 and 2022, net outflows of $848 million and $179 million are excluded as these amounts are
related to ceded AV to Global Atlantic.
The following table presents the Gross Premiums for each of our markets for the periods specified.
Gross Premiums by Market (2)
Tax-Exempt
Corporate
Institutional
Other
Total FYP
Tax-Exempt
Corporate
Other
Total renewal premiums
Gross premiums
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
1,113 $
357
98
13
1,581
1,703
378
144
2,225
3,806 $
1,001 $
323
772
22
2,118
1,785
377
168
2,330
4,448 $
1,017
450
9
25
1,501
1,789
373
176
2,338
3,839
______________
(1) Prior period amounts related to the AV and AUA roll-forward were updated to include Mutual Fund AUA. The impact of the revision to
Gross premiums for the year ended December 31, 2021 was $216 million, respectively.
(2) For the years ended December 31, 2023 and 2022, Gross Premiums are exclusive of $273 million and $72 million related to ceded AV to
Global Atlantic.
Markets
We primarily operate in the tax-exempt 403(b)/457(b), corporate 401(k) and other markets.
•
•
Tax-exempt 403(b)/457(b)/401(a). Our core customer base consists of governmental plans of which Public School
Districts and their employees make up the majority of our portfolio.
Overall, the 403(b) and 457(b) markets represent 71% of FYP in the Group Retirement segment for the year ended
December 31, 2023. We seek to grow in these markets by increasing our presence in the school districts where we
currently operate and also by potentially growing our presence in school districts where we currently do not have
access.
Corporate 401(k). We target small and medium-sized businesses with 401(k) plans that generally have under
$20 million in assets. Our product offerings accommodate start up plans and plans with accumulated assets. Typically,
11
our products appeal to companies with strong contribution flows and a smaller number of participants with relatively
high average participant balances. The under $20 million asset plan market is well aligned with our advisor
distribution, which has a strong presence in the small and medium-sized business market, and complements our other
products focused on this market (such as life insurance and employee benefits products aimed at this market).
•
•
Institutional 401(k). In 2022, we expanded our presence in the institutional lifetime income market through our
relationship with AllianceBernstein. Our Institutional business offers GMxB and other annuity guarantees to large
institutional retirement plans (>$500M in assets). The products are distributed through asset managers in the defined
contribution markets. We are actively seeking to expand the institutional business.
Other. Our other business includes an affinity-based direct marketing program where we offer retirement and
individual products to employers that are members of industry or trade associations and various other sole proprietor
and small business retirement accounts.
The following table presents the relative contribution of each of our markets to AV as of the dates indicated.
AV by Market
Tax-Exempt (1)
Corporate
Institutional
Other
AV (2)
______________
2023
December 31,
2022 (1)
(in millions)
2021 (1)
$
$
26,519 $
4,691
488
4,772
36,470 $
22,942 $
4,299
468
4,296
32,005 $
37,072
5,367
70
5,300
47,809
(1) Total AV revised to include ERV/E360R AUM and AUA in Other.
(2) For the years ended December 31, 2023 and 2022, AV is exclusive of $10.0 billion and $9.6 billion related to ceded AV to Global
Atlantic.
Distribution
We primarily distribute our products and services to this market through Equitable Advisors, primarily using RBG and
third-party distribution firms. For the year ended December 31, 2023, these channels represented approximately 76% and 24%
of our sales, respectively. We also distribute through direct online sales, which includes engaging existing clients to increase
contributions online. Our direct-to-consumer program uses data analysis combined with digital media to engage educators,
teach them about their retirement needs and increase awareness of our products and services.We employ internal and external
wholesalers to exclusively market our products through Equitable Advisors and third-party firms that are licensed to sell our
products. Equitable Advisers also accounted for 95% of our 403(b) sales in 2023.
The following table presents first year premium by distribution channel for the periods indicated:
FYP by Distribution
Equitable Advisors
Third-Party
Total
Competition
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
1,242 $
390
1,632 $
1,187 $
931
2,118 $
1,155
151
1,306
We compete with select insurance companies, asset managers, record keepers and diversified financial institutions that
target similar market segments. In the K–12 public education market, competitors are primarily insurance-based providers that
focus on school districts. In the small and medium-sized business market, the primary competitors are insurance-based
12
providers and mutual fund companies. The main features that distinguish our offering to clients include our RBG distribution
model, the product features we offer to clients, including guarantees, and our financial strength.
Underwriting and Pricing
We generally do not underwrite our annuity products on an individual-by-individual basis. Instead, we price our products
based upon our expected investment returns and assumptions regarding mortality, longevity and persistency for our
policyholders collectively, while taking into account historical experience, volatility of expected earnings on our AV, and the
expected time to retirement. Our product pricing models also consider capital requirements, hedging costs and operating
expenses. Investment-oriented products are priced based on various factors, which may include investment return, expenses,
persistency and optionality.
Our variable annuity products generally include penalties for early withdrawals. We periodically reevaluate the type and
level of guarantees and other features we offer. We have previously changed the nature and pricing of the features we offer and
will likely do so from time to time in the future as the needs of our clients, the economic environment and our risk appetite
evolve.
Fees
We earn various types of fee revenue based on AV, fund assets and benefit base. Fees that we collect include mortality &
expense; administrative charges and distribution charges; withdrawal charges; investment management fees; 12b-1 fees; death
benefit rider charges; and living benefit rider charges.
13
Investment Management and Research
Our Investment Management and Research business provides diversified investment management, research and related
services globally to a broad range of clients through AB’s three buy-side distribution channels: Institutions, Retail and Private
Wealth Management, and AB’s sell-side business, Bernstein Research Services. AB Holding is a master limited partnership
publicly listed on the NYSE. We own an approximate 61% economic interest in AB. As the general partner of AB, we have the
authority to manage and control its business, and accordingly, this segment reflects AB’s consolidated financial results.
Our Investment Management and Research business had approximately $725.2 billion in AUM as of December 31, 2023,
composed of 43% equities, 39% fixed income and 18% multi-asset class solutions, alternatives and other assets. By distribution
channel, institutional clients represented 44% of AUM, while retail and private wealth clients represented 39% and 17%
respectively, as of December 31, 2023.
AB’s high-quality, in-depth research is the foundation of its asset management and private wealth management businesses.
AB believes that its global team of research professionals, whose disciplines include economic, fundamental equity, fixed
income and quantitative research, gives it a competitive advantage in achieving investment success for its clients. AB also has
experts focused on multi-asset strategies, wealth management, ESG, and alternative investments.
We are AB’s largest client. We represented 16% of AB’s total AUM as of December 31, 2023 and 5% of AB’s net
revenues for the year ended December 31, 2023.
Generally, AB is compensated for its investment services on the basis of investment advisory and services fees calculated
as a percentage of AUM.
Products and Services
Investment Services
AB believes that by using differentiated research insights and a disciplined process to build high-active-share portfolios,
AB can achieve strong investment results for its clients over time. AB is fully invested in delivering better outcomes for their
clients. Key to this philosophy is developing and integrating research on material ESG issues, as well as AB’s approach to
engagement, when in the best interest of its clients. AB’s global research network, intellectual curiosity and collaborative
culture allow AB to advance clients’ investment objectives, whether AB’s clients are seeking idiosyncratic alpha, total return,
downside mitigation, or sustainability and impact-focused outcomes.
AB’s investment services include expertise in:
•
•
•
•
Actively-managed equity strategies across global and regional universes, as well as capitalization ranges, concentration
ranges and investment strategies, including value, growth and core equities;
Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
Actively-managed alternative investments, including fundamental and systematically-driven hedge funds, fund of
hedge funds and direct assets (e.g., direct lending, real estate debt and private equity);
Portfolios with Purpose, including Sustainable, Impact and Responsible+ (climate-conscious and ESG leaders) equity,
fixed income and multi-asset strategies that address AB’s clients desire to invest their capital with a dedicated ESG
focus, while pursuing strong investment returns;
• Multi-asset services and solutions, including dynamic asset allocation, customized target-date funds and target-risk
funds; and
•
Passive management, including index, ESG index and enhanced index strategies.
Markets
AB operates in major markets around the world, including the United States, EMEA (Europe, the Middle East and Africa)
and Asia. AB’s AUM by investment service and client domicile are as follows:
14
By Investment Service ($ in billions):
By Client Domicile ($ in billions):
Distribution Channels
AB distributes its products and solutions through three buy-side distribution channels: Institutions, Retail and Private
Wealth Management and its sell-side business, Bernstein Research Services.
Institutions
AB offers to its institutional clients, which include private and public pension plans, foundations and endowments,
insurance companies, central banks and governments worldwide, and Holdings and its subsidiaries, separately managed
accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other
investment vehicles (“Institutional Services”).
AB manages the assets of its institutional clients pursuant to written investment management agreements or other
arrangements, which generally are terminable at any time or upon relatively short notice by either party. In general, AB’s
written investment management agreements may not be assigned without the client’s consent.
Retail
AB provides investment management and related services to a wide variety of individual retail investors globally through
retail mutual funds AB sponsors, mutual fund sub-advisory relationships, separately-managed account programs and other
investment vehicles (“Retail Products and Services”).
AB distributes its Retail Products and Services through financial intermediaries, including broker-dealers, insurance sales
representatives, banks, registered investment advisers and financial planners. These products and services include open-end and
closed-end funds that are either (i) registered as investment companies under the Investment Company Act or (ii) not registered
under the Investment Company Act and generally not offered to U.S. persons. They also include separately-managed account
programs, which are sponsored by financial intermediaries and generally charge an all-inclusive fee covering investment
management, trade execution, asset allocation, and custodial and administrative services. In addition, AB provides distribution,
shareholder servicing, transfer agency services and administrative services for its Retail Products and Services.
15
December 31, 2023U.S.$42859%Non-U.S.$29741%December 31, 2022U.S.$36957%Non-U.S.$27743%December 31, 2021U.S.$44657%Non-U.S.$33343%December 31, 2023U.S.$52773%Non-U.S.$19827%December 31, 2022U.S.46071%Non-U.S.18629%December 31, 2021U.S.$53068%Non-U.S.$24932% Private Wealth Management
AB partners with its clients, embracing innovation and research to address increasingly complex challenges. AB’s clients
include high net worth individuals and families who have created generational wealth as successful business owners, athletes,
entertainers, corporate executives and private practice owners. AB also provides investment and wealth advice to foundations
and endowments, family offices and other entities. AB’s flexible investment platform offers a range of solutions, including
separately-managed accounts, hedge funds, mutual funds and other investment vehicles, tailored to meet each distinct client’s
needs. AB’s investment platform is complimented with a wealth platform that includes complex tax and estate planning, pre-
IPO and pre-transaction planning, multi-generational family engagement, and philanthropic advice in addition to tailored
approaches to meeting the unique needs of emerging wealth and multi-cultural demographics.
AB manages these accounts pursuant to written investment advisory agreements, which generally are terminable at any
time or upon relatively short notice by any authorized party, and may not be assigned without the client’s consent.
Bernstein Research Services
AB offers high-quality fundamental and quantitative research and trade execution services in equities and listed options to
institutional investors, such as mutual fund and hedge fund managers, pension funds and other institutional investors
(“Bernstein Research Services”). AB serves its clients, which are based in major markets around the world, through its trading
professionals, who are primarily based in New York, London and Hong Kong, and research analysts, who provide fundamental
company and industry research along with quantitative research into securities valuation and factors affecting stock-price
movements.
Additionally, AB occasionally provides equity capital markets services to issuers of publicly-traded securities, such as
initial public offerings and follow-on offerings, generally acting as co-manager in such offerings.
In the fourth quarter of 2022, AB and Société Générale, a leading European bank, announced plans to form a joint venture
combining their respective cash equities and research businesses. We expect this transaction to close in the first half of 2024. As
a result, the Bernstein Research Services business has been classified as held for sale. For further discussion, see Note 25 of the
Notes to the Consolidated Financial Statements.
Custody
AB’s U.S.-based broker-dealer subsidiary acts as custodian for the majority of AB’s Private Wealth Management AUM
and some of its Institutional AUM. Other custodian arrangements, directed by clients, include banks, trust companies,
brokerage firms and other financial institutions.
For additional information about AB’s investment advisory fees, including performance-based fees, see “Risk Factors—
Risks Relating to Our Investment Management and Research Business” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Results of Operations by Segment—Investment Management and Research.”
Competition
AB competes in all aspects of its business with numerous investment management firms, mutual fund sponsors, brokerage
and investment banking firms, insurance companies, banks, savings and loan associations and other financial institutions that
often provide investment products with similar features and objectives as those AB offers. AB’s competitors offer a wide range
of financial services to the same customers that AB seeks to serve.
To grow its business, AB believes it must be able to compete effectively for AUM. Key competitive factors include:
(i) AB’s investment performance for clients; (ii) AB’s commitment to place the interests of its clients first; (iii) the quality of
AB’s research; (iv) AB’s ability to attract, motivate and retain highly skilled, and often highly specialized, personnel; (v) the
array of investment products AB offers; (vi) the fees AB charges; (vii) Morningstar/Lipper rankings for the AB Funds;
(viii) AB’s ability to sell its actively-managed investment services despite the fact that many investors favor passive services;
(ix) AB’s operational effectiveness; (x) AB’s ability to further develop and market its brand; and (xi) AB’s global presence.
16
AUM
AUM by distribution channel were as follows:
Institutions
Retail
Private Wealth Management
Total
AUM by investment service were as follows:
Equity
Actively Managed
Passively Managed (1)
Total Equity
Fixed Income
Actively Managed
Taxable
Tax-exempt
Total Actively Managed
Passively Managed (1)
Total Fixed Income
Alternatives/Multi-Asset Solutions (2)
Actively Managed
Passively Managed (1)
Total Other
Total
2023
December 31,
2022
(in billions)
2021
317.1 $
286.8
121.3
725.2 $
297.3 $
242.9
106.2
646.4 $
337.1
319.9
121.6
778.6
2023
December 31,
2022
(in billions)
2021
247.5 $
62.1
309.6
217.9 $
53.8
271.7
208.6
61.1
269.7
11.4
281.1
190.3
52.5
242.8
9.4
252.2
125.9
8.6
134.5
725.2 $
115.8
6.7
122.5
646.4 $
287.6
71.6
359.2
246.3
57.1
303.4
13.2
316.6
97.3
5.5
102.8
778.6
$
$
$
$
_____________
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
Net long-term inflows (outflows) for actively managed investment services as compared to passively managed investment
services are as follows:
Actively Managed
Equity
Fixed Income
Alternatives/Multi-Asset Solutions
Year Ended December 31,
2023
2022
(in billions)
2021
$
(15.5) $
12.3
(2.0)
(5.2)
(2.7) $
(17.3)
20.9
0.9
21.9
(3.9)
8.3
26.3
17
Passively Managed
Equity
Fixed Income
Alternatives/Multi-Asset Solutions
Total net long-term inflows (outflows)
Year Ended December 31,
2023
2022
(in billions)
2021
$
$
(4.0)
1.5
0.7
(1.8)
(7.0) $
(5.3) $
(1.3)
2.1
(4.5)
(3.6) $
(7.5)
5.0
2.3
(0.2)
26.1
Average AUM by distribution channel and investment service were as follows:
Distribution Channel:
Institutions
Retail
Private Wealth Management
Total
Investment Service:
Equity Actively Managed
Equity Passively Managed (1)
Fixed Income Actively Managed – Taxable
Fixed Income Actively Managed – Tax-exempt
Fixed Income Passively Managed (1)
Alternatives/Multi-Asset Solutions (2)
Total
Year Ended December 31,
2023
2022
(in billions)
2021
$
$
$
$
304.6 $
262.0
113.7
680.3 $
231.5 $
57.7
198.3
56.0
9.7
127.1
680.3 $
308.4 $
267.8
110.3
686.5 $
239.7 $
60.4
210.0
54.1
11.5
110.8
686.5 $
325.7
291.0
114.1
730.8
252.2
68.7
253.1
53.8
9.6
93.4
730.8
______________
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
Fees
Generally, AB is compensated for its investment services on the basis of investment advisory and services fees calculated
as a percentage of AUM. Bernstein Research Services revenue consists principally of commissions received for providing
equity research and brokerage-related services to institutional investors. The components of net revenues are as follows and are
prior to intercompany eliminations:
Investment advisory and services fees:
Institutions:
Base fees
Performance-based fees
Retail:
Base fees
Performance-based fees
Year Ended December 31,
2023
2022
(in millions)
2021
$
612 $
54
666
582 $
77
659
1,276
—
1,276
1,321
2
1,323
540
46
586
.
1,442
51
1,493
18
Private Wealth:
Base fees
Performance-based fees
Total:
Base fees
Performance-based fees
Bernstein Research Services
Distribution revenues
Dividend and interest income
Investment (losses) gains
Other revenues
Total revenues
Less: Interest expense
Net revenues
Protection Solutions
Year Ended December 31,
2023
2022
(in millions)
2021
942
91
1,033
2,830
145
2,975
386
586
199
14
101
4,261
108
4,153 $
922
66
988
2,825
145
2,970
416
607
123
(102)
106
4,120
66
4,054 $
967
149
1,116
2,949
246
3,195
452
652
39
(1)
108
4,445
4
4,441
$
Our Protection Solutions segment includes our life insurance and employee benefits businesses.
Life Insurance. We offer a targeted range of life insurance products aimed at serving the financial needs of our clients. We
serve all Equitable client segments, but we specialize in small to medium enterprises and high-income and/or high-net worth
clients. Our product offerings include VUL, IUL and term life products, which represented 91%, 4% and 5% of our total life
insurance annualized premium, respectively, for the year ended December 31, 2023. Our products are distributed through
Equitable Advisors and select third-party firms. Equitable Advisors represented approximately 71% of our total life insurance
sales for the year ended December 31, 2023.
Employee Benefits. In the employee benefits market, we target our products towards small and medium-sized businesses.
Our core products consist of Group Life Insurance (including Accidental Death & Dismemberment), Supplemental Life,
Dental, Vision, Short-Term Disability and Long-Term Disability. In addition, we offer a full suite of Supplemental Health
products including Accident, Critical Illness and Hospital Indemnity. Our employee benefits’ solutions are distributed through
Equitable Advisors and select third-party firms, including the traditional broker channel, strategic partnerships (medical
partners, professional employer associations (“PEOs”), and associations), General Agencies, TPAs and Retail Equitable
Advisors.
Life Insurance
Products
Our life insurance products are primarily designed to help individuals and small and medium-sized businesses with protection,
wealth accumulation and transfer of wealth at death, as well as corporate planning solutions including non-qualified deferred
compensation, succession planning and key person insurance. We target select segments of the life insurance market:
permanent life insurance, including permanent life insurance, including VUL and IUL products and term insurance. In recent
years, we have refocused our product offering and distribution towards less capital intensive, higher return accumulation and
protection products. We plan to grow our operating earnings over time through earnings generated from sales of our
repositioned product portfolio and by proactively managing and optimizing our in-force book.
Permanent Life Insurance. We have three permanent life insurance offerings built upon a UL insurance framework: VUL,
COLI and IUL, targeting individuals and the small and medium-sized business market. UL policies offer flexible premiums,
and generally offer one of two death benefit options: a level benefit equal to the policy’s original face amount or a variable
benefit equal to the original face amount plus any existing policy AV. Our insurance products include single-life and second-to-
die (i.e., survivorship) products.
19
VUL. VUL uses a series of investment options to generate the investment return allocated to the cash value. The sub-
accounts are similar to retail mutual funds: a policyholder can invest policy values in one or more underlying investment
options offering varying levels of risk and growth potential. These provide long-term growth opportunities, tax-
deferred earnings and the ability to make tax-free transfers among the various sub-accounts. In addition, the policyholder can
invest premiums in a guaranteed interest option, as well as an investment option we call the MSO, which provides downside
protection from losses in the index up to a specified percentage. Our COLI product is a VUL insurance product tailored
specifically to support executive benefits in the small business market.
IUL. IUL uses an equity-linked approach for generating policy investment returns. The equity linked options provide
upside return based on an external equity-based index (e.g., S&P 500) subject to a cap. In exchange for this cap on investment
returns, the policy provides downside protection in that annual investment returns are floored at zero, protecting the
policyholder in the event of a market movement down. As noted above, the performance of any UL insurance policy also
depends on the level of policy charges. For further discussion, see “—Pricing and Fees.”
We work with employees of EIMG to identify and include appropriate underlying investment options in our variable life
products, as well as to control the costs of these options.
Term Life. Term life provides basic life insurance protection for a specified period of time. Life insurance benefits are paid
if death occurs during the term period, as long as required premiums have been paid. The required premiums are guaranteed not
to increase during the term period. Our term products include conversion features that allow the policyholder to convert their
term life insurance policy to permanent life insurance within policy limits.
Other Benefits. We offer a portfolio of riders to enable clients to customize their policies. Our Long-Term Care Services
Rider provides an acceleration of the policy death benefit in the event of a chronic illness. The MSO II rider, referred to above
and offered via a policy rider on our variable life products, enables policyholders to manage volatility.
The following table presents individual life insurance annualized premiums for the periods indicated:
Annualized Premium
Indexed Universal Life
Variable Universal Life
Term
Total
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
10 $
210
12
232 $
13 $
184
13
210 $
25
169
16
210
20
The following table presents individual life insurance FYP and renewals by product and total Gross Premiums for the
periods indicated:
FYP by Product Line
Indexed Universal Life
Variable Universal Life
Term
Other (1)
Total
Renewals by Product Line
Universal Life
Indexed Universal Life
Variable Universal Life
Term
Other (1)
Total
Total Gross Premiums
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
$
$
$
11 $
339
12
1
363 $
729 $
288
1,002
363
15
2,397 $
19 $
309
13
1
342 $
764 $
304
989
373
17
2,447 $
45
287
16
1
349
824
310
968
379
19
2,500
2,760 $
2,789 $
2,849
______________
(1) For the individual life insurance in-force, other includes current assumption universal life insurance, whole life insurance and other
products available for sale but not actively marketed.
Our in-force book spans three insurance companies, Equitable Financial, Equitable America and Equitable L&A. Equitable
L&A is closed for new business. Certain term products and permanent products riders from Equitable America and Equitable
Financial have been reinsured to our captive reinsurer EQ AZ Life Re. Our in-force portfolio is made up of core product
offerings as described above, as well as past generation product offerings that include current assumption universal life
insurance, whole life insurance and other products.
The following table presents our in-force face amount and Protection Solutions Reserves as of the dates indicated,
respectively, for the individual life insurance products we offer:
In-force face amount by product: (1)
Universal Life (2)
Indexed Universal Life
Variable Universal Life (3)
Term
Whole Life
Total in-force face amount
Protection Solutions Reserves (4)
General Account
Separate Accounts
Total Protection Solutions Reserves
2023
December 31,
2022
(in billions)
2021
$
$
$
$
40.9 $
26.9
136.9
206.5
1.1
412.3 $
43.1 $
27.5
133.4
211.9
1.1
417.0 $
45.9
27.9
132.8
215.4
1.2
423.2
2023
December 31,
2022
(in millions)
2021
18,184 $
16,337
34,521 $
18,208 $
13,634
31,842 $
18,902
17,012
35,914
21
______________
(1) Does not include life insurance sold as part of our employee benefits business.
(2) UL includes GUL insurance products.
(3) VUL includes variable life insurance and COLI.
(4) Does not include Protection Solutions Reserves for our employee benefits business.
As part of our in-force management function, we monitor the performance of our life insurance portfolio against our
expectations at the time of pricing of the products. It is our objective to align the performance of our portfolio to pricing
expectations and take in-force actions where appropriate, in accordance with our contracts, applicable law and our governance
processes.
Markets
While we serve all Equitable client segments, we specialize in small to medium enterprises and high-income/high-net
worth clients and their advisers. We also complement our permanent product suite with term products for clients with simpler
needs. We focus on creating value for our customers through the differentiated features and benefits we offer on our products.
We distribute these products through retail advisors and third-party firms who demonstrate the value of life insurance in helping
clients to accumulate wealth and protect their assets.
Distribution
We primarily distribute life insurance through two channels: Equitable Advisors and third-party firms, including broker
dealers and registered investment advisors that assist clients.
The following table presents individual life insurance annualized premium by distribution channel for the periods
indicated:
Annualized Premium by Distribution
Equitable Advisors
Third-Party Firms
Total
Competition
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
166 $
66
232 $
152 $
58
210 $
162
48
210
The life insurance industry consists of many companies with no single company dominating the market for all products.
We selectively compete with large, well-established life insurance companies in a mature market, where product features, price
and service are key drivers. We primarily compete with others based on these drivers as well as distribution channel
relationships, brand recognition, financial strength ratings of our insurance subsidiaries and financial stability. We are selective
in our markets of interest and will continue to focus deeply in those areas that align to our offering.
Underwriting and Pricing
Our underwriters consider both the application and information obtained from external sources. This information includes,
but is not limited to, the insured’s age and sex, results from medical exams and financial information. We continuously monitor
our underwriting decisions through internal audits and other quality control processes, to ensure accurate and consistent
application of our underwriting guidelines. We continue to research and develop guideline changes to increase the efficiency of
our underwriting process (e.g., through the use of predictive models), both from an internal cost perspective and our customer
experience perspective.
Life insurance products are priced based upon assumptions including, but not limited to, expected future premium
payments, surrender rates, mortality and morbidity rates, investment returns, hedging costs, equity returns, expenses and
inflation and capital requirements.
Employee Benefits
Our employee benefits business focuses on serving small and medium-sized businesses, a priority segment for us, offering
these businesses a differentiated technology platform and competitive suite of group insurance products. Leveraging our
22
innovative technology platform, we have formed strategic partnerships with large insurance and health carriers as their primary
group benefits provider.
Products
Our product offering includes: a suite of Group Life Insurance (including Accidental Death & Dismemberment),
Supplemental Life, Dental, Vision, Short-Term Disability, Long-Term Disability, Critical Illness, Accident and Hospital
Indemnity insurance products.
The following table presents employee benefits Gross Premiums and annualized premium for the periods indicated:
Employee Benefits Gross Premiums
Group life insurance sales
Short-term disability
Long-term disability
Dental
Vision
Other (1)
Total
Annualized premium
______________
(1) Other includes Critical Illness and Accident insurance products.
Markets
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
$
127 $
84
72
69
12
8
372 $
104 $
62
61
55
9
4
295 $
104 $
82 $
82
44
43
40
6
1
216
76
Our employee benefit product suite is focused on small and medium-sized businesses seeking simple, technology-driven
employee benefits management. We built the employee benefits business based on feedback from brokers and employers,
ensuring the business’ relevance to the market we address. We are committed to continuously evolving our product suite and
technology platform to meet market needs.
Distribution
Our Employee Benefits’ solutions are distributed through the traditional broker channel, strategic partnerships (medical
partners, PEOs, and associations), General Agencies, TPAs and Equitable Advisors.
Competition
The employee benefits space is a competitive environment. The main factors of competition include price, quality of
customer service and claims management, technological capabilities, quality of distribution and financial strength ratings. In
this market, we compete with several companies offering similar products. In addition, there is competition in attracting brokers
to actively market our products. Key competitive factors in attracting brokers include product offerings and features, financial
strength, support services and compensation.
Underwriting and Pricing
Our underwriting guidelines consider the following factors, among others: case size, industry, plan design and employer-
specific factors. The application of our underwriting guidelines is continuously monitored through internal underwriting
controls and audits to achieve high standards of underwriting and consistency.
Employee benefits pricing reflects the claims experience and the risk characteristics of each group. We consider
demographic information and, for larger groups, the experience of the group. The claims experience is reviewed at the time of
policy issuance and during the renewal timeframes, resulting in periodic pricing adjustments at the group level.
23
Wealth Management
We are an emerging leader in the wealth management space with a differentiated advice value proposition, that offers
discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity
products. In 2023, we began reporting this business separately from our other segments and Corporate and Other.
Equitable Advisors
Equitable Advisors is central to how we serve our clients. Our approximately 4,400 financial advisors offer distinctive,
financial planning advice with access to a sophisticated suite of products and services designed to address even the most
complex financial needs. We support our advisors through a national branch footprint with over 80 locations, an integrated
digital platform, a robust training program, strong marketing capabilities, and cutting-edge client management tools. We
continuously invest in the development and refinement of capabilities designed to maximize advisor productivity and client
satisfaction. Our differentiated financial advisor support system creates a compelling value proposition and an important driver
of recruitment and retention of our financial advisors.
The following three pillars of Equitable Advisors’s value proposition are unique as they are designed around deep client
relationships, integrated technology and “supported independence,” the sum of which we believe is not replicated in the
industry.
• Client Promise: The Equitable Advisors wealth management experience is centered around our promise to our clients
to create a relationship of trust (understanding and respecting each client situation), to help each client achieve their
financial goals (comprehensive financial advice), and everything in between.
• Supporting our Clients and our Advisory Practice: The personalized client relationships that evolve from the
Equitable Advisor client promise is underpinned by integrated digital capabilities that help our advisors differentiate
their practices while creating an industry-leading experience that delights advisors and their clients.
• Enabling an Advisor Independence: Finally, our advisor Platform is designed around “supported independence”
where we recognize the ambition of our advisors who would like the freedom and flexibility to build their own practice
with the benefits of an established brand that reflects long-term stability and financial integrity.
Product & Services
Comprehensive advice considers every aspect of a client’s financial future. We offer a broad range of financial solutions
that are designed to serve a client through their financial journey in life from asset accumulation to retirement, income, and
protection. While market volatility has a significant impact on asset appreciation, our advisors have a proven track record of
supporting strong growth in advisory net flows resulting in continued asset accumulation and growth. Additional revenues are
produced through the distribution of industry leading proprietary and non-proprietary insurance and annuity products to our
retail client base. We offer the following products and services through our Wealth Management segment:
• Brokerage products and services for retail clients. As of December 31, 2023, the Equitable Advisors broker-dealer
business included $87.0 billion in AUA.
• Discretionary and non-discretionary investment advisory accounts. We receive fees based on the assets held in that
account, as well as related fees or costs associated with the underlying securities held in that account.
• Life insurance and annuities products from our proprietary and non-proprietary suite. We receive a portion of the
revenue generated from the sale of unaffiliated products and certain administrative fees.
• Financial planning and advice services. We provide personalized financial planning and financial solutions for which
we may charge fees and may receive sales commissions for selling products that aid in the client’s plan.
Fees
We earn fee revenue from advisory product-based assets where we charge a fee for financial planning, advice, and active
management aligned with advisory assets. A significant portion of this segment’s revenues is driven by client assets,
particularly in advisory products.
24
Growth Drivers
Increasing Productivity of Existing Advisor Base
We believe that Equitable Advisors serves as the client’s primary financial relationship by offering a differentiated
planning model – Holistic Life Planning – that speaks to their purpose, lifestyle, and financial choices. Over time, we believe
that Equitable Advisors will continue to drive increased productivity as they manage more of their clients’ investable assets, add
new clients, and expand their existing practices with additional advisors. To further catalyze advisor productivity, we provide
advisors and clients state-of-the-art technology and digital capabilities, in addition to offering a proprietary Life Planning
training curriculum to all advisors.
Advisor Retention and Recruiting
An important driver of our success is the continuous recruitment and retention of financial advisors. Our ability to attract
and retain high quality advisors is based on our values-based culture, cutting edge capabilities and the unique ways in which we
provide services to our financial advisors through premier technology and support. We will continue to invest in robust wealth
management capabilities, resources and services leading to increased retention, win rates and an expanded pipeline of new and
experienced advisors.
Competition
The Wealth Management segment competes with a variety of financial firms to attract new and experienced advisors.
These financial firms operate in various channels and markets: wire-house firms, independent broker-dealers, registered
investment advisors, insurance companies and other financial institutions Competitive factors influencing our ability to attract
and retain financial advisors include compensation structures, brand recognition and reputation, product offerings, and
technology support.
Further, our financial advisors compete for clients with a range of other advisors, broker-dealers, and direct channels. This
includes wire houses, regional broker-dealers, independent broker-dealers, insurers, banks, asset managers, registered
investment advisers and direct distributors. Competitive factors influencing our ability to attract and retain clients include
quality of advice provided, price, reputation, advertising and brand recognition, product offerings, technology offerings and
service quality.
Legacy
This segment primarily consists of the capital intensive fixed-rate GMxB business written in the Individual Retirement
market prior to 2011. We historically offered a variety of variable annuity benefit features, including GMxB features (ie.
GMDBs and GLBs) to our policyholders.The remainder of these products either feature only ROP death benefits or do not
contain GMxB features. As this business was priced and designed under conditions prior to the 2008 global financial crisis and
is materially different from our current product offering, we have chosen to manage this block and report its results separately
from our core Individual Retirement Business.
The fees we receive from this block of business mirror the fees we receive from our Individual Retirement business. For
more information, see —Segment Information—Individual Retirement—Fees.
Since discontinuing the products offered in this segment, we have undertaken risk management transactions to minimize
the risk this block of business poses to the Company. For more information, see —Segment Information—Risk Management—
Other Legacy-Related Risk Management Strategies.
Corporate and Other
Corporate and Other includes certain of our financing and investment expenses. It also includes: the Closed Block, run-
off group pension business, run-off health business, benefit plans for our employees and certain unallocated items, including
capital and related investments, interest expense and corporate expense. AB’s results of operations are reflected in the
Investment Management and Research segment. Accordingly, Corporate and Other does not include any items applicable to
AB.
25
Closed Block
In connection with the demutualization of Equitable Financial in 1992, the Closed Block was established for the benefit of
certain classes of individual participating policies for which Equitable Financial had a dividend scale payable in 1991 and
which were in force on that date. Assets were allocated to the Closed Block in an amount which, together with anticipated
revenues from policies included in the Closed Block, was reasonably expected to be sufficient to support such business,
including provisions for the payment of claims, certain expenses and taxes, and for the continuation of dividend scales payable
in 1991, assuming the experience underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block and
will not revert to the benefit of the Company. The plan of demutualization prohibits the reallocation, transfer, borrowing or
lending of assets between the Closed Block and other portions of the General Account, any of our Separate Accounts or to any
affiliate of ours without the approval of the NYDFS. Closed Block assets and liabilities are carried on the same basis as similar
assets and liabilities held in the General Account. The excess of Closed Block liabilities over Closed Block assets represents the
expected future post-tax contribution from the Closed Block which would be recognized in income over the period the policies
and contracts in the Closed Block remain in force.
For additional information on the Closed Block, see Note 6 of the Notes to the Consolidated Financial Statements.
Risk Management
We approach risk management of our products: (i) prospectively, by assessing, and from time to time, modifying our
current product offerings to manage our risk and (ii) retrospectively, by implementing actions to reduce our exposure and
manage the risks associated with in-force contracts. We use a combination of hedging and reinsurance programs to
appropriately manage our risk and for capital management purposes.
The following tables summarize our current uses of hedging and third-party reinsurance in each of the applicable reporting
segments.
Hedging
Segment
Individual
Retirement
Hedging Details
Purpose
Dynamic and static hedging using derivatives contracts,
including futures and total return swaps (both equity and
fixed income), options and variance swaps, as well as, to
a lesser extent, bond investments and repurchase
agreements
Dynamic hedging (supplemented by static
hedges): to offset economic liability from equity
market and interest rate changes
Static hedging: to maintain a target asset level
for all variable annuities
Group Retirement Derivatives contracts whose payouts, in combination
Support the returns associated with the SIO
with fixed income investments, emulate those of certain
securities indices, commodities indices, or ETFs, subject
to caps and buffers
Dynamic and static hedging using derivatives contracts,
including futures and total return swaps (both equity and
fixed income), options and variance swaps, as well as, to
a lesser extent, bond investments and repurchase
agreements
Derivatives contracts whose payouts, in combination
with returns from the underlying fixed income
investments, seek to replicate those of the index price,
subject to prescribed caps and buffers.
Dynamic hedging (supplemented by static
hedges): to offset economic liability from equity
market and interest rate changes
Static hedging: to maintain a target asset level
for all variable annuities
Hedge the exposure contained in our IUL
products and the MSO II rider we offer on our
VUL products.
Dynamic and static hedging using derivatives contracts,
including futures and total return swaps (both equity and
fixed income), options and variance swaps, as well as, to
a lesser extent, bond investments and repurchase
agreements
Dynamic hedging (supplemented by static
hedges): to offset economic liability from equity
market and interest rate changes
Static hedging: to maintain a target asset level
for all variable annuities.
Protection
Solutions
Legacy
26
Reinsurance
We use reinsurance to mitigate a portion of the risks that we face in certain of our variable annuity products with regard to
a portion of the historical GMxB features issued in connection with our Individual Retirement, Group Retirement, and Legacy
segments. Under our reinsurance arrangements, other insurers assume a portion of the obligation to pay claims and related
expenses to which we are subject. However, we remain liable as the direct insurer on all risks we reinsure and, therefore, are
subject to the risk that our reinsurer is unable or unwilling to pay or reimburse claims at the time demand is made.
Segment
Type of Reinsurance
Purpose
Individual
Retirement
Ceded
Equitable Financial ceded to a non-affiliated reinsurer on a coinsurance basis
90% of our fixed deferred annuity business sold prior to 2018.
Group Retirement
Ceded
Equitable Financial ceded to a non-affiliated reinsurer, on a combined
coinsurance and modified coinsurance basis, a 50% quota share of
approximately 360,000 legacy Group EQUI-VEST deferred variable annuity
contracts issued by Equitable Financial between 1980 and 2008.
Protection
Solutions
Life Insurance
Employee Benefits:
Varied
Legacy
Reinsurance / Ceded
Affiliate Reinsurance:
Equitable Financial reinsured all of its net retained General Account liabilities,
including all of its net retained liabilities relating to certain universal life
insurance policies issued outside the State of New York prior to October 1,
2022 to its affiliate, Equitable America, effective April 1, 2023, on a
coinsurance funds withheld basis.
Non-Affiliate Reinsurance:
We have set up reinsurance pools with highly rated unaffiliated reinsurers that
obligate the pool participants to pay death claim amounts in excess of our
retention limits for an agreed-upon premium.
Captive:
EQ AZ Life Re Company reinsures a 90% quota share of level premium term
insurance issued by Equitable Financial on or after March 1, 2003 through
December 31, 2008 and 90% of the risk of the lapse protection riders under
UL insurance policies issued by Equitable Financial on or after June 1, 2003
through June 30, 2007 and those issued by Equitable America on or after June
1, 2003 through June 30, 2007 on a 90% quota share basis as well as excess
claims relating to certain variable annuities with GMIB riders issued by
Equitable Financial. (1)
We reinsure our group life, disability, critical illness, and accident products.
These treaties include both quota share reinsurance and excess of loss.
Specifics of each treaty vary by product and support our risk management
objectives.
Non-Affiliate Reinsurance:
In connection with the Venerable Transaction, we ceded to CS Life certain
non-New York policies containing fixed rate GMIB and GMDB guarantees
sold by Equitable Financial between 2006-2008. (2)
Captive:
Ceded to its affiliate, EQ AZ Life RE, a captive reinsurance company, a 100%
quota share of all liabilities for variable annuities with GMIB riders issued on
or after May 1, 1999 through August 31, 2005 in excess of the liability
assumed by two unaffiliated reinsurers. (1)
(1) For additional information regarding our use of captives, see “—Regulation—Insurance Regulation—Captive Reinsurance
Regulation and Variable Annuity Capital Standards”, “Risk Factors—Risks Relating to Our Retirement and Protection Businesses
—Risks Relating to Reinsurance and Hedging—Our reinsurance arrangement with an affiliated captive” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Captive Reinsurance
Company.”
(2) See Note 13 to our Consolidated Financial Statements.
27
Other Legacy-Related Risk Management Strategies
We previously undertook several other programs to reduce gross reserves and reduce the risk associated with our in-force
legacy block, and in many cases, offered a benefit to our clients by offering liquidity or flexibility. These products include the
following:
•
Investment Option Changes. We added passive investment strategies and reduced the credit risk of some bond
portfolios. We also introduced managed volatility funds to reduce the portfolio’s equity exposure during periods when
certain market indicators indicate that market volatility is above specific thresholds set for the portfolio.
• Operational Buyouts. We bought out contracts issued between 2002-2009 that benefited clients whose needs had
changed and reduced our exposure to certain GMxB features.
• Premium Suspension Programs. We stopped accepting subsequent premiums to certain GMxB contracts.
• Lump Sum Option. We offer certain policyholders the option to receive a one-time lump sum payment rather than
systematic lifetime payments if their AV falls to zero. This option provided the same advantages as a buyout.
In conjunction with our hedging and reinsurance strategies, we believe they significantly reduced our risk exposure with
respect to our in-force legacy block.
Equitable Investment Management
EIMG is the investment advisor to the EQ Advisors Trust, our proprietary variable funds, and previously served as
investment advisor to the 1290 Funds, our retail mutual funds, and as administrator to both EQ Advisors Trust and the 1290
Funds (each, a “Trust” and collectively, the “Trusts”). Equitable Investment Management, LLC (“EIM LLC”) was formed on
June 10, 2022, and became the investment advisor to the 1290 Funds and the administrator for both Trusts effective January 1,
2023. EIMG and EIM LLC are collectively referred to as “Equitable Investment Management.”
Equitable Investment Management
Equitable Investment Management supports each of our retirement and protection businesses. Accordingly, Equitable
Investment Management results are embedded in the Individual Retirement, Group Retirement, Protection Solutions and
Legacy segments. EIMG helps add value and marketing appeal to our retirement and protection solutions products by bringing
investment management expertise and specialized strategies to the underlying investment lineup of each product. In addition, by
advising on an attractive array of proprietary investment portfolios (each, a “Portfolio,” and together, the “Portfolios”), EIMG
brings investment acumen, financial controls and economies of scale to the construction of underlying investment options for
our products.
EIMG provides investment management services to proprietary investment vehicles sponsored by the Company, including
investment companies that are underlying investment options for our variable insurance and annuity products, and EIM LLC
provides investment management services to our retail mutual funds. Each of EIMG and EIM LLC is registered as an
investment adviser under the Investment Advisers Act. EIMG serves as the investment adviser to EQ Advisors Trust and to two
private investment trusts established in the Cayman Islands. EQ Advisors Trust and each private investment trust is a “series”
type of trust with multiple Portfolios. EIMG provides discretionary investment management services to the Portfolios,
including, among other things, (1) portfolio management services for the Portfolios; (2) selecting, monitoring and overseeing
investment sub-advisers; and (3) developing and executing asset allocation strategies for multi-advised Portfolios and Portfolios
structured as funds-of-funds. EIMG is further charged with ensuring that the other parts of the Company that interact with the
Trusts, such as product management, the distribution system and the financial organization, have a specific point of contact.
EIMG has a variety of responsibilities for the management of its investment company clients. One of EIMG’s primary
responsibilities is to provide clients with portfolio management and investment advisory services, principally by reviewing
whether to appoint, dismiss or replace sub-advisers to each Portfolio, and thereafter monitoring and reviewing each sub-
adviser’s performance through qualitative and quantitative analysis, as well as periodic in-person, telephonic and written
consultations with the sub-advisers. Currently, EIMG has entered into sub-advisory agreements with more than 40 different
sub-advisers, including AB. Another primary responsibility of EIMG is to develop and monitor the investment program of each
Portfolio, including Portfolio investment objectives, policies and asset allocations for the Portfolios, select investments for
Portfolios (or portions thereof) for which it provides direct investment selection services, and ensure that investments and asset
allocations are consistent with the guidelines that have been approved by clients.
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EIM LLC is the investment advisor to our retail 1290 Funds and provides administrative services to both Trusts. EIM LLC
provides or oversees the provision of all investment advisory and portfolio management to the 1290 Funds. EIM LLC has
supervisory responsibility for the management and investment of 1290 Fund assets and develops investment objectives and
investment policies for the funds. It is also responsible for overseeing sub-advisors and determining whether to appoint, dismiss
or replace sub-advisors to each 1290 Fund. Currently, EIM LLC has entered into sub-advisory agreements with six different
sub-advisors. The administrative services that EIM LLC provides to the Trusts include, among others, coordination of each
Portfolio’s audit, financial statements and tax returns; expense management and budgeting; legal administrative services and
compliance monitoring; portfolio accounting services, including daily net asset value accounting; risk management; oversight
of proxy voting procedures and an anti-money laundering program.
General Account Investment Management
Equitable Financial Investment Management, LLC (“EFIM”) is the investment manager for Equitable Financial’s General
Account portfolio. On November 20, 2023, Equitable America entered into an investment management agreement with
Equitable Financial Investment Management America, LLC (“EFIMA”), by which EFIMA became the investment manager for
Equitable America’s General Account portfolio.
EFIM and EFIMA provide investment management services to the Equitable Financial and Equitable America General
Account portfolios, respectively. They each provide investment advisory and asset management services including, but not
limited to, providing investment advice on strategic investment management activities, asset strategies through affiliated and
unaffiliated asset managers, strategic oversight of the General Account portfolio, portfolio management, yield/duration
optimization, asset liability management, asset allocation, liquidity and close alignment to business strategies, as well as
advising on other services in accordance with the applicable investment advisory and management agreement. Subject to
oversight and supervision, EFIM and EFIMA may each delegate any of their duties with respect to some or all of the assets of
the General Account to a sub-adviser.
Regulation
Insurance Regulation
Our insurance subsidiaries are licensed to transact insurance business and are subject to extensive regulation and
supervision by insurance regulators, in all 50 states of the United States, the District of Columbia, Puerto Rico, and the U.S.
Virgin Islands. The primary regulator of an insurance company, however, is located in its state of domicile. Equitable Financial
is domiciled in New York and is primarily regulated by the Superintendent of the NYDFS. Equitable America and EQ AZ Life
Re are domiciled in Arizona and are primarily regulated by the Director of Insurance of the Arizona Department of Insurance
and Financial Institutions. Equitable L&A is domiciled in Colorado and is primarily regulated by the Commissioner of
Insurance of the Colorado Division of Insurance. The extent of regulation by jurisdiction varies, but most jurisdictions have
laws and regulations governing the financial aspects and business conduct of insurers. State laws in the United States grant
insurance regulatory authorities broad administrative powers with respect to, among other things, licensing companies to
transact business, sales practices, establishing statutory capital and reserve requirements and solvency standards, reinsurance
and hedging, protecting privacy, regulating advertising, restricting the payment of dividends and other transactions between
affiliates, permitted types and concentrations of investments and business conduct to be maintained by insurance companies as
well as agent and insurance producer licensing, and, to the extent applicable to the particular type of insurance, approval or
filing of policy forms and rates. Insurance regulators have the discretionary authority to limit or prohibit new issuances of
business to policyholders within their jurisdictions when, in their judgment, such regulators determine that the issuing company
is not maintaining adequate statutory surplus or capital. Additionally, New York’s insurance laws limit sales commissions and
certain other marketing expenses that Equitable Financial may incur.
Supervisory agencies in each of the jurisdictions in which we do business may conduct regular or targeted examinations of
our operations and accounts and make requests for particular information from us. For example, periodic financial examinations
of the books, records, accounts and business practices of insurers domiciled in their states are generally conducted by such
supervisory agencies every three to five years. From time to time, regulators raise issues during examinations or audits of us
that could, if determined adversely, have a material adverse effect on us. In addition, the interpretations of regulations by
regulators may change and statutes may be enacted with retroactive impact, particularly in areas such as accounting or statutory
reserve requirements. In addition to oversight by state insurance regulators in recent years, the insurance industry has seen an
increase in inquiries from state attorneys general and other state officials regarding compliance with certain state insurance,
securities and other applicable laws. We have received and responded to such inquiries from time to time. For additional
information on legal and regulatory risks, see “Risk Factors—Legal and Regulatory Risks.”
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Each of our insurance subsidiaries is required to file detailed annual and, with the exception of EQ AZ Life Re, quarterly
financial statements, prepared on a statutory accounting basis or in accordance with other accounting practices prescribed or
permitted by the applicable regulator, with supervisory agencies in each of the jurisdictions in which such subsidiary does
business. The NAIC has approved a series of uniform SAP that has been adopted by all state insurance regulators, in some
cases with certain modifications. As a basis of accounting, SAP was developed to monitor and regulate the solvency of
insurance companies. In developing SAP, insurance regulators were primarily concerned with ensuring an insurer’s ability to
pay all its current and future obligations to policyholders. As a result, statutory accounting focuses on conservatively valuing
the assets and liabilities of insurers, generally in accordance with standards specified by the insurer’s domiciliary state. The
values for assets, liabilities and equity reflected in financial statements prepared in accordance with U.S. GAAP are usually
different from those reflected in financial statements prepared under SAP. See Note 20 of the Notes to the Consolidated
Financial Statements.
Holding Company and Shareholder Dividend Regulation
All states regulate transactions between an insurer and its affiliates under their insurance holding company laws. The
insurance holding company laws and regulations vary from jurisdiction to jurisdiction, but generally require that all transactions
affecting insurers within a holding company system be fair and reasonable and, in many cases, require prior notice and approval
or non-disapproval by the insurer’s domiciliary insurance regulator.
The insurance holding company laws and regulations generally also require a controlled insurance company (i.e., an insurer
that is a subsidiary of an insurance holding company) to register and file with state insurance regulatory authorities certain
reports, including information concerning its capital structure, ownership, financial condition, certain intercompany transactions
and general business operations. In addition, states require the ultimate controlling person of a U.S. insurer to file an annual
enterprise risk report with the lead state regulator of the insurance holding company system identifying risks likely to have a
material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a
whole.
State insurance laws also place restrictions and limitations on the amount of dividends or other distributions payable by
insurance company subsidiaries to their parent companies, as well as on transactions between an insurer and its affiliates. Under
New York’s insurance laws, which are applicable to Equitable Financial, a domestic stock life insurer may pay an ordinary
dividend to its stockholders without regulatory approval provided that the amount does not exceed the statutory formula
(“Ordinary Dividend”). Dividends in excess of this amount require a New York domestic life insurer to file a notice of its intent
to declare the dividend with the NYDFS and obtain prior approval or non-disapproval from the NYDFS with respect to such
dividend (“Extraordinary Dividend”). Due to a permitted statutory accounting practice agreed to with the NYDFS, Equitable
Financial needs the prior approval of the NYDFS to pay the portion, if any, of any Ordinary Dividend that exceeds the Ordinary
Dividend that Equitable Financial would be permitted to pay under New York’s insurance laws absent the application of such
permitted practice (such excess, the “Permitted Practice Ordinary Dividend”).
Other states’ insurance laws have limitations on dividends similar to New York’s, providing that dividends in excess of
prescribed limits, based on an insurance company’s earnings and surplus for the prior year, are considered to be extraordinary
dividends and require explicit approval from the insurer’s domiciliary insurance regulator. In addition, the insurance laws of
some states require that any dividend to a domestic insurance company’s stockholders be paid from the insurer’s earned surplus
or that prior approval or non-disapproval be obtained from its domiciliary insurance regulator for any dividend payable from
other than earned surplus. As a holding company, we depend on dividends from our subsidiaries to meet our obligations. For
additional information on shareholder dividends, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources.”
State insurance holding company laws and regulations also regulate changes in control. State laws provide that no person,
corporation or other entity may acquire control of a domestic insurance company, or any parent company of such insurance
company, without the prior approval of the insurance company’s domiciliary state insurance regulator. Generally, any person
acquiring, directly or indirectly, 10% or more of the voting securities of an insurance company is presumed to have acquired
“control” of the company. This statutory presumption may be rebutted by a showing that control does not exist in fact. State
insurance regulators, however, may find that “control” exists in circumstances in which a person owns or controls, directly or
indirectly, less than 10% of the voting securities.
The laws and regulations regarding acquisition of control transactions may discourage potential acquisition proposals and
may delay or prevent a change of control involving us, including through unsolicited transactions that some of our shareholders
might consider desirable.
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NAIC
The mandate of the NAIC is to benefit state insurance regulatory authorities and consumers by promulgating model
insurance laws and regulations for adoption by the states. The NAIC has established statutory accounting principles set forth in
the Manual. However, a state may have adopted or in the future may adopt statutory accounting principles that differ from the
Manual. Changes to the Manual or states’ adoption of prescribed differences to the Manual may impact the statutory capital and
surplus of our U.S. insurance companies.
The NAIC’s Risk Management and Own Risk and Solvency Assessment Model Act (“ORSA”), which has been enacted by
our insurance subsidiaries’ domiciliary states, requires insurers to maintain a risk management framework and conduct an
internal risk and solvency assessment of their material risks in normal and stressed environments. The assessment is
documented in a confidential annual ORSA summary report, a copy of which must be made available to regulators as required
or upon request.
The NAIC’s Corporate Governance Annual Disclosure Model Act has also been adopted by our insurance subsidiaries’
domiciliary states. It requires insurers to annually file detailed information regarding their corporate governance policies.
The NAIC amended the Standard Valuation Law to require a principle-based approach to reserving for life insurance and
annuity contracts, which resulted in corresponding amendments to the NAIC’s Valuation Manual (the “Valuation Manual”).
Principle-based reserving is designed to better address reserving for life insurance and annuity products. It has been adopted in
all states, although in New York, principle-based reserving became effective with the adoption of Regulation 213, which differs
from the NAIC Standard Valuation Law pursuant to New York’s Regulation 213, as discussed further below.
The NAIC has been focused on a macro-prudential initiative since 2017 that is intended to enhance risk identification
efforts through proposed enhancements to supervisory practices related to liquidity, recovery and resolution, capital stress
testing and counterparty exposure concentrations for life insurers. In 2020, the NAIC adopted amendments to the Model
Holding Company Act and Regulation that implement an annual filing requirement related to a liquidity stress-testing
framework (the “Liquidity Stress Test”) for certain large U.S. life insurers and insurance groups (based on amounts of certain
types of business written or material exposure to certain investment transactions, such as derivatives and securities lending).
The Liquidity Stress Test is used as a regulatory tool in jurisdictions which have adopted the holding company amendments.
The NAIC also developed a group capital calculation tool (“GCC”) using an RBC aggregation methodology for all entities
within the insurance holding company system, including non-U.S. entities. The GCC provides U.S. solvency regulators with an
additional analytical tool for conducting group-wide supervision. The NAIC’s amendments to the Model Holding Company Act
and Regulation in 2020 also adopted the GCC Template and Instructions and implemented the annual filing requirement with
an insurance group’s lead state regulator. The GCC filing requirement becomes effective when the holding company
amendments have been adopted by the state where an insurance group’s lead state regulator is located.
In August 2023, New York adopted legislation codifying the Liquidity Stress Test and the GCC. The first GCC filing will
be required on June 30, 2024.
In August 2023, the NAIC adopted a short-term solution related to the accounting treatment of an insurer’s negative
interest maintenance reserve (“IMR”) balance, which may occur when a rising interest rate environment causes an insurer’s
IMR balance to become negative as a result of bond sales executed at a capital loss. If this occurs, previous statutory accounting
guidance required the non-admittance of negative IMR, which can impact how accurately an insurer’s surplus and financial
strength are reflected in its financial statements and result in lower reported surplus and RBC ratios. The NAIC’s new interim
statutory accounting guidance, which is effective until December 31, 2025, allows an insurer with an authorized control level
RBC greater than 300% to admit negative IMR up to 10% of its General Account capital and surplus, subject to certain
restrictions and reporting obligations. The NAIC is developing a long-term solution for the accounting treatment of negative
IMR, which may nullify the application of the short-term solution if implemented prior to December 31, 2025.
Captive Reinsurance Regulation and Variable Annuity Capital Standards
We use an affiliated captive reinsurer as part of our capital management strategy. During the last few years, the NAIC and
certain state regulators, including the NYDFS, have been focused on insurance companies’ use of affiliated captive reinsurers or
offshore entities.
The NAIC adopted a revised preamble to the NAIC accreditation standards (the “Standard”) which applies the Standard to
captive insurers that assume level premium term life insurance (“XXX”) business and universal life with secondary guarantees
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(“AXXX”) business. The NAIC also developed a regulatory framework, the XXX/AXXX Reinsurance Framework, for XXX/
AXXX transactions. The framework requires more disclosure of an insurer’s use of captives in its statutory financial statements
and narrows the types of assets permitted to back statutory reserves that are required to support the insurer’s future obligations.
The XXX/AXXX Reinsurance Framework was implemented through an actuarial guideline (“AG 48”), which requires a ceding
insurer’s actuary to opine on the insurer’s reserves and issue a qualified opinion if the framework is not followed. AG 48
applies prospectively, so that XXX/AXXX captives are not subject to AG 48 if reinsured policies were issued prior to
January 1, 2015 and ceded so that they were part of a reinsurance arrangement as of December 31, 2014, as is the case for the
XXX business and AXXX business reinsured by our Arizona captive. The Standard is satisfied if the applicable reinsurance
transaction satisfies the XXX/AXXX Reinsurance Framework requirements. The NAIC also adopted the Term and Universal
Life Insurance Reserving Financing Model Regulation which contains the same substantive requirements as AG 48, as
amended by the NAIC, and it establishes uniform, national standards governing reserve financing arrangements pertaining to
the term life and universal life insurance policies with secondary guarantees. The model regulation has been adopted by our
insurance subsidiaries’ domiciliary states.
The NAIC adopted a new framework for variable annuity captive reinsurance transactions that became operational in 2020,
which includes reforms that improve the statutory reserve and RBC framework for insurance companies that sell variable
annuity products. Among other changes, the framework includes new prescriptions for reflecting hedge effectiveness,
investment returns, interest rates, mortality and policyholder behavior in calculating statutory reserves and RBC. Overall, we
believe the NAIC reform has moved variable annuity capital standards towards an economic framework which is consistent
with how we manage our business. The Company adopted the NAIC reserve and capital framework for the year ended
December 31, 2019.
As previously noted, New York’s Regulation 213, which applies to Equitable Financial, differs from the NAIC’s variable
annuity reserve and capital framework described above. Regulation 213 requires New York licensed insurers, to carry statutory
basis reserves for variable annuity contract obligations equal to the greater of those required under (i) the NAIC standard or (ii)
a revised version of the NYDFS requirement in effect prior to the adoption of the regulation’s first amendment for contracts
issued prior to January 1, 2020, and for policies issued after that date a new standard that is more conservative than the NAIC
standard. As a result, Regulation 213 materially increases the statutory basis reserves that New York licensed insurers are
required to carry which could adversely affect their capacity to distribute dividends. As a holding company, Holdings relies on
dividends and other payments from its subsidiaries and, accordingly, any material limitation on Equitable Financial’s dividend
capacity could materially affect Holdings’ ability to return capital to stockholders through dividends and stock repurchases.
In order to mitigate the impacts of Regulation 213 discussed above, the Company completed a series of management
actions prior to year-end 2022. Equitable Financial entered into a reinsurance agreement with Swiss Re Life & Health America
Inc., we completed the Global Atlantic Reinsurance Transaction, we completed certain internal restructurings that increase cash
flows to Holdings from non-life insurance entities, and we changed our underwriting practices to emphasize issuing products
out of our non-New York domiciled insurance subsidiary. Equitable Financial was also granted a permitted practice by the
NYDFS which partially mitigates Regulation 213’s impact from the Venerable Transaction to make the regulation’s application
to Equitable Financial more consistent with the NAIC reserve and capital framework. In addition, in May 2023, Equitable
Financial completed a reinsurance transaction whereby it reinsured virtually all of its net retained General Account liabilities,
including all of its net retained liabilities relating to the living benefit and death riders related to (i) its variable annuity contracts
issued outside the State of New York prior to October 1, 2022 (and with respect to its Equi-Vest variable annuity contracts,
issued outside the State of New York prior to February 1, 2023) and (ii) certain universal life insurance policies issued outside
the State of New York prior to October 1, 2022, to its affiliate, Equitable Financial Life Insurance Company of America, an
Arizona-domiciled insurer. In addition, all of the separate account liabilities relating to such variable annuity contracts were
reinsured as part of that transaction. There can be no assurance that any of these management actions individually or
collectively will fully mitigate the impact of Regulation 213. Other state insurance regulators may also propose and adopt
standards that differ from the NAIC framework. See Note 20 of the Notes to the Consolidated Financial Statements for
additional detail on the permitted practice granted by the NYDFS.
We cannot predict what revisions, if any, will be made to the model laws and regulations relating to the use of captives.
Any regulatory action that limits our ability to achieve desired benefits from the use of or materially increases our cost of using
captive reinsurance and applies retroactively, without grandfathering provisions for existing captive variable annuity
reinsurance entities, could have a material adverse effect on our financial condition or results of operations. For additional
information on our use of a captive reinsurance company, see “Risk Factors—Legal and Regulatory Risks.”
Surplus and Capital; Risk Based Capital
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Insurers are required to maintain their capital and surplus at or above minimum levels. Regulators have discretionary
authority, in connection with the continued licensing of insurance companies, to limit or prohibit an insurer’s sales to
policyholders if, in their judgment, the regulators determine that such insurer has not maintained the minimum surplus or capital
or that the further transaction of business would be hazardous to policyholders. We report our RBC based on a formula
calculated by applying factors to various asset, premium and statutory reserve items, as well as taking into account the risk
characteristics of the insurer. The major categories of risk involved are asset risk, insurance risk, interest rate risk, market risk
and business risk. The formula is used as a regulatory tool to identify possible inadequately capitalized insurers for purposes of
initiating regulatory action, and not as a means to rank insurers generally. State insurance laws provide insurance regulators the
authority to require various actions by, or take various actions against, insurers whose RBC ratio does not meet or exceed
certain RBC levels. The NAIC approved RBC revisions for corporate bonds, real estate equity and longevity risk that took
effect at year-end 2021 and had a minimal RBC impact on Equitable Financial. The NAIC also approved an RBC update for
mortality risk that took effect at year-end 2022, which had a minimal impact on Equitable Financial. As of the date of the most
recent annual statutory financial statements filed with insurance regulators, the RBC of each of our insurance subsidiaries was
in excess of each of those RBC levels.
Regulation of Investments
State insurance laws and regulations limit the amount of investments that our insurance subsidiaries may have in certain
asset categories, such as below investment grade fixed income securities, real estate equity, other equity investments, and
derivatives, and require diversification of investment portfolios. Investments exceeding regulatory limitations are not admitted
for purposes of measuring surplus. In some instances, laws require us to divest any non-qualifying investments.
The NAIC is also evaluating the risks associated with insurers’ investments in certain categories of structured securities,
including CLOs. In March 2023, the NAIC adopted an amendment to the Purposes and Procedures Manual to give the NAIC’s
Structured Securities Group, housed within the SVO, responsibility for modeling CLO securities and evaluating tranche level
losses across all debt and equity tranches under a series of calibrated and weighted collateral stress scenarios in order to assign
NAIC designations. Under the amended Purposes and Procedures Manual, which will become effective no earlier than year-end
2024 financial reporting, CLO investments will no longer be broadly exempt from filing with the SVO based on ratings from
Credit Rating Providers (“CRPs”). The NAIC’s goal is to ensure that the weighted average RBC factor for owning all tranches
of a CLO more closely aligns with what would be required for directly owning all of the underlying loan collateral, in order to
avoid RBC arbitrage. The NAIC is collaborating with interested parties to develop and refine the process for modeling CLO
investments. In addition, in August 2023, the NAIC adopted an interim proposal to increase the RBC factor for structured
security residual tranches from 30% to 45% beginning January 1, 2024. If the NAIC intends to modify the 45% charge for year-
end 2024, it must take action by June 30, 2024. We cannot predict what form the final proposal may take, or what effect its
adoption may have on our business and compliance costs. More broadly, in August 2023 the NAIC’s Financial Condition (E)
Committee launched a holistic review of its approach to insurer investment risk regulation, with particular focus on the SVO’s
discretion to review NAIC designations for individual investments, the appropriate extent of SVO reliance on CRPs, and
oversight of the development of new RBC charges for CLOs and other structured securities.
Guaranty Associations and Similar Arrangements
Each state in which we are admitted to transact business requires life insurers doing business within the jurisdiction to
participate in guaranty associations, which are organized to pay certain contractual insurance benefits owed pursuant to
insurance policies issued by impaired, insolvent or failed insurers. The laws are designed to protect policyholders from losses
under insurance policies issued by insurance companies that become impaired or insolvent. These associations levy
assessments, up to prescribed limits, on all member insurers in a particular state based on their proportionate share of premiums
written in the lines of business in which the impaired, insolvent or failed insurer is engaged. Some states permit member
insurers to recover assessments paid through full or partial premium tax offsets.
During each of the past five years, the assessments levied against us have not been material.
Adjusting Non-Guaranteed Elements of Life Insurance Products
In recent years, state regulators have considered whether to apply regulatory standards to the determination and/or
readjustment of non-guaranteed elements (“NGEs”) within life insurance policies and annuity contracts that may be adjusted at
the insurer’s discretion, such as the cost of insurance for universal life insurance policies and interest crediting rates for life
insurance policies and annuity contracts. For example, New York’s Insurance Regulation 210 establishes standards for the
determination and any readjustment of NGEs, including a prohibition on increasing profit margins on existing business or
recouping past losses on such business, and requires advance notice of any adverse change in a NGE to both the NYDFS and
affected policyholders. We have developed policies and procedures designed to comply with Regulation 210 and to date, have
not seen adverse effects on our business. It is possible, however, that Regulation 210 could adversely impact management’s
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ability to determine and/or readjust NGEs in the future. Beyond the New York regulation and similar rules enacted in California
(effective on July 1, 2019) and Texas (effective on January 1, 2021), the likelihood of enacting of any additional state-based
regulation is uncertain at this time, but if implemented, these regulations could have an adverse effect on our business and
consolidated results of operations.
Broker-Dealer and Securities Regulation and Commodities Regulation
We and certain policies and contracts offered by us are subject to regulation under the Federal securities laws administered
by the SEC, self-regulatory organizations and under certain state securities laws. These regulators may conduct examinations of
our operations, and from time to time make requests for particular information from us.
Certain of our subsidiaries, including Equitable Advisors, Equitable Distributors, SCB LLC and AllianceBernstein
Investments, Inc., are registered as broker-dealers (collectively, the “Broker-Dealers”) under the Exchange Act. The Broker-
Dealers are subject to extensive regulation by the SEC and are members of, and subject to regulation by, FINRA, a self-
regulatory organization subject to SEC oversight. Among other regulation, the Broker-Dealers are subject to the capital
requirements of the SEC and FINRA, which specify minimum levels of capital (“net capital”) that the Broker-Dealers are
required to maintain and also limit the amount of leverage that the Broker-Dealers are able to employ in their businesses. The
SEC and FINRA also regulate the sales practices of the Broker-Dealers. In June 2020, Regulation Best Interest (“Regulation
BI”) went into effect with respect to recommendation of securities and accounts to “retail customers.” Regulation BI requires
the Broker-Dealers, when making a recommendation of any securities transaction or investment strategy involving securities
(including account recommendations) to a retail customer, to provide specified disclosures and act in the retail customer’s best
interest. Moreover, in recent years, the SEC and FINRA have intensified their scrutiny of sales practices relating to variable
annuities, variable life insurance and alternative investments, among other products. In addition, the Broker-Dealers are also
subject to regulation by state securities administrators in those states in which they conduct business, who may also conduct
examinations, direct inquiries to the Broker-Dealers and bring enforcement actions against the Broker-Dealers. Broker-Dealers
are required to obtain approval from FINRA for material changes in their businesses as well as certain restructuring and
mergers and acquisition events. The Broker-Dealers are also subject to registration and regulation by regulatory authorities in
the foreign jurisdictions in which they do business.
Certain of our Separate Accounts are registered as investment companies under the Investment Company Act. Separate
Accounts interests under certain annuity contracts and insurance policies issued by us are also registered under the Securities
Act. EQAT and 1290 Funds are registered as investment companies under the Investment Company Act and shares offered by
these investment companies are also registered under the Securities Act. Many of the investment companies managed by AB,
including a variety of mutual funds and other pooled investment vehicles, are registered with the SEC under the Investment
Company Act, and, if appropriate, shares of these entities are registered under the Securities Act.
Certain subsidiaries, including EIMG, Equitable Advisors and AB, and certain of its subsidiaries are registered as
investment advisers under the Investment Advisers Act. The investment advisory activities of such registered investment
advisers are subject to various federal and state laws and regulations and to the laws in those foreign countries in which they
conduct business. These U.S. and foreign laws and regulations generally grant supervisory agencies broad administrative
powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws and regulations.
EIMG is registered with the CFTC as a commodity pool operator with respect to certain portfolios and is also a member of
the NFA. AB and certain of its subsidiaries are also separately registered with the CFTC as commodity pool operators and
commodity trading advisers; SCB LLC is also registered with the CFTC as a commodity introducing broker. The CFTC is a
federal independent agency that is responsible for, among other things, the regulation of commodity interests and enforcement
of the CEA. The NFA is a self-regulatory organization to which the CFTC has delegated, among other things, the
administration and enforcement of commodity regulatory registration requirements and the regulation of its members. As such,
EIMG is subject to regulation by the NFA and CFTC and is subject to certain legal requirements and restrictions in the CEA
and in the rules and regulations of the CFTC and the rules and by-laws of the NFA on behalf of itself and any commodity pools
that it operates, including investor protection requirements and anti-fraud prohibitions, and is subject to periodic inspections and
audits by the CFTC and NFA. EIMG is also subject to certain CFTC-mandated disclosure, reporting and record-keeping
obligations.
Regulators, including the SEC, FINRA, and state securities regulators and attorneys general, continue to focus attention on
various practices in or affecting the investment management and/or mutual fund industries, including portfolio management,
valuation, fee break points, and the use of fund assets for distribution.
We and certain of our subsidiaries provide regular financial reporting, as well as, and in certain cases, additional
information and documents to the SEC, FINRA, the CFTC, NFA, state securities regulators and attorneys general, the NYDFS
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and other state insurance regulators, and other regulators regarding our compliance with insurance, securities and other laws and
regulations regarding the conduct of our businesses. For additional information on regulatory matters, see Note 20 of the Notes
to the Consolidated Financial Statements.
The SEC, FINRA, the CFTC and other governmental regulatory authorities may institute administrative or judicial
proceedings against our subsidiaries or their personnel that may result in censure, fines, the issuance of cease-and-desist orders,
trading prohibitions, the suspension or expulsion of a broker-dealer, investment adviser, commodity pool operator, or other type
of regulated entity, or member, its officers, registered representatives or employees or other similar sanctions.
Dodd-Frank Wall Street Reform and Consumer Protection Act
Currently, the U.S. federal government does not directly regulate the business of insurance. While the Dodd-Frank Act
does not remove primary responsibility for the supervision and regulation of insurance from the states, Title V of the Dodd-
Frank Act established the FIO within the U.S. Treasury Department and reformed the regulation of the non-admitted property
and casualty insurance market and the reinsurance market. The Dodd-Frank Act also established the FSOC, which is authorized
to designate certain non-bank financial companies, including insurers, as systemically significant (a “SIFI”) if the FSOC
determines that the financial institution could pose a threat to U.S. financial stability. Such a designation would subject a non-
bank SIFI to supervision and heightened prudential standards by the Federal Reserve. On November 3, 2023, the FSOC adopted
guidance that establishes a new process for designating certain non-bank financial institutions as SIFIs. Under the new
guidance, the FSOC is no longer required to conduct a cost-benefit analysis and an assessment of the likelihood of a non-bank
financial company’s material financial distress before considering the designation of the company. The revised process could
have the effect of simplifying and shortening FSOC’s procedures for designating certain financial companies as non-bank
SIFIs.
The FIO’s authority extends to all lines of insurance except health insurance, crop insurance and (unless included with life
or annuity components) long-term care insurance. Under the Dodd-Frank Act, the FIO is charged with monitoring all aspects of
the insurance industry (including identifying gaps in regulation that could contribute to a systemic crisis), recommending to the
FSOC the designation of any insurer and its affiliates as a non-bank financial company subject to oversight by the Board of
Governors of the Federal Reserve System (including the administration of stress testing on capital), assisting the Treasury
Secretary in negotiating “covered agreements” with non-U.S. governments or regulatory authorities, and, with respect to state
insurance laws and regulation, determining whether state insurance measures are pre-empted by such covered agreements.
In addition, the FIO is empowered to request and collect data (including financial data) on and from the insurance industry
and insurers (including reinsurers) and their affiliates. In such capacity, the FIO may require an insurer or an affiliate of an
insurer to submit such data or information as the FIO may reasonably require. In addition, the FIO’s approval is required to
subject a financial company whose largest U.S. subsidiary is an insurer to the special orderly liquidation process outside the
federal bankruptcy code, administered by the FDIC pursuant to the Dodd-Frank Act. U.S. insurance subsidiaries of any such
financial company, however, would be subject to rehabilitation and liquidation proceedings under state insurance law. The
Dodd-Frank Act also reforms the regulation of the non-admitted property/casualty insurance market (commonly referred to as
excess and surplus lines) and the reinsurance markets, including prohibiting the ability of non-domiciliary state insurance
regulators to deny credit for reinsurance when recognized by the ceding insurer’s domiciliary state regulator.
In October 2022, the SEC adopted final rules requiring the recovery of erroneously awarded compensation as mandated by
the Dodd-Frank Act.
The following aspects of our operations could also be affected by the Dodd-Frank Act:
Heightened Standards and Safeguards
The FSOC may recommend that state insurance regulators or other regulators apply new or heightened standards and
safeguards for activities or practices we and other insurers or other financial services companies engage in if the FSOC
determines that those activities or practices could create or increase the risk that significant liquidity, credit or other problems
spread among financial companies. We cannot predict whether any such recommendations will be made or their effect on our
business, consolidated results of operations or financial condition.
Over-The-Counter Derivatives Regulation
The Dodd-Frank Act includes a framework of regulation for the OTC derivatives markets, which has largely been
implemented. The Dodd-Frank Act provided authority to the CFTC to regulate “swaps” and the SEC to regulate “security-based
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swaps.” Swaps include, among other things, OTC derivatives on interest rates, commodities, broad-based securities indexes,
currency and treasury and other exempted securities. Security-based swaps include, among other things, OTC derivatives on
single securities, baskets of securities, narrow-based indexes or loans. The Dodd-Frank Act also granted authority to the U.S.
Secretary of the Treasury to exclude physically-settled foreign exchange instruments from regulation as swaps, which the
Secretary implemented shortly after adoption of the Dodd-Frank Act.
The Dodd-Frank Act authorized the SEC and the CFTC to mandate that specified types of OTC derivatives must be
executed in regulated markets and be submitted for clearing to regulated clearinghouses and directed the CFTC and SEC to
establish documentation, recordkeeping and registration requirements for swap dealers, major swap participants, security-based
swap dealers and major security-based swap participants for swaps, security-based swaps and specified other derivatives that
continued to trade on the OTC market. The Dodd-Frank Act also directed the SEC, CFTC, the Office of the Comptroller of the
Currency, the Federal Reserve Board, the FDIC, the Farm Credit Administration, and the Federal Housing Finance Agency
(collectively, the “Prudential Regulators”), with respect to the respective entities they regulate, to develop margin rules for OTC
derivatives and capital rules for regulated dealers and major participants. The Prudential Regulators completed substantially all
of the required regulations by 2017, and the CFTC finalized one of its last remaining rules – the capital rules for swap dealers in
July 2020. In December 2019 the SEC finalized and adopted the final set of rules related to security-based swaps, and the rules,
including registration of dealers in security-based swaps, became effective on or prior to November 1, 2021. Public trade
reporting of security-based swaps went into effect in February 2022. In December 2021, the SEC proposed rule 10B-1 under
the Exchange Act to require next day public reporting of security-based swaps that exceed certain specified thresholds.
In June 2023, the SEC reopened the comment period on proposed rule 10B-1 under the Exchange Act. As a result of the
CFTC regulations, several types of CFTC-regulated swaps are required to be traded on swap execution facilities and cleared
through a regulated DCO. Swaps and security-based swaps submitted for clearing are subject to minimum initial and variation
margin requirements set by the relevant DCO or security-based swap clearing organization. Both swaps and security-based
swaps are subject to transaction-reporting requirements. The rule’s potential effect, if adopted, is uncertain.
Under the CFTC’s and SEC’s regulations, swaps and security-based swaps traded by a non-banking entity are currently
subject to variation margin requirements as well as, for most entities, initial margin, as mandated by the CFTC and SEC. Under
regulations adopted by the Prudential Regulators, both swaps and security-based swaps traded by banking entities are currently
subject to variation margin requirements and, for most entities, initial margin requirements as well. Initial margin requirements
imposed by the CFTC, the SEC and the Prudential Regulators are being phased in over a period of time. As a result, initial
margin requirements took effect in September 2021 for us. The CFTC regulations require us to post and collect variation
margin (comprised of specified liquid instruments and subject to a required haircut) in connection with trading of swaps with
CFTC-regulated swap dealers, and the regulations adopted by the Prudential Regulators require us to post and collect variation
margin when trading either swaps or security-based swaps with a dealer regulated by the Prudential Regulators. SEC
regulations require posting and collection of variation margin by both us and our counterparty but require posting of initial
margin only by the entity facing the broker-dealer or security-based swap dealer but not the broker-dealer or security-based
swap dealer itself.
In addition, regulations adopted by the Prudential Regulators that became effective in 2019 require certain bank-regulated
counterparties and certain of their affiliates to include in qualified financial contracts, including many derivatives contracts,
repurchase agreements and securities lending agreements, terms that delay or restrict the rights of counterparties, such as us, to
terminate such contracts, foreclose upon collateral, exercise other default rights or restrict transfers of affiliate credit
enhancements (such as guarantees) in the event that the bank-regulated counterparty and/or its affiliates are subject to certain
types of resolution or insolvency proceedings. It is possible that these requirements in the market, could adversely affect our
ability to terminate existing derivatives agreements or to realize amounts to be received under such agreements. The Dodd-
Frank Act and related federal regulations and foreign derivatives requirements expose us to operational, compliance, execution
and other risks, including central counterparty insolvency risk.
We use derivatives to mitigate a wide range of risks in connection with our business, including the impact of increased
benefit exposures from certain variable annuity products that offer GMxB features. We have always been subject to the risk that
our hedging and other management procedures might prove ineffective in reducing the risks to which insurance policies expose
us or that unanticipated policyholder behavior or mortality, combined with adverse market events, could produce economic
losses beyond the scope of the risk management techniques employed. Any such losses could be increased by higher costs of
writing derivatives (including customized derivatives) and the reduced availability of customized derivatives that might result
from the enactment and implementation of new regulations.
Broker-Dealer Regulation
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The Dodd-Frank Act authorized the SEC to promulgate rules to provide that the standard of conduct for all broker-dealers,
when providing personalized investment advice about securities to retail customers. In response, the SEC adopted Regulation
BI, which became effective on June 30, 2020. As part of the same rulemaking package, the SEC also required registered broker
dealers and investment advisers to retail customers to file a client relationship summary (“Form CRS”) with the SEC and
deliver copies of Form CRS to their retail customers. Form CRS provides disclosures from the broker-dealer or investment
adviser about the applicable standard of conduct and conflicts of interest. The intent of these rules is to impose on broker-
dealers an enhanced duty of care to their customers similar to that which applies to investment advisers under existing law. We
have developed systems and processes and put in place policies and procedures to ensure that we are in compliance with
Regulation Best Interest.
In December 2022, the SEC proposed a new Regulation Best Execution, which would supplement existing best execution
rules enforced by FINRA and the Municipal Securities Rulemaking Board. In conjunction with Regulation Best Execution, the
SEC also proposed other rules or rule modifications that, if adopted as proposed, would materially impact broker-dealers
operating in the equity markets. These proposals include: (i) the Order Competition Rule, which would require certain retail
customer orders to be exposed first to a “qualified auction” operated by an open competition trading center prior to execution in
the over-the-counter market; (ii) amendments to Regulation NMS to adopt, among other things, minimum pricing increments
for quoting and trading of listed stocks and reduce exchange access fees; and (iii) amendments to disclosure requirements under
Regulation NMS to require monthly publication of order execution quality information in listed equity by certain large broker-
dealers and trading platforms in addition to the market centers that are currently required to publish such reports. If adopted, the
proposals will likely increase costs for our broker-dealers.
In December 2023, the SEC adopted rules to require covered clearing agencies to adopt policies and procedures reasonably
designed to require every direct participant of the agency to submit for clearing eligible secondary market transactions in US
Treasury securities, which will effectively require those participants to clear eligible cash transactions in US Treasury securities
by December 31, 2025, and eligible repurchase transactions in US Treasury securities by June 30, 2026. The rule’s potential
effect on the US Treasury securities market is uncertain.
Investment Adviser Regulation
Changes to the marketing requirements for registered investment advisers were adopted in December 2020 and became
effective in November 2022. The changes amend existing Rule 206(4)-1 under the Investment Advisers Act and incorporate
aspects of Investment Advisers Act Rule 206(4)-3, which the SEC simultaneously rescinded in its entirety. The amended rules
impose a number of new requirements that will affect marketing of certain advisory products, including, in particular, private
funds. We developed systems and processes and put in place policies and procedures to ensure that we are in compliance with
the amended rule. The SEC is currently focused on examining compliance efforts with newly amended Rule 206(4)-1. The SEC
has also adopted new reporting requirements for registered investment advisers regarding “say on pay” and more expansive
reporting on voting practices by managers for registered funds on Form N-PX. In October 2022, the SEC also proposed a new
rule and rule amendments under the Investment Advisers Act that would prohibit registered investment advisers from
outsourcing certain services and functions without conducting due diligence and monitoring the proposed service providers.
Both the new requirements and the new proposals, if adopted, will create substantially greater compliance requirements and
costs for our investment adviser entities.
In August 2023, the SEC adopted final private fund adviser reform rules under the Investment Advisers Act requiring
private fund advisers registered with the SEC to, among other things, provide investors with quarterly and annual statements
detailing information regarding private fund performance, fees, and expenses; obtain an annual audit for each private fund;
obtain a fairness opinion or valuation opinion in connection with an adviser-led secondary transaction; not provide certain
preferential rights to investors in a fund and disclose other preferential rights prior to an investor closing into the fund; and
obtain investor consent prior to allocating certain fees or expenses to a fund or borrowing or receiving credit from a fund.
Fiduciary Rules / “Best Interest” Standards of Conduct
We provide certain products and services to employee benefit plans that are subject to ERISA and certain provisions of the
Internal Revenue Code of 1986, as amended (the “Code”). As such, our activities are subject to the restrictions imposed by
ERISA and the Code, including the requirement that fiduciaries must perform their duties solely in the interests of plan
participants and beneficiaries, and fiduciaries may not cause or permit a covered plan to engage in certain prohibited
transactions with persons (parties-in-interest) who have certain relationships with respect to such plans. The applicable
provisions of ERISA and the Code are subject to enforcement by the DOL, the IRS, and the Pension Benefit Guaranty
Corporation.
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In December 2020, the DOL issued a “best interest” prohibited transaction exemption (“PTE 2020-02”) for investment
advice fiduciaries under ERISA, and the Code. If fiduciary status is triggered, PTE 2020-02 prescribes a set of impartial
conduct standards and disclosure obligations that are intended to be consistent with the SEC’s Regulation Best Interest. We
have devoted significant time and resources towards coming into compliance with PTE 2020-02. In October 2023, the DOL
released a comprehensive proposal to amend the definition of an investment advice “fiduciary” under ERISA and the Code (the
“Proposal”). The Proposal replaces the traditional five-part test for determining fiduciary status with a new three-part test that
significantly expands the scope of fiduciary level transactions by, among other things, including investment recommendations
made to retirement investors when such recommendations are made by a financial professional on a regular basis as part of that
financial professional’s business. The Proposal also makes substantial updates to the disclosure and other conditions of PTE
2020-02, and significantly revises prohibited transaction exemption 84-24, (“PTE 84-24”) such that a certain relief under PTE
84-24 will be available exclusively for independent insurance agents who provide fiduciary advice to retirement investors in
connection with such agents’ sales of non-securities insurance products. The Proposal also limits permissible compensation to
commissions only, and requires adherence to impartial conduct standards that are similar to those for PTE 2020-02, as a
condition of relief under PTE 84-24. We cannot predict what form the Proposal may take, or what effect its adoption may have
on our business and compliance costs.
In addition, in January 2020, the NAIC revised the Suitability in Annuity Transactions Model Regulation to apply a best
interest of the consumer standard on insurance producers’ annuity recommendations and to require that insurers supervise such
recommendations. Several state regulators have adopted the revised regulation to date, including in two of our insurance
subsidiaries’ domiciliary states, while others are currently considering doing so or instead issuing standalone impartial conduct
standards applicable to annuity and, in some cases, life insurance transactions. For example, the NYDFS amended Regulation
187 - Suitability and Best Interests in Life Insurance and Annuity Transactions (“Regulation 187”) to add a “best interest”
standard for recommendations regarding the sale of life insurance and annuity products in New York. In April 2021, the
Appellate Division of the New York State Supreme Court, Third Department, overturned Regulation 187 for being
unconstitutionally vague, although the New York State Court of Appeals reversed this ruling on October 20, 2022. We have
developed our compliance framework for Regulation 187 with respect to annuity sales as well as our life insurance business.
Massachusetts has adopted such a regulation applying a fiduciary duty standard to broker-dealers and their agents which,
although not applying to insurance product (including variable annuity) sales, did require us to make changes to certain policies
and procedures to ensure compliance. NASAA has proposed a broker-dealer conduct model rule that states might seek to adopt.
The stated objectives of the proposal are to incorporate the core principles of and definitions from Regulation BI and SEC
guidance, define these principles and their components for purposes of state law, and make other changes consistent with
Regulation BI. Beyond the New York and Massachusetts regulations, the likelihood of enactment of any such other standalone
state-based regulation is uncertain at this time, but if implemented, these regulations could have adverse effects on our business
and consolidated results of operations.
Climate Risks
The topic of climate risk has come under increased scrutiny by the NAIC and insurance regulators. In September 2020, the
NYDFS announced that it expects New York domestic and foreign authorized insurers to integrate financial risks from climate
change into their governance frameworks, risk management processes, and business strategies.
In November 2021, the NYDFS issued additional guidance for New York domestic insurers, such as Equitable Financial,
stating that they are expected to manage financial risks from climate change by taking actions that are proportionate to the
nature, scale and complexity of their businesses. For instance, the such an insurer should: (i) incorporate climate risk into its
financial risk management (e.g., a company’s ORSA should address climate risk); (ii) manage climate risk through its
enterprise risk management functions and ensure that its organizational structure clearly defines roles and responsibilities
related to managing such risk; (iii) use scenario analysis when developing business strategies and identifying risks; and (iv)
incorporate the management of climate risk into its corporate governance structure at the group or insurer entity level (i.e., an
insurer’s board of directors should understand climate risk and oversee the team responsible for managing such risk). As of
August 2022, New York domestic insurers should have implemented certain corporate governance changes and developed
plans to implement the organizational structure changes (e.g., defining roles and responsibilities related to managing climate
risk). With respect to implementing more involved changes (e.g., reflecting climate risks in the ORSA and using scenario
analysis when developing business strategies), insurers are encouraged to start work on these changes, although the NYDFS
intends to issue additional guidance with more specific timing information. We have developed our compliance framework with
respect to the November 2021 guidance.
The NYDFS also adopted an amendment to the regulation governing enterprise risk management, applicable to New York
domestic and foreign authorized insurers, which requires an insurance group’s enterprise risk management function to address
certain additional risks, including climate change risk.
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The NAIC has adopted a new standard for insurance companies to report their climate-related risks as part of its annual
Climate Risk Disclosure Survey, which applies to insurers that meet the reporting threshold of $100 million in countrywide
direct premium and are licensed in one of the participating jurisdictions. The new disclosure standard is consistent with the
international Task Force on Climate-Related Financial Disclosures’ framework for reporting climate-related financial
information.
In addition, the FIO is assessing how the insurance sector may mitigate climate risks and help achieve national climate-
related goals pursuant to its authority under the Dodd-Frank Act, as discussed above. On June 2023, the FIO released a report
titled, Insurance Supervision and Regulation of Climate-Related Risks, which evaluates climate-related issues and gaps in
insurer regulation. The report urges insurance regulators to adopt climate-related risk-monitoring guidance in order to enhance
their regulation and supervision of insurers.
In addition, the FIO is authorized to monitor the U.S. insurance industry under the Dodd-Frank Act, as discussed above. In
furtherance of President Biden’s Executive Order on Climate-Related Financial Risk, dated May 20, 2021, the FIO sought
public comment on climate-related financial risks in the insurance industry. The FIO is assessing how the insurance sector may
mitigate climate risks and help achieve national climate-related goals.
In March 2022, the SEC released proposed rule changes on climate-related disclosure. The proposed rule changes would
require companies to include certain climate-related disclosures including information about climate-related risks that have had
or reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain
climate-related financial statement metrics in a note to the audited financial statements. Among other things, the required
information about climate-related risks also would include disclosure of a company’s greenhouse gas emissions, information
about climate-related targets and goals, and if a transition plan has been adopted as part of climate-related risk management
strategy, and requires extensive attestation requirements. If adopted as proposed, the rule changes are expected to result in
additional compliance and reporting costs.
Finally, in May 2022, the SEC proposed amendments to existing rules that would require registered investment companies
and investment advisers to include specific disclosures regarding their environmental, social and governance (“ESG”) strategies
in prospectuses and shareholder reports and Form ADV.
Diversity and Corporate Governance
Insurance regulators are also focused on the topic of race, diversity and inclusion. In New York, the NYDFS issued a
circular letter in 2021 stating that it expects the insurers it regulates, such as Equitable Financial, to make diversity of their
leadership a business priority and a key element of their corporate governance. We consider the NYDFS’ guidance as part of
our commitment to diversity and inclusion. The NAIC is also evaluating issues related to this topic, including examining
practices in the insurance industry to determine how barriers are created that disadvantage people of color or historically
underrepresented groups. NAIC goals include improving access to different types of insurance products in minority
communities, addressing issues related to affordability, and providing guidance to regulators on ways to improve insurance
access and the understanding of insurance in underserved communities.
International Regulation
Many of AB’s subsidiaries are subject to the oversight of regulatory authorities in jurisdictions outside of the United States
in which they operate, including the Ontario Securities Commission, the Investment Industry Regulatory Organization of
Canada, the European Securities and Markets Authority, the Financial Conduct Authority in the U.K., the CSSF in
Luxembourg, the Financial Services Agency in Japan, the Securities & Futures Commission in Hong Kong, the Monetary
Authority of Singapore, the Financial Services Commission in South Korea, the Financial Supervisory Commission in Taiwan
and the Securities and Exchange Board of India. While these regulatory requirements often may be comparable to the
requirements of the SEC and other U.S. regulators, they are sometimes more restrictive and may cause AB to incur substantial
expenditures of time and money related to AB’s compliance efforts.
Federal Tax Legislation, Regulation and Administration
Although we cannot predict what legislative, regulatory, or administrative changes may or may not occur with respect to
the federal tax law, we nevertheless endeavor to consider the possible ramifications of such changes on the profitability of our
business and the attractiveness of our products to consumers. In this regard, we analyze multiple streams of information,
including those described below.
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Enacted Legislation
At present, the federal tax laws generally permit certain holders of life insurance and annuity products to defer taxation on
the build-up of value within such products (commonly referred to as “inside build-up”) until payments are made to the
policyholders or other beneficiaries. From time to time, Congress considers legislation that could enhance or reduce (or
eliminate) the benefit of tax deferral on some life insurance and annuity products. The modification or elimination of this tax-
favored status could also reduce demand for our products. In addition, if the treatment of earnings accrued inside an annuity
contract was changed prospectively, and the tax-favored status of existing contracts was grandfathered, holders of existing
contracts would be less likely to surrender or rollover their contracts. These changes could reduce our earnings and negatively
impact our business.
In August 2022, President Biden signed the Inflation Reduction Act into law which introduces a 15% minimum tax based
on financial statement income as well as a 1% excise tax on share buybacks, effective for tax years beginning in 2023. While
neither the minimum tax nor the excise tax on share buybacks are currently expected to have a significant impact on the
Company, we continue to monitor developments and regulations associated with the Inflation Reduction Act for any potential
future impacts on our business, results of operations and financial condition.
The SECURE 2.0 Act of 2022 (“SECURE 2.0”), signed into law in December 2022, makes significant changes to existing
law for retirement plans by building upon provisions in the Setting Every Community Up for Retirement Enhancement Act of
2019. SECURE 2.0 introduces new requirements and considerations for plan sponsors that are intended to expand coverage,
increase savings, preserve income, and simplify plan rules and administrative procedures. Among other provisions, SECURE
2.0 directs the DOL to review its current interpretive bulletin regarding ERISA plan sponsors’ selection of annuity providers for
purposes of transferring plan sponsor benefit plan liability to such annuity providers. Such review could result in the DOL’s
imposition of new or different requirements on plan sponsors or on annuity providers or could make such selection process
more difficult for the parties involved.
Regulatory and Other Administrative Guidance from the Treasury Department and the IRS
Regulatory and other administrative guidance from the Treasury Department and the IRS also could impact the amount of
federal tax that we pay. For example, the adoption of “principles based” approaches for calculating statutory reserves may lead
the Treasury Department and the IRS to issue guidance that changes the way that deductible insurance reserves are determined,
potentially reducing future tax deductions for us.
Privacy and Security of Customer Information and Cybersecurity Regulation
We are subject to federal and state laws and regulations that require financial institutions to protect the security, integrity,
confidentiality, and availability of customer information, and to notify customers about their policies and practices relating to
their collection and disclosure of customer information and their practices related to protecting the security of that information.
We maintain, and we require our third-party service providers to maintain, security controls designed to ensure the integrity,
confidentiality, and availability of our systems and the confidential and sensitive information we maintain and process, or
which is processed on our behalf. We have adopted a privacy policy outlining the Company’s procedures and practices relating
to the collection, maintenance, disclosure, disposal, and protection of customer information, including personal information. As
required by law, subject to certain exceptions, a copy of the privacy policy is mailed to customers on an annual basis. Federal
and state laws generally require that we provide notice to affected individuals, law enforcement, regulators and/or potentially
others if there is a situation in which customer information is disclosed to and/or accessed or acquired by unauthorized third
parties. Federal regulations require financial institutions to implement programs to protect against unauthorized access to this
customer information, and to detect, prevent and mitigate identity theft. Federal and state laws and regulations regulate the
ability of financial institutions to make telemarketing calls and to send unsolicited e-mail or fax messages to both consumers
and customers, and also regulate the permissible uses of certain categories of customer information.
The violation of data privacy and data protection laws and regulations or the failure to implement and maintain reasonable
and effective cybersecurity programs may result in significant fines, remediation costs and regulatory enforcement actions.
Moreover, a cybersecurity incident that disrupts critical operations and customer services could expose the Company to
litigation, losses, and reputational damage. As cyber threats continue to evolve, regulators continue to develop new
requirements to account for risk exposure, including specific cybersecurity safeguards and program oversight. As such, it may
be expected that legislation considered by either the U.S. Congress and/or state legislatures could create additional and/or more
burdensome obligations relating to the use and protection of customer information.
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We are subject to the rules and regulations of the NYDFS which in 2017 adopted the Cybersecurity Requirements for
Financial Services Companies (the “NY Cybersecurity Regulation”), a regulation applicable to banking and insurance entities
under its jurisdiction. The NY Cybersecurity Regulation requires covered entities to, among other things, assess risks associated
with their information systems and establish and maintain a cybersecurity program reasonably designed to protect such systems,
consumers’ private data, and confidential business data. We have adopted a cybersecurity policy outlining our policies and
procedures for the protection of our information systems and information stored on those systems that comports with the
regulation. In November 2023, the NYDFS formally adopted amendments to the NY Cybersecurity Regulation, which include
significant changes, such as: (i) requiring new technical reporting; (ii) the implementation of governance and oversight
measures, including that a senior governing body (e.g., the board of directors) have sufficient understanding of cybersecurity-
related matters to exercise effective oversight; the enhancement of certain cybersecurity safeguards (e.g., annual audits,
vulnerability assessments, and password controls and monitoring); (iii) mandating notifications to the NYDFS within 24 hours
of a covered entity’s cyber-ransom payment and otherwise requiring prompt notification to the NYDFS, following the
occurrence of a cybersecurity event; (iv) requiring covered entities to maintain for examination and inspection upon request by
NYDFS all records, schedules, and supporting data regarding cybersecurity events; and (v) annually certifying to NYDFS a
covered entity’s material compliance with the NY Cybersecurity Regulation. The amendments require compliance within 180
days of adoption, but also include delayed compliance dates for certain requirements. We are currently assessing the effect the
amendments will have on our business as well as developing a compliance strategy.
Similarly, the NAIC adopted the Insurance Data Security Model Law for entities licensed under the relevant state’s
insurance laws. The model law requires such entities to establish standards for data security and for the investigation and
notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain
nonpublic information. Several states have adopted the model law, although it has not been adopted by any of our significant
insurance subsidiaries’ domiciliary states. We expect additional states to adopt the model law, even though it is not an NAIC
accreditation standard, but we cannot predict whether or not, or in what form or when, they will do so.
The NAIC’s Privacy Protections (H) Working Group (“PPWG”) is developing a new Consumer Privacy Protections and
Model Law (“Model 674”) to replace the existing privacy models, #670 (Insurance Information and Privacy Protections Model
Act) and #672 (Privacy of Consumer Financial and Health Information Regulation). In 2023, the PPWG received a large
number of comments on a revised draft of Model 674, as a result of which the PPWG received an extension until December 31,
2024 to develop the new model law. We cannot predict whether Model 674 will be adopted, what form it will take, or what
effect it would have on our business or compliance efforts in the form adopted by states whose laws apply to our insurance
subsidiaries.
In July 2023, the SEC adopted the Risk Management, Strategy, Governance, and Incident Disclosure Final Rule (the
“Cybersecurity Final Rule”) enhancing disclosure requirements for registered companies covering cybersecurity risk and
management. The Cybersecurity Final Rule requires registrants to disclose material cybersecurity incidents on Form 8-K within
four business days of a determination that a cybersecurity incident is material, and such materiality determination must be made
without unreasonable delay. The rule also requires periodic disclosures of, among other things, details on the company’s
process to assess, identify, and manage cybersecurity risks, cybersecurity governance, and management’s role in overseeing
such a compliance program, including the board of directors’ oversight of cybersecurity risks. Certain reporting requirements
under the Cybersecurity Final Rule became effective in December 2023. In addition, federal regulators are increasingly focused
on cybersecurity and several have established specific and potentially burdensome requirements. For instance, in October 2021,
the Federal Trade Commission announced significant amendments to the Standards for Safeguarding Customer Information
Rule (the “Safeguards Rule”) that require financial institutions to implement specific data security measures within their formal
information security measures. The updated Safeguards Rule became effective in June 2023. Failure to comply with new
regulations or requirements may result in enforcement action, fines and/or other operational or reputational harms.
Under the California Consumer Privacy Act (“CCPA”), California residents enjoy the right to know what information a
business has collected from them, the sourcing and sharing of that information, and the right to delete and limit certain uses of
that information. CCPA also establishes a private right of action with potentially significant statutory damages, whereby
businesses that fail to implement reasonable security measures to protect against breaches of personal information could be
liable to affected consumers. Certain data processing which is otherwise regulated, including under the Gramm-Leach-Bliley
Act, is excluded from the CCPA; however, this is not an entity-wide exclusion. We expect a significant portion of our business
to be excepted from the requirements of the CCPA. The California Privacy Rights Act (“CPRA”), which came into effect in
January 2023, amends the CCPA to provide California consumers the right to correct personal information, limit certain uses of
sensitive data and the sharing of data that does not constitute a sale, and establishes a new agency, the California Privacy Rights
Agency (“CPPA”), to adopt rules for and enforce the CCPA. The CPPA’s first set of updated CCPA regulations came into force
in April 2023, and the CPPA has initiated further rulemaking activities that may lead to additional regulations. The CPRA and
any future regulations may require additional compliance efforts, such as changes to our policies, procedures or operations.
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Several other states have adopted, or are considering, similar comprehensive privacy laws or regulations in the near future. To
date, several of these state laws include entity-level exemptions for financial institutions that are subject to privacy protections
in the Gramm-Leach-Bliley Act or similar, state-level financial privacy laws.
Innovation and Technology
As a result of increased innovation and technology in the insurance sector, the NAIC and insurance regulators are focused
on the use of “big data” techniques, such as the use of artificial intelligence, machine learning and automated decision-making.
In December 2023, the NAIC’s Innovation, Cybersecurity and Technology (H) Committee (the “(H) Committee”) adopted the
Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (the “AI Bulletin”) after exposing a draft for comment.
The AI Bulletin outlines how insurance regulators should govern the development, acquisition and use of artificial intelligence
technologies, as well as the types of information that regulators may request during an investigation or examination of an
insurer in regard to artificial intelligence systems. The (H) Committee also plans to form a new task force in 2024 that will be
charged with creating a regulatory framework for the oversight of insurers’ use of third-party data and models.
Further, the NAIC and state insurance regulators have been focused on addressing unfair discrimination in the use of
consumer data and technology, and some states have passed laws targeting unfair discrimination practices. For instance, in
2021, Colorado enacted a law which prohibits insurers from using external consumer data and information sources (“ECDIS”),
as well as algorithms or predictive models that use ECDIS, in a way that unfairly discriminates based on race, color, national or
ethnic origin, religion, sex, sexual orientation, disability, gender identity or gender expression. In August 2023, Colorado
adopted the first legally binding regulation, effective on November 14, 2023, requiring life insurers to adopt a governance and
risk management framework for the use of artificial intelligence, machine learning and other technologies that utilize “external
consumer data.” It is expected that Colorado will also promulgate governance and testing regulations for other lines of
insurance. Similarly, in January 2024, the NYDFS released for public comment a proposed circular letter focused on how
insurers should develop and manage their use of external consumer data and artificial intelligence systems in underwriting and
pricing so as not to harm consumers.
On July 26, 2023, the SEC proposed rules that, if adopted, would require a broker-dealer or investment adviser, when using
a covered technology in a retail investor interaction (i.e., to engage or communicate with a retail investor), to eliminate or
neutralize any conflict of interest that results in an investor interaction that places the interest of the broker-dealer or investment
adviser ahead of the retail investors interests.
We expect big data to remain an important issue for the NAIC and state insurance regulators. We cannot predict which
regulators will adopt the AI Bulletin, or what, if any, changes to laws or regulations may be enacted with regard to “big data” or
artificial intelligence technologies.
Environmental Considerations
Federal, state and local environmental laws and regulations apply to our ownership and operation of real property. Inherent
in owning and operating real property are the risk of environmental liabilities and the costs of any required clean-up. Under the
laws of certain states, contamination of a property may give rise to a lien on the property to secure recovery of the costs
of clean-up, which could adversely affect our mortgage lending business. In some states, this lien may have priority over the
lien of an existing mortgage against such property. In addition, in some states and under the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, or CERCLA, we may be liable, in certain circumstances, as
an “owner” or “operator,” for costs of cleaning-up releases or threatened releases of hazardous substances at a property
mortgaged to us. We also risk environmental liability when we foreclose on a property mortgaged to us. However, federal
legislation provides for a safe harbor from CERCLA liability for secured lenders, provided that certain requirements are met.
Application of various other federal and state environmental laws could also result in the imposition of liability on us for costs
associated with environmental hazards.
We routinely conduct environmental assessments prior to making a mortgage loan or taking title to real estate, whether
through acquisition for investment or through foreclosure on real estate collateralizing mortgages. We cannot provide assurance
that unexpected environmental liabilities will not arise. However, based on information currently available to us, we believe
that any costs associated with compliance with environmental laws and regulations or any clean-up of properties would not
have a material adverse effect on our consolidated results of operations.
Intellectual Property
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We rely on a combination of copyright, trademark, patent and trade secret laws to establish and protect our intellectual
property rights. We regard our intellectual property as valuable assets and protect them against infringement.
Human Capital Management
As of December 31, 2023, we had approximately 8,500 full time employees. Of these, approximately 4,700 were employed
full-time by AB.
Equitable
To execute our business plan successfully, we need not only a sound business strategy but an equally well-developed
people strategy. Central to achieving our goals and strategies as an organization is building a culture of professional excellence,
employee engagement and inclusion and continuous learning. We have made significant strides towards delivering on these
three fronts.
Professional Excellence
Equitable seeks to help our clients secure their financial well-being so they can pursue long and fulfilling lives. To achieve
that mission, we must deliver best-in-class services while increasing our speed to market to maximize our impact on our
customers’ financial outcomes. This requires our employees to embrace our mission and genuinely enjoy working with and for
Equitable. In 2023, we implemented New Ways of Working (“NWOW”) throughout the organization. NWOW, which is
tailored to the Equitable environment, sharpens our focus on the following five areas of the employee experience: (i) Adaptive
Leadership — empowering those closest to the work with decision-making authority; (ii) Outcomes, Objectives & Key Results
(“OKRs”) — long-term objectives and a goal-setting framework; (iii) Dynamic Enablers — processes and tools that promote
innovation, autonomy and skills development; (iv) Enterprise Agile — adapting in the face of rapid change; and (v) Design
Thinking — client-centric solutions design. We believe that by prioritizing these five areas, our business adapts with greater
speed, agility, creativity and client focus.
Of particular importance is Equitable’s focus on OKRs, which establish clear, measurable, and aspirational goals to both
inspire and collectively focus teams across the organization. We recognize that our employees must believe in the possibility of
their success. Further, our definition of success must be attainable. By clearly articulating and refining our view of employee
success, we can ensure a balanced, holistic approach that will deliver successful outcomes for our employees, and by extension,
our clients and investors. Since we adopted NWOW, we have seen its positive impact on our culture, as measured through our
employee engagement and culture drivers survey results.
Equitable’s NWOW has fundamentally changed the way we think, work and lead as a company, ensuring we are better
positioned to grow, meet our clients’ needs and attract the best talent.
Employee Engagement and Inclusion
Equitable consistently scores highly on workplace quality rankings because of our emphasis on employee engagement and
inclusion. We have been recognized as a “Great Place to Work” by the Great Place to Work® Institute, an independent
workplace authority, each year since 2016.Equitable has also received high scores on the Human Rights Campaign Foundation's
Corporate Equality Index (“CEI”) for the 10th consecutive year, which recognizes our inclusive workplace culture. In addition,
we received a perfect score for the third consecutive year as a “Best Place to Work for Disability Inclusion”, with participation
in the Disability Equality Index (“DEI”) since 2015. We strive to maintain and expand upon our efforts that have garnered us
this recognition.
Employee Engagement
Key to our employee development efforts is the ability of our leaders to keep employees engaged in our hybrid work
structure. As we transitioned to our hybrid model, we reinforced the leadership skills of people leaders to help meet the need for
adaptive leadership in a hybrid world. The NWOW methodology supported our leaders through this transition and as they
transformed their teams through the NWOW transition and pivoted towards data-driven management. They also ensured our
employees remained engaged, even when performing work remotely in our hybrid working structure.
We also enhanced our recognition efforts by embedding recognition in the employee life cycle. We found that these efforts
made our employees feel valued, which created a retention benefit.
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As we strive to continuously listen, learn and adapt, we execute a multi-channeled employee listening strategy, including
pulse surveys and ad-hoc focus groups as we measure our culture and amplify the valued voice our people.
Diversity, Equity and Inclusion
At Equitable, building a more diverse, equitable and inclusive workplace is an essential and ongoing endeavor. It helps us
better serve our clients and communities, creates a more supportive and productive work environment, and ultimately enables
our people to achieve their full potential.
Our DEI vision is to inspire, lead and serve as a model for the financial industry of an inclusive, diverse, empowering and
equitable workplace for all. To achieve our vision, our specific strategic goals are to:
•
•
•
Attract, retain and advance diverse talent. By strategically and thoughtfully recruiting and advancing diverse
talent, we seek to create the most effective and impactful team in the financial services industry.
Create and uphold an inclusive company culture. Employees thrive in a culture that values contributions from
all and encourages collaboration, flexibility and fairness. A culture that enables us to work at our full potential,
set higher standards and maximize value for clients, employees, financial professionals, shareholders, and
communities.
Instill commitment and accountability at all levels. An inclusive workplace is only possible when all are
committed to and accountable for its creation and success. We strive to have every person at Equitable do their
part to bend the “arc of history” toward a more just and equitable company and society.
Our Employee Resource Groups, Field Advisory Councils and Diversity Advocates play a key role in serving as a
community voice to leadership, driving important policy changes and helping to build and shape our DEI strategy. They also
create development opportunities for our people, with members working collaboratively to address business challenges and
share ideas.
We are committed to continue deepening our understanding of the issues facing the communities we serve. In 2023, we
hosted 6 Impact Days across the country. These one-day events bring together Equitable Advisors financial professionals,
employees and local community leaders for collaborative discussions on creating a more diverse, equitable and inclusive
society through economic empowerment and financial education. Impact Days are specifically tailored to the unique needs of
each market. For example, in Texas and Cleveland, our financial professionals focused on career readiness of diverse high
school students and preparing them for higher education. In New York, Georgia and North Carolina, financial professionals
came together with the minority-owned, small business community to discuss building equity through entrepreneurship. Each
Impact Day concluded with discussions on the importance of holistic financial planning in creating generational wealth.
Talent Acquisition
The Talent Acquisition Team at Equitable is charged with communicating the value proposition of working with Equitable
to the external market. One principal area of focus is growing the number of diverse employees at Equitable, and we continue to
make strides towards this important goal. As part of Equitable’s recruiting strategy, we have implemented diverse interview
panels and diverse interview candidate slates. Having a diverse interview panel is crucial for ensuring a fair and unbiased hiring
process. By bringing a variety of perspectives and experiences to the interview process, organizations can improve their
recruitment outcomes and create a more diverse and inclusive workplace.
In addition, we partnered with diversity-focused external organizations (i.e, Prospanica, Thurgood Marshall College Fund
and National Black MBA) to attract more diverse candidates to open roles at Equitable. Equitable has also expanded its
outreach more broadly through its social media presence, leading to an increase in total diverse applicants applying to
Equitable. The result is an increased percentage of diverse new hires who join Equitable.
Continuous Learning
At Equitable, our power is in our people. We believe our people are at the heart of our business. Attracting, developing,
and retaining talent is crucial to our long-term success and strategy. We actively cultivate and reward passion and innovation in
our people. We embrace diverse thought on our teams by continuously investing in and creating opportunities for our
employees to deliver meaningful work at Equitable.
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Our culture of continuous learning and professional excellence starts with the relationship between the employee and
leader, which continues through peer discussions, skill building and bringing professional aspirations into focus. Employees
own their own growth and development enabled by user-friendly resources in Thrive, our centralized HR hub, or by taking
advantage of the wide range of Learning and Development courses. Additionally, the Company offers tuition assistance to
support educational endeavors.
Employee Development
At Equitable, we are on a continuous journey to reimagine how we think, grow and perform in our careers. Our Career
Model Framework provides employees with the anchor and foundation to grow and develop their careers. Our framework
elevates skills, provides a holistic performance expectation and enables employees to see where their skills transfer across the
organization. Skills is the common language we use to talk to our people, enabling them to demonstrate their best abilities and
chart their career paths.
Our commitment to employee development is further demonstrated by measurable results by the quality of our workforce
and our approach to career progression. At Equitable, career progression is defined holistically to include skill progression,
internal mobility, people leadership elevation and proficiency level “promotion.”
Equitable offers a wide range of vehicles for growth and development (learning curriculum, talent programs, development
programs) aimed at accelerating functional and foundational skills, all delivered through multi-channel learning platforms.
Equitable invests in various talent programs to support the development of our colleagues and financial professionals. These
programs range from three months to a full-year engagement and include developmental learning, mentorship or sponsorship
and coaching engagements.
We encourage employees to take full advantage of rich experiences that support their career and growth. This starts with
the people leader and employee partnership and continues through discussions with colleagues to bring professional aspirations
into focus.
Compensation and Benefits
Rewarding performance is the cornerstone of our “Total Rewards” offering. Total Rewards include access to
comprehensive benefits programs and the opportunity to share in company results through equity awards. Our benefits portfolio
allows eligible employees and financial professionals to elect the right coverage for health needs, to build their wealth and to
provide protection for themselves and their families from the unexpected events that might occur along the way. Our Total
Rewards package includes market-competitive pay, equity award programs and bonuses, healthcare benefits, retirement savings
plans, paid time off and family leave, flexible work schedules, an educational assistance program, family support services
including backup child and elder care support, college coaching and tutoring services, adoption support and an employee
assistance program and other mental health services.
Health and Wellness
We aspire to create an innovative, resilient culture that fosters exceptional health and wellbeing and enhances
organizational performance. To measure the effectiveness of our wellness strategy, we created an index that incorporates a
proprietary survey as well as a set of key performance indicators (“KPIs”) based on our Total Rewards offering. This index and
initial KPIs such as 401(k) participation rates, preventative healthcare screenings and abandoned PTO enabled us to establish a
baseline from which we will evaluate our strategy in the future.
We believe that while well being needs and priorities differ by individual, resilience is a universal attribute of wellbeing.
Resilience is the ability to regularly recover from, adapt to and grow from stress, and can be increased through intentional
oscillation between stress and recovery. This is an area where we can meaningfully impact our employees’ lives through
leadership and development programs. We are focused on resilience and energy management, creating a new center of
excellence with bespoke programming focused on the importance of rest and recovery. Since July, we trained more than 1,500
employees through a new center of excellence with programming focused on the importance of rest and recovery. This training
achieved an impressive 100% employee net promoter score from attendees.
Equitable Foundation
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Equitable Foundation directs the Company’s philanthropic and volunteer activities. Equitable Foundation gives our
employees and financial professionals an opportunity to commit their time and effort to organizations they believe in, as well as
supports their efforts through charitable grants and through our company volunteer program, Equitable in Action.
We believe the best way to achieve our aspirations is through programs that drive greater impact by simultaneously (i)
focusing our efforts around key areas and geographies, while also (ii) harnessing our biggest systems including Equitable’s
General Account, our $100 million endowment, Equitable Foundation, and the power of our people. Our key focus areas and
aspirations include the following:
•
•
•
College access and career advancement – We aspire to provide programmatic support, scholarships, and social capital
to empower students and educators to reach their full potential.
Healthy and vibrant communities – We aspire to help drive community vitality, support social causes, and advance
social and economic mobility.
Equity and opportunity – deliver programs to help foster greater equity and opportunity within the communities where
we live and work.
Equitable Excellence, a scholarship program for high school seniors, is the flagship program of Equitable Foundation. In
alignment with Equitable’s own mission of helping people achieve financial security so that they can face the future with
confidence, the Equitable Excellence Scholarship places an emphasis on empowering students’ future plans so that they can
continue to have positive impacts in their community.
Through our matching gifts program, we double the impact of the charitable contributions made by our employees and
financial professionals. Eligible donations of $50 or more are matched up to $2,000 per year, per individual. In 2023, Equitable
Foundation matched over $1.5 million to nonprofits directed by our employees and financial professionals.
AllianceBernstein
The information contained herein does not apply Holdings’s subsidiary, AllianceBernstein (AB), which has its own human
capital strategy and programs. For AB’s human capital disclosure, see Part I, Item 1 of AB’s Annual Report on Form 10-K for
the year ended December 31, 2023.
Available Information
We maintain a public website at https://equitableholdings.com. We use our website as a routine channel for distribution of
important information, including news releases, analyst presentations, financial information and corporate governance
information. We post filings on our website as soon as practicable after they are electronically filed with, or furnished to, the
SEC, including our annual and quarterly reports on Forms 10-K and 10-Q and current reports on Form 8-K; our proxy
statements; and any amendments to those reports or statements. All such postings and filings are available on the “Investors”
section of our website free of charge. The SEC’s website, www.sec.gov, contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
We may use our website as a means of disclosing material information and for complying with our disclosure obligations
under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website in the “Investors”
section. Accordingly, investors should monitor this portion of our website, in addition to following our news releases, SEC
filings, public conference calls and webcasts. The information contained on or connected to our website is not a part of this
Form 10-K.
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Part I, Item 1A.
RISK FACTORS
You should read and consider all of the risks described below, as well as other information set forth in this Annual Report on
Form 10-K. The risks described below are not the only ones we face. Many of these risks are interrelated and could occur
under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence or
exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our
businesses, results of operations, financial condition or liquidity.
Risks Relating to Our Consolidated Business
Risks Relating to Conditions in the Financial Markets and Economy
Conditions in the global capital markets and the economy.
Our business, results of operations or financial condition are materially affected by conditions in the global capital markets
and the economy. A wide variety of factors continue to impact economic conditions and consumer confidence. These factors
include, among others, uncertainty regarding the federal debt limit, volatility in the capital markets, equity market declines,
inflationary pressures, plateauing or decreasing economic growth, high fuel and energy costs and changes in fiscal or monetary
policy. The Russian invasion of the Ukraine and Hamas’s attack on Israel, and the ensuing conflicts and the sanctions and other
measures imposed in response to these conflicts have significantly increased the level of volatility in the financial markets and
have increased the level of economic and political uncertainty. Given our interest rate and equity market exposure in our
investment and derivatives portfolios and many of our products, these factors could have a material adverse effect on us. The
value of our investments and derivatives portfolios may also be adversely affected by reductions in price transparency, changes
in the assumptions or methodology we use to estimate fair value and changes in investor confidence or preferences, which
could potentially result in higher realized or unrealized losses. Market volatility may also make it difficult to transact in or to
value certain of our securities if trading becomes less frequent.
In an economic downturn, the demand for our products and our investment returns could be materially and adversely
affected. The profitability of many of our products depends in part on the value of the assets supporting them, which may
fluctuate substantially depending on various market conditions. In addition, a change in market conditions could cause a change
in consumer sentiment and adversely affect sales and could cause the actual persistency of these products to vary from their
anticipated persistency and adversely affect profitability. Our policyholders may choose to defer paying insurance premiums or
stop paying insurance premiums altogether. In addition, market conditions may adversely affect the availability and cost of
reinsurance protections and the availability and performance of hedging instruments.
Equity market declines and volatility.
Declines or volatility in the equity markets can negatively impact our business, results of operations or financial condition.
For example, equity market declines or volatility could decrease our AUM, the AV of our annuity and variable life contracts, or
AUA, which, in turn, would reduce the amount of revenue we derive from fees charged on those account and asset values. Our
variable annuity business is particularly sensitive to equity markets, and sustained weakness or stagnation in equity markets
could decrease its revenues and earnings. At the same time, for variable annuity contracts that include GMxB features, equity
market declines increase the amount of our potential obligations related to such GMxB features and could increase the cost of
executing GMxB-related hedges beyond what was anticipated in the pricing of the products being hedged. This could result in
an increase in claims and reserves related to those contracts, net of any reinsurance reimbursements or proceeds from our
hedging programs. Equity market declines and volatility may also influence policyholder behavior, which may adversely
impact the levels of surrenders, withdrawals and amounts of withdrawals of our annuity and variable life contracts or cause
policyholders to reallocate a portion of their account balances to more conservative investment options (which may have lower
fees), which could negatively impact our future profitability or increase our benefit obligations particularly if they were to
remain in such options during an equity market increase. Market volatility can negatively impact the value of equity securities
we hold for investment which could in turn reduce the statutory capital of certain of our insurance subsidiaries. In addition,
equity market volatility could reduce demand for variable products relative to fixed products, and reduce our current earnings
and result in changes to MRB balances, which could increase the volatility of our earnings. Lastly, periods of high market
volatility or adverse conditions could decrease the availability or increase the cost of derivatives.
Interest rate fluctuations.
Some of our retirement and protection products and certain of our investment products, and our investment returns, are
sensitive to interest rate fluctuations, and changes in interest rates and interest rate benchmarks may adversely affect our
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investment returns and results of operations, including in the following respects:
•
•
•
•
•
•
•
•
•
changes in interest rates may reduce the spread on some of our products between the amounts that we are required to
pay under the contracts and the rate of return we are able to earn on our General Account investments supporting the
contracts;
when interest rates rise rapidly, policy loans and surrenders and withdrawals of annuity contracts and life insurance
policies may increase, requiring us to sell investment assets potentially resulting in realized investment losses, which
could reduce our net income;
a decline in interest rates accompanied by unexpected prepayments of certain investments may result in reduced
investment income and a decline in our profitability. An increase in interest rates accompanied by unexpected
extensions of certain lower yielding investments may result in a decline in our profitability;
changes in the relationship between long-term and short-term interest rates may adversely affect the profitability of
some of our products;
changes in interest rates could result in changes to the fair value of our MRB purchased assets, which could increase
the volatility of our earnings;
changes in interest rates could result in changes to the fair value liability of our variable annuity GMxB business;
changes in interest rates may adversely impact our liquidity and increase our costs of financing and hedges;
we may not be able to effectively mitigate and we may sometimes choose not to fully mitigate or to increase, the
interest rate risk of our assets relative to our liabilities; and
the delay between the time we make changes in interest rate and other assumptions used for product pricing and the
time we are able to reflect such changes in assumptions in products available for sale may negatively impact the long-
term profitability of certain products sold during the intervening period.
Market conditions and other factors could materially and adversely affect our goodwill.
Business and market conditions may impact the amount of goodwill we carry in our consolidated balance sheet related to
the Investment Management and Research segment. To the extent that securities valuations are depressed for prolonged periods
of time or market conditions deteriorate, or that AB experiences significant net redemptions, its AUM, revenues, profitability
and unit price will be adversely affected. This may result in the need to recognize an impairment of goodwill which could
adversely affect our business, results of operations or financial condition.
Adverse capital and credit market conditions.
Volatility and disruption in the capital and credit markets may exert downward pressure on the availability of liquidity and
credit capacity. We need liquidity to pay our operating expenses (including potential hedging losses), interest expenses and any
distributions on our capital stock and to capitalize our insurance subsidiaries. Without sufficient liquidity, we could be required
to curtail our operations and our business would suffer. While we expect that our future liquidity needs will be satisfied
primarily through cash generated by our operations, borrowings from third parties and dividends and distributions from our
subsidiaries, it is possible that we will not be able to meet our anticipated short-term and long-term benefit and expense
payment obligations. If current resources are insufficient to satisfy our needs, we may access financing sources such as bank
debt or the capital markets. These services may not be available during times of stress or may only be available on unfavorable
terms. If we are unable to access capital markets to issue new debt, refinance existing debt or sell additional shares as needed, or
if we are unable to obtain such financing on acceptable terms, our business could be adversely impacted. Volatility in the
capital markets may also consume liquidity as we pay hedge losses and meet collateral requirements related to market
movements. We expect these hedging programs to incur losses in certain market scenarios, creating a need to pay cash
settlements or post collateral to counterparties. Although our liabilities will also be reduced in these scenarios, this reduction is
not immediate, and so in the short term, hedging losses will reduce available liquidity.
Disruptions, uncertainty or volatility in the capital and credit markets may limit our ability to raise additional capital to
support business growth, or to counter-balance the consequences of losses or increased regulatory reserves and rating agency
capital requirements. This could force us to: (i) delay raising capital; (ii) miss payments on our debt or reduce or eliminate
dividends paid on our capital stock; (iii) issue capital of different types or under different terms than we would otherwise; or
(iv) incur a higher cost of capital than would prevail in a more stable market environment. Ratings agencies may change our
credit ratings, and any downgrade is likely to increase our borrowing costs and limit our access to the capital markets and could
be detrimental to our business relationships with distribution partners. Our business, results of operations, financial condition,
liquidity, statutory capital or rating agency capital position could be materially and adversely affected by disruptions in the
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capital and credit markets.
In the U.S., the continued disagreement over the federal debt limit and other budget questions threatens the economy.
Failure to resolve these issues in a timely manner could result in a government shutdown, erratic shutdown in government
spending or a default on government debt, which could result in increased market volatility and reduced economic activity.
Risks Relating to Our Operations
Holdings depends on the ability of its subsidiaries to transfer funds to it to meet its obligations.
Dividends and other distributions from Holdings’ subsidiaries are the principal sources of funds available to Holdings to
pay principal and interest on its outstanding indebtedness, to pay corporate operating expenses, to pay any stockholder
dividends, to repurchase stock and to meet its other obligations. The inability to receive dividends from our subsidiaries could
have a material adverse effect on our business, results of operations or financial condition. The ability of our insurance
subsidiaries to pay dividends and make other distributions to Holdings will depend on their earnings, tax considerations,
covenants contained in any financing or other agreements and applicable regulatory restrictions and receipt of regulatory
approvals. If the ability of our insurance or non-insurance subsidiaries to pay dividends or make other distributions or payments
to Holdings is materially restricted by these or other factors, we may be required to raise cash through the incurrence of debt,
the issuance of equity or the sale of assets. However, there is no assurance that we would be able to raise sufficient cash by
these means. This could materially and adversely affect our ability to pay our obligations.
Failure to protect the confidentiality, integrity, or availability of customer information or proprietary business information.
We and certain of our vendors retain confidential information (including customer transactional data and personal
information about our customers, the employees and customers of our customers, and our own employees). The privacy or
security of this information may be compromised, including as a result of an information security breach. We have
implemented a formal, risk-based data security program, including physical, technical, and administrative safeguards; however,
failure to implement and maintain effective data protection and cybersecurity programs that comply with applicable law, or any
compromise of the security, confidentiality, integrity, or availability of our information systems, or those of our vendors, the
cloud-based systems we use, or the sensitive information stored on such systems, through cyber-attacks or for any other reason
that results in unauthorized access, use, modification, disclosure or destruction of personally identifiable information, customer
information, or other confidential or proprietary information, or the disruption of critical operations and services, could damage
our reputation, deter people from purchasing our products, subject us to significant civil and criminal liability and require us to
incur significant technical, legal and other expenses any of which could have a material adverse effect on our business, results
of operations or financial condition. For further information on the cybersecurity and data privacy laws applicable to our
insurance subsidiaries, see “Cybersecurity—Overview of Equitable Cybersecurity Risk Management” and “Cybersecurity—
Governance of Cybersecurity Risk Management.”
Our operational failures or those of service providers on which we rely.
Weaknesses or failures in our internal processes or systems or those of our vendors could lead to disruption of our
operations, liability to clients, exposure to disciplinary action or harm to our reputation. Our business is highly dependent on
our ability to process large numbers of transactions, many of which are highly complex, across numerous and diverse markets.
These transactions generally must comply with client investment guidelines, as well as stringent legal and regulatory standards.
If we make a mistake in performing our services that causes financial harm to a client, we have a duty to act promptly to put the
client in the position the client would have been in had we not made the error. The occurrence of mistakes, particularly
significant ones, can have a material adverse effect on our reputation, business, results of operations or financial condition.
Our reliance on vendors creates a number of business risks, such as the risk that we may not maintain service quality,
control or effective management of the outsourced business operations and that we cannot control the facilities or networks of
such vendors. We are also at risk of being unable to meet legal, regulatory, financial or customer obligations if the facilities or
networks of a vendor are disrupted, damaged or fail due to physical disruptions, such as fire, natural disaster, pandemic or
power outage, or other impacts to vendors, including labor strikes, political unrest, and terrorist attacks. Since certain vendors
conduct operations for us outside the United States, the political and military events in foreign jurisdictions could have an
adverse impact on our outsourced operations. We may be adversely affected by a vendor who fails to deliver contracted
services, which could lower revenues, increase costs, reduce profits, disrupt business, or damage our reputation.
Further, the development and adoption of artificial intelligence ("AI"), including generative artificial intelligence
(“Generative AI”), and its use and anticipated use by us or by third parties on whom we rely, may increase the operational risks
discussed above or create new operational risks that we are not currently anticipating. AI technologies offer potential benefits in
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areas such as customer service personalization and process automation, and we expect to use AI and Generative AI to help
deliver products and services and support critical functions. We also expect third parties on whom we rely to do the same. AI
and Generative AI may be misused by us or by such third parties, and that risk is increased by the relative newness of the
technology, the speed at which it is being adopted, and the lack of laws, regulations or standards governing its use. Such misuse
could expose us to legal or regulatory risk, damage customer relationships or cause reputational harm. Our competitors may
also adopt AI or Generative AI more quickly or more effectively than we do, which could cause competitive harm. Because the
Generative AI technology is so new, many of the potential risks of Generative AI are currently unknowable.
The occurrence of a catastrophe, including natural or man-made disasters and/or pandemics or other public health issues.
Any catastrophic event, terrorist attacks, accidents, floods, severe storms or hurricanes, pandemics and other public health
issues, or cyber-terrorism, could have a material and adverse effect on our business. We could experience long-term
interruptions in our service and the services provided by our significant vendors. Some of our operational systems are not fully
redundant, and our disaster recovery and business continuity planning cannot account for all eventualities. Additionally,
unanticipated problems with our disaster recovery systems could further impede our ability to conduct business, particularly if
those problems affect our computer-based data processing, transmission, storage and retrieval systems and destroy valuable
data. We could experience a material adverse effect on our liquidity, financial condition and the operating results of our
insurance business due to increased mortality and, in certain cases, morbidity rates and/or its impact on the economy and
financial markets. We may also experience lower sales or other negative impacts to the use of services we provide if economic
conditions worsen due to a catastrophe or pandemic or other public health emergency, as the financial condition of current or
potential customers, policyholders, and clients may be adversely affected. See “—Conditions in the global capital markets and
economy.” Our workforce may be unable to be physically located at one of our facilities, including due to government-
mandated shutdowns, requests or orders for employees to work remotely, and other social distancing measures, which could
result in lengthy interruptions in our service. A catastrophe may affect our computer-based data processing, transmission,
storage and retrieval systems and destroy valuable data. Climate change may increase the frequency and severity of weather-
related disasters and pandemics. These events could result in an adverse impact on our ability to conduct our business,
including our ability to sell our products and services and our ability to adjudicate and pay claims in a timely manner.
If economic conditions worsen as a result of a catastrophe, pandemic or other public health issue, companies may be unable
inability to make interest and principal payments on their debt securities or mortgage loans that we hold for investment
purposes. Accordingly, we may still incur significant losses that can result in a decline in net investment income and/or material
increases in credit losses on our investment portfolios. With respect to commercial real estate, there could be potential impacts
to estimates of expected losses resulting from lower underlying values, reflecting current market conditions at that time.
Our ability to recruit, motivate and retain key employees and experienced and productive financial professionals.
Our business depends on our ability to recruit, motivate and retain highly skilled, technical, investment, managerial and
executive personnel, and there is no assurance that we will be able to do so. Our financial professionals and our key employees
are key factors driving our sales. Intense competition exists among insurers and other financial services companies for financial
professionals and key employees. We cannot provide assurances that we will be successful in our respective efforts to recruit,
motivate and retain key employees and top financial professionals and the loss of such employees and professionals could have
a material adverse effect on our business, results of operations or financial condition.
Misconduct by our employees or financial professionals.
Misconduct by our employees, financial professionals, agents, intermediaries, representatives of our broker-dealer
subsidiaries - or employees of our vendors could result in obligations to report such misconduct publicly, regulatory
enforcement proceedings and, even findings that violations of law were committed by us or our subsidiaries, regulatory
sanctions or serious reputational or financial harm. Certain types of violations may result in our inability to act as an investment
adviser or broker-dealer or to represent issuers in Regulation D offerings by acting as placement agent, general partner or other
roles. We employ controls and procedures designed to monitor employees’ and financial professionals’ business decisions and
to prevent them from taking excessive or inappropriate risks, including with respect to information security, but employees may
take such risks regardless of such controls and procedures. If our employees or financial professionals take excessive or
inappropriate risks, those risks could harm our reputation, subject us to significant civil or criminal liability and require us to
incur significant technical, legal and other expenses.
Potential strategic transactions.
We may consider potential strategic transactions, including acquisitions, dispositions, mergers, reinsurance, joint ventures
and similar transactions. These transactions may not be effective and could result in decreased earnings and harm to our
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competitive position. In addition, these transactions, if undertaken, may involve a number of risks and present financial,
managerial and operational challenges. Furthermore, strategic transactions may require us to increase our leverage or, if we
issue shares to fund an acquisition, would dilute the holdings of the existing stockholders. Any of the above could cause us to
fail to realize the benefits anticipated from any such transaction.
Changes in accounting standards.
Our consolidated financial statements are prepared in accordance with U.S. GAAP, the principles of which are revised
from time to time. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by
recognized authoritative bodies, including the Financial Accounting Standards Board (“FASB”). We may not be able to predict
or assess the effects of these new accounting pronouncements or new interpretations of existing accounting pronouncements,
and they may have material adverse effects on our business, results of operations or financial condition. For a discussion of
accounting pronouncements and their potential impact on our business, see Note 2 of the Notes to the Consolidated Financial
Statements.
Investment advisory agreements with clients and selling and distribution agreements with various financial intermediaries
and consultants.
AB derives most of its revenues pursuant to written investment management agreements (or other arrangements) with
institutional investors, mutual funds and private wealth clients, and selling and distribution agreements with financial
intermediaries that distribute AB funds. In addition, as part of our variable annuity products, EIMG enters into written
investment management agreements (or other arrangements) with mutual funds. Generally, these investment management
agreements (and other arrangements) are terminable without penalty at any time or upon relatively short notice by either party.
In addition, the investment management agreements pursuant to which AB and EIMG manage an SEC-registered investment
company (a “RIC”) must be renewed and approved by the RIC’s boards of directors (including a majority of the independent
directors) annually. Consequently, there can be no assurance that the board of directors of each RIC will approve the investment
management agreement each year or will not condition its approval on revised terms that may be adverse to us.
Similarly, we enter into selling and distribution agreements with various financial intermediaries that are terminable by
either party upon notice (generally 60 days) and do not obligate the financial intermediary to sell any specific amount of our
products. These intermediaries generally offer their clients investment products that compete with our products. In addition,
certain institutional investors rely on consultants to advise them about choosing an investment adviser and some of AB’s
services may not be considered among the best choices by these consultants. As a result, investment consultants may advise
their clients to move their assets invested with AB to other investment advisers, which could result in significant net outflows.
Increasing scrutiny and evolving expectations regarding ESG matters.
There is increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders on ESG
practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion,
racial justice and workplace conduct. Legislators and regulators have imposed and likely will continue to impose ESG-related
legislation, rules and guidance, which may conflict with one another and impose additional costs on us, impede our business
opportunities or expose us to new or additional risks. For example, the SEC has proposed new ESG reporting rules, including
relating to climate change, which, if adopted as proposed, could result in additional compliance and reporting costs. See
“Business—Regulation—Climate Risks.” In addition, state attorneys general and other state officials have spoken out against
ESG motivated investing by some investment managers and terminated contracts with managers based on their following
certain ESG-motivated strategies. Moreover, proxy advisory firms that provide voting recommendations to investors have
developed ratings for evaluating companies on their approach to different ESG matters, and unfavorable ratings of our company
or our industry may lead to negative investor sentiment and the diversion of investment to other companies or industries. If we
are unable to meet these standards or expectations, whether established by us or third parties, it could result in adverse publicity,
reputational harm, or loss of customer and/or investor confidence, which could adversely affect our business, results of
operations, financial condition and liquidity.
Risks Relating to Credit, Counterparties and Investments
Our counterparties’ requirements to pledge collateral related to declines in estimated fair value of derivative contracts.
We use derivatives and other instruments to help us mitigate various business risks. Our transactions with financial and
other institutions generally specify the circumstances under which the parties are required to pledge collateral related to any
decline in the market value of the derivatives contracts. If our counterparties fail or refuse to honor their obligations under these
contracts, we could face significant losses to the extent collateral agreements do not fully offset our exposures and our hedges
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of the related risk will be ineffective. Such failure could have a material adverse effect on our business, results of operations or
financial condition.
Changes in the actual or perceived soundness or condition of other financial institutions and market participants.
A default by any financial institution or by a sovereign could lead to additional defaults by other market participants. Such
failures could disrupt securities markets or clearance and settlement systems and lead to a chain of defaults, because the
commercial and financial soundness of many financial institutions may be closely related as a result of credit, trading, clearing
or other relationships. Even the perceived lack of creditworthiness of a financial institution may lead to market-wide liquidity
problems and losses or defaults by us or by other institutions. This risk is sometimes referred to as “systemic risk” and may
adversely affect financial intermediaries with which we interact on a daily basis. Systemic risk could have a material adverse
effect on our ability to raise new funding and on our business, results of operations or financial condition. In addition, such a
failure could impact future product sales as a potential result of reduced confidence in the financial services industry.
Losses due to defaults by third parties and affiliates, including outsourcing relationships.
We depend on third parties and affiliates that owe us money, securities or other assets to pay or perform under their
obligations. Defaults by one or more of these parties could have a material adverse effect on our business, results of operations
or financial condition. Moreover, as a result of contractual provisions certain swap dealers require us to add to derivatives
documentation and to agreements, we may not be able to exercise default rights or enforce transfer restrictions against certain
counterparties which may limit our ability to recover amounts due to us upon a counterparty’s default. We rely on various
counterparties and other vendors to augment our existing investment, operational, financial and technological capabilities, but
the use of a vendor does not diminish our responsibility to ensure that client and regulatory obligations are met. Disruptions in
the financial markets and other economic challenges may cause our counterparties and other vendors to experience significant
cash flow problems or even render them insolvent, which may expose us to significant costs and impair our ability to conduct
business. We are also subject to the risk that our rights against third parties may not be enforceable in all circumstances. The
deterioration or perceived deterioration in the credit quality of third parties whose securities or obligations we hold could result
in losses or adversely affect our ability to use those securities or obligations for liquidity purposes.
Economic downturns, defaults and other events may adversely affect our investments.
The occurrence of a major economic downturn, acts of corporate malfeasance, widening credit risk spreads, ratings
downgrades or other events that adversely affect the issuers or guarantors of securities we own or the underlying collateral of
structured securities we own could cause the estimated fair value of our fixed maturity securities portfolio and corresponding
earnings to decline and cause the default rate of the fixed maturity securities in our investment portfolio to increase. We may
have to hold more capital to support our securities to maintain our insurance companies’ RBC levels, should securities we hold
suffer a ratings downgrade. Levels of write-downs or impairments are impacted by intent to sell, or our assessment of the
likelihood that we will be required to sell, fixed maturity securities, as well as our intent and ability to hold equity securities
which have declined in value until recovery. Realized losses or impairments on these securities may have a material adverse
effect on our business, results of operations, liquidity or financial condition in, or at the end of, any quarterly or annual period.
Some of our investments are relatively illiquid and may be difficult to sell.
We hold certain investments that may lack liquidity, such as privately placed fixed maturity securities, mortgage loans,
commercial mortgage backed securities and alternative investments. In the past, even some of our very high quality investments
experienced reduced liquidity during periods of market volatility or disruption. If we were required to liquidate these
investments on short notice or were required to post or return collateral, we may have difficulty doing so and be forced to sell
them for less than we otherwise would have been able to realize. The reported values of our relatively illiquid types of
investments do not necessarily reflect the current market price for the asset. If we were forced to sell certain of our assets in the
current market, there can be no assurance that we would be able to sell them for the prices at which we have recorded them and
we might be forced to sell them at significantly lower prices, which could have a material adverse effect on our business, results
of operations, liquidity or financial condition.
Defaults on our mortgage loans and volatility in performance.
A portion of our investment portfolio consists of mortgage loans on commercial and agricultural real estate. Although we
manage credit risk and market valuation risk for our commercial and agricultural real estate assets through geographic, property
type and product type diversification and asset allocation, general economic conditions in the commercial and agricultural real
estate sectors will continue to influence the performance of these investments. With respect to commercial real estate, there
could be potential impacts to estimates of expected losses resulting from lower underlying values, reflecting current market
conditions at that time. These factors, which are beyond our control, could have a material adverse effect on our business,
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results of operations, liquidity or financial condition. An increase in the default rate of our mortgage loan investments or
fluctuations in their performance could have a material adverse effect on our business, results of operations, liquidity or
financial condition.
Risks Relating to Our Retirement and Protection Businesses
Risks Relating to Reinsurance and Hedging
Our reinsurance and hedging programs.
We seek to mitigate some risks associated with the GMxB features or minimum crediting rate contained in certain of our
retirement and protection products through our hedging and reinsurance programs. However, these programs cannot eliminate
all of the risks, and no assurance can be given as to the extent to which such programs will be completely effective in reducing
such risks.
Reinsurance—We use reinsurance to mitigate a portion of the risks that we face, principally in certain of our in-force
annuity and life insurance products. Under our reinsurance arrangements, other insurers assume a portion of the obligation to
pay claims and related expenses to which we are subject. However, we remain liable as the direct insurer on all risks we
reinsure and, therefore, are subject to the risk that our reinsurer is unable or unwilling to pay or reimburse claims at the time
demand is made. The inability or unwillingness of a reinsurer to meet its obligations to us, or the inability to collect under our
reinsurance treaties for any other reason, could have a material adverse impact on our business, results of operations or financial
condition. Prolonged or severe adverse mortality or morbidity experience could result in increased reinsurance costs, and
ultimately may reduce the availability of reinsurance for future life insurance sales, if available at all. If, for new sales, we are
unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider
sufficient, we would either have to be willing to accept an increase in our net exposures, revise our pricing to reflect higher
reinsurance premiums or limit the amount of new business written on any individual life. If this were to occur, we may be
exposed to reduced profitability and cash flow strain or we may not be able to price new business at competitive rates. The
premium rates and other fees that we charge are based, in part, on the assumption that reinsurance will be available at a certain
cost. If a reinsurer raises the rates that it charges on a block of in-force business, we may not be able to pass the increased costs
onto our customers and our profitability will be negatively impacted. Additionally, such a rate increase could result in our
recapturing of the business, which may result in a need to maintain additional reserves, reduce reinsurance receivables and
expose us to greater risks.
Hedging Programs—We use a hedging program to mitigate a portion of the unreinsured risks we face in, among other
areas, the GMxB features of our variable annuity products and minimum crediting rates on our variable annuity and life
products from unfavorable changes in benefit exposures due to movements in the capital markets. In certain cases, however, we
may not be able to effectively apply these techniques because the derivatives markets in question may not be of sufficient size
or liquidity or there could be an operational error in the application of our hedging strategy or for other reasons. The operation
of our hedging programs is based on models involving numerous estimates and assumptions. There can be no assurance that
ultimate actual experience will not differ materially from our assumptions, particularly, but not only, during periods of high
market volatility, which could adversely impact our business, results of operations or financial condition. For example, in the
past, due to, among other things, levels of volatility in the equity and interest rate markets above our assumptions as well as
deviations between actual and assumed surrender and withdrawal rates, gains from our hedging programs did not fully offset
the economic effect of the increase in the potential net benefits payable under the GMxB features offered in certain of our
products. If these circumstances were to re-occur in the future or if, for other reasons, results from our hedging programs in the
future do not correlate with the economic effect of changes in benefit exposures to customers, we could experience economic
losses which could have a material adverse impact on our business, results of operations or financial condition. Additionally,
our strategies may result in under or over-hedging our liability exposure, which could result in an increase in our hedging losses
and greater volatility in our earnings and have a material adverse effect on our business, results of operations or financial
condition. For further discussion, see “—Risks Relating to Estimates, Assumptions and Valuations—Our risk management
policies and procedures.”
Our reinsurance arrangement with an affiliated captive.
The reinsurance arrangement with EQ AZ Life Re Company (the “Affiliated Captive”) provides important capital
management benefits to Equitable Financial and Equitable America (collectively, the “Affiliated Cedants”). Under applicable
statutory accounting rules, the Affiliated Cedants are currently, and will in the future be, entitled to a credit in their calculations
of reserves for amounts reinsured to the Affiliated Captive, to the extent the Affiliated Captive holds assets in trust or provides
letters of credit or other financing acceptable to the respective domestic regulators of the Affiliated Cedants. The level of assets
required to be maintained in the trust fluctuates based on market and interest rate movements, age of the policies, mortality
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experience and policyholder behavior. Increasing reserve requirements may necessitate that additional assets be placed in trust
or securing additional letters of credit, which could impact the liquidity of the Affiliated Captive.
Risks Relating to Our Products, Our Structure and Product Distribution
GMxB features within certain of our products.
Certain of the variable annuity products we offer and certain in-force variable annuity products we offered historically, and
certain variable annuity risks we assumed historically through reinsurance, include GMxB features. We also offer index-linked
variable annuities with guarantees against a defined floor on losses. GMxB features are designed to offer protection to
policyholders against changes in equity markets and interest rates. Any such periods of significant and sustained negative or
low Separate Accounts returns, increased equity volatility or reduced interest rates will result in an increase in the valuation of
our liabilities associated with those products. In addition, if the Separate Account assets consisting of fixed income securities,
which support the guaranteed index-linked return feature, are insufficient to reflect a period of sustained growth in the equity-
index on which the product is based, we may be required to support such Separate Accounts with assets from our General
Account and increase our liabilities. An increase in these liabilities would result in a decrease in our net income and depending
on the magnitude of any such increase, could materially and adversely affect our financial condition, including our
capitalization, as well as the financial strength ratings which are necessary to support our product sales.
Additionally, we make assumptions regarding policyholder behavior at the time of pricing and in selecting and using the
GMxB features inherent within our products. An increase in the valuation of the liability could result to the extent emerging and
actual experience deviates from these policyholder option use assumptions. If we update our assumptions based on our actuarial
assumption review, we could be required to increase the liabilities we record for future policy benefits and claims to a level that
may materially and adversely affect our business, results of operations or financial condition which, in certain circumstances,
could impair our solvency. In addition, we have in the past updated our assumptions on policyholder behavior, which has
negatively impacted our net income, and there can be no assurance that similar updates will not be required in the future.
In addition, hedging instruments may not effectively offset the costs of GMxB features or may otherwise be insufficient in
relation to our obligations. Furthermore, we are subject to the risk that changes in policyholder behavior or mortality, combined
with adverse market events, could produce economic losses not addressed by our risk management techniques. These factors,
individually or collectively, may have a material adverse effect on our business, results of operations, including net income,
capitalization, financial condition or liquidity including our ability to receive dividends from our insurance subsidiaries.
The amount of statutory capital that we have and the amount of statutory capital we must hold to meet our statutory capital
requirements and our financial strength and credit ratings can vary significantly.
In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of
factors. For further information on the National Association of Insurance Commissioners’ (the “NAIC”) review of the RBC
treatment of certain complex assets in which insurers have invested during recent years, see “Business—Regulation—Insurance
Regulation—Surplus and Capital; Risk Based Capital.” Additionally, state insurance regulators have significant leeway in how
to interpret existing regulations, which could further impact the amount of statutory capital or reserves that we must maintain.
Equitable Financial is primarily regulated by the NYDFS, which from time to time has taken more stringent positions than other
state insurance regulators on matters affecting, among other things, statutory capital or reserves. In certain circumstances,
particularly those involving significant market declines, the effect of these more stringent positions may be that our financial
condition appears to be worse than competitors who are not subject to the same stringent standards, which could have a material
adverse impact on our business, results of operations or financial condition. Moreover, rating agencies may implement changes
to their internal models that have the effect of increasing or decreasing the amount of capital our insurance subsidiaries must
hold in order to maintain their current ratings. To the extent that our statutory capital resources are deemed to be insufficient to
maintain a particular rating by one or more rating agencies, our insurance subsidiaries’ financial strength and credit ratings
might be downgraded by one or more rating agencies. There can be no assurance that any of our insurance subsidiaries will be
able to maintain its current RBC ratio in the future or that its RBC ratio will not fall to a level that could have a material adverse
effect on our business, results of operations or financial condition.
The failure of any of our insurance subsidiaries to meet its applicable RBC requirements or minimum capital and surplus
requirements could subject it to further examination or corrective action imposed by insurance regulators, including limitations
on its ability to write additional business, supervision by regulators, rehabilitation, or seizure or liquidation. Any corrective
action imposed could have a material adverse effect on our business, results of operations or financial condition. A decline in
RBC ratios may limit the ability of an insurance subsidiary to pay dividends or distributions to us, could result in a loss of
customers or new business, and could be a factor in causing ratings agencies to downgrade the insurer’s financial strength
ratings, each of which could have a material adverse effect on our business, results of operations or financial condition.
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A downgrade in our financial strength and claims-paying ratings.
Claims-paying and financial strength ratings are important factors in establishing the competitive position of insurance
companies. They indicate the rating agencies’ opinions regarding an insurance company’s ability to meet policyholder
obligations and are important to maintaining public confidence in our products and our competitive position. A downgrade of
our ratings or those of Equitable Financial, Equitable America or Holdings could adversely affect our business, results of
operations or financial condition by, among other things, reducing new sales of our products, increasing surrenders and
withdrawals from our existing contracts, possibly requiring us to reduce prices or take other actions for many of our products
and services to remain competitive, or adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on
reinsurance. A downgrade in our ratings may also adversely affect our ability to hedge our risks, our cost of raising capital or
limit our access to capital.
State insurance laws limit the ability of our insurance subsidiaries to pay dividends and other distributions to Holdings.
The payment of dividends and other distributions to Holdings by its insurance subsidiaries, including its captive reinsurer,
is regulated by state insurance laws and regulations. These restrictions may limit or prevent our insurance subsidiaries from
making dividend or other payments to Holdings. These restrictions are based, in part, on earned surplus and the prior year’s
statutory income and policyholder surplus. In general, dividends may be paid only from earned surplus (typically defined as
available or unassigned surplus, subject to possible adjustments) which is derived from realized net profits on the company’s
business. Dividends up to specified levels are considered ordinary and generally may be made without prior regulatory
approval. Meanwhile, dividends paid from sources other than earned surplus or in larger amounts, often called “extraordinary
dividends,” are generally subject to approval by the insurance commissioner of the relevant state of domicile. In addition,
certain states may prohibit the payment of dividends from other than the insurance company’s earned surplus. If any of our
insurance subsidiaries subject to the positive earned surplus requirement do not succeed in building up sufficient positive
earned surplus to have ordinary dividend capacity in future years, such subsidiary would be unable to pay dividends or
distributions to our holding company, in certain cases, absent prior approval of its domiciliary insurance regulator. For further
information on state insurance laws related to payments of dividends, see “Business—Regulation—Insurance Regulation—
Holding Company and Shareholder Dividend Regulation.”
From time to time, the NAIC and various state insurance regulators have considered, and may in the future consider,
proposals to further limit dividend payments that an insurance company may make without regulatory approval. For example,
the NYDFS enacted Regulation 213. Due to a permitted statutory accounting practice agreed to with the NYDFS, Equitable
Financial needs the prior approval of the NYDFS to pay the portion, if any, of any ordinary dividend that exceeds the ordinary
dividend that Equitable Financial would be permitted to pay under New York’s insurance laws absent the application of such
permitted practice. If more stringent restrictions on dividend payments are adopted by jurisdictions in which our insurance
subsidiaries are domiciled, such restrictions could have the effect of significantly reducing dividends or other amounts payable
to Holdings by its insurance subsidiaries without prior approval by regulatory authorities. The ability of our insurance
subsidiaries to pay dividends or make other distributions is also limited by our need to maintain the financial strength ratings
assigned to such subsidiaries by the rating agencies. These ratings depend to a large extent on the capitalization levels of our
insurance subsidiaries.
A loss of, or significant change in, key product distribution relationships.
We distribute certain products under agreements with third-party distributors and other members of the financial services
industry that are not affiliated with us. We compete with other financial institutions to attract and retain commercial
relationships in each of these channels. An interruption or significant change in certain key relationships could materially and
adversely affect our ability to market our products and could have a material adverse effect on our business, results of operation
or financial condition. Distributors may elect to alter, reduce or terminate their distribution relationships with us, including for
such reasons as changes in our distribution strategy, adverse developments in our business, adverse rating agency actions or
concerns about market-related risks. Alternatively, we may terminate one or more distribution agreements due to, for example,
a loss of confidence in, or a change in control of, one of the third-party distributors, which could reduce sales.
We are also at risk that key distribution partners may merge or change their business models in ways that affect how our
products are sold, either in response to changing business priorities or as a result of shifts in regulatory supervision or potential
changes in state and federal laws and regulations regarding standards of conduct applicable to third-party distributors when
providing investment advice to retail and other customers. Our key distribution relationships may also be adversely impacted by
regulatory changes that increase the costs associated with marketing or restrict the ability of distribution partners to receive
sales and promotion related charges.
Risks Relating to Estimates, Assumptions and Valuations
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Our risk management policies and procedures.
Our policies and procedures, including hedging programs, to identify, monitor and manage risks may not be adequate or
fully effective. Many of our methods of managing risk and exposures are based upon our use of historical market behavior or
statistics based on historical models. As a result, these methods may not predict future exposures, which could be significantly
greater than the historical measures indicate. Other risk management methods depend upon the evaluation of information
regarding markets, clients, catastrophe occurrence or other matters that is publicly available or otherwise accessible to us, which
may not always be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks
requires, among other things, policies and procedures to record and verify large numbers of transactions and events. These
policies and procedures may not be fully effective.
We employ various strategies to mitigate risks inherent in our business and operations. These risks include current or future
changes in the fair value of our assets and liabilities, current or future changes in cash flows, the effect of interest rates, equity
markets and credit spread changes, the occurrence of credit defaults and changes in mortality and longevity. We seek to control
these risks by, among other things, entering into reinsurance contracts and through our hedging programs. Developing an
effective strategy for dealing with these risks is complex, and no strategy can completely insulate us from such risks. Our
hedging strategies also rely on assumptions and projections that may prove to be incorrect or prove to be inadequate. Moreover,
definitions used in our derivatives contracts may differ from those used in the contract being hedged. For example, swap
documents typically use SOFR as a fallback to LIBOR whereas corporate or municipal bonds or loans held by us may use
different fallback rates. Accordingly, our hedging activities may not have the desired beneficial impact on our business, results
of operations or financial condition. As U.S. GAAP accounting differs from the methods used to determine regulatory reserves
and rating agency capital requirements, our hedging program tends to create earnings volatility in our U.S. GAAP financial
statements. Further, the nature, timing, design or execution of our hedging transactions could actually increase our risks and
losses. Our hedging strategies and the derivatives that we use, or may use in the future, may not adequately mitigate or offset
the hedged risk and our hedging transactions may result in losses, including both losses based on the risk being hedged as well
as losses based on the derivative. The terms of the derivatives and other instruments used to hedge the stated risks may not
match those of the instruments they are hedging which could cause unpredictability in results.
Our reserves could be inadequate and product profitability could decrease due to differences between our actual experience
and management’s estimates and assumptions.
Our reserve requirements for our direct and reinsurance assumed business are calculated based on a number of estimates
and assumptions, including estimates and assumptions related to future mortality, morbidity, longevity, persistency, interest
rates, future equity performance, reinvestment rates, claims experience and policyholder elections (i.e., the exercise or non-
exercise of rights by policyholders under the contracts). The assumptions and estimates used in connection with the reserve
estimation process are inherently uncertain and involve the exercise of significant judgment. We review the appropriateness of
reserves and the underlying assumptions at least annually and, if necessary, update our assumptions as additional information
becomes available. We cannot, however, determine with precision the amounts that we will pay for, or the timing of payment
of, actual benefits and claims or whether the assets supporting the policy liabilities will grow to the level assumed prior to
payment of benefits or claims. Our claim costs could increase significantly, and our reserves could be inadequate if actual
results differ significantly from our estimates and assumptions. If so, we will be required to increase reserves or reduce DAC,
which could materially and adversely impact our business, results of operations or financial condition. Future reserve increases
in connection with experience updates could be material and adverse to the results of operations or financial condition of the
Company. Future changes as a result of future assumptions reviews could require us to make material additional capital
contributions to one or more of our insurance company subsidiaries or could otherwise materially and adversely impact our
business, results of operations or financial condition and may negatively and materially impact our stock price.
Significant deviations in actual experience from our pricing assumptions could have an adverse effect on the profitability of
our products. If actual persistency is significantly different from that assumed in our current reserving assumptions, our reserves
for future policy benefits may prove to be inadequate. Although some of our variable annuity and life insurance products permit
us to increase premiums or adjust other charges and credits during the life of the policy or contract, the adjustments permitted
under the terms of the policies or contracts may not be sufficient to maintain profitability. Many of our variable annuity and life
insurance products do not permit us to increase premiums or adjust other charges and credits or limit those adjustments during
the life of the policy or contract. Even if we are permitted under the contract to increase premiums or adjust other charges and
credits, we may not be able to do so due to litigation, point of sale disclosures, regulatory reputation and market risk or due to
actions by our competitors. In addition, the development of a secondary market for life insurance could adversely affect the
profitability of existing business and our pricing assumptions for new business.
Our financial models rely on estimates, assumptions and projections.
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We use models in our hedging programs and many other aspects of our operations including, but not limited to, product
development and pricing, capital management, the estimation of actuarial reserves, the amortization of DAC, the fair value of
the GMIB reinsurance contracts and the valuation of certain other assets and liabilities. These models rely on estimates,
assumptions and projections that are inherently uncertain and involve the exercise of significant judgment. Due to the
complexity of such models, it is possible that errors in the models could exist and our controls could fail to detect such errors.
Failure to detect such errors could materially and adversely impact our business, results of operations or financial condition.
Subjectivity of the determination of the amount of allowances and impairments taken on our investments.
The determination of the amount of allowances and impairments varies by investment type and is based upon our
evaluation of known and inherent risks associated with the respective asset class. Management updates its evaluations regularly
and reflects changes in allowances and impairments in operations as such evaluations are revised. There can be no assurance
that management’s judgments, as reflected in our financial statements, will ultimately prove to be an accurate estimate of the
actual diminution in realized value. Historical trends may not be indicative of future impairments or allowances. Additional
impairments may need to be taken or allowances provided for in the future that could have a material adverse effect on our
business, results of operations or financial condition. Further, rapidly changing and unprecedented credit and equity market
conditions could materially impact the valuation of securities as reported within our financial statements and the period-to-
period changes in estimated fair value could vary significantly. Decreases in the estimated fair value of securities we hold may
have a material adverse effect on our business, results of operations or financial condition.
Risks Relating to Our Investment Management and Research Business
AB’s revenues and results of operations depend on the market value and composition of AB’s AUM.
AB derives most of its revenues from investment advisory and services fees, which typically are calculated as a percentage
of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period,
and vary with the type of investment service, the size of the account and the total amount of assets AB manages for a particular
client. The value and composition of AB’s AUM can be adversely affected by several factors, including market factors, client
preferences, AB’s investment performance, investing trends, service changes and interest rate changes. A decrease in the value
of AB’s AUM, a decrease in the amount of AUM AB manages, an adverse mix shift in its AUM and/or a reduction in the level
of fees AB charges would adversely affect AB’s investment advisory fees and revenues. A reduction in revenues, without a
commensurate reduction in expenses, adversely affects AB’s and our business, results of operations or financial condition.
The industry-wide shift from actively-managed investment services to passive services.
AB’s competitive environment has become increasingly difficult, as active managers, which invest based on individual
security selection, have, on average, consistently underperformed passive services, which invest based on market indices. While
this trend reversed in the most recent period, as active performance relative to benchmarks improved, overall, in this
environment, organic growth through positive net inflows is difficult to achieve for active managers, such as AB, and requires
taking market share from other active managers. The significant shift from active services to passive services adversely affects
Bernstein Research Services revenues as well. Institutional global market trading volumes continue to be pressured by
persistent active equity outflows and passive equity inflows. As a result, portfolio turnover has declined, and investors hold
fewer shares that are actively traded by managers.
AB’s reputation could suffer if it is unable to deliver consistent, competitive investment performance.
AB’s business is based on the trust and confidence of its clients. Damage to AB’s reputation, resulting from poor or
inconsistent investment performance, among other factors, can reduce substantially AB’s AUM and impair its ability to
maintain or grow its business.
Performance-based fee arrangements with AB’s clients cause greater fluctuations in its net revenues.
AB sometimes charges its clients performance-based fees, whereby it charges a base advisory fee and is eligible to earn an
additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results
or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some performance-based
fees include a high-watermark provision, which generally provides that if a client account under-performs relative to its
performance target (whether in absolute terms or relative to a specified benchmark), it must gain back such under-performance
before AB can collect future performance-based fees. Therefore, if AB fails to achieve the performance target for a particular
period, AB will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, AB’s
ability to earn future performance-based fees will be impaired.
57
The revenues generated by Bernstein Research Services and AB’s broker-dealers may be adversely affected by
circumstances beyond our control.
Electronic, or “low-touch,” trading represents a significant percentage of buy-side trading activity and typically produces
transaction fees that are significantly lower than the price of traditional full service fee rates. As a result, blended pricing
throughout our industry is lower now than it was historically, and price declines may continue. In addition, fee rates we charge
and charged by other brokers for brokerage services have historically experienced price pressure, and we expect these trends to
continue. Also, while increases in transaction volume and market share often can offset decreases in rates, this may not
continue. In addition, the failure or inability of any of AB’s broker-dealer’s significant counterparties to perform could expose
AB to substantial expenditures and adversely affect its revenues. For example, SCB LLC, as a member of clearing and
settlement organizations, would be required to settle open trades of any non-performing counterparty. This exposes AB to the
mark-to-market adjustment on the trades between trade date and settlement date, which could be significant, especially during
periods of severe market volatility. Also, AB’s ability to access liquidity in such situations may be limited by what its funding
relationships are able to offer us at such times. Finally, extensive changes proposed by the SEC to the equity market
structure, including Regulation Best Execution, the proposed Order Competition Rule and proposed changes to Regulation
NMS to establish, among other things, minimum pricing increments and require disclosures by larger broker-dealers and
specified trading platforms, if adopted as proposed, could substantially increase the cost of conducting AB’s buy-side and
broker-dealer operations and, possibly, adversely impact trade execution quality.
AB may be unable to develop new products and services, and the development of new products and services may expose AB
to reputational harm, additional costs or operational risk.
AB’s financial performance depends, in part, on its ability to react nimbly to changes in the asset management industry,
respond to evolving client needs, and develop, market and manage new investment products and services. Conversely, the
development and introduction of new products and services, including the creation of products with concentrations in industries
or sectors specific to individual client criteria, or with a focus on ESG, requires continuous innovative effort on AB’s part and
may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are
associated with the introduction of new products and services, including the implementation of new and appropriate operational
controls and procedures, shifting client and market preferences, the introduction of competing products or services, and
compliance with regulatory and disclosure requirements.
AB’s seed capital investments are subject to market risk.
AB has a seed investment program for the purpose of building track records and assisting with the marketing initiatives
pertaining to its new products. These seed capital investments are subject to market risk. AB’s risk management team oversees
a seed hedging program that attempts to minimize this risk, subject to practical and cost considerations. Also, not all seed
investments are deemed appropriate to hedge, and in those cases AB is exposed to market risk. In addition, AB may be subject
to basis risk in that it cannot always hedge with precision its market exposure and, as a result, AB may be subject to relative
spreads between market sectors. As a result, volatility in the capital markets may cause significant changes in its period-to-
period financial and operating results.
AB uses various derivative instruments in conjunction with its seed hedging program. While in most cases broad market
risks are hedged, AB’s hedges are imperfect, and some market risk remains. In addition, AB’s use of derivatives results in
counterparty risk (i.e., the risk that AB may be exposed to credit-related losses in the event of non-performance by
counterparties to these derivative instruments), regulatory risk (e.g., short selling restrictions) and cash/synthetic basis risk (i.e.,
the risk that underlying positions do not move identically to the related derivative instruments).
AB may not accurately value the securities it holds on behalf of its clients or its company investments.
In accordance with applicable regulatory requirements, contractual obligations or client direction, AB employs procedures
for the pricing and valuation of securities and other positions held in client accounts or for company investments. AB has
established a valuation committee and sub-committees, which oversee a consistent framework of pricing controls and valuation
processes for the firm and each of its advisory affiliates. If market quotations for a security are not readily available, the
valuation committee determines a fair value for the security.
Extraordinary volatility in financial markets, significant liquidity constraints or AB’s failure to adequately consider one or
more factors when determining the fair value of a security based on information with limited market observability could result
in AB failing to properly value securities AB holds for its clients or investments accounted for on its balance sheet. Improper
valuation likely would result in AB basing fee calculations on inaccurate AUM figures, striking incorrect net asset values for
company-sponsored mutual funds or hedge funds or, in the case of company investments, inaccurately calculating and reporting
58
AB’s financial condition and operating results. Although the overall percentage of AB’s AUM that it fair values based on
information with limited market observability is not significant, inaccurate fair value determinations can harm AB’s clients,
create regulatory issues and damage its reputation.
The quantitative and systematic models AB uses in certain of its investment services may contain errors.
AB uses quantitative and systematic models in a variety of its investment services, generally in combination with
fundamental research. These models are developed by senior quantitative professionals and typically are implemented by IT
professionals. AB’s model risk oversight committee oversees the model governance framework and associated model review
activities, which are then executed by AB’s model risk team. However, due to the complexity and large data dependency of
such models, it is possible that errors in the models could exist and AB’s controls could fail to detect such errors. Failure to
detect errors could result in client losses and reputational damage.
AB may not successfully manage actual and potential conflicts of interest that arise in its business.
Increasingly, AB must manage actual and potential conflicts of interest, including situations where its services to a
particular client conflict, or are perceived to conflict, with the interests of another client. Failure to adequately address potential
conflicts of interest could adversely affect AB’s reputation, results of operations and business prospects. AB’s reputation could
be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected if AB
fails, or appears to fail, to deal appropriately with actual or perceived conflicts of interest. In addition, potential or perceived
conflicts could give rise to litigation or regulatory enforcement actions.
Changes in the treatment of AB Holding and ABLP as partnerships for tax purposes would have significant tax
ramifications.
Having elected under Section 7704(g) of the Internal Revenue Code of 1986, as amended to be subject to a 3.5% federal
tax on partnership gross income from the active conduct of a trade or business, AB Holding is a publicly traded partnership
(“PTP”) for federal income tax purposes. In order to preserve AB Holding’s status as a PTP for federal income tax purposes,
management seeks to ensure that AB Holding does not directly or indirectly (through ABLP) enter into a substantial new line of
business. A “new line of business” includes any business that is not closely related to AB’s historical business of providing
research and diversified investment management and related services to its clients. A new line of business is “substantial” when
a partnership derives more than 15% of its gross income from, or directly uses more than 15% of its total assets (by value) in,
the new line of business.
ABLP is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corporate
income taxes. In order to preserve ABLP’s status as a private partnership for federal income tax purposes, AB Units must not
be considered publicly traded. If such units were to be considered readily tradable, ABLP would become subject to federal and
(applicable state and local) corporate income tax on its net income. Further, unitholders would be subject to federal (and
applicable state and local) taxes upon receipt of dividends.
We are heavily regulated.
Legal and Regulatory Risks
We are heavily regulated, and regulators continue to increase their oversight over financial services companies. The
adoption of new laws, regulations or standards and changes in the interpretation or enforcement of existing laws, regulations or
standards have directly affected, and will continue to affect, our business, including making our efforts to comply more
expensive and time-consuming. For additional information on regulatory developments and the risks we face, including the
Dodd-Frank Act, the use of “big data” and artificial intelligence technologies, and model laws and regulations developed by the
NAIC and NASAA, see “Business—Regulation”.
Our retirement and protection business is subject to a complex and extensive array of state and federal tax, securities,
insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different
governmental and self-regulatory authorities, including, among others, state insurance regulators, state securities administrators,
state banking authorities, the SEC, FINRA, the DOL and the IRS. Failure to administer our retirement and protections products
in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities or insurance
requirements could subject us to administrative penalties imposed by a governmental or self-regulatory authority, unanticipated
costs associated with remedying such failure or other claims, litigation, harm to our reputation or interruption of our operations.
Certain of our insurance subsidiaries are required to file periodic and other reports within certain time periods imposed by
U.S. federal securities laws, rules and regulations. Failure to file such reports within the designated time period or failure to
59
accurately report our financial condition or results of operations could require these insurance subsidiaries to curtail or cease
sales of certain of our products or delay the launch of new products or new features, which could cause a significant disruption
in the business of our insurance subsidiaries. If our affiliated and third-party distribution platforms are required to curtail or
cease sales of our products, we may lose shelf space for our products indefinitely, even once we are able to resume sales.
Virtually all aspects of our investment management and research business are subject to federal and state laws and
regulations, rules of securities regulators and exchanges, and laws and regulations certain foreign jurisdictions in which we
conduct business. If we violate these laws or regulations, we could be subject to civil liability, criminal liability or sanction,
including restriction or revocation of our professional licenses or registrations or our ability to serve as an investment adviser to
registered investment companies or as a qualified professional asset manager for employee benefit plans, revocation of the
licenses of our employees, censures, fines, restrictions from relying on the issuance safe harbor of Regulation D under the
Securities Act when issuing securities or causing our clients not to be able to rely on Regulation D if we act as an investment
adviser, placement agent or promoter for the client or to refers clients to private funds or temporary suspension or permanent
bar from conducting business. Any such liability or sanction could have a material adverse effect on our business, results of
operations or financial condition. A regulatory proceeding could require substantial expenditures of time and money, trigger
termination or default rights under contracts to which we are a party and could potentially damage our reputation.
In addition, regulators have proposed, imposed and may continue to impose new requirements or issue new guidance aimed
at addressing or mitigating climate change-related risks and further regulating the industries in which we operate. For example,
the SEC has proposed amendments to Rule 22e-4 under the Investment Company Act, which was itself only recently
implemented, that would impose substantial new costs on top of those recently spent by us to comply with the rule. Other SEC
proposals relating to registered funds, such as proposed amendments to Rule 22c-1 of the Investment Company Act, would
require adoption of “swing pricing” and a “hard close” by all open-end funds other than money market funds, which could
substantially increase the operating costs associated with our funds and potentially adversely impact the appeal of the products
to certain investors. These emerging regulatory initiatives could result in increased compliance cost to our businesses and
changes to our corporate governance and risk management practices.
Recently, the DOL issued a proposed regulation that would re-define which individuals and entities act as “fiduciaries”
when such individuals and entities provide investment advice to ERISA plans and IRAs. The DOL simultaneously issued
proposed amendments to existing prohibited transaction exemptions that apply to the provision of investment advice to ERISA
plans and IRAs. If finalized in their proposed form, this new definition and these amended exemptions will likely impose
additional regulatory burdens on our business as it relates to the sale of insurance products and related provision of investment
advice to ERISA plans and IRAs.
Changes in U.S. tax laws and regulations or interpretations thereof.
Changes in tax laws and regulations or interpretations of such laws, including U.S. tax reform, could increase our corporate
taxes and reduce our earnings. Changes may increase our effective tax rate or have implications that make our products less
attractive to consumers. Tax authorities may enact laws, change regulations to increase existing taxes, or add new types of taxes
and authorities who have not imposed taxes in the past, may impose additional taxes. Any such changes may harm our business,
results of operations or financial condition.
Uncertainty surrounding potential legal, regulatory and policy changes, as well as the potential for general market volatility,
because of the upcoming presidential election in the United States.
We face regulatory and tax uncertainties because of a possible change in the current presidential administration due to the
upcoming election in 2024. The nature, timing and economic effects of any potential change to the current legal and regulatory
framework affecting our insurance subsidiaries or the products they offer remains highly uncertain. Uncertainty surrounding
future changes may adversely affect our operating environment and have an adverse impact on our business, financial
condition, results of operations and growth prospects.
Legal proceedings and regulatory actions.
A number of lawsuits and regulatory inquiries have been filed or commenced against us and other financial services
companies in the jurisdictions in which we do business. Some of these matters have resulted in the award of substantial fines
and judgments, including material amounts of punitive damages, or in substantial settlements. We face a significant risk of, and
from time to time we are involved in, such actions and proceedings, including class action lawsuits. The frequency of large
damage awards, including large punitive damage awards and regulatory fines that bear little or no relation to actual economic
damages incurred, continues to create the potential for an unpredictable judgment in any given matter. In addition,
60
investigations or examinations by federal and state regulators and other governmental and self-regulatory agencies could result
in legal proceedings (including securities class actions and stockholder derivative litigation), adverse publicity, sanctions, fines
and other costs. A substantial legal liability or a significant federal, state or other regulatory action against us, as well as
regulatory inquiries or investigations, may divert management’s time and attention, could create adverse publicity and harm our
reputation, result in material fines or penalties, result in significant expense, including legal and settlement costs, and otherwise
have a material adverse effect on our business, results of operations or financial condition. For information regarding legal
proceedings and regulatory actions pending against us, see Note 19 of the Notes to the Consolidated Financial Statements.
Certain provisions in our certificate of incorporation and by-laws.
Risks Relating to Our Common Stock
Our second amended and restated certificate of incorporation and our sixth amended and restated by-laws include a number
of provisions that may discourage, delay or prevent a change in our management or prevent a takeover attempt that stockholders
may consider favorable. These provisions may prevent our stockholders from receiving the benefit from any premium to the
market price of our common stock offered in a takeover context or may even adversely affect the price of our common stock if
the provisions discourage takeover attempts. Our second amended and restated certificate of incorporation and amended and
sixth restated by-laws may also make it difficult for stockholders to replace or remove our management.
We have designated a sole and exclusive forum for certain litigation that may be initiated by our stockholders.
Our second amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of
an alternative forum, the Court of Chancery of the State of Delaware is, to the fullest extent permitted by law, be the sole and
exclusive forum for a number of actions. Notwithstanding the foregoing, the exclusive provision shall not preclude or contract
the scope of exclusive federal or concurrent jurisdiction for actions brought under the Exchange Act or the Securities Act or the
respective rules and regulations promulgated thereunder.
General Risks
Competition from other insurance companies, banks, asset managers and other financial institutions.
We face strong competition from others offering the types of products and services we provide. It is difficult to provide
unique retirement and protection or asset management products because, once such products are made available to the public,
they often are reproduced and offered by our competitors. If competitors charge lower fees for similar products or services, we
may decide to reduce the fees on our own products or services in order to retain or attract customers.
Competition may adversely impact our market share and profitability. Many of our competitors are large and well-
established and some have greater market share or breadth of distribution, offer a broader range of products, services or
features, assume a greater level of risk, have greater financial resources, have higher claims-paying or credit ratings, have better
brand recognition or have more established relationships with clients than we do. We also face competition from new market
entrants or non-traditional or online competitors, many of whom are leveraging digital technology that may challenge the
position of traditional financial service companies. Due to the competitive nature of the financial services industry, there can be
no assurance that we will continue to effectively compete within the industry or that competition will not materially and
adversely impact our business, results of operations or financial condition.
Protecting our intellectual property.
We rely on a combination of contractual rights, copyright, trademark and trade secret laws to establish and protect our
intellectual property. Third parties may infringe or misappropriate our intellectual property. The loss of intellectual property
protection or the inability to secure or enforce the protection of our intellectual property assets could have a material adverse
effect on our business and our ability to compete. Third parties may have, or may eventually be issued, patents or other
protections that could be infringed by our products, methods, processes or services or could limit our ability to offer certain
product features. If we were found to have infringed or misappropriated a third-party patent or other intellectual property right,
we could in some circumstances be enjoined from providing certain products or services to our customers or from using and
benefiting from certain patents, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter
into costly licensing arrangements with third parties or implement a costly alternative. Any of these scenarios could harm our
reputation and have a material adverse effect on our business, results of operations or financial condition.
61
Part I, Item 1B.
None.
Part I, Item 1C.
UNRESOLVED STAFF COMMENTS
Overview of Our Cybersecurity Risk Management
CYBERSECURITY
Equitable’s cybersecurity program (the “Program”) is based on, and leverages industry-leading frameworks, including the
National Institute of Standards and Technology Framework Cyber Security Framework (“NIST CSF”). The NIST CSF provides
standards, guidelines and best practices on managing cybersecurity risk, as well as the organization, improvement and
assessment of the Program. Equitable’s Chief Information Security Officer (“CISO”), who reports to its Chief Information
Officer, manages the Program through an information security team organized into five functional areas (as outlined below), the
CISO establishes and monitors compliance with our internal controls using published standards, cybersecurity software and
similar tools, and control assurance reviews. These five areas also work closely with our information technology team to
provide expertise and guidance to help manage risks and controls related to cybersecurity.
The information security team’s five functional areas consist of:
•
•
•
•
•
Information Security Governance, Risk and Strategic Program Management – this includes cybersecurity
policy lifecycle and regulatory change management, enterprise and role-based security awareness and training
programs (including phishing campaigns), cyber risk management, strategy and program management and
communications and reporting.
Information Security Compliance – this includes cybersecurity assurance reviews, acting as a liaison for
cybersecurity-related regulatory reviews and audits (both internal and external), support for third-party vendor
security reviews, and IT financial controls oversight.
Security Operations and Intelligence – this includes security operations center management, cyber incident
lifecycle management, threat intelligence monitoring, vulnerability management and tabletop exercises.
Identity and Access Management – this includes identity governance and administration, access recertification,
and management of multi-factor authentication processes and password vaults.
Security Architecture and Engineering – this includes establishing cybersecurity-related technical standards
and baselines, reviews of any proposed exceptions to those standards, participating in architectural and software
review processes and providing security engineering services for cybersecurity tools/solutions as well as with IT
network and infrastructure teams.
Equitable continues to prioritize the security of its technology and sensitive data through investments in cybersecurity
detection and prevention technologies as well as employee communications and training. Equitable recently launched a cyber-
incident readiness program, and regularly conducts cyber exercises and readiness assessments, penetration testing and
independent control reviews to validate and protect the confidentiality, integrity and availability of our information systems.
Equitable also conducts annual security awareness training and periodic phishing simulation exercises to train employees to
recognize and report phishing attacks, as well as other supplemental training organized by the information security team.
Equitable also regularly engages external consultants to develop or refresh target operating models, roadmaps, and new
technologies and solutions for managing key cybersecurity risks. These engagements provide an external view that incorporates
solutions to address evolving technologies and threats, and also aids with strategic alignment of vendors to achieve cyber risk
reduction goals in a cost-effective manner. External consultants also perform penetration testing, advise on cyber incident
response preparedness, conduct tabletop exercises, support security operations center activities, and perform third-party vendor
cyber risk reviews.
The Program uses a risk-based approach to requiring Equitable’s third-party service providers to maintain security controls
designed to ensure the integrity, confidentiality, and availability of the providers’ systems and the confidential and sensitive
information that the provider maintains and processes on Equitable’s behalf. A third-party service provider risk team performs
cybersecurity assessments on third-party service providers with support from information security compliance to evaluate the
62
provider’s controls based on the level of risk that the provider’s services or solutions may present to Equitable. Relevant
provisions of service provider contracts require providers to implement enhanced or heightened levels of controls, as applicable.
This assessment is a part of Equitable’s overall corporate sourcing and procurement management process, and the corporate
sourcing and procurement team separately tracks and reports any exceptions or compliance action plans to the same executive
management-level committees to which the CISO provides cybersecurity risk updates, as discussed more fully below.
Equitable also maintains an Operational Resilience program managed by the enterprise risk management function that aims
to protect its people, customers, and brand by sustaining critical services at defined levels while responding to expected and
unexpected disruptions and adapting to changes in its operating environment. The Operational Resilience program includes a
consultative process to identify critical resources across the organization to prioritize for recovery during a crisis such as
business processes, applications, staffing, hardware/software and recovery timeframes. Under that program, both critical and
non-critical applications are required to have a documented application recovery plan, and all business units are required to
have a documented business continuity plan. Each of these plans is required to be certified annually and is tested periodically,
with test results tracked and documented for distribution to designated management teams.
During the fiscal year of this Report, Equitable has not identified risks from cybersecurity threats that have materially
affected or are reasonably anticipated to materially affect the organization. Nevertheless, it recognizes that cybersecurity threats
are ongoing and evolving, and we continue to remain vigilant. For more information on our cybersecurity risks, see “Risk
Factors—Risks Relating to Our Operations—Failure to protect the confidentiality of customer information or proprietary
business information” and “Risk Factors—Risks Relating to Our Operations—Failure” to protect the confidentiality, integrity,
or availability of customer information or proprietary business information.
Governance of Cybersecurity Risk Management
The Program — overseen by the CISO, who has over 20 years of experience in cybersecurity roles, holds over 10 cyber-
related industry certifications, is a Series 99 FINRA licensed Operations Professional, and has a Bachelor of Science degree in
Computer Systems & Networking as well as a Master’s degree in business administration — is integrated into Equitable’s
overall Enterprise Risk Management (ERM) program to identify, evaluate and manage risks, which is managed by Equitable’s
risk management area and overseen by its Chief Risk Officer, who reports directly to its Chief Executive Officer. Under the
ERM program, cybersecurity risks are evaluated alongside and consistent with the evaluation of other business risks, with the
information security team providing subject matter expertise with respect to the identification, assessment, and tracking of
cybersecurity risks pursuant to guidelines established as part of the ERM program. Various cross-functional committees within
Equitable also meet on a regular basis to review risks, mitigation plans and projects that impact Equitable’s information
technology systems. In addition, Equitable’s Program is assessed on at least an annual basis by its internal audit function,
including an assessment of control effectiveness related to designated risk scenarios.
The information security team also works with other areas of Equitable, including enterprise risk management, data
privacy, compliance, internal audit, and fraud to coordinate and align (i) risk management processes (e.g., identification,
assessment, and management), and (ii) reporting to senior management, the Board of Directors and certain committees thereof.
More specifically, the information security team uses its subject matter expertise to tailor the risk assessment process for
evaluation of cybersecurity risks while enterprise risk management establishes overall corporate risk policy and risk tolerance
levels. In addition, a cross-functional team which includes members of the above-referenced areas routinely monitors threat
intelligence feeds and evaluates emerging threats. Key risks are escalated and reported to executive management and the Board
or committees thereof, via (i) an established cadence of at least quarterly cybersecurity updates, (ii) an incident response plan
with respect to risks related to cybersecurity incidents meeting a defined threshold, and (iii) ad hoc meetings between the CISO
and executive management and/or Board members as necessary.
The CISO provides regular updates regarding the Program and cybersecurity risks to Equitable’s Information Risk and
Data Protection committee, comprised of members of executive management, and also provides quarterly updates to the Audit
Committee of Equitable’s Board of Directors, which oversees cybersecurity risk. In addition to receiving quarterly updates from
the CISO, the Audit Committee receives reports on cybersecurity risks from our internal audit function, and also periodically
receives reports from an external cybersecurity advisor. The Board receives quarterly reports from the Audit Committee, and
also receives at least annual updates on the Program and cybersecurity risks from the CISO.The CISO also meets on an
individual basis at least quarterly, or more frequently as needed, with members of executive management with cybersecurity
oversight responsibility, and has the authority to escalate disagreements with management regarding cybersecurity risks and
management of such risks directly to the Board of Directors.
63
Periodic updates regarding the Operational Resilience program are provided by Equitable’s Chief Risk Officer or a
designee to its Audit Risk and Compliance Committee, comprised of members of executive management, as well as the
Information Risk and Data Protection Committee and the Audit Committee.
Under Holdings’s service agreement with Equitable Financial, Equitable Financial provides personnel services, employee
benefits, facilities, supplies and equipment to Holdings to conduct its business. Included in these services are the cybersecurity
monitoring and oversight procedures described herein.
The information contained herein does not apply to Holdings’s subsidiary, AllianceBernstein (AB), which has its own
information systems and cybersecurity program to address cybersecurity risks associated with those systems. That program
includes reporting of cybersecurity incidents impacting AB’s information systems to our CISO if they meet a defined threshold.
For additional information regarding AB’s cybersecurity program, see Part I, Item 1C of AB’s Annual Report on Form 10-K for
the year ended December 31, 2023.
Part I, Item 2.
PROPERTIES
Our principal executive offices are located at 1345 Avenue of the Americas, New York, NY pursuant to a lease that will
expire in 2039. We also have significant office space leases in Syracuse, NY, where our lease that was scheduled to expire in
2023 was amended to extend the term for a portion of the space through 2028 and in Charlotte, NC, where we occupy space
under a lease that expires in 2028. Our lease of premises in Jersey City, NJ expired as of September 30, 2023.
AB’s principal executive offices at 501 Commerce Street, Nashville, TN are occupied pursuant to a 15-year lease that
commenced during the fourth quarter of 2020. In addition, AB leases office space at 1345 Avenue of the Americas, New York,
NY pursuant to a lease expiring in 2024 that will be replaced by a 20-year lease agreement in New York, NY at 66 Hudson
Boulevard that is expected to commence in 2024. AB also leases space in San Antonio, TX under a lease expiring in 2029.
Additionally, AB leases space in Pune, India under a lease expiring in 2033.
Part I, Item 3.
For information regarding certain legal proceedings pending against us, see Note 19 of the Notes to the Consolidated
Financial Statements. See “Risk Factors—Legal and Regulatory Risks—Legal proceedings and regulatory actions.”
LEGAL PROCEEDINGS
Part I, Item 4.
Not Applicable.
Part II, Item 5.
MINE SAFETY DISCLOSURES
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
General
Our common stock, par value $0.01 per share, began trading on the NYSE under the symbol “EQH” on May 10, 2018. As
of January 29, 2024, there were two shareholders of record, which differs from the number of beneficial owners of our common
stock.
Dividends
The declaration, payment and amount of future dividends is subject to the discretion of our Board of Directors and depends
on our financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of
dividends by Holdings’ insurance subsidiaries and other factors deemed relevant by the Board. The payment of dividends will
be substantially restricted in the event that we do not declare and pay (or set aside) dividends on the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock, for the last proceeding dividend period. See “Management’s Discussion
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and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Dividends Declared and
Paid” for further information regarding common stock dividends.
Equity Compensation Plan
For information regarding our equity compensation plan, see “Security Ownership of Certain Beneficial Owners and
Related Stockholder Matters”—“Equity Compensation Plan Information.”
Purchases of Equity Securities by the Issuer
The following table summarizes Holdings’ repurchases of its common stock during the three months ended December 31,
2023.
Period
Month #1 (October 1-31)
Month #2 (November 1-30)
Month #3 (December 1-31)
Total
Total Number of
Shares (or Units)
Purchased
Average Price
Paid per Share (or
Unit)
3,482,922 $
2,366,497 $
2,439,714 $
8,289,133 $
26.99
27.89
33.08
29.04
Total Number of Shares
(or Units) Purchased as
Part of Publicly
Announced Programs
Approximate Dollar
Value of Shares (or
Units) that May Yet Be
Purchased Under the
Program (1)
3,482,922 $
2,366,497 $
2,439,714 $
8,289,133 $
312,109,581
246,109,942
157,610,157
157,610,157
_____________
(1) See Note 22 of the Notes to the Consolidated Financial Statements for the Share Repurchase program.
Holdings may choose to suspend or discontinue the repurchase program at any time. The repurchase program does not
obligate Holdings to purchase any particular number of shares. During the three months ended December 31, 2023, the
Company repurchased approximately 8 million shares of its common stock, at a total cost of approximately $241 million. The
repurchased common stock was recorded as treasury stock in the consolidated balance sheets.
Stock Performance Graph
Effective January 18, 2024, the S&P Dow Jones Indices added Holdings to the S&P MidCap 400 Index. We believe this
index consists of a more appropriate peer group and our inclusion will increase our visibility and exposure to a broader investor
base. Where Holdings previously used the S&P 500 index for benchmarking purposes, going forward, it will use the Standard
& Poor’s 400 indices as shown in the graph and table below, which present Holdings’ cumulative total shareholder return
relative to the performance of: (1) the S&P MidCap 400 Index; (2) the S&P MidCap 400 Insurance Industry Index; (3) the S&P
MidCap 400 Financials Index; and (4) the S&P 500, respectively, for the year ended December 31, 2023, commencing May 14,
2018 (our initial day of “regular-way” trading on the NYSE).
All values assume a $100 initial investment in the Holdings’ common stock on the NYSE and data for each of the S&P
MidCap 400 Index, the S&P MidCap 400 Insurance Industry Index, the S&P MidCap 400 Financials Index and the S&P 500
assume all dividends were reinvested on the date paid. The points on the graph and the values in the table represent quarter-end
values based on the last trading day of each quarter. The comparisons are based on historical data and are not indicative of, nor
intended to forecast, the future performance of our common stock.
65
May 14,
2018
Dec 31,
2018
Dec 31,
2019
Dec 31,
2020
Dec 31,
2021
Dec 31,
2022
Dec 31,
2023
Equitable Holdings, Inc.
S&P 400
S&P 400 Financials
S&P 400 Insurance
S&P 500
$
$
$
$
$
100.00
100.00
100.00
100.00
100.00
$
$
$
$
$
78.71
86.86
80.92
97.61
93.08
$
$
$
$
$
120.53 $
127.79
109.59 $
124.55
102.19 $
100.47
123.50 $
114.11
122.39 $
144.74
$
$
$
$
$
169.33 $
151.10 $
179.74
155.36 $
135.01 $
157.13
133.57 $
128.93 $
139.30
139.02 $
151.58 $
176.30
183.22 $
152.62 $
192.52
Part II, Item 6.
RESERVED
Part II, Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction
with our annual financial statements included elsewhere herein. In addition to historical data, this discussion contains forward-
looking statements about our business, operations and financial performance based on current expectations that involve risks,
uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a
result of various factors. Factors that could or do contribute to these differences include those factors discussed below and
66
Period EndingIndex ValueCumulative Total Return Based upon an initial investment of $100 on May 14, 2018Equitable Holdings, Inc.S&P 400S&P 400 Financials S&P 400 Insurance S&P 500May 14, 2018Dec 31, 2018Dec 31, 2019Dec 31, 2020Dec 31, 2021Dec 31, 2022Dec 31, 2023$60$80$100$120$140$160$180$200
elsewhere in this Form 10-K, particularly under the captions “Risk Factors” and “Note Regarding Forward-Looking
Statements and Information.”
Executive Summary
Overview
We are one of America’s leading financial services companies, providing: (i) advice and solutions for helping Americans
set and meet their retirement goals and protect and transfer their wealth across generations; and (ii) a wide range of investment
management insights, expertise and innovations to drive better investment decisions and outcomes for clients worldwide.
We manage our business through six segments: Individual Retirement, Group Retirement, Investment Management and
Research, Protection Solutions, Wealth Management and Legacy. We report certain activities and items that are not included in
these segments in Corporate and Other. See Note 21 of the Notes to the Consolidated Financial Statements for further
information on our segments.
We benefit from our complementary mix of businesses. This business mix provides diversity in our earnings sources,
which helps offset fluctuations in market conditions and variability in business results, while offering growth opportunities.
Internal Reinsurance Treaty
On May 17, 2023, Equitable Financial entered into a reinsurance agreement (the “Reinsurance Treaty”) with its affiliate,
Equitable America, effective April 1, 2023. Pursuant to the Reinsurance Treaty, virtually all of Equitable Financial’s net
retained General Account liabilities, including all of its net retained liabilities relating to the living benefit and death riders
related to (i) its variable annuity contracts issued outside the State of New York prior to October 1, 2022 (and with respect to its
EQUI-VEST variable annuity contracts, issued outside the State of New York prior to February 1, 2023) and (ii) certain
universal life insurance policies issued outside the State of New York prior to October 1, 2022, were reinsured to Equitable
America on a coinsurance funds withheld basis. In addition, all of the Separate Accounts liabilities relating to such variable
annuity contracts were reinsured to Equitable America on a modified coinsurance basis. Equitable America’s obligations under
the Reinsurance Treaty are secured through Equitable Financial’s retention of certain assets supporting the reinsured liabilities.
This reinsurance treaty has no impact to the consolidated financial statements of the Company. The NYDFS and the Arizona
Department of Insurance and Financial Institutions each approved the Reinsurance Treaty.
The Reinsurance Treaty further diversifies Equitable Financial’s sources of regulated cash flows and supports more stable
dividends to the Company from Equitable Financial and Equitable America.
As a condition to approving the Reinsurance Treaty, the NYDFS has required that Equitable Financial seek to novate the
reinsured contracts on a reasonable best efforts basis either to Equitable America or another affiliate over the next three years.
Novations of the reinsured contracts are subject to additional regulatory approvals, as well as certain policyholder approvals.
Long - Duration Targeted Improvements (“LDTI”) Adoption
Effective January 1, 2023, the Company adopted ASU 2018-12 and elected a transition date of January 1, 2021, thereby
permitting the Company to implement the standard only for the last two fiscal years rather than the customary last three fiscal
years.
The Company adopted ASU 2018-12 for liability for future policy benefits, additional insurance liabilities, DAC and
balances amortized on a basis consistent with DAC on a modified retrospective basis. ASU 2018-12 was adopted for MRBs on
a full retrospective basis. See Note 2 of the Notes to the Consolidated Financial Statements for further information on the
adoption of LDTI.
67
One of the most significant changes as result of the LDTI implementation are the MRBs. The following table presents the
balances and changes to the balances for the market risk benefits for the GMxB benefits on deferred variable annuities:
Balance, beginning of year
Balance BOP before changes in the instrument specific credit
risk
Model changes and effect of changes in cash flow assumptions
Actual market movement effect (1)
Interest accrual
Attributed fees accrued (2)
Benefit payments
Actual policyholder behavior different from expected behavior (3)
Changes in future economic assumptions (4)
Issuances
Balance EOP before changes in the instrument-specific credit
risk
Changes in the instrument-specific credit risk
Balance, end of year
Year Ended December 31, 2023
Individual
Retirement
GMxB Core
GMxB Legacy
Legacy
Purchased
MRB
Net Legacy
$
530 $
14,699 $
(10,415) $
4,284
(in millions)
529
20
(481)
73
407
(47)
23
(203)
1
15,314
(11)
(1,847)
770
843
(1,354)
(14)
(673)
—
(10,358)
(33)
986
(555)
(284)
768
(41)
130
—
322
268
590 $
13,028
390
13,418 $
(9,387)
(33)
(9,420) $
$
4,956
(44)
(861)
215
559
(586)
(55)
(543)
—
3,641
357
3,998
____________
(1) The effect of actual market movement in equity is materially offset by hedging gains/losses, which are not shown in the table above.
(2) Attributed fees accrued represents the portion of the fees set aside to fund future GMxB claims. For our Core business, the $407 million
attributed fees set aside is less than the explicit GMxB Rider fees we actually collect from policyholders. For our Core business, the net
riders fees (rider fees charged minus attributed fees) reported in our policy charges and fee income is $78 million. This means that the
GMxB rider fees we charge more than cover the future claims and hedging costs associated with the GMxB riders. For our Legacy
business, the attributed fees of $843 million set aside to fund future GMxB claims is more than the rider fees actually collected from
policyholders. This is because the product was not sufficiently priced for the claims we now expect. This required us to attribute a
portion of the base contract fees, in addition to the rider fees, to reserve for the rider claims. Net rider fees (rider fees charged minus
attributed fees), net of reinsurance, for Legacy business reported in the policy charges and fee income are a loss of $275 million, and are
more than covered by base contract fees.
(3) Actual policyholder behavior different from expected behavior measures the effectiveness of our modeling of policyholder behavior. Put
differently, it measures the difference between our expectations about how our MRB rider reserves would change in response to
policyholder behavior, and how our MRB rider reserves actually changed in response to policyholder behavior. For our Core business,
the MRB rider reserve was $23 million higher than we expected after accounting for actual policyholder behavior. The unfavorable
impact of this actual policyholder behavior was more than covered by the excess rider fees noted above. For our Legacy business, the
impact on our GAAP earnings from policyholder behavior, net of reinsurance, was a net gain of $55 million.
(4) Changes in future economic assumptions represents the impact from interest rates on the MRB balance. These fluctuations are offset
through our interest rate hedging program which is reflected partially in GAAP Net Income with the remainder reflected in OCI.
Macroeconomic and Industry Trends
Our business and consolidated results of operations are significantly affected by economic conditions and consumer
confidence, conditions in the global capital markets and the interest rate environment.
Financial and Economic Environment
A wide variety of factors continue to impact global financial and economic conditions. These factors include, among
others, uncertainty regarding the federal debt limit, volatility in the capital markets, equity market declines, plateauing or
decreasing economic growth, high fuel and energy costs, changes in fiscal or monetary policy and geopolitical tensions. The
Russian invasion of the Ukraine and Hamas’s attack on Israel, and the ensuing conflicts and the sanctions and other measures
imposed in response to these conflicts significantly increased the level of volatility in the financial markets and have increased
the level of economic and political uncertainty.
68
Stressed conditions, volatility and disruptions in the capital markets, particular markets, or financial asset classes can have
an adverse effect on us, in part because we have a large investment portfolio. In addition, our insurance liabilities and
derivatives are sensitive to changing market factors, including equity market performance and interest rates, which continued to
rise in 2023 but are expected to fall in 2024 based on statements of members of the Board of Governors of the Federal Reserve
System. An increase in market volatility could continue to affect our business, including through effects on the yields we earn
on invested assets, changes in required reserves and capital and fluctuations in the value of our AUM, AV or AUA from which
we derive our fee income. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy,
the scope of potential deregulation and levels of global trade.
The potential for increased volatility could pressure sales and reduce demand for our products as consumers consider
purchasing alternative products to meet their objectives. In addition, this environment could make it difficult to consistently
develop products that are attractive to customers. Financial performance can be adversely affected by market volatility and
equity market declines as fees driven by AV and AUM fluctuate, hedging costs increase and revenues decline due to reduced
sales and increased outflows. However, US equity markets registered strong gains in the final quarter of 2023, buoyed by
slowing inflation data and expectations that the Federal Reserve Board has finished its rate hiking cycle and will move towards
cuts in 2024.
We will continue to monitor the behavior of our customers and other factors, including mortality rates, morbidity rates,
annuitization rates and lapse and surrender rates, which change in response to changes in capital market conditions, to ensure
that our products and solutions remain attractive and profitable. For additional information on our sensitivity to interest rates
and capital market prices, see “Risk Factors—Risks Relating to Conditions in the Financial Markets and Economy” and
“Quantitative and Qualitative Disclosures About Market Risk.”
Regulatory Developments
Our life insurance subsidiaries are regulated primarily at the state level, with some policies and products also subject to
federal regulation. In addition, Holdings and its insurance subsidiaries are subject to regulation under the insurance holding
company laws of various U.S. jurisdictions. Furthermore, on an ongoing basis, regulators refine capital requirements and
introduce new reserving standards. Regulations recently adopted or currently under review can potentially impact our statutory
reserve, capital requirements and profitability of the industry and result in increased regulation and oversight for the industry.
For additional information on regulatory developments and the risks we face, see “Business—Regulation” and “Risk Factors—
Legal and Regulatory Risks.”
Revenues
Our revenues come from three principal sources:
•
•
•
fee income derived from our retirement and protection products and our investment management and research
services;
premiums from our traditional life insurance and annuity products; and
investment income from our General Account investment portfolio.
Our fee income varies directly in relation to the amount of the underlying AV or benefit base of our retirement and
protection products and the amount of AUM of our Investment Management and Research business. AV and AUM, each as
defined in “Key Operating Measures,” are influenced by changes in economic conditions, primarily equity market returns, as
well as net flows. Our premium income is driven by the growth in new policies written and the persistency of our in-force
policies, both of which are influenced by a combination of factors, including our efforts to attract and retain customers and
market conditions that influence demand for our products. Our investment income is driven by the yield on our General
Account investment portfolio and is impacted by the prevailing level of interest rates as we reinvest cash associated with
maturing investments and net flows to the portfolio.
Benefits and Other Deductions
Our primary expenses are:
•
•
policyholders’ benefits and interest credited to policyholders’ account balances;
sales commissions and compensation paid to intermediaries and advisors that distribute our products and services;
and
69
•
compensation and benefits provided to our employees and other operating expenses.
Policyholders’ benefits are driven primarily by mortality, customer withdrawals, and benefits which change in response to
changes in capital market conditions. In addition, some of our policyholders’ benefits are directly tied to the AV and benefit
base of our variable annuity products. Interest credited to policyholders varies in relation to the amount of the underlying AV or
benefit base. Sales commissions and compensation paid to intermediaries and advisors vary in relation to premium and fee
income generated from these sources, whereas compensation and benefits to our employees are more constant and impacted by
market wages and decline with increases in efficiency. Our ability to manage these expenses across various economic cycles
and products is critical to the profitability of our company.
Net Income Volatility
We have offered and continue to offer variable annuity products with GMxB features. The future claims exposure on these
features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and
reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest
rate movements. We are using a combination of General Account assets and derivatives to manage duration gap on an
economic basis. The changes in the values of the derivatives associated with these programs due to equity and interest rate
movements, together with the GMxB MRBs assets and liabilities, are recognized in net income in the periods in which they
occur, while the General Account asset gains and losses are recorded in OCI resulting in an offset between OCI and net income.
In addition, we conduct macro hedging to protect our statutory capital which could also cause net income volatility as further
described below. Net income is also impacted by changes in our reinsurers credit spread, while changes in the Company’s
credit spread is recorded in OCI. See “—Significant Factors Impacting Our Results—Impact of Hedging and GMIB
Reinsurance on Results.”
In addition to our dynamic hedging strategy, we have static hedge positions designed to mitigate the adverse impact of
changing market conditions on our statutory capital. We believe this program will continue to preserve the economic value of
our variable annuity contracts and better protect our target variable annuity asset level. However, these static hedge positions
increase the size of our derivative positions and may result in additional net income volatility on a period-over-period basis.
Due to the impacts on our net income of equity market and interest rate movements and other items that are not part of the
underlying profitability drivers of our business, we evaluate and manage our business performance using Non-GAAP Operating
Earnings, a non-GAAP financial measure that is intended to remove these impacts from our results. See “—Key Operating
Measures—Non-GAAP Operating Earnings.”
Significant Factors Impacting Our Results
The following significant factors have impacted, and may in the future impact, our financial condition, results of operations
or cash flows.
Impact of Hedging and GMxB Reinsurance on Results
We have offered and continue to offer variable annuity products with GMxB features. The future claims exposure on these
features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and
reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest
rate movements. These programs include:
•
Variable annuity hedging programs. We use a dynamic hedging program (within this program, generally, we
reevaluate our economic exposure at least daily and rebalance our hedge positions accordingly) to mitigate certain
risks associated with the GMxB features that are embedded in our liabilities for our variable annuity products. This
program utilizes various derivative instruments that are managed in an effort to reduce the economic impact of
unfavorable changes in GMxB features’ exposures attributable to movements in the equity markets and interest rates.
Although this program is designed to provide a measure of economic protection against the impact of adverse market
conditions, it does not qualify for hedge accounting treatment. Accordingly, changes in value of the derivatives will be
recognized in the period in which they occur with offsetting changes in reserves recognized in the current period. In
addition, we utilize AFS fixed maturity securities in our General Account to mitigate the economic impact of
unfavorable changes in GMxB features’ exposures attributable to movements in interest rates. However, the economic
effect of interest rate changes on such securities is reflected in OCI, which results in net income volatility as the
economic effect of interest rates on our GMxB MRB liabilities is reflected in net income.
70
•
•
In addition to our dynamic hedging program, we have a hedging program using static hedge positions (derivative
positions intended to be HTM with less frequent re-balancing) to protect our statutory capital against stress scenarios.
This program, in addition to our dynamic hedge program, has increased the size of our derivative positions, resulting
in additional net income volatility. The impacts are most pronounced for variable annuity products.
GMxB reinsurance contracts. Historically, GMxB reinsurance contracts were used to cede to non-affiliated reinsurers
a portion of our exposure to variable annuity products that offer GMxB features. We account for the reinsurance
contracts as MRBs and report them at fair value. In addition, on June 1, 2021, we ceded legacy variable annuity
policies sold by Equitable Financial between 2006-2008 (the “Block”), comprised of non-New York “Accumulator”
policies containing fixed rate GMIB and/or GMDB guarantees.
Effect of Assumption Updates on Operating Results
During the third quarter of each year, we conduct our annual review of the assumptions underlying the valuation of DAC,
deferred sales inducement assets, unearned revenue liabilities, liabilities for future policyholder benefits and market risk
benefits for our Individual Retirement, Group Retirement, Protection Solutions, and Legacy segments (assumption reviews are
not relevant for the Investment Management and Research and Wealth Management segments). Assumptions are based on a
combination of Company experience, industry experience, management actions and expert judgement and reflect our best
estimate as of the date of the applicable financial statements.
Most of the variable annuity products, variable universal life insurance and universal life insurance products we offer
maintain policyholder deposits that are reported as liabilities and classified within either Separate Accounts liabilities or
policyholder account balances. Our products and riders also impact liabilities for future policyholder benefits, market risk
benefits and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is
based on differing accounting methods depending on the product, each of which requires numerous assumptions and
considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not
limited to, the following: (i) traditional life insurance products for which assumptions are updated annually to estimate the value
of future death, morbidity or income benefits; (ii) universal life insurance and variable life insurance secondary guarantees for
which benefit liabilities are determined by estimating the expected value of death benefits payable when the account balance is
projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments;
and (iii) certain product guarantees reported as market risk benefits at fair value.
For further details of our accounting policies and related judgments pertaining to assumption updates, see Note 2 of the
Notes to the Consolidated Financial Statements.
Assumption Updates and Model Changes
We conduct our annual review of our assumptions and models during the third quarter of each year. We also update our
assumptions as needed in the event we become aware of economic conditions or events that could require a change in our
assumptions that we believe may have a significant impact to the carrying value of product liabilities and assets and
consequently materially impact our earnings in the period of the change.
Impact of Assumption Updates and Model Changes on Income from Continuing Operations before income taxes and Net
income (loss)
The table below presents the impact of our actuarial assumption update to our income (loss) from continuing operations,
before income taxes and net income (loss).
Year Ended December 31,
2023
2022
2021
(in millions)
Impact of assumption update on Net income (loss):
Variable annuity product features related assumption update
Assumption updates for other business
Impact of assumption updates on Income (loss) from continuing operations,
before income tax
Income tax benefit on assumption update
Net income (loss) impact of assumption update
$
$
44 $
(49)
(5)
1
(4) $
(205) $
(1)
(206)
43
(163) $
445
(45)
400
(84)
316
71
2023 Assumption Updates
The impact of the economic assumption update during 2023 was a decrease of $5 million to income (loss) from continuing
operations, before income taxes and a decrease to net income (loss) of $4 million.
The net impact of this assumption update on income (loss) from continuing operations, before income taxes of $5 million
consisted of a decrease in other income of $9 million, an increase in remeasurement of liability for future policy benefits of $51
million, a decrease in policyholders’ benefits of $2 million and an decrease in change in market risk benefits and purchased
market risk benefits of $53 million.
2022 Assumption Updates
The impact of the economic assumption update during 2022 was a decrease of $206 million to income (loss) from
continuing operations, before income taxes and a decrease to net income (loss) of $163 million.
The net impact of this assumption update on income (loss) from continuing operations, before income taxes of $206
million consisted of a increase in remeasurement of liability for future policy benefits of $14 million, a decrease in
policyholders’ benefits of $13 million, an increase in change in market risk benefits and purchased market risk benefits of $204
million and an increase in interest credited to policyholder’s account balances of $1 million.
2021 Assumption Updates
The impact of the economic assumption update during 2021 was an increase of $400 million to income (loss) from
continuing operations, before income taxes and an increase to net income (loss) of $316 million. As part of this annual update,
the reference interest rate utilized in our GAAP fair value calculations was updated from the LIBOR swap curve to the US
Treasury curve due to the impending cessation of LIBOR and our GAAP fair value liability risk margins. There were no other
significant change to the process used to calculate the MRB balances.
The net impact of this assumption update on income (loss) from continuing operations, before income taxes of $400
million consisted of an increase in remeasurement of liability for future policy benefits of $33 million, an increase in
policyholders’ benefits of $11 million, a decrease in change in market risk benefits and purchased market risk benefits of $446
million, an increase in interest credited to policyholder’s account balances of $1 million and a decrease in the amortization of
DAC of $1 million.
Model Changes
There were no material model changes during 2023, 2022 and 2021.
Impact of Assumption Updates and Model Changes on Pre-tax Non-GAAP Operating Earnings Adjustments
The table below presents the impact on pre-tax Non-GAAP Operating Earnings of our actuarial assumption updates by segment
and Corporate and Other.
Impact of assumption updates by segment:
Individual Retirement
Group Retirement
Protection Solutions
Legacy
Impact of assumption updates on Corporate and Other
Total impact on pre-tax Non-GAAP Operating Earnings
2023 Assumption Updates
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
1 $
—
11
3
—
15 $
(1) $
—
(4)
—
3
(2) $
(37)
1
(6)
—
(6)
(48)
The impact of our 2023 annual review on Non-GAAP Operating Earnings was favorable by $15 million before taking into
consideration the tax impacts, or $12 million after tax.
72
The net impact of assumption changes on Non-GAAP Operating Earnings increased other income by $4 million, decreased
remeasurement of liability for future policy benefits by $10 million, and decreased policyholders’ benefits by $1 million. Non-
GAAP Operating Earnings excludes items related to variable annuity product features, such as changes in the market risk
benefits and purchased market risk benefits.
2022 Assumption Updates
The impact of our 2022 annual review on Non-GAAP Operating Earnings was unfavorable by $2 million before taking into
consideration the tax impacts or $1 million after tax.
The net impact of assumption changes on Non-GAAP Operating Earnings increased remeasurement of liability for future
policy benefits by $14 million, decreased policyholders’ benefits by $13 million and increased interest credited by to
policyholder’s account balances by $1 million. Non-GAAP Operating Earnings excludes items related to variable annuity
product features, such as changes in the market risk benefits and purchased market risk benefits.
2021 Assumption Updates
The impact of our 2021 annual review on Non-GAAP Operating Earnings was unfavorable by $48 million before taking
into consideration the tax impacts or $38 million after tax. For Individual Retirement segment, the impacts primarily reflect
updated mortality on our older payout business. For Group Retirement segment, the impacts reflect updated economic
assumptions. The annual update for Protection Solutions segment reflects favorable economic conditions and surrenders
primarily on the VUL line. This, in turn, creates future profits and lowers the accrual on our PFBL reserve.
The net impact of assumption changes on Non-GAAP Operating Earnings increased remeasurement of liability for future
policy benefits by $33 million, increased Policyholders’ benefits by $11 million, increased interest credited by to policyholder’s
account balances by $1 million and increased Amortization of DAC by $1 million. Non-GAAP Operating Earnings excludes
items related to Variable annuity product features, such as changes in the market risk benefits and purchased market risk
benefits.
Productivity
As part of our continuing efforts to drive productivity improvements, in May 2023, we began a new program expected to
achieve $150 million of run-rate expense savings by 2027, of which $38 million has been achieved as of December 31, 2023.
We expect to achieve these savings by optimizing our real estate footprint at both Equitable and AB in addition to other
initiatives to improve operational efficiency.
As previously announced, we entered into a 15-year lease agreement in New York, NY at 1345 Avenue of the Americas
which commenced in 2023 and will reduce rental expense beginning in 2024. We also realized expense efficiencies in office
space leases as follows: in Syracuse, NY, we occupy space under a lease that was scheduled to expire in 2023, but which was
amended to extend a portion of the space through 2028 at a lower total cost; and in Jersey City, NJ, we occupied space under a
lease that expired in 2023 and was not extended or replaced.
As previously announced in 2018, AB established its corporate headquarters in Nashville, Tennessee at 501 Commerce
Street and began the process of transitioning Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and
Sales and Marketing functions. As of December 31, 2023, 1,048 employees were located in Nashville. AB will continue to
operate a principal location in New York City, which houses Portfolio Management, Sell-side Research and Trading, and New
York-based Wealth Management Private Wealth businesses. Beginning in 2025, once this transition period has been completed,
AB expects to realize an estimated $75 million of annual savings from a combination of lower occupancy and compensation
expenses.
73
Key Operating Measures
In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP Operating Earnings, Non-GAAP
Operating ROE, and Non-GAAP operating common EPS, each of which is a measure that is not determined in accordance with
U.S. GAAP. Management principally uses these non-GAAP financial measures in evaluating performance because they present
a clearer picture of our operating performance and they allow management to allocate resources. Similarly, management
believes that the use of these Non-GAAP financial measures, together with relevant U.S. GAAP measures, provide investors
with a better understanding of our results of operations and the underlying profitability drivers and trends of our business. These
non-GAAP financial measures are intended to remove from our results of operations the impact of market changes (where there
is a mismatch in the valuation of assets and liabilities) as well as certain other expenses which are not part of our underlying
profitability drivers or likely to re-occur in the foreseeable future, as such items fluctuate from period-to-period in a manner
inconsistent with these drivers. These measures should be considered supplementary to our results that are presented in
accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP measures. Other companies may use
similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures.
Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.
We also discuss certain operating measures, including AUM, AUA, AV, Protection Solutions reserves and certain other
operating measures, which management believes provide useful information about our businesses and the operational factors
underlying our financial performance.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on
a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to
Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and
statutory capital, and the variable annuity product MRBs. This is a large source of volatility in net income.
Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate
the impact of the following items:
•
•
•
•
•
Items related to variable annuity product features, which include: (i) changes in the fair value of market risk benefits
and purchased market risk benefits, including the related attributed fees and claims, offset by derivatives and other
securities used to hedge the market risk benefits which result in residual net income volatility as the change in fair value
of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to
deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable
possibility of a significant loss from insurance risk;
Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of
securities/investments, realized capital gains/losses and valuation allowances;
Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and
expected experience on pension plan assets or projected benefit obligation during a given period related to pension,
other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
Other adjustments, which primarily include restructuring costs related to severance and separation, lease write-offs
related to non-recurring restructuring activities, COVID-19 related impacts, net derivative gains (losses) on certain
Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital
mark-to-market adjustments, unrealized gain/losses and realized capital gains/losses from sales or disposals of select
securities, certain legal accruals; a bespoke deal to repurchase UL policies from one entity that had invested in
numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by
that entity related to those UL policies, impact of the annual actuarial assumption updates attributable to LFPB; and
Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of
uncertain tax positions for a given audit period and a decrease of deferred tax valuation allowance.
In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual actuarial
assumption update attributable to LFPB as the majority of the earnings volatility attributable to these assumption updates relate
to the Company’s Legacy and non-business segment products and as such do not represent the Company’s ongoing revenue
generating activities or future business strategy, and impede comparability of operating results period over period. Operating
earnings were favorably impacted by this change in the amount of $61 million for the year ended December 31, 2023. The
presentation of operating earnings in prior periods was not revised to reflect this modification because the impact to those
periods was immaterial.
74
Also, in the fourth quarter of 2023, the Company updated its operating earnings measure to exclude the impact of realized
amounts related to equity classified instruments. The recognition of the realized capital gains and losses from investments in
current net investment income is generally considered distortive and not reflective of the ongoing core business activities of the
segments. Operating earnings were favorably impacted in the amount of $8 million for the year ended December 31, 2023. The
presentation of operating earnings in prior periods was not revised to reflect this modification. The impact to operating earnings
would have been $36 million favorable for the year ended December 31, 2022 and $50 million unfavorable for the year ended
December 31, 2021.
Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management
believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our
business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of 21% while taking into account any non-recurring differences for
events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at
lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings.
The table below presents a reconciliation of net income (loss) attributable to Holdings to Non-GAAP Operating Earnings:
Net income (loss) attributable to Holdings
Adjustments related to:
Variable annuity product features (5)
Investment (gains) losses
Net actuarial (gains) losses related to pension and other
postretirement benefit obligations
Other adjustments (1) (2) (3)
Income tax expense (benefit) related to above adjustments
Non-recurring tax items (4)
Non-GAAP Operating Earnings
Year Ended December 31,
2023
2022
(in millions)
2021
$
1,302 $
2,153 $
1,755
607
713
39
351
(359)
(959)
1,694 $
(2,193)
945
82
605
118
16
1,726 $
1,115
(867)
120
628
(208)
12
2,555
$
___________
(1)
(2)
Includes separation costs of $82 million for the year ended December 31, 2021. Separation costs were completed during 2021.
Includes Non-GMxB related derivative hedge losses of $26 million, ($34) million and $65 million for the years ended December 31,
2023, 2022 and 2021, respectively.
Includes certain gross legal expenses related to the cost of insurance litigation and claims related to a commercial relationship of $144
million, $218 million and $207 million for the year ended December 31, 2023, 2022 and 2021, respectively. Includes policyholder
benefit costs of $75 million for the year ended December 31, 2022. Includes the impact of annual actuarial assumptions updates
related to LFPB of $61 million for the year ended December 31, 2023. Prior period impact was immaterial and was not revised.
Non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period. For the twelve months ended
December 31, 2023 includes tax valuation allowance decrease of $1 billion.
Includes the impact of favorable assumption updates of $40 million for the year ended December 31, 2023. Includes the impact of
unfavorable assumption updates of $204 million for the year ended December 31, 2022.
(3)
(4)
(5)
Non-GAAP Operating ROE
We calculate Non-GAAP Operating ROE by dividing Non-GAAP Operating Earnings for the previous twelve calendar
months by consolidated average equity attributable to Holdings’ common shareholders, excluding AOCI. AOCI fluctuates
period-to-period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related
to the market volatility of the unrealized gains and losses associated with our AFS securities. Therefore, we believe excluding
AOCI is more effective for analyzing the trends of our operations.
The following table presents return on average equity attributable to Holdings’ common shareholders, excluding AOCI and
Non-GAAP Operating ROE for the year ended December 31, 2023.
75
Net income (loss) available to Holdings’ common shareholders
Average equity attributable to Holdings’ common shareholders, excluding AOCI
Return on average equity attributable to Holdings’ common shareholders, excluding AOCI
Non-GAAP Operating Earnings available to Holdings’ common shareholders
Average equity attributable to Holdings’ common shareholders, excluding AOCI
Non-GAAP Operating ROE
Year Ended December
31, 2023
(in millions)
$
$
$
$
1,222
9,147
13.4 %
1,614
9,147
17.6 %
Non-GAAP Operating Common EPS
Non-GAAP operating common EPS is calculated by dividing Non-GAAP Operating Earnings by diluted common shares
outstanding. The following table sets forth Non-GAAP operating common EPS:
2023
Year Ended December 31,
2022
(per share amounts)
2021
Net income (loss) attributable to Holdings
Less: Preferred stock dividends
Net income (loss) available to Holdings’ common shareholders
Adjustments related to:
Variable annuity product features (5)
Investment (gains) losses
Net actuarial (gains) losses related to pension and other
postretirement benefit obligations
Other adjustments (1) (2) (3)
Income tax expense (benefit) related to above adjustments
Non-recurring tax items (4)
Non-GAAP Operating Earnings
$
$
3.70 $
0.22
3.48
1.73
2.03
0.11
0.99
(1.02)
(2.73)
4.59 $
5.67 $
0.21
5.46
(5.77)
2.49
0.22
1.58
0.31
0.04
4.33 $
4.17
0.19
3.98
2.65
(2.06)
0.29
1.48
(0.49)
0.03
5.88
______________
(1)
(2)
(3)
Includes separation costs of $0.20 for the year ended December 31, 2021. Separation costs were completed during 2021.
Includes Non-GMxB related derivative hedge losses of $0.07, $(0.09) and $0.14 for the years ended December 31, 2023, 2022 and 2021,
respectively.
Includes certain gross legal expenses related to the COI litigation and claims related to a commercial relationship of $0.41, $0.57 and
$0.50 for the years ended December 31, 2023, 2022 and 2021, respectively. Includes policyholder benefit costs of $0.20 for the year
ended December 31, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies
purchased in the life settlement market.
(4) Non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period. The twelve months ended
(5)
December 31, 2023 includes tax valuation allowance decrease of $2.84 per common share.
Includes the impact of favorable assumption updates of $0.11 for the year ended December 31, 2023. Includes the impact of unfavorable
assumption updates of $0.54 for the year ended December 31, 2022.
Assets Under Management
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB; (ii) the
assets in our General Account investment portfolio; and (iii) the Separate Accounts assets of our Individual Retirement, Group
Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.
Assets Under Administration
AUA includes non-insurance client assets that are invested in our savings and investment products or serviced by our
Equitable Advisors platform. We provide administrative services for these assets and generally record the revenues received as
distribution fees.
Account Value
76
AV generally equals the aggregate policy account value of our retirement products. General Account AV refers to account
balances in investment options that are backed by the General Account while Separate Accounts AV refers to Separate
Accounts investment assets.
Protection Solutions Reserves
Protection Solutions reserves equals the aggregate value of policyholders’ account balances and future policy benefits for
policies in our Protection Solutions segment.
77
Consolidated Results of Operations
Our consolidated results of operations are significantly affected by conditions in the capital markets and the economy
because we offer market sensitive products. These products have been a significant driver of our results of operations. Because
the future claims exposure on these products is sensitive to movements in the equity markets and interest rates, we have in place
various hedging and reinsurance programs that are designed to mitigate the economic risk of movements in the equity markets
and interest rates. The volatility in net income attributable to Holdings for the periods presented below results from the
mismatch between: (i) the change in carrying value of the reserves for GMDB and certain GMIB features that do not fully and
immediately reflect the impact of equity and interest market fluctuations; (ii) the change in fair value of products with the
GMIB feature that have a no-lapse guarantee; and (iii) our hedging and reinsurance programs.
Ownership and Consolidation of AllianceBernstein
Our indirect, wholly-owned subsidiary, AllianceBernstein Corporation, is the General Partner of AB. Accordingly, AB’s
results are fully reflected in our consolidated financial statements.
Our average economic interest in AB was approximately 61%, 64% and 65% for the years ended December 31, 2023, 2022
and 2021 respectively. The slight decrease was due to the issuance of AB Units relating to AB’s 100% acquisition of CarVal
Investments L.P. (“CarVal”). On July 1, 2022, AB issued 3.2 million AB Units (with a fair value of $133 million) with the
remaining 12.1 million AB units (with a fair value of $456 million) issued on November 1, 2022. AB also recorded a contingent
consideration payable of $229 million (to be paid predominantly in AB Units) based on CarVal achieving certain performance
objectives over a six-year period ending December 31, 2027.
Consolidated Results of Operations
The following table summarizes our consolidated statements of income (loss):
Consolidated Statements of Income (Loss)
REVENUES
Policy charges and fee income
Premiums
Net derivative gains (losses)
Net investment income (loss)
Investment gains (losses), net:
Credit losses on available-for-sale debt securities and loans
Other investment gains (losses), net
Total investment gains (losses), net
Investment management and service fees
Other income
Total revenues
Year Ended December 31,
2023
2021
2022
(in millions, except per share data)
$
2,380 $
1,104
(2,397)
4,320
2,454 $
994
907
3,315
2,768
960
(7,149)
3,846
(220)
(493)
(713)
4,820
1,014
10,528
(314)
(631)
(945)
4,891
1,028
12,644
2
866
868
5,395
926
7,614
78
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits
Remeasurement of liability for future policy benefits
Change in market risk benefits and purchased market risk benefits
Interest credited to policyholders’ account balances
Compensation and benefits
Commissions and distribution-related payments
Interest expense
Amortization of deferred policy acquisition costs
Other operating costs and expenses
Total benefits and other deductions
Income (loss) from continuing operations, before income taxes
Income tax (expense) benefit
Net income (loss)
Less: Net income (loss) attributable to the noncontrolling interest
Net income (loss) attributable to Holdings
Less: Preferred stock dividends
Year Ended December 31,
2021
2022
2023
(in millions, except per share data)
2,754
75
(1,807)
2,083
2,328
1,590
228
641
1,898
9,790
738
905
1,643
341
1,302
80
2,716
66
(1,280)
1,410
2,201
1,567
201
586
2,185
9,652
2,992
(598)
2,394
241
2,153
80
2,788
13
(5,943)
1,219
2,363
1,662
244
552
2,107
5,005
2,609
(439)
2,170
415
1,755
79
Net income (loss) available to Holdings’ common shareholders
$
1,222 $
2,073 $
1,676
EARNINGS PER COMMON SHARE
Net income (loss) applicable to Holdings’ common shareholders per common share:
Basic
Diluted
Weighted average common shares outstanding (in millions):
Basic
Diluted
Non-GAAP Operating Earnings
$
$
3.49 $
3.48 $
5.49 $
5.46 $
4.02
3.98
350.1
351.6
377.6
379.9
417.4
421.2
Year Ended December 31,
2023
2022
(in millions)
2021
$
1,694 $
1,726 $
2,555
The following table summarizes our Non-GAAP Operating Earnings per common share:
Non-GAAP Operating Earnings per common share:
Basic
Diluted
Year Ended December 31,
2023
2022
2021
$
$
4.61 $
4.59 $
4.36 $
4.33 $
5.93
5.88
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022
Net Income (Loss) Attributable to Holdings
Net income attributable to Holdings decreased by $851 million to a net income of $1.3 billion for the year ended December
31, 2023 from a net income of $2.2 billion for the year ended December 31, 2022. The following notable items were the
primary drivers for the change in net income (loss):
79
Unfavorable items included:
•
•
•
•
•
•
Net derivative losses increased by $3.3 billion mainly due to equity market appreciation during the year ended
December 31, 2023 compared to equity market depreciation during 2022.
Interest credited to policyholders’ account balances increased by $673 million mainly due to higher interest rates on
funding agreements in Corporate and Other and growth of SCS account values in our Individual Retirement segment,
partially offset by the impact of the Global Atlantic Transaction in our Group Retirement segment.
Amortization of DAC increased by $55 million mainly due to growth in our Individual Retirement segment from sales
momentum and an increased run-rate from model updates in the third quarter of 2023.
Fee-type revenue decreased by $49 million mainly driven by lower recognition of deferred gain from the Venerable
Transaction due to market movements in 2023, ceded assets from the Global Atlantic Transaction from our Group
Retirement segment, partially offset by higher premiums due to growth in our Protections Solutions segment.
Policyholders’ benefits increased by $38 million mainly due to growth in Employee Benefits in our Protection
Solutions segment (offset by higher premiums in Fee-type revenue).
Net income attributable to noncontrolling interest increased by $100 million mainly due to gains from AB’s
consolidated VIEs and an increase in noncontrolling interest.
These were partially offset by the following favorable items:
•
•
•
•
•
Net investment income increased by $1.0 billion mainly due to higher asset balances, higher investment yields, and
higher income from seed capital investments, partially offset by lower alternative investment income.
Change in market risk benefits and purchased market risk benefits decreased by $527 million mainly due to an
increase in equity markets during 2023 compared to a decrease during 2022, partially offset by a lower increase in
interest rates from 2023 compared to 2022.
Investment losses decreased by $232 million mainly due to rebalancing in 2022 versus sales to reduce duration in
2023.
Compensation, benefits, interest and other operating expenses decreased by $133 million mainly due to lower COI
accrual, partially offset by an increase in pension costs resulting from the higher interest rate environment.
Income tax expense decreased by $1.5 billion primarily due to a partial release of the valuation allowance of $1 billion
on the deferred tax asset, and lower pre-tax income for the year ended December 31, 2023 compared to the year ended
December 31, 2022.
See “—Significant Factors Impacting Our Results—Effect of Assumption Updates on Operating Results” for more
information regarding assumption updates.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings decreased by $32 million to $1.7 billion for the year ended December 31, 2023 from $1.7
billion in the year ended December 31, 2022. The following notable items were the primary drivers for the change in Non-
GAAP Operating Earnings:
Unfavorable items included:
• Interest credited to policyholders’ account balances increased by $673 million mainly due to higher interest rates on
funding agreements in Corporate and Other and growth of SCS account values in our Individual Retirement
segment, partially offset by the impact of the Global Atlantic Transaction in our Group Retirement segment.
• Policyholders’ benefits increased by $132 million mainly due to higher net mortality, growth in Employee Benefits
in our Protection Solutions segment, and higher benefits from GMIB annuitizations in our Legacy segment (offset
by higher premiums in fee-type revenue).
• Amortization of DAC increased by $55 million mainly due to growth in our Individual Retirement segment from
sales momentum and an increased run-rate from model updates in the third quarter of 2023.
• Compensation, benefits, interest expense and other operating costs increased by $39 million mainly due to higher
interest expense related to higher average outstanding borrowings and higher interest rates, higher incentive
80
compensation and base compensation expense, primarily offset by lower general and administrative cost related to
lower portfolio servicing and professional fees, in our Investment Management and Research segment.
• Net income attributable to the noncontrolling interest increased by $23 million mainly due to an increase in
noncontrolling interest, partially offset by lower pre-tax earnings.
These were partially offset by the following favorable items:
• Net investment income increased by $746 million mainly due to higher assets, higher investment yields and higher
income from seed capital investments, partially offset by lower alternative investment income.
• Fee-type revenue increased by $86 million mainly driven by higher interest income from sweep accounts in our
Wealth Management segment and higher premiums due to growth in Employee Benefits in our Protection Solutions
segment, partially offset by lower assets from the Global Atlantic Transaction in our Group Retirement segment.
• Remeasurement of liability for future policy benefits decreased by $70 million mainly due to favorable assumption
updates and model changes in 2023 compared to 2022 and unfavorable experience in prior period in our legacy
assumed life insurance business.
• Net derivative gains decreased by $37 million primarily due to higher losses from economically hedging seed capital
investments in rising equity markets in our Investment Management and Research segment.
• Income tax expense decreased by $48 million mainly driven by lower pre-tax earnings and a lower effective tax rate
in 2023.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021
Net Income Attributable to Holdings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Non-GAAP Operating Earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Results of Operations by Segment
We manage our business through the following six segments: Individual Retirement, Group Retirement, Investment
Management and Research, Protection Solutions, Wealth Management and Legacy. We report certain activities and items that
are not included in our six segments in Corporate and Other. The following section presents our discussion of operating
earnings (loss) by segment and AUM, AV and Protection Solutions Reserves by segment, as applicable. Consistent with U.S.
GAAP guidance for segment reporting, operating earnings (loss) is our U.S. GAAP measure of segment performance. See Note
21 of the Notes to the Consolidated Financial Statements for further information on our segments.
The following table summarizes operating earnings (loss) on our segments and Corporate and Other:
Operating earnings (loss) by segment:
Individual Retirement
Group Retirement
Investment Management and Research
Protection Solutions
Wealth Management
Legacy
Corporate and Other
Non-GAAP Operating Earnings
81
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
850 $
399
411
51
159
186
(362)
1,694 $
762 $
446
424
97
101
235
(339)
1,726 $
794
579
564
262
58
522
(224)
2,555
Effective Tax Rates by Segment
For 2023, 2022 and 2021 income tax expense was allocated to the Company’s business segments using a 16%, 17% and
16% ETR respectively, for our retirement and protection businesses (Individual Retirement, Group Retirement, Protection
Solutions and Legacy), 24%, 26% and 30% ETR for Wealth Management and a 23%, 28% and 27% ETR for Investment
Management and Research.
Individual Retirement
The Individual Retirement segment includes our variable annuity products which primarily meet the needs of individuals
saving for retirement or seeking retirement income.
The following table summarizes operating earnings (loss) of our Individual Retirement segment:
Operating earnings (loss)
Key components of operating earnings (loss) were:
REVENUES
Policy charges, fee income and premiums
Net investment income
Net derivative gains (losses)
Investment management, service fees and other income
Segment revenues
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits
Remeasurement of liability for future policy benefits
Interest credited to policyholders’ account balances
Commissions and distribution-related payments
Amortization of deferred policy acquisition costs
Compensation, benefits and other operating costs and expenses
Interest expense
Segment benefits and other deductions
The following table summarizes AV for our Individual Retirement segment:
AV (1)
General Account
Separate Accounts
Total AV
_____________
(1) AV presented are net of reinsurance.
82
Year Ended December 31,
2023
2022
2021
(in millions)
$
850 $
762 $
794
Year Ended December 31,
2023
2022
2021
(in millions)
$
660 $
655 $
1,643
(20)
360
2,643 $
1,056
(42)
359
2,028 $
82 $
—
699
261
388
193
1
1,624 $
56 $
(3)
318
235
334
165
—
1,105 $
$
$
$
726
863
(31)
431
1,989
67
30
225
233
294
191
—
1,040
December 31, 2023
December 31, 2022
(in millions)
$
$
52,062 $
39,619
91,681 $
37,822
36,455
74,277
The following table summarizes a roll-forward of AV for our Individual Retirement segment:
Year Ended December 31,
2023
2022
2021
Balance, beginning of period
Gross premiums
Surrenders, withdrawals and benefits
Net flows
Investment performance, interest credited and policy charges
Other (1) (2)
Balance, end of period
(in millions)
$ 74,277 $ 82,629 $ 72,519
10,991
(8,393)
2,598
7,493
19
$ 91,681 $ 74,277 $ 82,629
14,245
(8,689)
5,556
11,841
7
11,488
(7,555)
3,933
(12,285)
—
______________
(1) For the year ended December 31, 2023, amounts reflect a total special payment applied to the accounts of active clients during the three
months ended March 31, 2023, as part of a previously disclosed settlement agreement between Equitable Financial and the SEC.
(2) For the year ended December 31, 2021, amounts reflect $(38) million transfer of policyholders account balances to future policyholder
benefits and other policyholders liabilities related to structured settlement contracts and $57 million of AV transfer of a closed block of
GMxB business from the Group Retirement Segment to the Individual Retirement Segment.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Individual Retirement
Segment
Operating earnings
Operating earnings increased $88 million to $850 million during the year ended December 31, 2023 from $762 million in
the year ended December 31, 2022. The following notable items were the primary drivers of the change in operating earnings:
Favorable items included:
•
•
Net investment income increased by $587 million mainly due to higher SCS asset balances and higher investment
yields, partially offset by lower income from TIPS (offset in derivatives).
Net derivative losses decreased by $22 million mainly due to lower losses from TIPS hedging (offset in net investment
income).
These were partially offset by the following unfavorable items:
•
•
•
•
•
•
Interest credited to policyholders’ account balances increased by $381 million mainly due to growth of SCS account
values.
Amortization of DAC increased by $54 million mainly due to growth in the business from sales momentum and an
increased run-rate from model updates in the third quarter of 2023.
Compensation, benefits, interest expense and other operating costs increased by $29 million mainly due to an increase
in pension costs resulting from the higher interest rate environment.
Commissions and distribution-related payments increased by $26 million mainly due to growth in the SCS business.
Policyholders’ benefits increased by $26 million mainly due to higher annuitization activity in the non-GMxB block,
which is offset by higher premiums.
Income tax expense increased by $8 million partially driven by higher pre-tax earnings, partly offset by a lower
effective tax rate for the year ended December 31, 2023.
Net Flows and AV
•
The increase in AV of $17.4 billion in the year ended December 31, 2023 was driven by an increase in investments
performance as a result of equity market appreciation of $11.8 billion in the year ended December 31, 2023, as well as
net inflows of $5.6 billion.
83
•
Net inflows of $5.6 billion were $1.6 billion higher than in the year ended December 31, 2022, mainly driven by
higher sales in the year ended December 31, 2023 as compared to 2022.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Individual Retirement
Segment
Operating earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Net Flows and AV
For a discussion on net flows and AV comparative results for the year ended December 31, 2022 to the year ended
December 31, 2021 refer to the MD&A section in our Recast 2022 Annual Report.
Group Retirement
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by
educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.
The following table summarizes operating earnings (loss) of our Group Retirement segment:
Year Ended December 31,
2023
2022
2021
(in millions)
$
399 $
446 $
579
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
268 $
497
(1)
257
1,021 $
318 $
624
(30)
246
1,158 $
371
752
(20)
268
1,371
215
155
59
113
—
542 $
281
154
59
123
1
618 $
303
149
64
163
—
679
$
Operating earnings (loss)
Key components of operating earnings (loss) are:
REVENUES
Policy charges, fee income and premiums
Net investment income
Net derivative gains (losses)
Investment management, service fees and other income
Segment revenues
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders’ account balances
Commissions and distribution-related payments
Amortization of deferred policy acquisition costs
Compensation, benefits and other operating costs and expenses
Interest expense
Segment benefits and other deductions
84
The following table summarizes AV and AUA for our Group Retirement segment:
AV and AUA
General Account
Separate Accounts and Mutual Funds
Total AV and AUA (2)
____________
(1) AV presented are net of reinsurance.
December 31, 2023
December 31, 2022
(in millions)
$
$
8,963 $
27,507
36,470 $
9,175
22,830
32,005
The following table summarizes a roll-forward of AV and AUA for our Group Retirement segment:
Year Ended December 31,
2023
2022
2021
Balance, beginning of period
Gross Premiums
Surrenders, withdrawals and benefits
Net flows (1) (3)
Investment performance, interest credited and policy charges (1) (3)
Ceded to Global Atlantic (4)
Other (2) (5)
Balance, end of period
(in millions)
$ 32,005 $ 47,809 $ 42,756
3,839
(4,016)
(177)
5,287
—
(57)
$ 36,470 $ 32,005 $ 47,809
3,806
(4,062)
(256)
4,694
—
27
4,448
(3,814)
634
(7,075)
(9,363)
—
____________
(1) Prior period amounts related to the AV and AUA roll-forward were updated to include Mutual Fund AUA. The impact of the revision to
the beginning balance of the year ended December 31, 2021 was $297 million. Net Flows revision impact for the year ended December
31, 2021 was $129 million. Investment performance, interest credited and policy charges revision impact for the year ended December
31, 2021 was $30 million.
(2) For the year ended December 31, 2021, amounts reflect AV transfer of GMxB closed block business from Group Retirement Segment to
the Individual Retirement Segment.
(3) For the year ended December 31, 2023 and 2022, net outflows of $848 million and $179 million and investment performance, interest
credited and policy charges of $1.2 billion and $(422) million, respectively, are excluded as these amounts are related to ceded AV to
Global Atlantic.
(4) Effective October 3, 2022, AV excludes activity related to ceded AV to Global Atlantic Transaction. In addition, roll-forward reflects the
AV ceded pursuant to the Global Atlantic Transaction as of the transaction date.
(5) For the year ended December 31, 2023, amounts reflect a total special payment applied to the accounts of active clients as part of a
previously disclosed settlement agreement between Equitable Financial and the SEC.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Group Retirement Segment
Operating earnings
Operating earnings decreased by $47 million to $399 million during the year ended December 31, 2023 from $446 million
during the year ended December 31, 2022. The following notable items were the primary drivers of the change in operating
earnings:
Unfavorable items included:
•
•
Net investment income decreased by $127 million due to lower alternative investment income, lower income from
TIPS partially offset in derivatives and lower assets from the Global Atlantic Transaction, partially offset by higher
investment yields.
Fee-type revenue decreased by $39 million primarily due to lower assets from the Global Atlantic Transaction,
partially offset by higher equity market performance.
85
These were partially offset by the following favorable items:
•
•
•
•
Interest credited to policyholders’ account balances decreased by $66 million mainly due to the portion of policies
ceded from the Global Atlantic Transaction.
Net derivative losses decreased by $29 million due to lower losses from TIPS hedging (offset in net investment
income).
Compensation, benefits, interest expense and other operating costs decreased by $11 million mainly due to expense
efficiencies and sub-advisory expense ceded as part of the Global Atlantic Transaction, offset in revenue.
Income tax expense decreased by $14 million driven by lower pre-tax earnings and a lower effective tax rate in 2023.
Net Flows and AV
•
•
The increase in AV of $4.5 billion in the year ended December 31, 2023 was driven by equity market appreciation
slightly offset by net outflows of $256 million.
Net outflows of $256 million for the year ended December 31, 2023 decreased $890 million compared to the year
ended December 31, 2022, driven by a large lump sum premium in our institutional market in 2022 and higher
surrender activity in 2023, partially offset by our reinsurance benefit from the portion of policies ceded as part of the
Global Atlantic Transaction.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Group Retirement
Segment
Operating earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Net Flows and AV
For a discussion on net flows and AV comparative results for the year ended December 31, 2022 to the year ended
December 31, 2021 refer to the MD&A section in our Recast 2022 Annual Report.
Investment Management and Research
The Investment Management and Research segment provides diversified investment management, research and related
services to a broad range of clients around the world. Operating earnings (loss), net of tax, presented here represents our
average economic interest in AB of approximately 61%, 64% and 65% during the years ended December 31, 2023, 2022 and
2021.
Operating earnings (loss)
Key components of operating earnings (loss) were:
REVENUES
Net investment income (loss)
Net derivative gains (losses)
Investment management, service fees and other income
Segment revenues
86
Year Ended December 31,
2022
2021
2023
(in millions)
$
411 $
424 $
564
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
18 $
(16)
4,115
4,117 $
(43) $
41
4,107
4,105 $
13
(13)
4,430
4,430
BENEFITS AND OTHER DEDUCTIONS
Commissions and distribution related payments
Compensation, benefits and other operating costs and expenses
Interest expense
Segment benefits and other deductions
Year Ended December 31,
2023
2022
2021
(in millions)
$
610 $
630 $
2,567
54
3,231 $
2,519
18
3,167 $
$
708
2,507
5
3,220
Changes in AUM in the Investment Management and Research segment were as follows:
Balance, beginning of period
Long-term flows
Sales/new accounts
Redemptions/terminations
Cash flow/unreinvested dividends
Net long-term (outflows) inflows (2)
Adjustments (1)
Acquisition (3)
Market appreciation (depreciation)
Net change
Balance, end of period
Year Ended December 31,
2023
2022
2021
(in billions)
$
646.4 $
778.6 $
685.9
101.5
(88.2)
(20.3)
(7.0)
—
—
85.8
78.8
725.2 $
115.6
(95.4)
(23.8)
(3.6)
(0.4)
12.2
(140.4)
(132.2)
646.4 $
150.0
(103.8)
(20.1)
26.1
—
—
66.6
92.7
778.6
$
__________
(1) Approximately $0.4 billion of Institutional AUM was removed from AB total assets under management during the second quarter 2022
due to a change in the fee structure.
(2) Net flows include $4.5 billion and $1.3 billion of AXA redemptions for 2022 and 2021, respectively.
(3) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter 2022.
Average AUM in the Investment Management and Research segment for the periods presented by distribution channel and
investment services were as follows:
87
Distribution Channel:
Institutions
Retail
Private Wealth
Total
Investment Service:
Equity Actively Managed
Equity Passively Managed (1)
Fixed Income Actively Managed – Taxable
Fixed Income Actively Managed – Tax-exempt
Fixed Income Passively Managed (1)
Alternatives/Multi-Asset Solutions (2)
Total
Year Ended December 31,
2023
2022
2021
(in billions)
$
$
$
$
304.6 $
262.0
113.7
680.3 $
308.4 $
267.8
110.3
686.5 $
231.5 $
57.7
198.3
56.0
9.7
127.1
680.3 $
239.7 $
60.4
210.0
54.1
11.5
110.8
686.5 $
325.7
291.0
114.1
730.8
252.2
68.7
253.1
53.8
9.6
93.4
730.8
____________
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity of fixed income services.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Investment Management and
Research Segment
Operating earnings
Operating earnings decreased $13 million to $411 million during the year ended December 31, 2023 from $424 million in
the year ended December 31, 2022. The following notable items were the primary drivers of the change in operating earnings:
Unfavorable items included:
•
•
Compensation, benefits, interest expense and other operating costs increased by $84 million mainly due to higher
interest expense related to higher average outstanding borrowings and higher interest rates, higher incentive
compensation and base compensation expense, primarily offset by lower general and administrative costs related to
lower portfolio servicing fees and professional fees.
Net derivative gains decreased by $57 million mainly due to lower income from economically hedging the seed capital
investments (partially offset by net investment income).
These were offset by the following favorable items:
•
•
•
•
Net investment income increased by $61 million mainly due to higher income from seed capital investments (partially
offset by net derivative losses).
Commissions and distribution-related payments decreased by $20 million mainly due to lower payments to financial
intermediaries for the distribution of AB mutual funds.
Fee-type revenue increased by $8 million primarily due to higher other income from higher net interest earned on
customer margin balances, higher advisory base fees driven by a slight shift in product mix to alternatives offset by
lower average AUM, all which were partially offset by lower Bernstein Research Services driven by lower global
customer trading activity due to prevailing macro-economic environment.
Income tax expense decreased by $36 million primarily due to a lower effective tax rate due to a release of the
valuation allowance and lower pre-tax earnings for 2023 compared to 2022.
88
Long-Term Net Flows and AUM
• Total AUM as of December 31, 2023 was $725.2 billion, up $78.8 billion, or 12.2%, compared to December 31, 2022.
The increase is a result of market appreciation of $85.8 billion, partially offset by net outflows of $7.0 billion. Market
appreciation of $85.8 billion attributed to Retail of $40.3 billion, Institutions of $31.5 billion and Private Wealth of
$14.0 billion. Institutions net outflows of $11.8 billion were partially offset by Private Wealth and Retail net inflows of
$3.7 billion and $1.1 billion, respectively.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Investment Management
and Research Segment
Operating earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Net Flows and AUM
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Protection Solutions
The Protection Solutions segment includes our life insurance and employee benefits businesses. We provide a targeted
range of products aimed at serving the financial needs of our clients throughout their lives, including VUL, IUL and term life
products. In 2015, we entered the employee benefits market and currently offer a suite of dental, vision, life, as well as short-
and long-term disability insurance products to small and medium-size businesses.
The following table summarizes operating earnings (loss) of our Protection Solutions segment:
Operating earnings (loss)
Year Ended December 31,
2023
2022
2021
(in millions)
$
51 $
97 $
262
89
Key components of operating earnings (loss) were:
REVENUES
Policy charges, fee income and premiums
Net investment income
Net derivative gains (losses)
Investment management, service fees and other income
Segment revenues
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits
Remeasurement of liability for future policy benefits
Interest credited to policyholders’ account balances
Commissions and distribution related payments
Amortization of deferred policy acquisition costs
Compensation, benefits and other operating costs and expenses
Interest expense
Segment benefits and other deductions
Year Ended December 31,
2023
2022
2021
(in millions)
2,104 $
952
(16)
140
3,180 $
2,018 $
981
(20)
141
3,120 $
1,951
1,102
(20)
146
3,179
1,975 $
18
520
158
120
323
5
3,119 $
1,896 $
47
511
142
117
289
1
3,003 $
1,881
(33)
516
131
116
255
—
2,866
$
$
$
$
The following table summarizes Protection Solutions Reserves for our Protection Solutions segment:
Protection Solutions Reserves (1)
General Account
Separate Accounts
Total Protection Solutions Reserves
December 31, 2023
December 31, 2022
(in millions)
$
$
18,184 $
16,337
34,521 $
18,208
13,634
31,842
_______________
(1) Does not include Protection Solutions Reserves for our employee benefits business as it is a scaling business and therefore has
immaterial in-force policies.
The following table presents our in-force face amounts for our individual life insurance products:
In-force face amount by product: (1)
Universal Life (2)
Indexed Universal Life
Variable Universal Life (3)
Term
Whole Life
Total in-force face amount
_______________
December 31, 2023
December 31, 2022
(in billions)
$
$
40.9 $
26.9
136.9
206.5
1.1
412.3 $
43.1
27.5
133.4
211.9
1.1
417.0
(1)
Includes individual life insurance and does not include employee benefits as it is a scaling business and therefore has immaterial in-
force policies.
(2) UL includes GUL.
(3) VUL includes VL and COLI.
90
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Protection Solutions Segment
Operating earnings (loss)
Operating earnings decreased $46 million to $51 million during the year ended December 31, 2023 from $97 million in the
year ended December 31, 2022. The following notable items were the primary drivers of the change in the operating loss:
Unfavorable items included:
• Policyholders’ benefits increased by $79 million mainly due to higher net mortality and growth in Employee Benefits
(partially offset in fee-type revenue).
• Compensation, benefits, interest expense and other operating costs increased by $38 million mainly due to higher
pension and other benefit costs.
• Net investment income decreased by $29 million mainly due to lower average assets and lower alternative investment
income, partially offset by higher investment yields.
• Commissions and distribution-related payments increased by $16 million mainly due to growth in Life and Employee
Benefits.
•
Interest credited to policyholders’ account balances increased by $9 million mainly due to higher interest rates.
These were partially offset by the following favorable items:
• Fee-type revenue increased by $85 million mainly driven by higher premiums due to growth in Employee Benefits
(offset in policyholders’ benefits) and Life.
• Remeasurement of liability for future policy benefits decreased by $29 million mainly due to elevated claims in 2022
compared to 2023.
• Net derivative losses decreased by $4 million mainly due to lower losses from TIPS hedging (offset in net investment
income).
•
Income tax expense decreased by $10 million primarily due to lower pre-tax earnings.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Protection Solutions
Segment
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Wealth Management
The Wealth Management segment is an emerging leader in the wealth management space with a differentiated advice value
proposition that offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life
insurance, and annuity products. In 2023, we began reporting this business separately from our other segments and Corporate
and Other.
The following table summarizes operating earnings (loss) of our Wealth Management segment:
Operating earnings (loss)
Year Ended December 31,
2023
2022
2021
(in millions)
$
159 $
101 $
58
91
Key components of operating earnings (loss) were:
REVENUES
Net investment income
Investment management, service fees and other income
Segment revenues
BENEFITS AND OTHER DEDUCTIONS
Commissions and distribution-related payments
Compensation, benefits and other operating costs and expenses
Segment benefits and other deductions
Year Ended December 31,
2023
2022
2021
(in millions)
13 $
1,538
1,551 $
2 $
1,444
1,446 $
—
1,437
1,437
968 $
373
1,341 $
940 $
370
1,310 $
946
408
1,354
$
$
$
$
The following table summarizes revenue by activity type for our Wealth Management segment:
Revenue by Activity Type
Investment management, service fees and other income:
Investment management and advisory fees
Distribution fees
Interest income
Service and other income
Total Investment management, service fees and other income
The following table summarizes a roll-forward of AUA for our Wealth Management segment:
Year Ended December 31,
2023
2022
(in millions)
$
$
542 $
931
50
15
1,538 $
519
894
15
17
1,444
Total Wealth Management Assets
Advisory assets:
Beginning, beginning of period
Advisory Net Flows
Advisory Market appreciation (depreciation) and other
Advisory ending assets
Brokerage and direct assets
Balance, end of period
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
45,544 $
2,978
6,550
55,072 $
50,575 $
3,513
(8,544)
45,544 $
39,146
6,471
4,958
50,575
$
31,975 $
26,862 $
32,219
$
87,047 $
72,406 $
82,794
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Wealth Management Segment
Operating earnings
Operating earnings increased $58 million to $159 million during the year ended December 31, 2023 compared to $101
million in the year ended December 31, 2022. The following were notable changes:
92
Favorable items included:
•
•
Investment management, service fees and other income increased by $94 million mainly due to higher interest income
from sweep accounts combined with increased distribution fees and advisory fees type revenue from higher retirement
sales and average asset balances.
Net investment income increased by $11 million mainly due to higher interest rates.
These were partially offset by the following unfavorable items:
•
•
Commissions and distribution-related payments increased by $28 million mainly due to higher distribution and
advisory fee-type revenue from higher retirement sales and average asset balances
Income tax expense increased by $16 million primarily due to higher pre-tax earnings.
Net Flows and AUA
•
•
The increase in AUA of $14.6 billion in the year ended December 31, 2023 was driven by equity market appreciation
of $9.1 billion and net flows of $5.5 billion.
Advisory net flows were lower in 2023 with mix shift to brokerage .
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Wealth Management
Segment
Operating earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Net Flows and AUA
For a discussion on net flows and AUA comparative results for the year ended December 31, 2022 to the year ended
December 31, 2021 refer to the MD&A section in our Recast 2022 Annual Report.
Legacy
The Legacy segment consists of our capital intensive fixed-rate GMxB business written prior to 2011.
The following table summarizes operating earnings (loss) of our Legacy segment:
Operating earnings (loss)
Year Ended December 31,
2023
2022
2021
(in millions)
$
186 $
235 $
522
93
Key components of operating earnings (loss) were:
REVENUES
Policy charges, fee income and premiums
Net investment income
Investment management, service fees and other income
Segment revenues
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits
Remeasurement of liability for future policy benefits
Interest credited to policyholders’ account balances
Commissions and distribution-related payments
Amortization of deferred policy acquisition costs
Compensation, benefits and other operating costs and expenses
Interest expense
Segment benefits and other deductions
The following table summarizes AV for our Legacy segment:
AV (1)
General Account
Separate Accounts
Total AV
_______________
(1) AV presented are net of reinsurance.
The following table summarizes a roll-forward of AV for our Legacy segment:
Balance, beginning of period
Gross Premiums
Surrenders, withdrawals and benefits
Net flows (1)
Investment performance, interest credited and policy charges
Ceded to Venerable (2)
Balance, end of period
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
$
$
155 $
238
408
801 $
217 $
(2)
45
172
63
83
—
578 $
139 $
252
428
819 $
335
424
470
1,229
167 $
—
49
187
65
65
1
534 $
175
9
53
230
66
72
—
605
December 31, 2023
December 31, 2022
(in millions)
$
$
849 $
21,316
22,165 $
925
20,557
21,482
Year Ended December 31,
2023
2022
2021
$ 21,482 $
267
(2,556)
(2,289)
2,972
—
$ 22,165 $
(in millions)
29,275 $
259
(2,491)
(2,232)
(5,561)
—
21,482 $
44,869
258
(3,750)
(3,492)
4,825
(16,927)
29,275
_____________
(1) For the years ended December 31, 2023, 2022 and 2021, net flows of $(1.1) billion, $(312) million and $(830) million and investment
performance, interest credited and policy charges of $1.6 billion, $689 million and $589 million, respectively, are excluded as these
amounts are related to ceded AV to Venerable.
94
(2) Effective June 1, 2021, AV excludes activity related to ceded AV to Venerable. In addition, roll-forward reflects the AV ceded to
Venerable as of the transaction date. For additional information on the Venerable Transaction see Note 1 of the Notes to Consolidated
Financial Statements.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 for the Legacy Segment
Operating earnings
Operating earnings decreased $49 million to $186 million during the three months ended December 31, 2023 from $235
million in the year ended December 31, 2022. The following notable items were the primary drivers of the change in operating
earnings:
Unfavorable items included:
•
•
•
Policyholders’ benefits increased by $50 million mainly due to higher benefits from GMIB annuitizations, (partially
offset by higher premiums in fee-type revenue).
Compensation, benefits, interest expense and other operating costs increased by $17 million mainly due to a one-time
favorable legal reserve release in 2022.
Net investment income decreased by $14 million mainly due to lower alternative investment income, partially offset
by higher investment yields
These were partially offset by the following favorable items:
•
•
Commissions and distribution-related payments decreased by $15 million mainly due to lower asset-based
commissions from lower average account values.
Income tax expense decreased by $13 million primarily due to lower pre-tax earnings.
Net Flows and AV
•
•
The increase in AV of $683 million in the year ended December 31, 2023 was driven by equity market appreciation,
partially offset by net outflows of $2.3 billion.
Net outflows of $2.3 billion were consistent with the year ended December 31, 2022.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 for the Legacy Segment
Operating earnings
For a discussion that compares results for the year ended December 31, 2022 to the year ended December 31, 2021 refer to
the MD&A section in our Recast 2022 Annual Report.
Net Flows and AV
For a discussion on net flows and AV comparative results for the year ended December 31, 2022 to the year ended
December 31, 2021 refer to the MD&A section in our Recast 2022 Annual Report.
95
Corporate and Other
Corporate and Other includes some of our financing and investment expenses. It also includes: the Closed Block, run-off
variable annuity reinsurance business, run-off group pension business, run-off health business, benefit plans for our employees,
certain strategic investments and certain unallocated items, including capital and related investments, interest expense and
financing fees and corporate expense. AB’s results of operations are reflected in the Investment Management and Research
segment. Accordingly, Corporate and Other does not include any items applicable to AB.
The following table summarizes operating earnings (loss) of Corporate and Other:
Operating earnings (loss)
General Account Investment Portfolio
Year Ended December 31,
2023
2022
2021
(in millions)
$
(362) $
(339) $
(224)
Our investment philosophy is driven by our long-term commitments to clients, robust risk management and strategic asset
allocation. Our General Account investment portfolio investment strategy seeks to achieve sustainable risk-adjusted returns by
focusing on principal preservation and investment return, subject to duration and liquidity requirements by product as well as
diversification of investment risks. Investment activities are undertaken based on established investment guidelines and are
required to comply with applicable laws and insurance regulations.
Risk tolerances are established for credit risk, market risk, liquidity risk and concentration risk across issuers and asset
classes, each of which seek to mitigate the impact of cash flow variability arising from these risks. Significant interest rate
increases and market volatility since 2022 have reduced the fair value of fixed maturities from a net unrealized gain position to
a net unrealized loss. As a part of asset and liability management, we maintain a weighted average duration for our General
Account investment portfolio that is within an acceptable range of the estimated duration of our liabilities given our risk
appetite and hedging programs.
The General Account investment portfolio consists largely of investment grade fixed maturities, short-term investments,
commercial, agricultural and residential mortgage loans, alternative investments and other financial instruments. Fixed
maturities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, bonds issued by states
and municipalities, agency and non-agency mortgage-backed securities and asset-backed securities. In addition, from time to
time we use derivatives to hedge our exposure to equity markets, interest rates, foreign currency and credit spreads.
We incorporate ESG factors into the investment processes for a significant portion of our General Account portfolio. As
investors with a long-term horizon, we believe that companies with sustainable practices are better positioned to deliver value to
stakeholders over an extended period. These companies are more likely to increase sales through sustainable products, reduce
energy costs and attract and retain talent. This belief underpins our approach to sustainable investing, where we seek to enhance
the sustainability and quality of our investment portfolio.
Investments in our surplus portfolio are generally comprised of a mix of fixed maturity investment grade and below
investment grade securities as well as various alternative investments, primarily private equity and real estate equity. Although
alternative investments are subject to period over period earnings fluctuations, they have historically achieved returns in excess
of the fixed maturity portfolio.
The General Account investment portfolio reflects certain differences from the presentation of the U.S. GAAP
Consolidated Financial Statements. This presentation is consistent with how we manage the General Account investment
portfolio. For further investment information, see Note 3 and Note 4 of the Notes to the Consolidated Financial Statements.
Investment Results of the General Account Investment Portfolio
The following table summarizes the General Account investment portfolio results with Non-GAAP Operating Earnings
adjustments by asset category for the periods indicated. This presentation is consistent with how we measure investment
performance for management purposes.
96
Fixed Maturities:
Income (loss)
Ending assets
Mortgages:
Income (loss)
Ending assets
Other Equity Investments: (1)
Income (loss)
Ending assets
Policy Loans:
Income (loss)
Ending assets
Cash and Short-term Investments: (3)
Income (loss)
Ending assets
Funding agreements:
Interest expense and other
Ending assets (liabilities)
Total Invested Assets:
Income (loss)
Ending Assets
Short Duration Fixed Maturities:
Income (loss)
Ending assets
Total:
Investment income (loss)
Less: investment fees (4)
Investment Income, Net
Ending Net Assets
Year Ended December 31,
2023
2022
2021
Yield
Amount (2)
Yield
(Dollars in millions)
Amount (2)
Yield
Amount (2)
4.17 % $ 3,103
73,526
3.57 % $ 2,619
72,255
3.40 % $
4.65 %
806
18,171
3.92 %
587
16,481
4.08 %
3.88 %
5.30 %
(2.51) %
135
3,433
216
4,158
(81)
4,718
(425)
(7,616)
5.21 %
5.35 %
(1.44) %
171
3,433
215
4,033
(24)
1,419
(156)
(8,501)
20.45 %
5.01 %
(0.13) %
3.98 %
3,754
96,390
3.79 %
3,412
89,120
4.28 %
4.14 %
3.62 %
3
16
5
87
4.48 %
2,429
72,545
547
14,033
534
2,901
203
4,024
(2)
1,662
(56)
(6,647)
3,655
88,518
78
142
3.98 %
(0.18) %
3.80 %
3,757
(166)
3,591
$ 96,406
3.79 %
(0.15) %
3.63 %
3,417
(138)
3,279
$ 89,207
4.28 %
(0.14) %
4.15 %
3,733
(118)
3,615
$ 88,660
_____________
(1)
Includes, as of December 31, 2023, December 31, 2022 and December 31, 2021 respectively, $361 million, $400 million and $319
million of other invested assets. Amounts for certain consolidated VIE investments are shown net of associated non-controlling interest.
(2) Amount for fixed maturities and mortgages represents original cost, reduced by repayments, write-downs, adjusted amortization of
premiums, accretion of discount and allowances. Cost for equity securities represents original cost reduced by write-downs; cost for
other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions.
(3) Cash and Short-term net of collateral expense.
(4) Fixed maturities yield excludes out of period income adjustment .
AFS Fixed Maturities
The fixed maturity portfolio consists largely of investment grade corporate debt securities and includes significant amounts
of U.S. government and agency obligations. The below investment grade securities in the General Account investment portfolio
consist of loans to middle market companies, public high yield securities, bank loans, as well as “fallen angels,” originally
purchased as investment grade investments.
AFS Fixed Maturities by Industry
The following table sets forth these fixed maturities by industry category along with their associated gross unrealized gains
and losses:
97
AFS Fixed Maturities by Industry (1)
Amortized
Cost
Allowance
for Credit
Losses
Gross
Unrealized
Gains
(Dollars in millions)
Gross
Unrealized
Losses
Fair Value
Percentage
of Total (%)
$ 13,181 $
11,333
6,838
8,242
3,758
3,253
2,493
190
49,288
5,735
2,470
56
614
719
3,595
11,049
$ 73,526 $
$ 13,537 $
11,797
6,808
8,299
3,740
3,394
2,277
124
49,976
7,054
908
41
609
985
3,823
8,859
$ 72,255 $
2 $
1
1
—
—
—
—
—
4
—
—
—
—
—
—
—
4 $
— $
2
—
22
—
—
—
—
24
—
—
—
—
—
—
—
24 $
49 $
60
44
79
26
30
22
9
319
2
18
3
9
3
2
52
408 $
9 $
14
14
16
11
14
8
3
89
1
1
2
7
2
—
4
106 $
1,209 $ 12,019
10,062
1,330
6,055
826
7,404
917
3,337
447
2,977
306
2,225
290
186
13
44,265
5,338
4,631
1,106
2,355
133
59
—
549
74
611
111
3,082
515
10,991
110
7,387 $ 66,543
1,682 $ 11,864
10,016
1,793
5,759
1,063
7,057
1,236
3,177
574
2,975
433
1,918
367
112
15
42,878
7,163
5,837
1,218
822
87
43
—
527
89
836
151
3,235
588
8,490
373
9,669 $ 62,668
18 %
15 %
9 %
11 %
5 %
4 %
3 %
— %
65 %
7 %
4 %
— %
1 %
1 %
5 %
17 %
100 %
19 %
16 %
9 %
11 %
5 %
5 %
3 %
— %
68 %
10 %
1 %
— %
1 %
1 %
5 %
14 %
100 %
As of December 31, 2023
Corporate Securities:
Finance
Manufacturing
Utilities
Services
Energy
Retail and wholesale
Transportation
Other
Total corporate securities
U.S. government
Residential mortgage-backed (2)
Preferred stock
State & political
Foreign governments
Commercial mortgage-backed
Asset-backed securities (3)
Total
As of December 31, 2022
Corporate Securities:
Finance
Manufacturing
Utilities
Services
Energy
Retail and wholesale
Transportation
Other
Total corporate securities
U.S. government
Residential mortgage-backed (2)
Preferred stock
State & political
Foreign governments
Commercial mortgage-backed
Asset-backed securities (3)
Total
______________
(1)
Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by
industry for all other holdings.
Includes publicly traded agency pass-through securities and collateralized obligations.
Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
(2)
(3)
98
Fixed Maturities Credit Quality
The SVO of the NAIC evaluates the investments of insurers for regulatory reporting purposes and assigns fixed maturities
to one of six categories (“NAIC Designations”). NAIC Designations of “1” or “2” include fixed maturities considered
investment grade, which include securities rated Baa3 or higher by Moody’s or BBB- or higher by Standard & Poor’s. NAIC
Designations of “3” through “6” are referred to as below investment grade, which include securities rated Ba1 or lower by
Moody’s and BB+ or lower by Standard & Poor’s. As a result of time lags between the funding of investments and the
completion of the SVO filing process, the fixed maturity portfolio typically includes securities that have not yet been rated by
the SVO as of each balance sheet date. Pending receipt of SVO ratings, the categorization of these securities by NAIC
designation is based on the expected ratings indicated by internal analysis.
The following table sets forth the General Account’s fixed maturities portfolio by NAIC rating:
AFS Fixed Maturities
NAIC Designation
Rating Agency Equivalent
As of December 31, 2023
Amortized
Cost
Allowance
for Credit
Losses
Gross
Unrealized
Gains
(in millions)
Gross
Unrealized
Losses
Fair Value
1................................ Aaa, Aa, A
2................................ Baa
Investment grade
3................................ Ba
4................................ B
5................................ Caa
6................................ Ca, C
Below investment
grade
Total Fixed Maturities
As of December 31, 2022:
1................................ Aaa, Aa, A
2................................ Baa
Investment grade
3................................ Ba
4................................ B
5................................ Caa
6................................ Ca, C
Below investment
grade
Total Fixed Maturities
Mortgage Loans
$ 47,694 $
23,476
71,170
1,292
927
134
3
2,356
$ 73,526 $
$ 44,612 $
24,843
69,455
1,565
1,161
64
10
2,800
$ 72,255 $
— $
—
—
2
—
2
—
4
4 $
— $
—
—
2
20
2
—
24
24 $
217 $
179
396
5
5
2
—
4,660 $ 43,251
21,020
2,635
64,271
7,295
1,235
60
909
23
126
8
2
1
12
408 $
92
2,272
7,387 $ 66,543
56 $
47
103
1
1
1
—
5,652 $ 39,016
21,086
3,804
60,102
9,456
1,434
130
1,067
75
56
7
9
1
3
106 $
213
2,566
9,669 $ 62,668
The mortgage portfolio primarily consists of commercial, agricultural, and residential mortgage loans. The investment
strategy for the mortgage loan portfolio emphasizes diversification by property type and geographic location with a primary
focus on asset quality. The commercial mortgage loan portfolio is backed by high quality properties located in primary markets
typically owned by experienced institutional investors with a demonstrated ability to manage their assets through business
cycles. Our commercial loan portfolio is monitored on an ongoing basis, assigning credit quality ratings for each loan, with the
particular emphasis on loans that are scheduled to mature in the next 12 to 24 months. Scheduled maturities for full year 2024,
are $1.3 billion, 8% of the commercial mortgage portfolio. The commercial mortgage portfolio consists of 87% fixed rate loans
and 13% floating rate loans. For floating rate loans, the borrower is typically required to purchase an interest rate cap to the
scheduled maturity of the loan to protect against rising rates.
99
Commercial mortgage loans are evaluated annually to determine a current LTV ratio. Property financial statements, current
rent roll, lease maturities, tenant creditworthiness, property physical inspections, and forecasted leasing market strength are
used to develop projected cash flows. A discounted cash flow methodology which incorporates market data is used to determine
property values. The average LTV ratio at origination provided by a certified appraisal firm was 53%. The average LTV ratio
was 64% and 62% at December 31, 2023 and December 31, 2022, respectively, which reflects the most recent opinion of value
on the underlying collateral.
Over the past year, we began working with CarVal to establish investment programs in residential whole loans and other
private and public securities. These programs allow us to leverage CarVal’s expertise in asset classes where we are looking to
increase exposure. The residential mortgage portfolio primarily consists of purchased closed end, amortizing residential
mortgage loans. The investment strategy for the mortgage loan portfolio emphasizes high credit quality borrowers, conservative
LTV ratios, superior ability to repay and geographic diversification.
Residential mortgage loans are pooled by loan type (i.e., Jumbo, Agency Eligible, Non-Qualified, etc.) and pooled by
similar risk profiles (including consumer credit score and LTV ratios). The portfolio is monitored monthly primarily based on
payment activity, occurrence of regional natural disasters and borrower interactions with the mortgage servicer.
The tables below show the breakdown of the amortized cost of the General Account’s investments in mortgage loans by
geographic region and property type:
Mortgage Loans by Region and Property Type
December 31, 2023
December 31, 2022
Amortized
Cost
% of Total
Amortized
Cost
% of Total
(Dollars in millions)
By Region:
U.S. Regions:
Pacific
Middle Atlantic
South Atlantic
East North Central
Mountain
West North Central
West South Central
New England
East South Central
Total U.S.
Other Regions:
Europe
Total Other
Total Mortgage Loans
By Property Type:
Office
Multifamily
Agricultural loans
Retail
Industrial
Hospitality
Residential
Other
Total Mortgage Loans
27 % $
20
15
6
8
5
7
5
3
96
4
4
100 % $
26 % $
34
14
2
13
3
2
6
100 % $
4,903
3,529
2,059
1,087
1,368
826
1,111
859
475
16,217
393
393
16,610
4,749
5,657
2,590
327
2,125
427
—
735
16,610
30 %
21
12
7
8
5
7
5
3
98
2
2
100 %
29 %
33
16
2
13
3
—
4
100 %
$
$
$
$
5,004
3,678
2,809
1,102
1,557
828
1,336
865
527
17,706
744
744
18,450
4,756
6,500
2,545
305
2,366
595
298
1,085
18,450
100
Other Equity Assets
The following table includes information related to our alternative investments in certain other equity investments and
consolidated VIEs, including private equity funds, real estate funds and other alternative investments. These investments are
typically structured as limited partnerships or LLCs and are reported to us on a lag of one month and three months for hedge
funds and private equity funds, respectively.
At December 31, 2023 and December 31, 2022, the fair value of alternative investments was $2.7 billion and $3.1 billion
respectively. Alternative investments were 2.5% and 3.1% of cash and invested assets at December 31, 2023 and December 31,
2022, respectively.
Alternative Investments (1)
December 31, 2023
December 31, 2022
Fair Value
%
Fair Value
%
$
1,455
53 % $
1,638
(in millions)
161
208
603
57
264
6 %
8 %
22 %
2 %
9 %
148
207
523
58
510
53 %
5 %
7 %
16 %
2 %
17 %
$
2,748
100 % $
3,084
100 %
Private Equity
Private Debt
Infrastructure
Real Estate
Hedge Funds
Other (2)
Total (3)
_____________
(1) Reported in Other Equity Investments in the consolidated balance sheets.
(2)
Includes CLO equity, co-investments and investments in other strategies. CLO equity investments are consolidated and assets are
reported in Fixed Maturities, at fair value using the fair value option in the consolidated balance sheets.
Includes $0.5 billion and $0.5 billion of non-General Account assets as of December 31, 2023 and December 31, 2022, respectively.
(3)
Liquidity and Capital Resources
Liquidity refers to our ability to generate adequate amounts of cash from our operating, investment and financing activities
to meet our cash requirements with a prudent margin of safety. Capital refers to our long-term financial resources available to
support business operations and future growth. Our ability to generate and maintain sufficient liquidity and capital is dependent
on the profitability of our businesses, timing of cash flows related to our investments and products, our ability to access the
capital markets, general economic conditions and the alternative sources of liquidity and capital described herein. When
considering our liquidity and cash flows, we distinguish between the needs of Holdings and the needs of our insurance and non-
insurance subsidiaries. We also distinguish and separately manage the liquidity and capital resources of our retirement and
protection businesses (our Individual Retirement, Group Retirement, Protection Solutions and Legacy segments) and our
Investment Management and Research and Wealth Management segments.
Sources and Uses of Liquidity
The Company has sufficient cash flows from operations to satisfy liquidity requirements in 2024.
Cash Flows of Holdings
As a holding company with no business operations of its own, Holdings primarily derives cash flows from dividends from
its subsidiaries and distributions related to its economic interest in AB, all of which is currently held outside our insurance
company subsidiaries. These principal sources of liquidity are augmented by cash and short-term investments held by Holdings
and access to bank lines of credit and the capital markets. The main uses of liquidity for Holdings are interest payments and
debt repayment, payment of dividends and other distributions to stockholders (which may include stock repurchases) loans and
capital contributions, if needed, to our insurance subsidiaries. Our principal sources of liquidity and our capital position are
described in the following paragraphs.
101
Sources and Uses of Holding Company Highly Liquid Assets
The following table sets forth Holdings’ principal sources and uses of highly liquid assets:
Highly Liquid Assets, beginning of period
Dividends from subsidiaries
Issuance of loans to affiliates
Capital contribution from parent company
Capital contributions to subsidiaries
M&A Activity
Total Business Capital Activity
Purchase of treasury shares
Shareholder dividends paid
Total Share Repurchases, Dividends and Acquisition Activity
Issuance of preferred stock
Preferred stock dividend
Total Preferred Stock Activity
Issuance of long-term debt
Repayment of long-term debt
Total External Debt Activity
Proceeds from loans from affiliates
Net decrease (increase) in existing facilities to affiliates (1)
Total Affiliated Debt Activity
Interest paid on external debt and P-Caps
Others, net
Total Other Activity
Net increase (decrease) in highly liquid assets
Highly Liquid Assets, end of period
$
Year Ended December 31,
2023
2022
(in millions)
1,992 $
2,442
—
—
(1,142)
—
1,300
(919)
(301)
(1,220)
—
(80)
(80)
500
(520)
(20)
—
90
90
(212)
148
(64)
1,742
1,801
—
—
(225)
—
1,576
(849)
(294)
(1,143)
—
(80)
(80)
—
—
—
—
(235)
(235)
(209)
341
132
6
1,998 $
250
1,992
$
_______________
(1) Represents net activity of draws and repayments of existing credit facilities between Holdings and affiliates.
Capital Contribution to Our Subsidiaries
During the year ended December 31, 2023, Holdings made cash capital contributions of $1.1 billion to Equitable America
to support the Reinsurance Treaty. This transaction moved approximately 50% of the account value from Equitable Financial to
Equitable America. This capital contribution enabled the Company to move capital to match the liabilities moved and maintain
an RBC ratio above 400%. During the year ended December 31, 2023, Holdings made cash capital contributions of $92 million
to EQ AZ Life Re.
Loans from Our Subsidiaries
There were no new loans from our subsidiaries during the year ended December 31, 2023.
102
Cash Distributions from Our Non-Insurance Subsidiaries
During the year ended December 31, 2023, Holdings received cash distributions of $386 million from AB and $198 million
from the investment management contracts with EFIM and EIM. We also received cash distributions of $110 million from
Equitable Advisors.
Distributions from Insurance Subsidiaries
Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Holdings
and other affiliates under applicable insurance law and regulation. Also, more generally, the ability of our insurance subsidiaries
to pay dividends can be affected by market conditions and other factors beyond our control.
Equitable's primary insurance regulators are the NYDFS and the state of Arizona. Under New York’s insurance laws,
which are applicable to Equitable Financial, a domestic stock life insurer may not pay an Ordinary Dividend exceeding an
amount calculated based on a statutory formula without prior approval of the NYDFS. Extraordinary Dividends require the
insurer to file a notice of its intent to declare the dividends with the NYDFS and obtain prior approval or non-disapproval from
the NYDFS. Similarly, under Arizona Insurance Law, which is applicable to Equitable America, a domestic life insurer may not
pay a dividend to its shareholders that exceeds an amount calculated based on a statutory formula without prior approval of the
Arizona Superintendent.
In 2023, Holdings received a cash dividend distribution from Equitable Financial of $1.7 billion. Of this amount, $1.1
billion was contributed to Equitable America as part of an internal Reinsurance Treaty that moved 50% of the in-force account
value from Equitable Financial to Equitable America. This capital contribution enabled the Company to support the transferred
liabilities and maintain an RBC ratio above 400%. The remaining $600 million was paid as a cash dividend from Equitable
Financial to Holdings in July 2023.
In 2024, Equitable America has Ordinary Dividend capacity of approximately $440 million. Based on the NYDFS formula,
Equitable Financial has no Ordinary Dividend capacity in 2024.
Distributions from AllianceBernstein
ABLP is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Partnership
Agreement of ABLP, to the holders of AB Units and to the General Partner. Available Cash Flow is defined as the cash flow
received by ABLP from operations minus such amounts as the General Partner determines, in its sole discretion, should be
retained by ABLP for use in its business, or plus such amounts as the General Partner determines, in its sole discretion, should
be released from previously retained cash flow. Distributions by ABLP are made 1% to the General Partner and 99% among the
limited partners.
Typically, Available Cash Flow has been the adjusted diluted net income per unit for the quarter multiplied by the number
of general and limited partnership interests at the end of the quarter. In future periods, management of AB anticipates that
Available Cash Flow will be based on adjusted diluted net income per unit, unless management of AB determines, with the
concurrence of the Board of Directors of AB, that one or more adjustments that are made for adjusted net income should not be
made with respect to the Available Cash Flow calculation.
AB Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of
Limited Partnership of AB Holding, to holders of AB Holding Units pro rata in accordance with their percentage interest in AB
Holding. Available Cash Flow is defined as the cash distributions AB Holding receives from ABLP minus such amounts as the
General Partner determines, in its sole discretion, should be retained by AB Holding for use in its business (such as the payment
of taxes) or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously
retained cash flow. AB Holding is dependent on the quarterly cash distributions it receives from ABLP, which is subject to the
performance of capital markets and other factors beyond our control. Distributions from AB Holding are made pro rata based
on the holder’s percentage ownership interest in AB Holding.
As of December 31, 2023, Holdings and its non-insurance company subsidiaries hold approximately 170.1 million AB
Units, 4.1 million AB Holding Units and the 1% General Partnership interest in ABLP.
As of December 31, 2023, the ownership structure of ABLP, including AB Units outstanding as well as the general
partner’s 1% interest, was as follows:
103
Owner
EQH and its subsidiaries
AB Holding
Unaffiliated holders
Total
Percentage
Ownership
59.8 %
39.5 %
0.7 %
100.0 %
Including both the general partnership and limited partnership interests in AB Holding and ABLP, Holdings and its
subsidiaries had an approximate 61% economic interest in AB as of December 31, 2023.
Holdings Credit Facilities
On June 24, 2021, Holdings entered into the Amended and Restated Revolving Credit Agreement with respect to a five-
year senior unsecured revolving credit facility (the “Credit Facility”), which lowered the facility amount to $1.5 billion and
extended the maturity date to June 24, 2026, among other changes. The Amended and Restated Revolving Credit Agreement
amends the Revolving Credit Agreement entered into by Holdings on February 16, 2018, as amended on March 22, 2021.
On December 15, 2023, the Company added a $75 million commitment from TD Bank to the Credit Facility, raising the
facility amount to $1.6 billion. Additionally, the Company entered in a letter of credit facility with MUFG Bank on January 23,
2024, in a face amount of $200 million to replace a $150 million facility with HSBC expiring on February 16, 2024.
The Credit Facility may provide significant support to our liquidity position when alternative sources of credit are limited.
In addition to the Credit Facility, we have letter of credit facilities with an aggregate principal amount of approximately
$1.9 billion (the “LOC Facilities”), primarily to be used to support our life insurance business reinsured to EQ AZ Life Re in
April 2018. In June 2021, Holdings entered into amendments with each of the issuers of its bilateral letter of credit facilities to
effect changes similar to those effected in the Amended and Restated Revolving Credit Agreement. The respective facility
limits of the bilateral letter of credit facilities remained unchanged. On May 12, 2023, the Company entered into an amendment
to the Credit Facility and LOC Facilities to replace remaining LIBOR-based benchmark rates with SOFR-based benchmark
rates and to make certain other conforming changes.
The Credit Facility and LOC Facilities contain certain administrative, reporting, legal and financial covenants, including
requirements to maintain a specified minimum consolidated net worth and to maintain a ratio of indebtedness to total
capitalization not in excess of a specified percentage, and limitations on the dollar amount of indebtedness that may be incurred
by our subsidiaries and the dollar amount of secured indebtedness that may be incurred by us, which could restrict our
operations and use of funds. The right to borrow funds under the Credit Facility and LOC Facilities is subject to the fulfillment
of certain conditions, including compliance with all covenants, and the ability to borrow thereunder is also subject to the
continued ability of the lenders that are or will be parties to the facilities to provide funds. As of December 31, 2023, we were
in compliance with these covenants.
Contingent Funding Arrangements
For information regarding activity pertaining to our contingent funding arrangements and other off-balance sheet
commitments, see “Commitments and Contingent Liabilities” in Note 19 of the Notes to the Consolidated Financial Statements
in this Form 10-K.
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
For information pertaining to our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock see Note
22 of the Notes to the Consolidated Financial Statements.
Capital Position of Holdings
We manage our capital position to maintain financial strength and credit ratings that facilitate the distribution of our
products and provide our desired level of access to the bank and capital markets. Our capital position is supported by the ability
of our subsidiaries to generate cash flows and distribute cash to us and our ability to effectively manage the risk of our
businesses and to borrow funds and raise capital to meet our operating and growth needs.
Our Board and senior management are directly involved in the development of our capital management policies.
Accordingly, capital actions, including proposed changes to the annual capital plan, capital targets and capital policies, are
approved by the Board.
104
Dividends Declared and Paid
The declaration and payment of future dividends is subject to the discretion of our Board of Directors and depends on our
financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of
dividends by Holdings’ insurance subsidiaries and other factors deemed relevant by the Board.
The payment of dividends will be substantially restricted in the event that we do not declare and pay (or set aside)
dividends on the Series A , Series B and Series C Preferred Stock for the last proceeding dividend period. For additional
information on our preferred stock, see “—Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock”.
For information regarding activity pertaining to common and preferred dividends declared and paid, see Note 22 of the
Notes to the Consolidated Financial Statements.
Share Repurchase Programs
For information regarding activity pertaining to share repurchase programs, see Note 22 of the Notes to the Consolidated
Financial Statements.
Sources and Uses of Liquidity of Our Insurance Subsidiaries
The principal sources of liquidity for our insurance subsidiaries are premiums, investment and fee income, deposits
associated with our insurance and annuity operations, cash and invested assets, as well as internal borrowings. The principal
uses of that liquidity include benefits, claims and dividends paid to policyholders and payments to policyholders in connection
with surrenders and withdrawals. Other uses of liquidity include commissions, general and administrative expenses, purchases
of investments, the payment of dividends to Holdings and hedging activity. Certain of our insurance subsidiaries’ principal
sources and uses of liquidity are described in the paragraphs that follow.
We manage the liquidity of our insurance subsidiaries with the objective of ensuring that they can meet payment
obligations linked to our Individual Retirement, Group Retirement and Protection Solutions businesses and to their outstanding
debt and derivative positions, including in our hedging programs, without support from Holdings. We employ an asset/liability
management approach specific to the requirements of each of our insurance businesses. We measure liquidity against internally-
developed benchmarks that consider the characteristics of our asset portfolio and the liabilities that it supports in both the short-
term (the next 12 months) and long-term (beyond the next 12 months). We consider attributes of the various categories of our
liquid assets (for example, type of asset and credit quality) in calculating internal liquidity indicators for our insurance and
reinsurance operations. Our liquidity benchmarks are established for various stress scenarios and durations, including company-
specific and market-wide events. The scenarios we use to evaluate the liquidity of our subsidiaries are defined to allow
operating entities to operate without support from Holdings.
Liquid Assets
The investment portfolios of our insurance subsidiaries are a significant component of our overall liquidity. Liquid assets
include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities, fixed maturities that are not
designated as HTM and public equity securities. We believe that our business operations and the liquidity profile of our assets
provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.
See “—General Account Investment Portfolio” and Note 3 and Note 4 of the Notes to the Consolidated Financial
Statements for a description of our retirement and protection businesses’ portfolio of liquid assets.
Hedging Activities
Because the future claims exposure on our insurance products, and in particular our variable annuity products with GMxB
features, is sensitive to movements in the equity markets and interest rates, we have in place various hedging and reinsurance
programs that are designed to mitigate the economic risks of movements in the equity markets and interest rates. We use
derivatives as part of our overall asset/liability risk management program primarily to reduce exposures to equity market and
interest rate risks. In addition, we use credit derivatives to replicate exposure to individual securities or pools of securities as a
means of achieving credit exposure similar to bonds of the underlying issuer(s) more efficiently. The derivative contracts are an
integral part of our risk management program, especially for the management of our variable annuities program, and are
collectively managed to reduce the economic impact of unfavorable movements in capital markets. These derivative
transactions require liquidity to meet payment obligations such as payments for periodic settlements, purchases, maturities and
terminations as well as liquid assets pledged as collateral related to any decline in the net estimated fair value. Collateral calls
105
represent one of our biggest drivers for liquidity needs for our insurance subsidiaries. Our derivatives contracts reside primarily
within Equitable Financial, which has a significantly large investment portfolio.
FHLB Membership
Equitable Financial and Equitable America are members of the FHLB, which provides access to collateralized borrowings
and other FHLB products.
See Note 19 of the Notes to the Consolidated Financial Statements for further description of our FHLB program.
FABN
Under the FABN program, Equitable Financial may issue funding agreements in U.S. dollar or other foreign currencies.
See Note 19 of the Notes to the Consolidated Financial Statements for further description of our FABN program.
FABCP
Under the FABCP program, Equitable Financial and Equitable America may issue funding agreements in U.S. dollars to
the SPLLC.
See Note 19 of the Notes to the Consolidated Financial Statements for further description of our FABCP program.
Sources and Uses of Liquidity of our Investment Management and Research Segment
The principal sources of liquidity for our Investment Management and Research business include investment management
fees and borrowings under its credit facilities and commercial paper program. The principal uses of liquidity include general
and administrative expenses, business financing and distributions to holders of AB Units and AB Holding Units plus interest
and debt service. The primary liquidity risk for our fee-based Investment Management and Research business is its profitability,
which is impacted by market conditions and our investment management performance.
EQH Facility
AB has a $900 million committed, unsecured senior credit facility (the “EQH Facility”). The EQH Facility matures on
November 4, 2024 and is available for AB’s general business purposes. Borrowings under the EQH Facility generally bear
interest at a rate per annum based on prevailing overnight commercial paper rates.
The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s
committed bank facilities. As of December 31, 2023, AB was in compliance with these covenants. The EQH Facility also
includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions
under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s
commitment may be terminated.
Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by AB from time to time until the maturity of
the facility. AB or Holdings may reduce or terminate the commitment at any time without penalty upon proper notice. Holdings
also may terminate the facility immediately upon a change of control of AB’s general partner.
As of December 31, 2023 and 2022, AB had $900 million outstanding under the EQH Facility, with interest rates of
approximately 5.3% and 4.3%, respectively. Average daily borrowing of the EQH Facility during 2023 and 2022 were
$743 million and $655 million, respectively, with a weighted average interest rates of approximately 4.9% and 1.7%,
respectively.
EQH Uncommitted Facility
In addition to the EQH Facility, AB entered into a $300 million uncommitted, unsecured senior credit facility (the “EQH
Uncommitted Facility”) with EQH. The EQH Uncommitted Facility matures on September 1, 2024 and is available for AB’s
general business purposes. Borrowings under the EQH Uncommitted Facility bear interest generally at a rate per annum based
on prevailing overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and financial
covenants, which are substantially similar to those in the EQH Facility. As of December 31, 2023, AB was in compliance with
these covenants.
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As of December 31, 2023, AB had no amounts outstanding under the EQH Uncommitted Facility. As of December 31,
2022, AB had $90 million outstanding under the EQH Uncommitted Facility with an interest rates of approximately 4.3%.
Average daily borrowing of the EQH Uncommitted Facility during the year ended December 31, 2023 and 2022 were $4
million and $1 million, respectively, with weighted average interest rate of approximately 4.6% and 4.3%.
Statutory Capital of Our Insurance Subsidiaries
Our capital management framework for our insurance subsidiaries is primarily based on statutory RBC standards and the
CTE asset standard for our variable annuity business.
RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to evaluate
the capital condition of regulated insurance companies. RBC is based on a formula calculated by applying factors to various
asset, premium, claim, expense and statutory reserve items. The formula takes into account the risk characteristics of the
insurer, including asset risk, insurance risk, interest rate risk, market risk and business risk and is calculated on a quarterly basis
and made public on an annual basis. The formula is used as an early warning regulatory tool to identify possible inadequately
capitalized insurers for purposes of initiating regulatory action, and not as a means to rank insurers generally. These rules apply
to our insurance company subsidiaries and not to Holdings. State insurance laws provide insurance regulators the authority to
require various actions by, or take various actions against, insurers whose TAC does not meet or exceed certain RBC levels. At
the date of the most recent annual statutory financial statements filed with insurance regulators, the TAC of each of these
insurance company subsidiaries subject to these requirements was in excess of each of those RBC levels.
See Note 20 of the Notes to the Consolidated Financial Statements for additional information relating to Prescribed and
Permitted Statutory Accounting practices and its impact on our statutory surplus.
Captive Reinsurance Company
We use a captive reinsurance company to more effectively manage our reserves and capital on an economic basis and to
enable the aggregation and transfer of risks. Our captive reinsurance company assumes business from affiliates only and is
closed to new business. Our captive reinsurance company is a wholly-owned subsidiary located in the United States. In addition
to state insurance regulation, our captive reinsurance company is subject to internal policies governing its activities. We
continue to analyze the use of our existing captive reinsurance structure, as well as additional third-party reinsurance
arrangements.
Borrowings
Our financial strategy going forward will remain subject to market conditions and other factors. For example, we may
from time to time enter into additional bank or other financing arrangements, including public or private debt, structured
facilities and contingent capital arrangements, under which we could incur additional indebtedness.
For information regarding activity pertaining to our total consolidated borrowings, see Note 14 of the Notes to the
Consolidated Financial Statements.
Ratings
Financial strength ratings (which are sometimes referred to as “claims-paying” ratings) and credit ratings are important
factors affecting public confidence in an insurer and its competitive position in marketing products. Our credit ratings are also
important for our ability to raise capital through the issuance of debt and for the cost of such financing.
Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an insurance company
to meet its obligations under an insurance policy. Credit ratings represent the opinions of rating agencies regarding an entity’s
ability to repay its indebtedness. The following table summarizes the ratings for Holdings and certain of its subsidiaries. AM
Best, S&P and Moody’s have a stable outlook.
107
Last review date
Financial Strength Ratings:
Equitable Financial Life Insurance Company
Equitable Financial Life Insurance Company of America
Credit Ratings:
Equitable Holdings, Inc.
Last review date
AllianceBernstein L.P.
AM Best
Feb '23
S&P
Feb '24
A
A
bbb+
A+
A+
A-
Sep '23
A
Moody’s
Dec '23
A1
A1
Baa1
Aug '23
A2
Material Cash Requirements
The table below summarizes the material short and long-term cash requirements related to contractual and other obligations
as of December 31, 2023. Short-term cash requirements are considered to be requirements within the next 12 months and long-
term cash requirements are considered to be beyond the next 12 months. We do not believe that our cash flow requirements can
be adequately assessed based solely upon an analysis of these obligations, as the table below does not contemplate all aspects of
our cash inflows, such as the level of cash flow generated by certain of our investments, nor all aspects of our cash outflows.
Material Cash Requirements:
Insurance liabilities (1)
FHLB Funding Agreements
Interest on FHLB Funding Agreements
FABN Funding Agreements
Interest on FABN Funding Agreements
Operating leases, net of sublease commitments
Long-Term and Short-term Debt
Interest on long-term debt and short-term debt
Interest on P-Caps
Employee benefits
Funding Commitments
Total Material Cash Requirements
Estimated Payments Due by Year
Total
2024
2025-2026
2027-2028
2029 and
thereafter
(in millions)
$ 106,815 $
7,615
291
6,284
480
1,011
3,850
2,507
347
3,137
2,133
$ 134,470 $
2,730 $
6,168
119
1,000
136
100
—
193
23
209
844
11,522 $
6,453 $
659
74
2,500
220
197
—
385
48
435
622
11,593 $
7,008 $
140
45
2,484
113
164
1,850
341
47
363
667
13,222 $
90,624
648
53
300
11
550
2,000
1,588
229
2,130
—
98,133
______________
(1) Policyholders’ liabilities represent estimated cash flows out of the General Account related to the payment of death and disability claims,
policy surrenders and withdrawals, annuity payments, minimum guarantees on Separate Account funded contracts, matured
endowments, benefits under accident and health contracts, policyholder dividends and future renewal premium-based and fund-based
commissions offset by contractual future premiums and deposits on in-force contracts. These estimated cash flows are based on
mortality, morbidity and lapse assumptions comparable with the Company’s experience and assume market growth and interest crediting
consistent with actuarial assumptions. These amounts are undiscounted and, therefore, exceed the policyholders’ account balances and
future policy benefits and other policyholder liabilities included in the consolidated balance sheet included elsewhere in this Annual
Report on Form 10-K. They do not reflect projected recoveries from reinsurance agreements. Due to the use of assumptions, actual cash
flows will differ from these estimates. Separate Accounts liabilities have been excluded as they are legally insulated from General
Account obligations and will be funded by cash flows from Separate Accounts assets.
Unrecognized tax benefits of $322 million, including $0 million related to AB were not included in the above table because
it is not possible to make reasonably reliable estimates of the occurrence or timing of cash settlements with the respective taxing
authorities.
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In addition, the below items are included as part of AB’s aggregate contractual obligations:
•
As of December 31, 2023, AB had a $355 million accrual for compensation and benefits, of which $10 million is
expected to be paid in 2024, $16 million in 2025-2026, $16 million in 2027-2028 and $38 million in 2029 and
thereafter. Further, AB expects to make contributions to its qualified profit-sharing plan of $19 million in each of the
next four years.
Summary of Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to adopt accounting policies
and make estimates and assumptions that affect amounts reported in our consolidated financial statements included elsewhere
herein. For a discussion of our significant accounting policies, see Note 2 of the Notes to the Consolidated Financial
Statements. The most critical estimates include those used in determining:
• market risk benefits and purchased market risk benefits;
•
•
•
•
accounting for reinsurance;
estimated fair values of investments in the absence of quoted market values and investment impairments;
estimated fair values of freestanding derivatives;
goodwill and related impairment;
• measurement of income taxes and the valuation of deferred tax assets; and
•
liabilities for litigation and regulatory matters.
In applying our accounting policies, we make subjective and complex judgments that frequently require estimates about
matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and
financial services industries while others are specific to our business and operations. Actual results could differ from these
estimates.
Market Risk Benefits
Market risk benefits include contract features that provide minimum guarantees to policyholders and include GMIB,
GMDB, GMWB, GMAB, and ROP DB benefits. MRBs are measured at estimated fair value with changes reported in the
change in market risk benefits and purchased market risk benefits on the Consolidated Statement of Income (Loss), except for
the portion of the fair value change related to the Company’s own credit risk, which is recognized in OCI.
MRBs are measured at fair value on a seriatim basis using an Ascribed Fee approach based upon policyholder behavior
projections and risk neutral economic scenarios adjusted based on the facts and circumstances of the Company’s product
features. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and
variations in actuarial assumptions, including policyholder behavior, mortality and risk margins related to non-capital market
inputs, as well as changes in our nonperformance risk adjustment may result in significant fluctuations in the estimated fair
value of the MRBs that could materially affect net income.
Risk margins are established to capture the non-capital market risks of the instrument which represent the additional
compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial
assumptions. The establishment of risk margins requires the use of significant management judgment, including assumptions of
the amount needed to cover the guarantees.
We ceded the risk associated with certain of the variable annuity products with GMxB features described in the preceding
paragraphs. The value of the MRBs on the ceded risk is determined using a methodology consistent with that described
previously for the guarantees directly written by us with the exception of the input for nonperformance risk that reflects the
credit of the reinsurer.
Sensitivity of MRBs to Changes in Interest Rates
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The following table demonstrates the sensitivity of the MRBs to changes in long-term interest rates by quantifying the
adjustments that would be required, assuming an increase and decrease in long-term interest rates of 50bps. This information
considers only the direct effect of changes in the interest rates on MRB balances, net of reinsurance.
Interest Rate Sensitivity
December 31, 2023
Increase in interest rates by 50bps
Decrease in interest rates by 50bps
Sensitivity of MRBs to Changes in Equity Returns
The following table demonstrates the sensitivity of the MRBs to changes in equity returns.
Equity Returns Sensitivity
December 31, 2023
Increase in equity returns by 10%
Decrease in equity returns by 10%
Sensitivity of MRBs to Changes in GMIB Lapses
Increase/(Decrease)
In MRB
(in millions)
(726)
831
Increase/(Decrease)
In MRB
(in millions)
(826)
933
$
$
$
$
Lapse rates are adjusted at the contract level based on a comparison of the value of the embedded GMIB rider and the
current policyholder account value, which include other factors such as considering surrender charges. Generally, lapse rates are
assumed to be lower in periods when a surrender charge applies. A dynamic lapse function reduces the base lapse rate when the
guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse.
GMIB Lapse floor Sensitivity
December 31, 2023
GMIB Lapse floor of 1%
Nonperformance Risk Adjustment
Increase/(Decrease)
In MRB
(in millions)
$
(153)
The valuation of our MRBs includes an adjustment for the risk that we fail to satisfy our obligations, which we refer to as
our nonperformance risk. The nonperformance risk adjustment, which is captured as a spread over the risk-free rate in
determining the discount rate to discount the cash flows of the liability, is determined by taking into consideration publicly
available information relating to spreads on corporate bonds in the secondary market comparable to Holdings’ financial strength
rating.
The table below illustrates the impact that a range of reasonably likely variances in credit spreads would have on our
consolidated balance sheet, excluding the effect of income tax, related to the GMxB Core and GMxB Legacy MRBs measured
at estimated fair value. Even when credit spreads do not change, the impact of the nonperformance risk adjustment on fair value
will change when the cash flows within the fair value measurement change. The table only reflects the impact of changes in
credit spreads on our consolidated financial statements included elsewhere herein and not these other potential changes. In
determining the ranges, we have considered current market conditions, as well as the market level of spreads that can
reasonably be anticipated over the near term. The ranges do not reflect extreme market conditions such as those experienced
during the 2008–2009 financial crisis as we do not consider those to be reasonably likely events in the near future.
NPR Sensitivity
December 31, 2023
110
Increase in NPR by 50bps
Decrease in NPR by 50bps
Reinsurance
Increase/(Decrease)
In MRB
(in millions)
$
$
(1,206)
1,332
Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future
performance of the underlying business and the potential impact of counterparty credit risk with respect to reinsurance
receivables. We periodically review actual and anticipated experience compared to the aforementioned assumptions used to
establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial strength of counterparties to
our reinsurance agreements using criteria similar to those evaluated in our security impairment process. See “—Estimated Fair
Value of Investments.” Additionally, for each of our reinsurance agreements, we determine whether the agreement provides
indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. We
review all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or
features that delay the timely reimbursement of claims. If we determine that a reinsurance agreement does not expose the
reinsurer to a reasonable possibility of a significant loss from insurance risk, we record the agreement using the deposit method
of accounting.
Estimated Fair Value of Investments
The Company’s investment portfolio principally consists of public and private fixed maturities, mortgage loans, equity
securities and derivative financial instruments, including exchange traded equity, currency and interest rate futures contracts,
total return and/or other equity swaps, interest rate swap and floor contracts, swaptions, variance swaps, as well as equity
options used to manage various risks relating to its business operations.
Fair Value Measurements
Investments reported at fair value in the consolidated balance sheets of the Company include fixed maturity securities
classified as AFS, equity and trading securities and certain other invested assets, such as freestanding derivatives. GMxB riders
and the reinsurance on these riders are held as Market Risk Benefits.
When available, the estimated fair value of securities is based on quoted prices in active markets that are readily and
regularly obtainable; these generally are the most liquid holdings and their valuation does not involve management judgment.
When quoted prices in active markets are not available, we estimate fair value based on market standard valuation
methodologies. These alternative approaches include matrix or model pricing and use of independent pricing services, each
supported by reference to principal market trades or other observable market assumptions for similar securities. More
specifically, the matrix pricing approach to fair value is a discounted cash flow methodology that incorporates market interest
rates commensurate with the credit quality and duration of the investment. For securities with reasonable price transparency, the
significant inputs to these valuation methodologies either are observable in the market or can be derived principally from or
corroborated by observable market data. When the volume or level of activity results in little or no price transparency,
significant inputs no longer can be supported by reference to market observable data but instead must be based on
management’s estimation and judgment. Substantially the same approach is used by us to measure the fair values of
freestanding and embedded derivatives with exception for consideration of the effects of master netting agreements and
collateral arrangements as well as incremental value or risk ascribed to changes in own or counterparty credit risk.
As required by the accounting guidance, we categorize our assets and liabilities measured at fair value into a three-level
hierarchy, based on the priority of the inputs to the respective valuation technique, giving the highest priority to quoted prices in
active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). For
additional information regarding the key estimates and assumptions surrounding the determinations of fair value measurements,
see Note 8 of the Notes to the Consolidated Financial Statements.
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Impairments and Valuation Allowances
The carrying values of fixed maturities classified as AFS are reported at fair value. Changes in fair value are reported in
OCI, net of allowance for credit losses, policy related amounts and deferred income taxes. With the adoption of the Financial
Instruments-Credit Losses standard, changes in credit losses are recognized in investment gains (losses), net.
With the assistance of our investment advisors, we evaluate AFS debt securities that experience a decline in fair value
below amortized cost for credit losses which are evaluated in accordance with the financial instruments credit losses guidance.
The remainder of the unrealized loss related to other factors, if any, is recognized in OCI. Integral to this review is an
assessment made each quarter, on a security-by-security basis, by our IUS Committee, of various indicators of credit
deterioration to determine whether the investment security has experienced a credit loss. This assessment includes, but is not
limited to, consideration of the severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled
payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial
strength, liquidity and continued viability of the issuer.
We recognize an allowance for credit losses on AFS debt securities with a corresponding adjustment to earnings rather than
a direct write down that reduces the cost basis of the investment, and credit losses are limited to the amount by which the
security’s amortized cost basis exceeds its fair value. Any improvements in estimated credit losses on AFS debt securities are
recognized immediately in earnings. We do not use the length of time a security has been in an unrealized loss position as a
factor, either by itself or in combination with other factors, to conclude that a credit loss does not exist, as was permitted to do
prior to January 1, 2020.
If there is no intent to sell or likely requirement to dispose of the fixed maturity security before its recovery, only the credit
loss component of any resulting allowance is recognized in income (loss) and the remainder of the fair value loss is recognized
in OCI. The amount of credit loss is the shortfall of the present value of the cash flows expected to be collected as compared to
the amortized cost basis of the security. The present value is calculated by discounting management’s best estimate of projected
future cash flows at the effective interest rate implicit in the debt security at the date of acquisition. Projections of future cash
flows are based on assumptions regarding probability of default and estimates regarding the amount and timing of recoveries.
These assumptions and estimates require use of management judgment and consider internal credit analyses as well as market
observable data relevant to the collectability of the security. For mortgage and asset-backed securities, projected future cash
flows also include assumptions regarding prepayments and underlying collateral value.
Write-offs of AFS debt securities are recorded when all or a portion of a financial asset is deemed uncollectible. Full or
partial write-offs are recorded as reductions to the amortized cost basis of the AFS debt security and deducted from the
allowance in the period in which the financial assets are deemed uncollectible. We elected to reverse accrued interest deemed
uncollectible as a reversal of interest income. In instances where we collect cash that has previously been written off, the
recovery will be recognized through earnings or as a reduction of the amortized cost basis for interest and principal,
respectively.
Mortgage loans are stated at unpaid principal balances, net of unamortized discounts and valuation allowances. For
collectively evaluated mortgages, the Company estimates the allowance for credit losses based on the amortized cost basis of its
mortgages over their expected life using a PD / LGD model. For individually evaluated mortgages, the Company continues to
recognize valuation allowances based on the present value of expected future cash flows discounted at the loan’s original
effective interest rate or on its collateral value if the loan is collateral dependent.
For commercial, agricultural and residential mortgage loans, an allowance for credit loss is typically recommended when
management believes it is probable that principal and interest will not be collected according to the contractual terms. Factors
that influence management’s judgment in determining allowance for credit losses include the following:
•
•
•
LTV ratio—Derived from current loan balance divided by the fair market value of the property. An allowance for
credit loss is typically recommended when the LTV ratio is in excess of 100%. In the case where the LTV is in excess
of 100%, the allowance for credit loss is derived by taking the difference between the fair market value (less cost of
sale) and the current loan balance.
DSC ratio—Derived from actual operating earnings divided by annual debt service. If the ratio is below 1.0x, then the
income from the property does not support the debt.
DTI ratio - Is used for residential mortgage loans to assess a borrower’s ability to repay a loan. DTI ratio is derived by
adding up all of the borrower’s debt payments and dividing that sum by the borrower’s gross monthly income.
112
•
•
•
Consumer Credit Score - Is used for residential mortgage loans to determine the borrower’s credit worthiness and
eligibility for a residential loan based upon credit reports.
Occupancy—Criteria vary by property type but low or below market occupancy is an indicator of sub-par property
performance.
Lease expirations—The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a decline in
rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-tenant properties or
properties with large tenant exposure, the lease expiration is a material risk factor.
• Maturity—Mortgage loans that are not fully amortizing and have upcoming maturities within the next 12 to 24 months
are monitored in conjunction with the capital markets to determine the borrower’s ability to refinance the debt and/or
pay off the balloon balance.
•
•
•
•
Borrower/tenant related issues—Financial concerns, potential bankruptcy, or words or actions that indicate imminent
default or abandonment of property.
Payment status—current vs. delinquent—A history of delinquent payments may be a cause for concern.
Property condition—Significant deferred maintenance observed during the lenders annual site inspections.
Other—Any other factors such as current economic conditions may call into question the performance of the loan.
Mortgage loans that do not share similar risk characteristics with other loans in the portfolio are individually evaluated
quarterly by the IUS Committee for impairment on a loan-by-loan basis, including an assessment of related collateral value.
Commercial mortgages 60 days or more past due and agricultural and residential mortgages 90 days or more past due, as well
as all mortgages in the process of foreclosure, are identified as problem mortgages. Based on its monthly monitoring of
mortgages, a class of potential problem mortgages also is identified, consisting of mortgage loans not currently classified as
problems but for which management has doubts as to the ability of the borrower to comply with the present loan payment terms
and which may result in the loan becoming a problem or being restructured. The decision whether to classify a performing
mortgage loan as a potential problem involves significant subjective judgments by management as to likely future industry
conditions and developments with respect to the borrower or the individual mortgaged property.
For problem mortgage loans a valuation allowance is established to provide for the risk of credit losses inherent in the
lending process. The allowance includes loan specific reserves for loans determined to be non-performing as a result of the loan
review process. A non-performing loan is defined as a loan for which it is probable that amounts due according to the
contractual terms of the loan agreement will not be collected. The loan specific portion of the loss allowance is based on our
assessment as to ultimate collectability of loan principal and interest. Valuation allowances for a non-performing loan are
recorded based on the present value of expected future cash flows discounted at the loan’s effective interest rate or based on the
fair value of the collateral if the loan is collateral dependent. The valuation allowance for mortgage loans can increase or
decrease from period to period based on such factors.
Impaired mortgage loans without provision for losses are mortgage loans where the fair value of the collateral or the net
present value of the expected future cash flows related to the loan equals or exceeds the recorded investment. Interest income
earned on mortgage loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income
on mortgage loans where the present value method is used to measure impairment is accrued on the net carrying value amount
of the loan at the interest rate used to discount the cash flows. Changes in the present value attributable to changes in the
amount or timing of expected cash flows are reported as investment gains or losses.
Mortgage loans are placed on nonaccrual status once management believes the collection of accrued interest is doubtful.
Once mortgage loans are classified as nonaccrual mortgage loans, interest income is recognized under the cash basis of
accounting and the resumption of the interest accrual would commence only after all past due interest has been collected or the
mortgage loan on real estate has been restructured to where the collection of interest is considered likely.
See Note 2 and Note 3 of the Notes to the Consolidated Financial Statements for additional information relating to our
determination of the amount of allowances and impairments.
Derivatives
We use freestanding derivative instruments to hedge various capital market risks in our products, including: (i) certain
guarantees, some of which are reported as embedded derivatives; (ii) current or future changes in the fair value of our assets and
liabilities; and (iii) current or future changes in cash flows. All derivatives, whether freestanding or embedded, are required to
113
be carried on the consolidated balance sheet at fair value with changes reflected in either net income (loss) or in OCI, depending
on the type of hedge. Below is a summary of critical accounting estimates by type of derivative.
Freestanding Derivatives
The determination of the estimated fair value of freestanding derivatives, when quoted market values are not available, is
based on market standard valuation methodologies and inputs that management believes are consistent with what other market
participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign
currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in
estimates and assumptions used in the pricing models. See Note 8 of the Notes to the Consolidated Financial Statements for
additional details on significant inputs into the OTC derivative pricing models and credit risk adjustment.
Goodwill
Goodwill represents the excess of purchase price over the estimated fair value of identifiable net assets acquired in a
business combination. We test goodwill for recoverability each annual reporting period at December 31 and at interim periods if
facts or circumstances are indicative of potential impairment. As of December 31, 2023, our goodwill of $5.1 billion results
solely from our investment in AB and is attributed to the Investment Management and Research segment, also deemed a
reporting unit for purpose of assessing the recoverability of that goodwill.
Estimating the fair value of reporting units for the purpose of goodwill impairment testing is a subjective process that
involves the use of significant judgements by management. Estimates of fair value are inherently uncertain and represent
management’s reasonable expectation regarding future developments, giving consideration to internal strategic plans and
general market and economic forecasts. On an annual basis, or when circumstances warrant, goodwill is tested for impairment
utilizing the market approach, where the fair value of the reporting unit is based on its adjusted market valuation assuming a
control premium.
Income Taxes
Income taxes represent the net amount of income taxes that we expect to pay to or receive from various taxing jurisdictions
in connection with its operations. We provide for Federal and state income taxes currently payable, as well as those deferred
due to temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and
liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the
temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient
taxable income within the carryforward periods under the tax law in the applicable jurisdiction. Valuation allowances are
established when management determines, based on available information, that it is more likely than not that deferred tax assets
will not be realized. Management considers all available evidence including past operating results, the existence of cumulative
losses in the most recent years, forecasted earnings, future taxable income and prudent and feasible tax planning strategies. Our
accounting for income taxes represents management’s best estimate of the tax consequences of various events and transactions.
At December 31, 2023, we determined that it was more likely than not that a portion of our capital deferred tax assets would not
be realized. For more information, see Note 18 - Income Taxes.
Significant management judgment is required in determining the provision for income taxes and deferred tax assets and
liabilities, and in evaluating our tax positions including evaluating uncertainties under the guidance for Accounting for
Uncertainty in Income Taxes. Under the guidance, we determine whether it is more likely than not that a tax position will be
sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial
statements. Tax positions are then measured at the largest amount of benefit that is greater than 50 percent likely of being
realized upon settlement.
Our tax positions are reviewed quarterly, and the balances are adjusted as new information becomes available.
Litigation and Regulatory Contingencies
We are a party to a number of legal actions and are involved in a number of regulatory investigations. Given the inherent
unpredictability of these matters, it is difficult to estimate the impact on our financial position, results of operations and cash
flows.
Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably
estimated. On a quarterly and annual basis, we review relevant information with respect to liabilities for litigation, regulatory
114
investigations and litigation-related contingencies to be reflected in our consolidated financial statements included elsewhere
herein. See Note 19 of the Notes to the Consolidated Financial Statements for information regarding our assessment of
litigation contingencies.
Adoption of New Accounting Pronouncements
See Note 2 of the Notes to the Consolidated Financial Statements for a complete discussion of newly issued accounting
pronouncements.
Part II, Item 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our businesses are subject to financial, market, political and economic risks, as well as to risks inherent in our business
operations. The discussion that follows provides additional information on market risks arising from our insurance asset/
liability management and investment management activities. Such risks are evaluated and managed by each business on a
decentralized basis. Primary market risk exposure results from interest rate fluctuations, equity price movements and changes in
credit quality.
Individual Retirement, Group Retirement, Protection Solutions and Legacy Segments
Our results significantly depend on profit margins or “spreads” between investment results from assets held in the General
Account investment portfolio and interest credited on individual insurance and annuity products. Management believes its fixed
rate liabilities should be supported by a portfolio principally composed of fixed rate investments that generate predictable,
steady rates of return. Although these assets are purchased for long-term investment, the portfolio management strategy
considers them AFS in response to changes in market interest rates, changes in prepayment risk, changes in relative values of
asset sectors and individual securities and loans, changes in credit quality outlook and other relevant factors. See the
“Investments” section of Note 2 of the Notes to the Consolidated Financial Statements for the accounting policies for the
investment portfolios. The objective of portfolio management is to maximize returns, taking into account interest rate and credit
risks. Insurance asset/liability management includes strategies to minimize exposure to loss as interest rates and economic and
market conditions change. As a result, the fixed maturity portfolio has modest exposure to call and prepayment risk and the vast
majority of mortgage holdings are fixed rate mortgages that carry yield maintenance and prepayment provisions.
Investments with Interest Rate Risk – Fair Value
Assets with interest rate risk include AFS and trading fixed maturities and mortgage loans that make up 76.7% and 81.6%
of the fair value of the General Account investment portfolio as of December 31, 2023 and 2022, respectively. As part of our
asset/liability management, quantitative analyses are used to model the impact various changes in interest rates have on assets
with interest rate risk. The table that follows shows the impact an immediate one percent increase/decrease in interest rates as of
December 31, 2023 and 2022 would have on the fair value of fixed maturities and mortgage loans:
Interest Rate Risk Exposure
December 31, 2023
Impact of
+1%
Change
Impact of
-1%
Change
Fair Value
December 31, 2022
Impact of
+1%
Change
Impact of
-1% Change
Fair Value
Fixed Income Investments:
AFS securities:
Fixed rate
Floating rate
Trading securities:
Fixed rate
Mortgage loans
(in millions)
$ 56,481 $ (3,997) $ 4,595 $ 53,135 $ (3,992) $ 4,625
10
$ 10,063 $
5 $ 9,533 $
(10) $
3 $
$
15 $
$ 16,467 $
— $
(585) $
87 $
— $
624 $ 14,690 $
(1) $
(640) $
1
689
A one percent increase/decrease in interest rates is a hypothetical rate scenario used to demonstrate potential risk; it does
not represent management’s view of future market changes. While these fair value measurements provide a representation of
interest rate sensitivity of fixed maturities and mortgage loans, they are based on various portfolio exposures at a particular
115
point in time and may not be representative of future market results. These exposures will change as a result of ongoing
portfolio activities in response to management’s assessment of changing market conditions and available investment
opportunities.
Investments with Equity Price Risk – Fair Value
The investment portfolios also have direct holdings of public and private equity securities. The following table shows the
potential exposure from those equity security investments, measured in terms of fair value, to an immediate 10% increase/
decrease in equity prices from those prevailing as of December 31, 2023 and 2022:
Equity Price Risk Exposure
December 31, 2023
Impact
of+10% Equity
Price Change
Impact of
-10% Equity
Price Change
December 31, 2022
Impact
of+10% Equity
Price Change
Impact of
-10% Equity
Price Change
Fair Value
Fair Value
Equity Investments
$
731 $
73 $
(in millions)
(73) $
728 $
73 $
(73)
A 10% decrease in equity prices is a hypothetical scenario used to calibrate potential risk and does not represent
management’s view of future market changes. The fair value measurements shown are based on the equity securities portfolio
exposures at a particular point in time and these exposures will change as a result of ongoing portfolio activities in response to
management’s assessment of changing market conditions and available investment opportunities.
Liabilities with Interest Rate Risk – Fair Value
As of December 31, 2023 and 2022, the aggregate carrying values of insurance contracts with interest rate risk were
$16.5 billion and $17.5 billion, respectively. The aggregate fair value of such liabilities as of December 31, 2023 and 2022 were
$16.0 billion and $16.5 billion, respectively. The impact of a relative 1% decrease in interest rates would be an increase in the
fair value of those liabilities of $280 million and $394 million, respectively. While these fair value measurements provide a
representation of the interest rate sensitivity of insurance liabilities, they are based on the composition of such liabilities at a
particular point in time and may not be representative of future results.
Asset/liability management is integrated into many aspects of the Individual Retirement, Group Retirement, Protection
Solutions and Legacy segments’ operations, including investment decisions, product development and determination of
crediting rates. As part of our risk management process, numerous economic scenarios are modeled, including cash flow testing
required for insurance regulatory purposes, to determine if existing assets would be sufficient to meet projected liability cash
flows. Key variables include policyholder behavior, such as persistency, under differing crediting rate strategies.
Derivatives and Interest Rate and Equity Risks – Fair Value
We primarily use derivative contracts for asset/liability risk management, to mitigate our exposure to equity market decline
and interest rate risks and for hedging individual securities. In addition, we periodically enter into forward, exchange-traded
futures and interest rate swap, swaptions and floor contracts to reduce the economic impact of movements in the equity and
fixed income markets, including the program to hedge certain risks associated with the GMxB features. As more fully described
in Note 2 and Note 4 of the Notes to the Consolidated Financial Statements, various traditional derivative financial instruments
are used to achieve these objectives. To minimize credit risk exposure associated with its derivative transactions, each
counterparty’s credit is appraised and approved, and risk control limits and monitoring procedures are applied. Credit limits are
established and monitored on the basis of potential exposures that take into consideration current market values and estimates of
potential future movements in market values given potential fluctuations in market interest rates. To reduce credit exposures in
OTC derivative transactions, we enter into master agreements that provide for a netting of financial exposures with the
counterparty and allow for collateral arrangements. We further control and minimize counterparty exposure through a credit
appraisal and approval process. Under the ISDA Master Agreement, we have executed a CSA with each of our OTC derivative
counterparties that require both posting and accepting collateral either in the form of cash or high-quality securities, such as
U.S. Treasury securities or those issued by government agencies.
Mark to market exposure is a point-in-time measure of the value of a derivative contract in the open market. A positive
value indicates existence of credit risk for us because the counterparty would owe money to us if the contract were closed.
Alternatively, a negative value indicates we would owe money to the counterparty if the contract were closed. If there is more
116
than one derivative transaction outstanding with a counterparty, a master netting arrangement exists with the counterparty. In
that case, the market risk represents the net of the positive and negative exposures with the single counterparty. In
management’s view, the net potential exposure is the better measure of credit risk. As of December 31, 2023 and 2022, the net
fair values of our derivatives were $4.5 billion and $1.1 billion, respectively.
The tables below show the interest rate or equity sensitivities of those derivatives, measured in terms of fair value. These
exposures will change as a result of ongoing portfolio and risk management activities.
Derivative Financial Instruments
Interest Rate Sensitivity
December 31, 2023
Swaps
Futures
Total
December 31, 2022
Swaps
Futures
Total
December 31, 2023
Futures
Swaps
Options
Total
December 31, 2022
Futures
Swaps
Options
Total
$
$
$
$
$
$
$
$
Notional
Amount
3,828
8,094
11,922
2,450
12,975
15,425
Weighted
Average Term
(Years)
Impact of -1%
Change
(in millions, except for Weighted Average Term)
Fair
Value
Impact of +1%
Change
6
—
15
—
$
$
$
$
180 $
40
220 $
(195) $
—
(195) $
(212) $
(74)
(286) $
(460) $
—
(460) $
Equity Sensitivity
(839)
(25)
(864)
(653)
125
(528)
Notional
Amount
Weighted
Average Term
(Years)
Fair Value
Balance after
-10% Equity Price Shift
(in millions, except for Weighted Average Term)
7,761
14,926
53,877
76,564
4,714
11,159
40,072
55,945
—
1
3
—
1
4
$
$
$
$
— $
53
10,084
10,137 $
— $
38
4,171
4,209 $
(250)
1,599
17,500
18,849
249
1,154
2,133
3,536
Market Risk Benefits and Interest Rate and Equity Risks – Fair Value
GMxB feature’s liability associated with certain annuity contracts is considered market risk benefits for accounting
purposes and was reported at its fair value of $14.0 billion and $15.3 billion as of December 31, 2023 and 2022, respectively.
The potential fair value exposure to an immediate 10% drop in equity prices from those prevailing as of December 31, 2023 and
2022, respectively, would be to decrease the direct market risk benefits balance by $1.5 billion and $1.5 billion. The potential
fair value exposure to an immediate 50 bps drop in interest rates from those prevailing as of December 31, 2023 and 2022,
respectively, would decrease the direct market risk benefits balance by $1.7 billion and $2.0 billion.
We have entered into reinsurance contracts to mitigate the risk associated with the impact of potential market fluctuations
GMxB features contained in certain annuity contracts. These reinsurance contracts are accounted for as purchased market risk
benefits and reported at their fair values of $9.4 billion and $10.4 billion as of December 31, 2023 and 2022, respectively. The
potential fair value exposure to an immediate 10% drop in equity prices from those prevailing as of December 31, 2023 and
2022, respectively, would increase the balances of the reinsurance contract asset by $560 million and $529 million. The
117
potential fair value exposure to an immediate 50 bps drop in interest rates from those prevailing as of December 31, 2023 and
2022, respectively, would increase the balances of the reinsurance contract asset by $914 million and $956 million.
Investment Management and Research
The investments of our Investment Management and Research segment consist of trading and AFS investments and other
investments. AB’s trading and AFS investments include U.S. Treasury bills and equity and fixed income mutual funds’
investments. Trading investments are purchased for short-term investment, principally to fund liabilities related to deferred
compensation plans and to seed new investment services. Although AFS investments are purchased for long-term investment,
the portfolio strategy considers them AFS from time to time due to changes in market interest rates, equity prices and other
relevant factors. Other investments include investments in hedge funds sponsored by AB and other private investment vehicles.
Investments with Interest Rate Risk – Fair Value
The table below provides AB’s potential exposure with respect to its fixed income investments, measured in terms of fair
value, to an immediate 1% increase in interest rates at all maturities from the levels prevailing as of December 31, 2023 and
2022:
Interest Rate Risk Exposure
December 31, 2023
December 31, 2022
Fair Value
Balance After
-1% Change
Balance After
+1% Change
Fair Value
Balance After
-1% Change
Balance After
+1% Change
(in millions)
$
71 $
76 $
66 $
93 $
100 $
87
Fixed Income Investments:
Trading
Such a fluctuation in interest rates is a hypothetical rate scenario used to calibrate potential risk and does not represent AB
management’s view of future market changes. Although these fair value measurements provide a representation of interest rate
sensitivity of its investments in fixed income mutual funds and fixed income hedge funds, they are based on AB’s exposures at
a particular point in time and may not be representative of future market results. These exposures will change as a result of
ongoing changes in investments in response to AB management’s assessment of changing market conditions and available
investment opportunities.
Investments with Equity Price Risk – Fair Value
AB’s investments include investments in equity mutual funds and equity hedge funds. The following table presents AB’s
potential exposure from its equity investments, measured in terms of fair value, to an immediate 10% drop in equity prices from
those prevailing as of December 31, 2023 and 2022:
Equity Price Risk Exposure
December 31, 2023
Balance After
+10% Equity
Price Change
Balance After
-10% Equity
Price Change
Fair Value
December 31, 2022
Balance After
+10% Equity
Price Change
Balance After
-10% Equity
Price Change
Fair Value
(in millions)
$
$
117 $
55 $
129 $
61 $
106 $
50 $
66 $
58 $
72 $
64 $
59
53
Equity Investments:
Trading
Other investments
A 10% decrease in equity prices is a hypothetical scenario used to calibrate potential risk and does not represent AB
management’s view of future market changes. While these fair value measurements provide a representation of equity price
sensitivity of AB’s investments in equity mutual funds and equity hedge funds, they are based on AB’s exposure at a particular
point in time and may not be representative of future market results. These exposures will change as a result of ongoing
portfolio activities in response to AB management’s assessment of changing market conditions and available investment
opportunities.
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Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP, New York, New York, PCAOB ID: 238) .... 120
Consolidated Balance Sheets, December 31, 2023 and 2022 ................................................................................................ 122
Consolidated Statements of Income (Loss), Years Ended December 31, 2023, 2022 and 2021 ........................................... 123
Consolidated Statements of Comprehensive Income (Loss), Years Ended December 31, 2023, 2022 and 2021 ................. 124
Consolidated Statements of Equity, Years Ended December 31, 2023, 2022 and 2021 ....................................................... 125
Consolidated Statements of Cash Flows, Years Ended December 31, 2023, 2022 and 2021 ............................................... 126
Notes to Consolidated Financial Statements
Note 1 - Organization
Note 2 - Significant Accounting Policies
Note 3 - Investments
Note 4 - Derivatives
Note 5 - Goodwill and Other Intangible Assets
Note 6 - Closed Block
Note 7 - DAC and Other Deferred Assets/Liabilities
Note 8 - Fair Value Disclosures
Note 9 - Liabilities for Future Policyholder Benefits
Note 10 - Market Risk Benefits
Note 11 - Policyholder Account Balances
Note 12 - Leases
Note 13 - Reinsurance
Note 14 - Short-Term and Long-Term Debt
Note 15 - Related Party Transactions
Note 16 - Employee Benefit Plans
Note 17 - Share-Based Compensation Programs
Note 18 - Income Taxes
Note 19 - Commitments and Contingent Liabilities
Note 20 - Insurance Statutory Financial Information
Note 21 - Business Segment Information
Note 22 - Equity
Note 23 - Earnings Per Share
Note 24 - Redeemable NCI
Note 25 - Held-For-Sale
Note 26 - Subsequent Events
128
129
150
163
170
171
172
175
189
196
198
204
207
208
210
211
218
222
224
229
232
235
241
241
241
242
Audited Consolidated Financial Statement Schedules
Schedule I - Summary of Investments - Other than Investments in Related Parties, December 31, 2023 ............................ 243
Schedule II - Balance Sheets ( Parent Company), December 31, 2022 and 2021 and Years Ended December 31, 2023,
2022 and 2021 ........................................................................................................................................................................ 244
Schedule III - Supplementary Insurance Information, as of and for the Years Ended December 31, 2023, 2022 and 2021 248
Schedule IV - Reinsurance, Years Ended December 31, 2023, 2022 and 2021 .................................................................... 250
119
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Equitable Holdings, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Equitable Holdings, Inc. and its subsidiaries (the
“Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income (loss), of
comprehensive income (loss), of equity and of cash flows for each of the three years in the period ended December 31,
2023, including the related notes and financial statement schedules listed in the index appearing under Item 15.2
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts
for long-duration insurance contracts in 2023.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under
Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting
was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
120
Table of Contents
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i) relates
to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which
it relates.
Valuation of Market Risk Benefits
As described in Notes 2 and 8 to the consolidated financial statements, certain guaranteed minimum death and living
benefits (collectively, the “GMxB features”) associated with variable annuity products, other general account annuities
and ceded reinsurance contracts with GMxB features with other than nominal market risk are identified by
management, measured at estimated fair value and presented separately on the balance sheet as market risk benefits.
Market risk benefits (MRBs) are measured at fair value on a seriatim basis using an ascribed fee approach. The
ascribed fee is determined at policy inception date so that the present value of claims, including any risk charge, is
equal to the present value of the projected attributed fees which will be capped at average present value of total
policyholder contractual fees. The attributed fee percentage is considered a fixed term of the MRB feature and is held
static over the life of the contract. The market risk benefits fair value is equal to the estimated present value of benefits
less the estimated present value of ascribed fees and is determined using a discounted cash flow valuation technique.
Considerable judgment is utilized by management in determining the assumptions related to lapse rates, withdrawal
rates, utilization rates, non-performance risk, volatility rates, annuitization rates and mortality (collectively, the
“significant market risk benefit assumptions”). As of December 31, 2023, the estimated fair value of purchased market
risk benefits, assets for market risk benefits and liabilities for market risk benefits was $9,427 million, $591 million
and $14,612 million, respectively.
The principal considerations for our determination that performing procedures relating to the valuation of market risk
benefits is a critical audit matter are (i) the significant judgment by management in developing the fair value estimate
of market risk benefits, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and
evaluating audit evidence related to management’s significant market risk benefit assumptions and (iii) the audit effort
involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to the valuation of market risk benefits, including controls over the development of the assumptions
utilized in the valuation of market risk benefits. These procedures also included, among others (i) evaluating
management’s process for developing the fair value estimate of market risk benefits, (ii) testing, on a sample basis, the
completeness and accuracy of data used by management in developing the estimates, and (iii) the involvement of
professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the significant market
risk benefit assumptions used in developing the fair value estimate of market risk benefits based on the consideration
of the Company’s historical and actual experience, industry trends, and market conditions, as applicable.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 26, 2024
We have served as the Company’s auditor since 1993.
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EQUITABLE HOLDINGS, INC.
Consolidated Balance Sheets
December 31, 2023 and 2022
ASSETS
Investments:
Fixed maturities available-for-sale, at fair value (amortized cost of $74,033 and $72,991)
(allowance for credit losses of $4 and $24)
Fixed maturities, at fair value using the fair value option (1)
Mortgage loans on real estate (net of allowance for credit losses of $279 and $129) (1)
Policy loans
Other equity investments (1)
Trading securities, at fair value
Other invested assets (1)
Total investments
Cash and cash equivalents (1)
Cash and securities segregated, at fair value
Broker-dealer related receivables
Deferred policy acquisition costs
Goodwill and other intangible assets, net
Amounts due from reinsurers (allowance for credit losses of $7 and $10)
Current and deferred income taxes
Purchased market risk benefits
Other assets (1)
Assets held-for-sale
Assets for market risk benefits
Separate Accounts assets
Total Assets
LIABILITIES
Policyholders’ account balances
Liability for market risk benefits
Future policy benefits and other policyholders' liabilities
Broker-dealer related payables
Customer related payables
Amounts due to reinsurers
Short-term debt
Long-term debt
Notes issued by consolidated variable interest entities, at fair value using the fair value option (1)
Other liabilities (1)
Liabilities held-for-sale
Separate Accounts liabilities
Total Liabilities
Redeemable noncontrolling interest (1) (2)
Commitments and contingent liabilities (3)
EQUITY
Equity attributable to Holdings:
Preferred stock and additional paid-in capital, $1 par value and $25,000 liquidation preference
Common stock, $0.01 par value, 2,000,000,000 shares authorized; 491,003,966 and 508,418,442
shares issued, respectively; 333,877,990 and 365,081,940 shares outstanding, respectively
Additional paid-in capital
Treasury stock, at cost, 157,125,976 and 143,336,502 shares, respectively
Retained earnings
Accumulated other comprehensive income (loss)
Total equity attributable to Holdings
Noncontrolling interest
Total Equity
December 31,
2023
2022
(in millions, except share data)
67,030 $
1,654
18,171
4,158
3,384
1,057
6,719
102,173
8,239
868
1,837
6,705
5,433
8,352
2,050
9,427
3,323
565
591
127,251
276,814 $
95,673 $
14,612
17,363
1,232
2,201
1,450
254
3,820
1,559
6,088
153
127,251
271,656 $
770 $
63,361
1,508
16,481
4,033
3,152
677
3,885
93,097
4,281
1,522
2,338
6,369
5,482
8,471
781
10,423
4,033
562
490
114,853
252,702
83,866
15,766
16,603
715
3,323
1,533
759
3,322
1,150
7,108
108
114,853
249,106
455
1,562 $
1,562
$
$
$
$
$
$
5
2,328
(3,712)
10,243
(7,777)
2,649
1,739
4,388
276,814 $
4
2,299
(3,297)
9,825
(8,992)
1,401
1,740
3,141
252,702
Total Liabilities, Redeemable Noncontrolling Interest and Equity
____________
(1) See Note 2 of the Notes to these Consolidated Financial Statements for details of balances with VIEs.
(2) See Note 24 of the Notes to these Consolidated Financial Statements for details of redeemable noncontrolling interest.
(3) See Note 19 of the Notes to these Consolidated Financial Statements for details of commitments and contingent liabilities.
$
See Notes to Consolidated Financial Statements.
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EQUITABLE HOLDINGS, INC.
Consolidated Statements of Income (Loss)
Years Ended December 31, 2023, 2022 and 2021
REVENUES
Policy charges and fee income
Premiums
Net derivative gains (losses)
Net investment income (loss)
Investment gains (losses), net:
Credit and intent to sell losses on available for sale debt securities and loans
Other investment gains (losses), net
Total investment gains (losses), net
Investment management and service fees
Other income
Total revenues
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits
Remeasurement of liability for future policy benefits
Change in market risk benefits and purchased market risk benefits
Interest credited to policyholders’ account balances
Compensation and benefits
Commissions and distribution-related payments
Interest expense
Amortization of deferred policy acquisition costs
Other operating costs and expenses
Total benefits and other deductions
Income (loss) from continuing operations, before income taxes
Income tax (expense) benefit
Net income (loss)
Less: Net income (loss) attributable to the noncontrolling interest (1)
Net income (loss) attributable to Holdings
Less: Preferred stock dividends
Net income (loss) available to Holdings’ common shareholders
EARNINGS PER COMMON SHARE
Net income (loss) applicable to Holdings’ common shareholders per common
share:
Basic
Diluted
Weighted average common shares outstanding (in millions):
Basic
Diluted
Year Ended December 31,
2023
2022
2021
(in millions, except per share data)
$
2,380 $
1,104
(2,397)
4,320
2,454 $
994
907
3,315
2,768
960
(7,149)
3,846
(220)
(493)
(713)
4,820
1,014
10,528
(314)
(631)
(945)
4,891
1,028
12,644
2,754
75
(1,807)
2,083
2,328
1,590
228
641
1,898
9,790
738
905
1,643
341
1,302
80
1,222 $
2,716
66
(1,280)
1,410
2,201
1,567
201
586
2,185
9,652
2,992
(598)
2,394
241
2,153
80
2,073 $
3.49 $
3.48 $
5.49 $
5.46 $
350.1
351.6
377.6
379.9
2
866
868
5,395
926
7,614
2,788
13
(5,943)
1,219
2,363
1,662
244
552
2,107
5,005
2,609
(439)
2,170
415
1,755
79
1,676
4.02
3.98
417.4
421.2
$
$
$
____________
(1) Includes redeemable noncontrolling interest. See Note 24 of the Notes to these Consolidated Financial Statements for details of
redeemable noncontrolling interest.
See Notes to Consolidated Financial Statements.
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EQUITABLE HOLDINGS, INC.
Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31, 2023, 2022 and 2021
Year Ended December 31,
2023
2022
2021
(in millions)
$
1,643 $
2,394 $
2,170
2,377
(1,027)
(137)
(12,606)
1,249
1,074
(3)
15
1,225
2,868
351
2,517 $
18
(46)
(10,311)
(7,917)
225
(8,142) $
(2,461)
50
279
266
(11)
(1,877)
293
416
(123)
COMPREHENSIVE INCOME (LOSS)
Net income (loss)
Other comprehensive income (loss) net of income taxes:
Change in unrealized gains (losses), net of reclassification adjustment
Change in market risk benefits - instrument-specific credit risk
Change in liability for future policy benefits - current discount rate
Change in defined benefit plan related items not yet recognized in periodic
benefit cost, net of reclassification adjustment
Foreign currency translation adjustment
Total other comprehensive income (loss), net of income taxes
Comprehensive income (loss)
Less: Comprehensive income (loss) attributable to the noncontrolling interest
Comprehensive income (loss) attributable to Holdings
$
See Notes to Consolidated Financial Statements.
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EQUITABLE HOLDINGS, INC.
Consolidated Statements of Equity
Years Ended December 31, 2023, 2022 and 2021
Year Ended December 31,
Equity Attributable to Holdings
Preferred
Stock and
Additional
Paid-In
Capital
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Holdings
Equity
Non-
controlling
Interest
Total
Equity
(in millions)
Balance, beginning of period
$
1,562
$
4
$
2,299
$
(3,297) $
9,825
$
(8,992) $
1,401
$
1,740
$
3,141
Stock compensation
Purchase of treasury stock
Reissuance of treasury stock
Retirement of common stock
Repurchase of AB Holding units
Dividends paid to noncontrolling interest
Dividends on common stock (cash dividends
declared per common share of $0.86)
Dividends on preferred stock
Net income (loss)
Other comprehensive income (loss)
Other
—
—
—
—
—
—
—
—
—
—
—
December 31, 2023
$
1,562
$
—
—
—
—
—
—
—
—
—
—
1
5
54
(1)
—
—
—
—
—
—
—
—
17
(918)
—
487
—
—
—
—
—
—
(24)
(1)
—
—
(16)
(487)
—
—
(301)
(80)
1,302
—
—
—
—
—
—
—
—
—
—
—
1,215
—
71
(919)
(16)
—
—
—
(301)
(80)
1,302
1,215
(24)
180
—
—
—
(144)
(334)
—
—
297
10
(10)
251
(919)
(16)
—
(144)
(334)
(301)
(80)
1,599
1,225
(34)
$
2,328
$
(3,712) $ 10,243
$
(7,777) $
2,649
$
1,739
$
4,388
Balance, beginning of period
$
1,562
$
4
$
1,919
$
(2,850) $
8,413
$
1,303
$
10,351
$
1,576
$
11,927
Stock compensation
Purchase of treasury stock
Reissuance of treasury stock
Retirement of common stock
Repurchase of AB Holding units
Dividends paid to noncontrolling interest
Issuance of AB Units for CarVal
acquisition
Dividends on common stock (cash dividends
declared per common share of $0.78)
Dividends on preferred stock
Net income (loss)
Other comprehensive income (loss)
Other
December 31, 2022
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
87
(34)
—
—
—
—
314
—
—
—
—
13
38
(815)
—
330
—
—
—
—
—
—
—
—
—
—
(38)
(330)
—
—
—
(294)
(80)
2,153
—
1
—
—
—
—
—
—
—
—
—
—
125
(849)
(38)
—
—
—
199
—
—
—
(211)
(401)
314
275
(294)
(80)
2,153
(10,295)
(10,295)
—
14
—
300
(16)
18
324
(849)
(38)
—
(211)
(401)
589
(294)
(80)
2,453
(10,311)
32
$
1,562
$
4
$
2,299
$
(3,297) $
9,825
$
(8,992) $
1,401
$
1,740
$
3,141
Balance, beginning of period
$
1,269
$
5
$
1,985
$
(2,245) $ 10,699
$
3,863
$
15,576
$
1,601
$ 17,177
Cumulative effect of adoption of ASU
2018-02, Long Duration Targeted
Improvements
Stock compensation
Purchase of treasury stock
Reissuance of treasury stock
Retirement of common stock
Repurchase of AB Holding units
Dividends paid to noncontrolling interest
Dividends on common stock (cash dividends
declared per common share of $0.71)
Dividends on preferred stock
Issuance of preferred stock
Net income (loss)
Other comprehensive income (loss)
Other
December 31, 2021
—
—
—
—
—
—
—
—
—
293
—
—
—
—
—
(1)
—
—
—
—
—
—
—
—
—
—
—
15
—
51
(27)
(1,610)
—
—
—
—
—
—
—
—
—
(54)
—
954
—
—
—
—
—
—
—
—
(2,661)
(682)
(3,343)
—
—
(51)
(954)
—
—
(296)
(79)
—
1,755
—
—
—
—
—
—
—
—
—
—
—
—
66
(1,638)
(51)
—
—
—
(296)
(79)
293
1,755
(1,878)
(1,878)
—
(54)
—
220
—
—
—
(262)
(393)
—
—
—
410
1
(1)
(3,343)
286
(1,638)
(51)
—
(262)
(393)
(296)
(79)
293
2,165
(1,877)
(55)
$
1,562
$
4
$
1,919
$
(2,850) $
8,413
$
1,303
$
10,351
$
1,576
$ 11,927
See Notes to Consolidated Financial Statements.
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EQUITABLE HOLDINGS, INC.
Consolidated Statements of Cash Flows
Years Ended December 31, 2023, 2022 and 2021
2023
Year Ended December 31,
2022
(in millions)
2021
$
1,643 $
2,394 $
2,170
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Interest credited to policyholders’ account balances
Policy charges and fee income
Net derivative (gains) losses
Credit and intent to sell losses on available for sale debt securities and loans
Investment (gains) losses, net
(Gains) losses on businesses held-for-sale
Realized and unrealized (gains) losses on trading securities
Non-cash long term incentive compensation expense
Amortization and depreciation
Remeasurement of liability for future policy benefits
Change in market risk benefits
Equity (income) loss from limited partnerships
Changes in:
Net broker-dealer and customer related receivables/payables
Reinsurance recoverable
Segregated cash and securities, net
Capitalization of deferred policy acquisition costs
Future policy benefits
Current and deferred income taxes
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Proceeds from the sale/maturity/pre-payment of:
Fixed maturities, available-for-sale
Fixed maturities, at fair value using the fair value option
Mortgage loans on real estate
Trading account securities
Short term investments
Other
Payment for the purchase/origination of:
Fixed maturities, available-for-sale
Fixed maturities, at fair value using the fair value option
Mortgage loans on real estate
Trading account securities
Short term investments
Other
$
$
Purchase of business, net of cash acquired
Cash from the sale of business, net of cash sold
Cash settlements related to derivative instruments, net
Investment in capitalized software, leasehold improvements and EDP
equipment
Other, net
Net cash provided by (used in) investing activities
$
2,083
(2,380)
2,397
220
493
(1)
(77)
234
812
75
(1,807)
(125)
(910)
(1,471)
655
(976)
329
(1,163)
(239)
(208) $
10,492 $
483
446
963
3,324
738
(12,031)
(592)
(2,246)
(1,301)
(2,772)
(878)
—
—
(1,335)
(117)
(25)
(4,851) $
1,410
(2,454)
(907)
314
631
7
198
286
636
66
(1,280)
(146)
189
(636)
(18)
(841)
(495)
470
(74)
(250) $
15,547 $
525
1,154
371
575
573
(18,502)
(488)
(3,683)
(521)
(1,502)
(1,173)
40
—
(316)
(167)
80
(7,487) $
1,219
(2,768)
7,149
(2)
(863)
(3)
26
226
519
13
(5,943)
(553)
(131)
(1,092)
250
(877)
(151)
133
485
(193)
34,434
763
1,696
5,159
87
1,716
(43,344)
(1,792)
(2,546)
(244)
(18)
(2,553)
—
215
(5,937)
(120)
(205)
(12,689)
See Notes to Consolidated Financial Statements.
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EQUITABLE HOLDINGS, INC.
Consolidated Statements of Cash Flows
Years Ended December 31, 2023, 2022 and 2021
Cash flows from financing activities:
Policyholders’ account balances:
Deposits
Withdrawals
Transfers (to) from Separate Accounts
Payments of market risk benefits
Change in short-term financings
Change in collateralized pledged assets
Change in collateralized pledged liabilities
(Decrease) increase in overdrafts payable
Issuance of long-term debt
Repayment of long term debt
Repayment of acquisition-related debt obligation
Proceeds from collateralized loan obligations
Proceeds from notes issued by consolidated VIEs
Dividends paid on common stock
Dividends paid on preferred stock
Issuance of preferred stock
Purchase of AB Holding Units to fund long-term incentive compensation
plan awards, net
Purchase of treasury shares
Purchases (redemptions) of noncontrolling interests of consolidated
company-sponsored investment funds
Distribution to noncontrolling interest of consolidated subsidiaries
Change in securities lending
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Change in cash of businesses held-for-sale
Cash and cash equivalents, end of period
Supplemental cash flow information:
Interest paid
Income taxes (refunded) paid
Non-cash transactions from investing and financing activities:
Transfer of assets to reinsurer
2023
Year Ended December 31,
2022
(in millions)
2021
16,925 $
(9,842)
1,359
(744)
(504)
(49)
2,354
—
497
—
—
40
362
(301)
(80)
—
(144)
(919)
274
(334)
116
(10)
9,000 $
23 $
3,964
4,281
(6)
8,239 $
16,367 $
(6,962)
1,447
(601)
147
36
(1,575)
(25)
—
—
(43)
—
6
(294)
(80)
—
(211)
(849)
52
(401)
—
31
7,045 $
(56) $
(748)
5,188
(159)
4,281 $
17,521
(7,069)
1,985
(563)
92
34
1,413
16
—
(280)
—
—
873
(296)
(79)
293
(262)
(1,637)
346
(392)
—
(47)
11,948
(18)
(952)
6,179
(39)
5,188
344 $
266 $
263 $
89 $
215
305
— $
(2,762) $
(9,023)
$
$
$
$
$
$
$
See Notes to Consolidated Financial Statements.
127
Table of Contents
1)
ORGANIZATION
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements
Equitable Holdings, Inc. is the holding company for a diversified financial services organization. The Company
conducts operations in six segments: Individual Retirement, Group Retirement, Investment Management and Research,
Protection Solutions, Wealth Management and Legacy. The Company’s management evaluates the performance of
each of these segments independently. See Note 21 of the Notes to these Consolidated Financial Statements for further
information on the change to the reportable segments in the first quarter of 2023, which was applied retrospectively.
•
•
•
•
•
•
The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily
sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans
sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-
sized businesses.
The Investment Management and Research segment provides diversified investment management, research
and related solutions globally to a broad range of clients through three main client channels - Institutional,
Retail and Private Wealth - and distributes its institutional research products and solutions through Bernstein
Research Services. The Investment Management and Research segment reflects the business of AB Holding
and ABLP and their subsidiaries (collectively, AB).
The Protection Solutions segment includes the Company’s life insurance and group employee benefits
businesses. The life insurance business offers a variety of VUL, IUL and term life products to help affluent
and high net worth individuals, as well as small and medium-sized business owners, with their wealth
protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of life,
short- and long-term disability, dental and vision insurance products to small and medium-size businesses
across the United States.
The Wealth Management segment is an emerging leader in the wealth management space with a
differentiated advice value proposition that offers discretionary and non-discretionary investment advisory
accounts, financial planning and advice, life insurance, and annuity products. In 2023, we began reporting this
business separately from our Individual Retirement, Group Retirement and Protection Solutions segments as
well as Corporate and Other.
The Legacy segment consists of our capital intensive fixed-rate GMxB business written prior to 2011. In
2023, we began reporting this business separately from our Individual Retirement business.
The Company reports certain activities and items that are not included in our segments in Corporate and Other.
Corporate and Other includes certain of our financing and investment expenses. It also includes closed block of life
insurance (the “Closed Block”), run-off variable annuity reinsurance business, run-off group pension business, run-off
health business, benefit plans for our employees, certain strategic investments and certain unallocated items, including
capital and related investments, interest expense and corporate expense. AB’s results of operations are reflected in the
Investment Management and Research segment. Accordingly, Corporate and Other does not include any items
applicable to AB.
As of December 31, 2023 and 2022, the Company’s economic interest in AB was approximately 61%, respectively.
The General Partner of AB is a wholly owned subsidiary of the Company. Because the General Partner has the
authority to manage and control the business of AB, AB is consolidated in the Company’s financial statements for all
periods presented.
Global Atlantic Reinsurance Transaction
On October 3, 2022, Equitable Financial completed the transactions (the “Global Atlantic Transaction”) contemplated
by the previously announced Master Transaction Agreement, dated August 16, 2022, by and between Equitable
Financial and First Allmerica Financial Life Insurance Company, a Massachusetts-domiciled insurance company (the
“Reinsurer”), a wholly owned subsidiary of Global Atlantic Financial Group.
At the closing of the Global Atlantic Transaction, Equitable Financial and the Reinsurer entered into a Coinsurance
and Modified Coinsurance Agreement (the “EQUI-VEST Reinsurance Agreement”), pursuant to which Equitable
Financial ceded to the Reinsurer, on a combined coinsurance and modified coinsurance basis, a 50% quota share of
approximately 360,000 legacy Group EQUI-VEST deferred variable annuity contracts issued by Equitable Financial
128
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
between 1980 and 2008, which predominately include Equitable Financial’s highest guaranteed General Account
crediting rates of 3%, supported by General Account assets of approximately $4 billion and $5 billion of Separate
Account value (the “Reinsured Contracts”). The Reinsured Contracts predominately include certain of Equitable
Financial’s contracts that offer the highest guaranteed General Account crediting rates of 3%. At the closing of the
Global Atlantic Transaction, the Reinsurer deposited assets supporting the General Account liabilities relating to the
Reinsured Contracts into a trust account for the benefit of Equitable Financial, which assets will secure its obligations
to Equitable Financial under the EQUI-VEST Reinsurance Agreement. Commonwealth Annuity and Life Insurance
Company, an insurance company domiciled in the Commonwealth of Massachusetts and affiliate of the Reinsurer
(“Commonwealth”), provided a guarantee of the Reinsurer’s payment obligation to Equitable Financial under the
EQUI-VEST Reinsurance Agreement.
The Company transferred assets of $2.8 billion, including primarily available-for-sale securities, cash and policy loans
as the consideration for the reinsurance transaction. In addition, the Company recorded $4.1 billion of direct insurance
liabilities ceded under the reinsurance contract included in amounts due from reinsurers and $1.2 billion of deferred
gain on cost of reinsurance included within other liabilities. Additionally, $5.3 billion of Separate Account liabilities
were ceded under a modified coinsurance portion of the agreement.
CarVal Acquisition
On July 1, 2022, AB acquired a 100% interest in CarVal Investments L.P. (“CarVal”). On the acquisition date, AB
issued 3.2 million AB Units (with a fair value of $133 million) with the remaining 12.1 million AB units (with a fair
value of $456 million) issued on November 1, 2022. AB also recorded a contingent consideration payable of
$229 million (to be paid predominantly in AB Units) based on CarVal achieving certain performance objectives over a
six-year period ending December 31, 2027.
2)
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions (including normal, recurring accruals) that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results
could differ from these estimates.
The accompanying consolidated financial statements present the consolidated results of operations, financial condition,
and cash flows of the Company and its subsidiaries and those investment companies, partnerships and joint ventures in
which the Company has control and a majority economic interest as well as those VIEs that meet the requirements for
consolidation.
Financial results in the historical consolidated financial statements may not be indicative of the results of operations,
comprehensive income (loss), financial position, equity or cash flows that would have been achieved had we operated
as a separate, standalone entity during the reporting periods presented. We believe that the consolidated financial
statements include all adjustments necessary for a fair presentation of the results of operations of the Company.
All significant intercompany transactions and balances have been eliminated in consolidation. The years “2023”,
“2022” and “2021” refer to the years ended December 31, 2023, 2022 and 2021, respectively.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Adoption of New Accounting Pronouncements
ASU 2018-12: Financial Services - Insurance (Topic 944)
Description
Effect on the Financial Statement or Other Significant Matters
This ASU provides targeted improvements to existing
recognition, measurement, presentation, and disclosure
requirements for long-duration contracts issued by an insurance
entity. The ASU primarily impacts four key areas, including:
On January 1, 2023, the Company adopted the new accounting
standard ASU 2018-12 using the modified retrospective
approach, except for MRBs which will use the full retrospective
approach.
Refer to “Transition impact of ASU 2018-12, Financial Services-
Insurance (Topic 944): Targeted Improvements to the Accounting
for Long-Duration Contracts” section within this note for further
details.
1. Measurement of the liability for future policy benefits for
traditional and limited payment contracts. The ASU requires
companies to review, and if necessary, update cash flow
assumptions at least annually for non-participating traditional and
limited-payment insurance contracts. The ASU also prescribes
the discount rate to be used in measuring the liability for future
policy benefits for traditional and limited payment long-duration
contracts.
2. Measurement of Market Risk Benefits (“MRBs”). MRBs, as
defined under the ASU, will encompass certain GMxB features
associated with variable annuity products and other general
account annuities with other than nominal market risk.
3. Amortization of deferred acquisition costs. The ASU simplifies
the amortization of deferred acquisition costs and other balances
amortized in proportion to premiums, gross profits, or gross
margins, requiring such balances to be amortized on a constant
level basis over the expected term of the contracts.
4. Expanded footnote disclosures. The ASU requires additional
disclosures including information about significant inputs,
judgements, assumptions and methods used in measurement.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Future Adoption of New Accounting Pronouncements
Description
Effective Date and Method of
Adoption
Effect on the Financial Statement or
Other Significant Matters
ASU 2023-07: Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
This ASU provides improvements to reportable segment
disclosure requirements, primarily through enhanced
disclosures about significant segment expenses. In
addition, the amendments enhance interim disclosure
requirements, clarify circumstances in which an entity
can disclose multiple measures of segment profit or loss,
provide new segment disclosure requirements for
entities with a single reportable segment and contain
other disclosure requirements.
The ASU is effective for fiscal
years beginning after December
15, 2023, and interim periods in
fiscal years beginning after
December 15, 2024. A calendar
year public entity will adopt the
ASU for its 2024 Form 10-K.
The Company is currently
assessing the additional required
disclosures under the ASU
including providing new segment
disclosure requirements for
entities with a single reportable
segment.
The ASU should be adopted
retrospectively to all periods
presented in the financial
statements unless it is
impracticable to do so.
Management is evaluating the
impact the adoption of this
guidance will have on the
Company’s consolidated financial
statements.
ASU 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The ASU will be effective for
annual periods beginning after
December 15, 2024. Entities are
required to apply the ASU on a
prospective basis.
The adoption of ASU 2023-09 is
not expected to materially impact
the Company’s financial position,
results of operation, or cash flows.
The ASU enhanced existing income tax disclosures
primarily related to the rate reconciliation and income
taxes paid information. With regard to the improvements
to disclosures of rate reconciliation, a public business
entity is required on an annual basis to (1) disclose
specific categories in the rate reconciliation and (2)
provide additional information for reconciling items that
meet a quantitative threshold. Similarly, a public entity
is required to provide the amount of income taxes paid
(net of refunds received) disaggregated by (1) federal,
state, and foreign taxes and by(2) individual jurisdictions
in which income taxes paid (net of refunds received) is
equal to or greater than 5 percent of total income taxes
paid (net of refunds received).
The ASU also includes certain other amendments to
improve the effectiveness of income tax disclosures, for
example, an entity is required to provide (1) pretax
income (or loss) from continuing operations
disaggregated between domestic and foreign, and (2)
income tax expense (or benefit) from continuing
operations disaggregated by federal, state, and foreign.
Transition impact of ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the
Accounting for Long-Duration Contracts
The Company has not retrospectively adjusted its consolidated financial statements for the year ended December 31,
2020 to reflect the adoption of ASU 2018-12, consistent with the Division of Corporation Finance’s Financial
Reporting Manual Section 11410.1.
The Company adopted ASU 2018-12 for liability for future policy benefits (“LFPB”), additional insurance liabilities,
DAC and balances amortized on a basis consistent with DAC on a modified retrospective basis. ASU 2018-12 was
adopted for MRBs on a full retrospective basis.
For the LFPB, the net transition adjustment has a favorable retained earnings impact due to the exclusion of DAC in
loss recognition and Profits-followed-by-loss (“PFBL”) testing, resulting in a lower VISL PFBL liability. The
unfavorable impact was offset by the removal of balances related to unrealized gains and losses on investments, any
premium deficiency recorded in AOCI, formerly included in loss recognition testing as well as PFBL testing.
For market risk benefits, the transition adjustment to AOCI related to the effect of the changes in the instrument-
specific credit risk of market risk benefits between the contract issue and transition date. The remaining transition
difference was related to recording market risk benefits at fair value. This change was recorded as an adjustment to
retained earnings as of the transition date.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
For DAC, and balances amortized on a basis consistent with DAC including sales inducement assets and unearned
revenue liabilities, there is no retained earnings impact due to application of the modified transition approach. There is
a favorable AOCI impact due to the removal of DAC balances recorded in AOCI, offsetting the unfavorable AOCI
impact resulting from LFPB.
The following table presents the effect of transition adjustment to total equity resulting from the adoption of ASU
2018-12 as of January 1, 2021:
Retained
Earnings
Accumulated Other
Comprehensive Income
Total
(in millions)
Liability for future policy benefits
Market risk benefits
DAC
Unearned revenue liability and sales inducement assets (1)
Total transition adjustment before taxes
Income taxes
Total transition adjustment (net of taxes)
$
$
30 $
(3,398)
—
—
(3,368)
707
(2,661) $
(1,343) $
(902)
1,548
(166)
(863)
181
(682) $
(1,313)
(4,300)
1,548
(166)
(4,231)
888
(3,343)
_______________
(1) Unearned revenue liability included within liability for future policy benefits financial statement line item in the consolidated balance
sheets. Sales inducement assets are included in other assets in the consolidated balance sheets.
The following table summarizes the balance of and changes in liability for future policy benefits on January 1, 2021
resulting from the adoption of ASU 2018-12:
Balance, December 31, 2020
Adjustment for reversal of balances recorded in Accumulated
Other Comprehensive Income
Effect of remeasurement of liability at current single A rate
(1)
Balance, January 1, 2021 (1)
Less: Reinsurance recoverable
Balance, January 1, 2021, net of reinsurance
Protection
Solutions
Individual
Retirement
Corporate & Other
Term
Payout
Group
Pension
(in millions)
Health
Total
$
1,423 $
3,047 $
771 $
2,100 $
7,341
—
(171)
(85)
(100)
(356)
560
1,983
(59)
531
3,407
—
94
780
—
300
2,300
(1,837)
1,485
8,470
(1,896)
$
1,924 $
3,407 $
780 $
463 $
6,574
________________
(1) LFPB transition table not inclusive of the following transition adjustments to AOCI including Protection Solutions PFBL of
$550 million, PDR of $(230) million, Rider Reserves and Term Reinsurance of $(24) million and Corporate and Other of $(111) million.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table summarizes the balance of and changes in the net liability position of market risk benefits on January 1,
2021 resulting from the adoption of ASU 2018-12:
Balance, December 31, 2020
Adjustment for reversal of balances recorded in
Accumulated Other Comprehensive Income
Adjustments for the cumulative effect of the changes in
the instrument-specific credit risk between the original
contract issuance date and the transition date (1)
Adjustments for the remaining difference (exclusive of the
instrument specific credit risk change and host contract
adjustments) between previous carrying amount and fair
value measurement for the MRB (1)
Balance, January 1, 2021
Individual
Retirement
Legacy
GMxB Core
GMxB Legacy
Purchased MRB
Total
(in millions)
$
2,206 $
19,891 $
(2,572) $
19,525
(4)
(70)
505
461
—
2
(74)
968
(563)
2,144 $
4,122
24,404 $
(194)
(2,764) $
3,365
23,784
$
_____________
(1) MRB transition table not inclusive of the following transition adjustments to retained earnings and AOCI including Individual
Retirement EQUI-VEST of $43 million, SCS of $21 million, Protection Solutions of $(2) million and Group Retirement EQUI-VEST of
$(20) million.
The following table summarizes the balance of and changes in DAC on January 1, 2021 resulting from the adoption of
ASU 2018-12:
Protection Solutions
Term
UL
(1)
VUL
(2)
IUL
(3)
Legacy
GMxB
Legacy
Individual Retirement
Group Retirement
GMxB
Core
EI (4)
IE (5)
SCS
EG (6) Momentum
Total
(in millions)
$ 403 $ — $ — $ — $ 654 $ 1,635 $ 134 $ 95 $ 645 $ 553 $
79 $ 4,198
—
177
714
162
13
11
20
(1) 210
81
22
1,409
$ 403 $ 177 $ 714 $ 162 $ 667 $ 1,646 $ 154 $ 94 $ 855 $ 634 $
101 $ 5,607
Balance, December
31, 2020
Adjustment for
reversal of balances
recorded in
Accumulated Other
Comprehensive
Income
Balance, January 1,
2021 (7)
______________
(1) “UL” defined as Universal Life
(2) “VUL” defined as Variable Universal Life
(3) “IUL” defined as Indexed Universal Life
(4) “EI” defined as EQUI-VEST Individual
(5) “IE” defined as Investment Edge
(6) “EG” defined as EQUI-VEST Group
(7) DAC transition table not inclusive of Closed Block of $136 million and Protection Solutions of $3 million transition adjustment.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following tables summarizes the balance of and changes in sales inducement assets and unearned revenue liability
on January 1, 2021 resulting from the adoption of ASU 2018-12:
Balance, December 31, 2020
Adjustment for reversal of balances recorded in Accumulated Other
Comprehensive Income
Balance, January 1, 2021
Balance, December 31, 2020
Adjustment for reversal of balances recorded in Accumulated Other
Comprehensive Income
Balance, January 1, 2021
Investments
Sales Inducement Assets
Legacy
Individual
Retirement
GMxB Legacy
GMxB Core
Total
(in millions)
246 $
158 $
—
246 $
—
158 $
404
—
404
Protection Solutions
Unearned Revenue Liability
UL
VUL
IUL
Total
31 $
29
60 $
(in millions)
438 $
14 $
483
127
565 $
9
23 $
165
648
$
$
$
$
The carrying values of fixed maturities classified as AFS are reported at fair value. Changes in fair value are reported
in OCI, net of allowance for credit losses, policy related amounts and deferred income taxes. Changes in credit losses
are recognized in Investment gains (losses), net. The redeemable preferred stock investments that are reported in fixed
maturities include REIT, perpetual preferred stock and redeemable preferred stock. These securities may not have a
stated maturity, may not be cumulative and do not provide for mandatory redemption by the issuer.
The Company determines the fair values of fixed maturities and equity securities based upon quoted prices in active
markets, when available, or through the use of alternative approaches when market quotes are not readily accessible or
available. These alternative approaches include matrix or model pricing and use of independent pricing services, each
supported by reference to principal market trades or other observable market assumptions for similar securities. More
specifically, the matrix pricing approach to fair value is a discounted cash flow methodology that incorporates market
interest rates commensurate with the credit quality and duration of the investment. The Company’s management, with
the assistance of its investment advisors, evaluates AFS debt securities that experienced a decline in fair value below
amortized cost for credit losses which are evaluated in accordance with the new financial instruments credit losses
guidance. Integral to this review is an assessment made each quarter, on a security-by-security basis, by the IUS
Committee, of various indicators of credit deterioration to determine whether the investment security has experienced
a credit loss. This assessment includes, but is not limited to, consideration of the severity of the unrealized loss, failure,
if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions
specifically related to the security or sector, and the financial strength, liquidity and continued viability of the issuer.
The Company recognizes an allowance for credit losses on AFS debt securities with a corresponding adjustment to
earnings rather than a direct write down that reduces the cost basis of the investment, and credit losses are limited to
the amount by which the security’s amortized cost basis exceeds its fair value. Any improvements in estimated credit
losses on AFS debt securities are recognized immediately in earnings. Management does not use the length of time a
security has been in an unrealized loss position as a factor, either by itself or in combination with other factors, to
conclude that a credit loss does not exist.
When the Company determines that there is more than 50% likelihood that it is not going to recover the principal and
interest cash flows related to an AFS debt security, the security is placed on nonaccrual status and the Company
reverses accrued interest receivable against interest income. Since the nonaccrual policy results in a timely reversal of
accrued interest receivable, the Company does not record an allowance for credit losses on accrued interest receivable.
If there is no intent to sell or likely requirement to dispose of the fixed maturity security before its recovery, only the
credit loss component of any resulting allowance is recognized in income (loss) and the remainder of the fair value loss
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
is recognized in OCI. The amount of credit loss is the shortfall of the present value of the cash flows expected to be
collected as compared to the amortized cost basis of the security. The present value is calculated by discounting
management’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security at
the date of acquisition. Projections of future cash flows are based on assumptions regarding probability of default and
estimates regarding the amount and timing of recoveries. These assumptions and estimates require use of management
judgment and consider internal credit analyses as well as market observable data relevant to the collectability of the
security. For mortgage and asset-backed securities, projected future cash flows also include assumptions regarding
prepayments and underlying collateral value.
Write-offs of AFS debt securities are recorded when all or a portion of a financial asset is deemed uncollectible. Full or
partial write-offs are recorded as reductions to the amortized cost basis of the AFS debt security and deducted from the
allowance in the period in which the financial assets are deemed uncollectible. The Company elected to reverse
accrued interest deemed uncollectible as a reversal of interest income. In instances where the Company collects cash
that it has previously written off, the recovery will be recognized through earnings or as a reduction of the amortized
cost basis for interest and principal, respectively.
Policy loans represent funds loaned to policyholders up to the cash surrender value of the associated insurance policies
and are carried at the unpaid principal balances due to the Company from the policyholders. Interest income on policy
loans is recognized in net investment income at the contract interest rate when earned. Policy loans are fully
collateralized by the cash surrender value of the associated insurance policies.
Partnerships, investment companies and joint venture interests that the Company has control of and has an economic
interest in or those that meet the requirements for consolidation under accounting guidance for consolidation of VIEs
are consolidated. Those that the Company does not have control of and does not have a majority economic interest in
and those that do not meet the VIE requirements for consolidation are reported on the equity method of accounting and
are reported in other equity investments. The Company records its interests in certain of these partnerships on a month
or one quarter lag.
Trading securities, which include equity securities and fixed maturities, are carried at fair value based on quoted
market prices, with realized and unrealized gains (losses) reported in net investment income (loss) in the consolidated
statements of income (loss).
The carrying values of certain fixed maturities are reported at fair value where the fair value option has been elected.
The fair value option allows the Company to elect fair value as an alternative measurement for selected financial assets
and financial liabilities not otherwise reported at fair value. Such elections have been made to help mitigate volatility
in earnings that result from different measurement attributes. Electing the fair value option also allows the consistent
accounting in net investment income (loss) for certain assets and liabilities. Changes in fair value of fixed maturities
that have elected the fair value option are reflected in realized and unrealized gains (losses) reported in net investment
income (loss) in the consolidated statements of income (loss).
Notes issued by consolidated variable interest entities represent notes issued by certain asset-backed investment
vehicles, primarily CLOs, which we are required to consolidate. The creditors of these VIEs do not have recourse to
the Company in excess of the assets contained within the VIEs. The Company has elected the fair value option for the
majority of these notes and has based the fair value on the corresponding debt security collateral. Changes in fair value
are reported in net investment income (loss).
COLI has been purchased by the Company and certain subsidiaries on the lives of certain key employees and the
Company and these subsidiaries are named as beneficiaries under these policies. COLI is carried at the cash surrender
value of the policies. As of December 31, 2023 and 2022, the carrying value of COLI was $921 million and $886
million, respectively, and is reported in other invested assets in the consolidated balance sheets.
Cash and cash equivalents includes cash on hand, demand deposits, money market accounts, overnight commercial
paper and highly liquid debt instruments purchased with an original maturity of three months or less. Due to the short-
term nature of these investments, the recorded value is deemed to approximate fair value. Cash and securities
segregated primarily includes U.S. Treasury Bills segregated by AB in a special reserve bank custody account for the
exclusive benefit of its brokerage customers under Rule 15c3-3 of the Exchange Act.
Securities Sold under Agreements to Repurchase
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Securities sold under agreements to repurchase involve the temporary exchange of securities for cash or other
collateral of equivalent value, with agreement to redeliver a like quantity of the same or similar securities at a future
date prior to maturity at a fixed and determinable price. Securities sold under agreements to repurchase transactions are
conducted by the Company under a standardized securities industry master agreement, amended to suit the
requirements of each respective counterparty. Transfers of securities under these agreements to repurchase are
evaluated by the Company to determine whether they satisfy the criteria for accounting treatment as secured borrowing
arrangements. Agreements not meeting the criteria would require recognition of the transferred securities as sales with
related forward repurchase commitments. All of the Company’s securities repurchase transactions are accounted for as
secured borrowings with the related obligations distinctly captioned in the consolidated balance sheets on a gross basis.
As of December 31, 2023 and 2022 the Company had no Securities sold under agreements to repurchase outstanding.
During the year ended December 31, 2021 there was no activity on Securities sold under agreements to repurchase.
Securities Lending Program
The Company enters into securities lending transactions whereby securities are loaned to third parties, primarily major
brokerage firms. Securities lending transactions are treated as financing arrangements and the associated liability is
recorded as the amount of cash received. Income and expenses associated with securities lending transactions are
reported within net investment income in the consolidated statements of income (loss).
Derivatives
Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial
indices, values of securities or commodities, credit spreads, market volatility, expected returns and liquidity. Values
can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and
non-performance risk used in valuation models. Derivative financial instruments generally used by the Company
include equity, currency, and interest rate futures, total return and/or other equity swaps, interest rate swaps and floors,
swaptions, variance swaps and equity options, all of which may be exchange-traded or contracted in the OTC market.
All derivative positions are carried in the consolidated balance sheets at fair value, generally by obtaining quoted
market prices or through the use of valuation models.
Freestanding derivative contracts are reported in the consolidated balance sheets either as assets within “other invested
assets” or as liabilities within “other liabilities.” The Company nets the fair value of all derivative financial instruments
with counterparties for which an ISDA Master Agreement and related CSA have been executed. All changes in the fair
value of the Company’s freestanding derivative positions not designated to hedge accounting relationships, including
net receipts and payments, are included in “net derivative gains (losses)” without considering changes in the fair value
of the economically associated assets or liabilities.
The Company has designated certain derivatives it uses to economically manage asset/liability risk in relationships
which qualify for hedge accounting. To qualify for hedge accounting, we formally document our designation at
inception of the hedge relationship as a cash flow, fair value or net investment hedge. This documentation includes our
risk management objective and strategy for undertaking the hedging transaction. The Company identifies how the
hedging instrument is expected to offset the designated risks related to the hedged item and the method that will be
used to retrospectively and prospectively assess the hedge effectiveness. To qualify for hedge accounting, a hedging
instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge
effectiveness is formally assessed and documented at inception and periodically throughout the life of the hedge
accounting relationship.
The Company does not exclude any components of the hedging instrument from the effectiveness assessments and
therefore does not separately measure or account for any excluded components of the hedging instrument.
While in cash flow hedge relationships, any periodic net receipts and payments from the hedging instrument are
included in the income or expense line that the hedged item’s periodic income or expense is recognized. Other changes
in the fair value of the hedging instrument while in a cash flow hedging relationship are reported within OCI. These
amounts are deferred in AOCI until they are reclassified to Net income (loss). The reclassified amount offsets the
effect of the cash flows on Net income (loss) in the same period when the hedged item affects earnings and on the
same line as the hedged item.
We discontinue cash flow hedge accounting prospectively when the Company determines: (1) the hedging instrument
is no longer highly effective in offsetting changes in the cash flow from the hedged risk, (2) the hedged item is no
longer probable of occurring within two months of their forecast, or (3) the hedging instrument is otherwise
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
redesignated from the hedging relationship. Changes in the fair value of the derivative after discontinuation of cash
flow hedge accounting are accounted for as freestanding derivative positions not designated to hedge accounting
relationships unless and until the derivative is redesignated to a hedge accounting relationship. When cash flow hedge
accounting is discontinued the amounts deferred in AOCI during the hedge relationship continue to be deferred in
AOCI, as long as the hedged items continue to be probable of occurring within two months of their forecast, until the
hedged item affects Net income (loss). Any amount deferred in AOCI for hedged items which are no longer probable
of occurring within two months of their forecast will be reclassified to “net derivative gains (losses)” at that time.
The Company is a party to financial instruments and other contracts that contain “embedded” derivative instruments.
At inception, the Company assesses whether the economic characteristics of the embedded instrument are “clearly and
closely related” to the economic characteristics of the remaining component of the “host contract” and whether a
separate instrument with the same terms as the embedded instrument would meet the definition of a derivative
instrument. Once those criteria are met the resulting embedded derivative is bifurcated from the host contract, carried
in the consolidated balance sheets at fair value, and changes in its fair value are recognized immediately and captioned
in the consolidated statements of income (loss) according to the nature of the related host contract. For certain financial
instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value,
the Company instead may elect to carry the entire instrument at fair value.
Mortgage Loans on Real Estate
The Company invests in commercial, agricultural and residential mortgage loans which are included in the
consolidated balance sheets as mortgage loans on real estate. Mortgage loans are stated at unpaid principal balances,
net of unamortized discounts and the allowance for credit losses. The Company calculates the allowance for credit
losses in accordance with the CECL model in order to provide for the risk of credit losses in the lending process.
Expected credit losses for loans with similar risk characteristics are estimated on a collective (i.e., pool) basis in order
to meet CECL’s risk of loss concept which requires the Company to consider possibilities of loss, even if remote.
For collectively evaluated mortgages, the Company estimates the allowance for credit losses based on the amortized
cost basis of its mortgages over their expected life using a PD / LGD model. The PD / LGD model incorporates the
Company’s reasonable and supportable forecast of macroeconomic information over a specified period. The length of
the reasonable and supportable forecast period is reassessed on a quarterly basis and may be adjusted as appropriate
over time to be consistent with macroeconomic conditions and the environment as of the reporting date. For periods
beyond the reasonable and supportable forecast period, the model reverts to historical loss information. The PD and
LGD are estimated at the loan-level based on loans’ current and forecasted risk characteristics as well as
macroeconomic forecasts. The PD is estimated using both macroeconomic conditions as well as individual loan risk
characteristics including LTV ratios, DSC ratios, DTI ratio, seasoning, collateral type, geography, and underlying
credit. The LGD is driven primarily by the type and value of collateral, and secondarily by expected liquidation costs
and time to recovery.
For individually evaluated mortgages, the Company continues to recognize a valuation allowance on the present value
of expected future cash flows discounted at the loan’s original effective interest rate or on its collateral value.
The CECL model is configured to the Company’s specifications and takes into consideration the detailed risk
attributes of each discrete loan in the mortgage portfolio which will vary by loan type, but are not limited to the
following:
•
•
•
•
•
LTV ratio – Derived from current loan balance divided by the fair market value of the property. An LTV ratio
in excess of 100% indicates an underwater mortgage.
DSC ratio – Derived from actual operating earnings divided by annual debt service. If the ratio is below 1.0x,
then the income from the property does not support the debt.
DTI ratio - Is used for residential mortgage loans to assess a borrower’s ability to repay a loan. DTI ratio is
derived by adding up all of the borrower’s debt payments and dividing that sum by the borrower’s gross
monthly income.
Consumer Credit Score - Is used for residential mortgage loans to determine the borrower’s credit worthiness
and eligibility for a residential loan based upon credit reports.
Occupancy – Criteria varies by property type but low or below market occupancy is an indicator of sub-par
property performance.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
•
•
Lease expirations – The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a
decline in rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-
tenant properties or properties with large tenant exposure, the lease expiration is a material risk factor.
Other – Any other factors such as maturity, borrower/tenant related issues, payment status, property
condition, or current economic conditions may call into question the performance of the loan.
Mortgage loans that do not share similar risk characteristics with other loans in the portfolio are individually evaluated
quarterly by the Company’s IUS Committee. The allowance for credit losses on these individually evaluated
mortgages is a loan-specific reserve as a result of the loan review process that is recorded based on the present value of
expected future cash flows discounted at the loan’s effective interest rate or based on the fair value of the collateral.
The individually assessed allowance for mortgage loans can increase or decrease from period to period based on such
factors.
Individually assessed loans may include, but are not limited to, mortgages that have deteriorated in credit quality such
as a TDR and reasonably expected TDRs, mortgages for which foreclosure is probable, and mortgages which have
been classified as “potential problem” or “problem” loans within the Company’s IUS Committee processes as
described below.
Within the IUS process, commercial mortgages 60 days or more past due and agricultural and residential mortgages 90
days or more past due, as well as all mortgages in the process of foreclosure, are identified as problem mortgage loans.
Based on its monthly monitoring of mortgages, a class of potential problem mortgage loans are also identified,
consisting of mortgage loans not currently classified as problem mortgage loans but for which management has doubts
as to the ability of the borrower to comply with the present loan payment terms and which may result in the loan
becoming a problem or being modified. The decision whether to classify a performing mortgage loan as a potential
problem involves judgments by management as to likely future industry conditions and developments with respect to
the borrower or the individual mortgaged property.
Individually assessed mortgage loans without provision for losses are mortgage loans where the fair value of the
collateral or the net present value of the expected future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on mortgage loans where the collateral value is used to measure impairment is
recorded on a cash basis. Interest income on mortgage loans where the present value method is used to measure
impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows.
Mortgage loans are placed on nonaccrual status once management believes the collection of accrued interest is not
probable. Once mortgage loans are classified as nonaccrual mortgage loans, interest income is recognized under the
cash basis of accounting and the resumption of the interest accrual would commence only after all past due interest has
been collected or the mortgage loan has been restructured to where the collection of interest is considered likely. The
Company charges off loan balances and accrued interest that are deemed uncollectible.
The components of amortized cost for mortgage loans on the consolidated balance sheets excludes accrued interest
amounts because the Company presents accrued interest receivables within other assets. Once mortgage loans are
placed on nonaccrual status, the Company reverses accrued interest receivable against interest income. Since the
nonaccrual policy results in the timely reversal of accrued interest receivable, the Company does not record an
allowance for credit losses on accrued interest receivable.
Held-for-Sale
The Company classifies assets and liabilities (“disposal group”) as held-for-sale when the specified criteria in
Accounting Standards Codification 360, Property, Plant and Equipment, are met. Assets and liabilities held-for-sale
are presented separately within the Consolidated Balance Sheets. Depreciation of property, plant and equipment and
amortization of intangible and right-of-use assets are not recorded while these assets are classified as held-for-sale. If,
in any period, the carrying value of the disposal group exceeds the estimated fair value, less costs to sell, an
impairment loss will be recognized. See Note 25 of the Notes to these Consolidated Financial Statements for additional
information regarding the disposal group.
Troubled Debt Restructuring
The investment the Company makes in commercial, agricultural and residential mortgage loans are included in the
consolidated balance sheets as mortgage loans on real estate. The investments the Company makes in privately
negotiated fixed maturities are included in the consolidated balance sheets as fixed maturities AFS. Under certain
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a TDR has
occurred. A modification is a TDR when the borrower is in financial difficulty and the creditor makes concessions.
Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally
stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market
interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the
concession granted in determining any impairment or changes in the specific credit allowance recorded in connection
with the TDR. A credit allowance may have been recorded prior to the period when the loan is modified in a TDR.
Accordingly, the carrying value (net of the allowance) before and after modification through a TDR may not change
significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. For
information pertaining to our TDRs see Note 3 of the Notes to these Consolidated Financial Statements.
Net Investment Income (Loss), Investment Gains (Losses) Net and Unrealized Investment Gains (Losses)
Realized investment gains (losses) are determined by identification with the specific asset and are presented as a
component of revenue. Changes in the allowance for credit losses are included in investment gains (losses), net.
Realized and unrealized holding gains (losses) on trading and equity securities are reflected in net investment income
(loss).
Unrealized investment gains (losses) on fixed maturities designated as AFS held by the Company are accounted for as
a separate component of AOCI, net of related deferred income taxes, as are amounts attributable to certain pension
operations, Closed Block’s policyholders’ dividend obligation, insurance liability loss recognition, DAC related to UL
policies, investment-type products and participating traditional life policies.
Changes in unrealized gains (losses) reflect changes in fair value of only those fixed maturities classified as AFS and
do not reflect any change in fair value of policyholders’ account balances and future policy benefits.
Fair Value of Financial Instruments
See Note 8 of the Notes to these Consolidated Financial Statements for additional information regarding determining
the fair value of financial instruments.
Recognition of Insurance Income and Related Expenses
Deposits related to UL and investment-type contracts are reported as deposits to policyholders’ account balances.
Revenues from these contracts consist of fees assessed during the period against policyholders’ account balances for
mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to
expense include benefit claims incurred in the period in excess of related policyholders’ account balances.
DAC
Acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business,
reflecting incremental direct costs of contract acquisition with independent third parties or employees that are essential
to the contract transaction, as well as the portion of employee compensation, including employee fringe benefits and
other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for
successfully negotiated contracts including commissions, underwriting, agency and policy issue expenses, are
deferred.
Contracts are measured on a grouped basis utilizing cohorts consistent with those used in the calculation of future
policy benefit reserves. DAC is amortized on a constant level basis for the grouped contracts over the expected term of
the contract. For life insurance products, DAC is amortized in proportion to the face amount in force. For annuity
products DAC is amortized in proportion to policy counts. The constant level basis used for amortization determines
the current period amortization considering both the current period’s actual experience and future projections. The
amortization pattern is revised quarterly on a prospective basis. Amortization of DAC is included in Amortization of
DAC, part of total benefits and other deductions.
For some products, policyholders can elect to modify product benefits, features, rights or coverages that occur by the
exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or
coverage within a contract. These transactions are known as internal replacements. If such modification substantially
changes the contract, the associated DAC is written off immediately through income and any new acquisition costs
associated with the replacement contract are deferred.
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Notes to Consolidated Financial Statements, Continued
Amount due to and from Reinsurers
For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification
against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under
reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews all
contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or
features that delay the timely reimbursement of claims.
For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the
difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying
contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. Subsequent amounts
paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are
recorded as premiums ceded (assumed); and amounts due from reinsurers (amounts due to reinsurers) are established.
Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance
sheet if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their
obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could
become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible
reinsurance.
Premiums, policy charges and fee income, and policyholders’ benefits include amounts assumed under reinsurance
agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported
in other revenues.
For reinsurance contracts, reinsurance recoverable balances are generally calculated using methodologies and
assumptions that are consistent with those used to calculate the direct liabilities.
Ceded reinsurance transactions are recognized and measured in a manner consistent with underlying reinsured
contracts, including using consistent assumptions. Assumed and ceded reinsurance contract rights and obligations are
accounted for on a basis consistent with our direct contract. The reinsurance cost or benefit for traditional life non-
participating and limited-payment contracts is recognized in proportion to the Gross Premiums of the underlying direct
cohorts. The locked-in single A discount rate used to calculate the reinsurance cost or benefit is established at
inception of the reinsurance contract. Changes to the single A discount rate are reflected in comprehensive income at
each reporting date.
If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a
significant loss from insurance risk, the Company records the agreement using the deposit method of accounting.
Deposits received are included in other liabilities and deposits made are included within other assets. As amounts are
paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such
deposits is recorded as other income or other operating costs and expenses, as appropriate.
Sales Inducement Assets
Sales inducement assets are offered on certain deferred annuity products in the form of either immediate bonus interest
credited or enhanced interest crediting rates for a period of time. The interest crediting expense associated with these
sales inducement assets is deferred and amortized over the lives of the underlying contracts in a manner consistent
with the amortization of DAC. Unamortized balances are included in other assets in the consolidated balance sheets
and amortization is included in interest credited to policyholders’ account balances in the consolidated statements of
income (loss).
Policyholders’ Account Balances
Policyholders’ account balances relate to contracts or contract features where the Company has no significant
insurance risk. This liability represents the contract value that has accrued to the benefit of the policyholder as of the
balance sheet date.
Obligations arising from funding agreements are also reported in policyholders’ account balances in the consolidated
balance sheets. As a member of the FHLB, the Company has access to collateralized borrowings. The Company may
also issue funding agreements to the FHLB. Both the collateralized borrowings and funding agreements would require
the Company to pledge qualified mortgage-backed assets and/or government securities as collateral.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Future Policy Benefits and Other Policyholders’ Liabilities
The liability for future policy benefits is estimated based upon the present value of future policy benefits and related
claim expenses less the present value of estimated future net premiums where net premium equals gross premium
under the contract multiplied by the net premium ratio. Related claim expenses include termination and settlement
costs and exclude acquisition costs and non-claim related costs. The liability is estimated using current assumptions
that include discount rate, mortality, and lapses. Assumptions are based on judgments that consider the Company’s
historical experience, industry data, and other factors.
For participating traditional life insurance policies, future policy benefit liabilities are calculated using a net level
premium method based on guaranteed mortality and dividend fund interest rates. The liability for annual dividends
represents the accrual of annual dividends earned. Terminal dividends are accrued in proportion to face amount over
the life of the contract.
For non-participating traditional life insurance policies (Term) and limited pay contracts (Payout, Pension), contracts
are grouped into cohorts by contract type and issue year. The Company quarterly updates its estimate of cash flows
using actual experience and current future cash flow assumptions, which is reflected in an updated net premium ratio
used to calculate the liability. The ratio of actual and future expected claims to actual and future expected premiums
determines the net premium ratio. The policy administration expense assumption is not updated after policy issuance.
If actual expenses differ from the original expense assumptions, the differences are recognized in the period identified.
The revised net premium ratio is used to determine the updated liability for future policy benefits as of the beginning
of the reporting period, discounted at the original contract issuance rate. Changes in the liability due to current
discount rates differing from original rates are included in other comprehensive income within the consolidated
statement of comprehensive income.
For non-participating traditional life insurance policies and limited pay contracts, the discount rate assumption used is
corporate A rated forward curve. We use a forward curve based upon a Bloomberg index. The liability is remeasured
each quarter with the remeasurement change reported in other comprehensive income. The locked-in discount rate is
generally based on expected investment returns at contract inception for contracts issued prior to January 1, 2021 and
the upper medium grade fixed income corporate instrument yield (i.e., single A) at contract inception for contracts
issued after January 1, 2021. The Company developed an LDTI discount rate methodology used to calculate the LFPB
for its traditional insurance liabilities and constructed a discount rate curve that references upper-medium grade (low
credit risk) fixed-income instrument yields (i.e. Single-A rated Corporate bond yields) which are meant to reflect the
duration characteristics of the corresponding insurance liabilities. The methodology uses observable market data,
where available, and uses various estimation techniques in line with fair value guidance (such as interpolation and
extrapolation) where data is limited. Discount rates are updated quarterly.
For limited-payment products, Gross Premiums received in excess of net premiums are deferred at initial recognition
as a deferred profit liability (“DPL”). DPL will be amortized in relation to the expected future benefit payments. As the
calculation of the DPL is based on discounted cash flows, interest accrues on the unamortized DPL balance using the
discount rate determined at contract issuance. The DPL is updated at the same time as the estimates for cash flows for
the liability for future policy benefits. Any difference between the recalculated and beginning of period DPL is
recognized in remeasurement gain or loss in the consolidated statements of income (loss), Remeasurement of Liability
for Future Policy Benefits, part of total benefits and other deductions. On the consolidated balance sheets the DPL is
recorded in the liability for future policy benefits.
Additional liabilities for contract or contract feature that provide for additional benefits in addition to the account
balance but are not market risk benefits or embedded derivatives (“additional insurance liabilities”) are established by
estimating the expected value of death or other insurance benefits in excess of the projected contract accumulation
value and recognizing the excess over the estimated life based on expected assessments (i.e., benefit ratio). The
liability equals the current benefit ratio multiplied by cumulative assessments recognized to date, plus interest, less
cumulative excess payments to date. These reserves are recorded within future policy benefits and other policyholders’
liabilities. The determination of this estimated future policy benefits liability is based on models that involve numerous
assumptions and subjective judgments, including those regarding expected market rates of return and volatility,
contract surrender and withdrawal rates, and mortality experience. There can be no assurance that actual experience
will be consistent with management’s estimates. Assumptions are reviewed annually and updated with the
remeasurement gain or loss reflected in total benefit expense.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The Company recognizes an adjustment in other comprehensive income for the additional insurance liabilities for
unrealized gains and losses not included when calculating the present value of expected assessments for the benefit
ratios.
The Company conducts annual premium deficiency testing except for liability for future policy benefits for non-
participating traditional and limited payment contracts. The Company reviews assumptions and determines whether
the sum of existing liabilities and the present value of future Gross Premiums is sufficient to cover the present value of
future benefits to be paid and settlement costs. Anticipated investment income is considered when performing
premium deficiency for long duration contracts. The anticipated investment income is projected based on current
investment portfolio returns grading to long term reinvestment rates over the projection periods, based on anticipated
gross reinvestment spreads, defaults and investment expenses. Premium deficiency reserves are recorded in certain
instances where the policyholder liability for a particular line of business may not be deficient in the aggregate to
trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier
years followed by losses in later years. This pattern of profits followed by losses is exhibited in our VISL business and
is generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee
ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit
even if there is insufficient policy value to cover the monthly deductions and charges. We accrue for these PFBL using
a dynamic approach that changes over time as the projection of future losses change.
Market Risk Benefits
Market risk benefits (“MRBs”) are contracts or contract features that provide protection to the contract holder from
other than nominal capital market risk and expose the Company to other than nominal capital market risk. Market risk
benefits include contract features that provide minimum guarantees to policyholders and include GMIB, GMDB,
GMWB, GMAB, and ROP DB benefits. MRBs are identified and measured at fair value on a seriatim basis using an
ascribed fee approach based upon policyholder behavior projections and risk neutral economic scenarios adjusted
based on the facts and circumstances of the Company’s product features. The MRB Asset and MRB Liability will be
equal to the estimated present value of benefits and risk margins less the estimated present value of ascribed fees.
Ascribed fees will consist of the fee needed at policy inception date, under a stochastically generated set of risk-neutral
scenarios, so that the present value of claims, including any risk charge, is equal to the present value of the projected
attributed fees which will be capped at estimated present value of total policyholder contractual fees. The attributed fee
percentage is considered a fixed term of the MRB feature and is held static over the life of the contract. Discount rates
are updated quarterly. Changes in fair value are recognized as a remeasurement gain/loss in the Change in market risk
benefits and purchased market risk benefits, part of total benefits and other deductions except for the portion of the
change in the fair value due to change in the Company’s own credit risk, which is recognized in other than
comprehensive income. Additionally, when an annuitization occurs (for annuitization benefits) or upon extinguishment
of the account balance (for withdrawal benefits) the balance related to the MRB will be derecognized and the amount
deducted (after derecognition of any related amount included in accumulated other comprehensive income) shall be
used in the calculation of the liability for future policy benefits for the payout annuity. Upon derecognition, any related
balance will be removed from AOCI.
The Company has issued and continues to offer certain variable annuity products with GMDB and/or contain a GMLB
(collectively, the “GMxB features”) which, if elected by the policyholder after a stipulated waiting period from
contract issuance, guarantees a minimum lifetime annuity based on predetermined annuity purchase rates that may be
in excess of what the contract account value can purchase at then-current annuity purchase rates. This minimum
lifetime annuity is based on predetermined annuity purchase rates applied to a GMIB base. The Company previously
issued certain variable annuity products with GMIB, GWBL, GMWB, and GMAB features. The Company has also
assumed reinsurance for products with GMxB features.
Features in ceded reinsurance contracts that meet the definition of MRBs are accounted for at fair value as a purchased
MRB. The fees used to determine the fair value of the reinsured market risk benefit are those defined in the
reinsurance contract. The expected periodic future premiums would represent cash outflows and the expected future
benefits would represent cash inflows in the fair value calculation. On the ceded side, the Purchased MRB will be
measured considering the counterparty credit risk of the reinsurer, while the direct contract liabilities will be measured
considering the instrument-specific credit risk of the insurer. As a result of the difference in the treatment of the
counterparty credit risk, the fair value of the direct and ceded contracts may be different even if the contractual fees
and benefits are the same. Changes in instrument-specific credit risk of the Company is included in the fair value of its
market risk benefit, whether in an asset or liability position, and whether related to an issued or purchased MRB, is
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
recognized in OCI. The counterparty credit risk of the reinsurer is recorded in the consolidated statements of income
(loss).
Policyholders’ Dividends
The amount of policyholders’ dividends to be paid (including dividends on policies included in the Closed Block) is
determined annually by the board of directors of the issuing insurance company. The aggregate amount of
policyholders’ dividends is related to actual interest, mortality, morbidity and expense experience for the year and
judgment as to the appropriate level of statutory surplus to be retained by the Company.
Separate Accounts
Generally, Separate Accounts established under New York State and Arizona State Insurance Law are not chargeable
with liabilities that arise from any other business of the Company. Separate Accounts assets are subject to General
Account claims only to the extent Separate Accounts assets exceed Separate Accounts liabilities. Assets and liabilities
of the Separate Account represent the net deposits and accumulated net investment earnings (loss) less fees, held
primarily for the benefit of policyholders, and for which the Company does not bear the investment risk. Separate
Accounts assets and liabilities are shown on separate lines in the consolidated balance sheets. Assets held in Separate
Accounts are reported at quoted market values or, where quoted values are not readily available or accessible for these
securities, their fair value measures most often are determined through the use of model pricing that effectively
discounts prospective cash flows to present value using appropriate sector-adjusted credit spreads commensurate with
the security’s duration, also taking into consideration issuer-specific credit quality and liquidity. Investment
performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and
the corresponding amounts credited to policyholders of such Separate Accounts are offset within the same line in the
consolidated statements of income (loss).
Deposits to Separate Accounts are reported as increases in Separate Accounts assets and liabilities and are not reported
in the consolidated statements of income (loss). Mortality, policy administration and surrender charges on all policies
including those funded by Separate Accounts are included in revenues.
The Company reports the General Account’s interests in Separate Accounts as trading securities, at fair value, in the
consolidated balance sheets.
Leases
The Company does not record leases with an initial term of 12 months or less in its consolidated balance sheets, but
instead recognizes lease expense for these leases on a straight-line basis over the lease term. For leases with a term
greater than one year, the Company records in its consolidated balance sheets at the time of lease commencement or
modification a RoU operating lease asset and a lease liability, initially measured at the present value of the lease
payments. Lease costs are recognized in the consolidated statements of income (loss) over the lease term on a straight-
line basis. RoU operating lease assets represent the Company’s right to use an underlying asset for the lease term and
RoU operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
Broker-Dealer Revenues, Receivables and Payables
Equitable Advisors and certain of the Company’s other subsidiaries provide investment management, brokerage and
distribution services for affiliates and third parties. Third-party revenues earned from these services are reported in
other income in the Company’s consolidated statement of income (loss).
Receivables from and payables to clients include amounts due on cash and margin transactions. Securities owned by
customers are held as collateral for receivables; such collateral is not reflected in the consolidated financial statements.
Goodwill and Other Intangible Assets
Goodwill recorded by the Company represents the excess of purchase price over the estimated fair value of identifiable
net assets of companies acquired in a business combination and relates principally to the acquisition of SCB Inc., an
investment research and management company formerly known as Sanford C. Bernstein Inc. (“Bernstein
Acquisition”), the purchase of AB Units, and AB’s acquisition of CarVal on July 1, 2022. The Company tests goodwill
for recoverability each annual reporting period at December 31 and at interim periods if facts or circumstances are
indicative of potential impairment.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The Company uses a market valuation approach. Under the market valuation approach, the fair value of the reporting
unit is based on its adjusted market valuation assuming a control premium. The Company determined that this
valuation technique provided a more exact determination of fair value for the reporting unit and was applied during its
annual testing for goodwill recoverability at December 31, 2023 and 2022.
The Company’s intangible assets primarily relate to AB’s acquisition of CarVal and reflect amounts assigned to
acquired investment management contracts based on their estimated fair values at the time of acquisition, less
accumulated amortization. These intangible assets generally are amortized on a straight-line basis over their estimated
useful life, ranging from six to twenty years. All intangible assets are periodically reviewed for impairment as events
or changes in circumstances indicate that the carrying value may not be recoverable. If the carrying value exceeds fair
value, impairment tests are performed to measure the amount of the impairment loss, if any.
Deferred Sales Commissions, Net
Commissions paid to financial intermediaries in connection with the sale of shares of open-end AB sponsored mutual
funds sold without a front-end sales charge (“back-end load shares”) are capitalized as deferred sales commissions and
amortized over periods not exceeding five and one-half years for U.S. fund shares and four years for non-U.S. fund
shares, the periods of time during which the deferred sales commissions are generally recovered. These commissions
are recovered from distribution services fees received from those funds and from CDSC received from shareholders of
those funds upon the redemption of their shares. CDSC cash recoveries are recorded as reductions of unamortized
deferred sales commissions when received. Since January 31, 2009, AB sponsored U.S. mutual funds have not offered
back-end load shares to new investors.
Management periodically reviews the deferred sales commission asset for impairment as events or changes in
circumstances indicate that the carrying value may not be recoverable. If these factors indicate impairment in value, a
comparison is made of the carrying value to the undiscounted cash flows expected to be generated by the asset over its
remaining life. If it is determined the deferred sales commission asset is not fully recoverable, the asset will be deemed
impaired and a loss will be recorded in the amount by which the recorded amount of the asset exceeds its estimated fair
value.
As of December 31, 2023 and 2022, respectively, net deferred sales commissions from AB totaled $87 million and $52
million and are included within other assets in the consolidated balance sheets. The estimated amortization expense of
deferred sales commissions, based on the December 31, 2023 net asset balance for each of the next three years is $42
million, $28 million and $16 million. The Company tests the deferred sales commission asset for impairment quarterly
by comparing undiscounted future cash flows to the recorded value, net of accumulated amortization. Each quarter,
significant assumptions used to estimate the future cash flows are updated to reflect management’s consideration of
current market conditions on expectations made with respect to future market levels and redemption rates. As of
December 31, 2023 and 2022, the Company determined that the deferred sales commission asset was not impaired.
Capitalized Computer Software and Hosting Arrangements
Capitalized computer software and hosting arrangements include certain internal and external costs used to implement
internal-use software and cloud computing hosting arrangements. These capitalized computer costs are included in
other assets in the consolidated balance sheets and amortized on a straight-line basis over the estimated useful life of
the software or term of the hosting arrangement that ranges between three and five years. Capitalized amounts are
periodically tested for impairment in accordance with the guidance on impairment of long-lived assets. An immediate
charge to earnings is recognized if capitalized computer costs no longer are deemed to be recoverable. In addition,
service potential is periodically reassessed to determine whether facts and circumstances have compressed the
software’s useful life or a significant change in the term of the hosting arrangement such that acceleration of
amortization over a shorter period than initially determined would be required.
Capitalized computer software and hosting arrangements, net of accumulated amortization, amounted to $163 million
and $224 million as of December 31, 2023 and 2022, respectively. Amortization of capitalized computer software and
hosting arrangements in 2023, 2022 and 2021 was $53 million, $45 million and $57 million, respectively, recorded in
other operating costs and expenses in the consolidated statements of income (loss).
Short-term and Long-term Debt
Liabilities for short-term and long-term debt are primarily carried at an amount equal to unpaid principal balance, net
of unamortized discount or premium and debt issue costs. Original-issue discount or premium and debt-issue costs are
recognized as a component of interest expense over the period the debt is expected to be outstanding, using the interest
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
method of amortization. Interest expense is generally presented within interest expense in the consolidated statements
of income (loss). Short-term debt represents debt coming due in the next twelve months, including that portion of debt
otherwise classified as long-term. See Note 14 of the Notes to these Consolidated Financial Statements for additional
information regarding short-term and long-term debt.
Income Taxes
The Company and certain of its consolidated subsidiaries and affiliates file a consolidated federal income tax return.
The Company provides for federal and state income taxes currently payable, as well as those deferred due to temporary
differences between the financial reporting and tax bases of assets and liabilities. Current federal income taxes are
charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable
operations for the current year. Deferred income tax assets and liabilities are recognized based on the difference
between financial statement carrying amounts and income tax bases of assets and liabilities using enacted income tax
rates and laws. Valuation allowances are established when management determines, based on available information,
that it is more likely than not that deferred tax assets will not be realized.
Under accounting for uncertainty in income taxes guidance, the Company determines whether it is more likely than not
that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the
benefit can be recorded in the consolidated financial statements. Tax positions are then measured at the largest amount
of benefit that is greater than 50% likely of being realized upon settlement.
ABLP is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state
corporate income taxes. However, ABLP is subject to a 4.0% New York City unincorporated business tax. AB
Holding is subject to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business.
Domestic corporate subsidiaries of AB are subject to federal, state and local income taxes. Foreign corporate
subsidiaries are generally subject to taxes in the foreign jurisdictions where they are located.
Recognition of Investment Management and Service Fees and Related Expenses
Investment management, advisory and service fees
Investment management and service fees principally include the Investment Management and Research segment’s
investment advisory and service fees, distribution revenues and institutional research services revenue. Investment
advisory and service base fees, generally calculated as a percentage, referred to as BPs, of assets under management,
are recorded as revenue as the related services are performed. Certain investment advisory contracts, including those
associated with hedge funds, provide for a performance-based fee, in addition to or in lieu of a base fee which is
calculated as either a percentage of absolute investment results or a percentage of the investment results in excess of a
stated benchmark over a specified period of time.
Investment management and administrative service fees are also earned by EIM and EIMG and reported in the
Individual Retirement, Group Retirement, Protection Solutions and Legacy segments as well as certain asset-based
fees associated with insurance contracts.
AB provides asset management services by managing customer assets and seeking to deliver returns to investors.
Similarly, EIM and EIMG provides investment management and administrative services, such as fund accounting and
compliance services, to EQAT and 1290 Funds as well as two private investment trusts established in the Cayman
Islands, AXA Allocation Funds Trust and AXA Offshore Multimanager Funds Trust (collectively, the “Other AXA
Trusts”). The contracts supporting these revenue streams create a distinct, separately identifiable performance
obligation for each day the assets are managed for the performance of a series of services that are substantially the
same and have the same pattern of transfer to the customer. Accordingly, these investment management, advisory, and
administrative service base fees are recorded over time as services are performed and entitle the Company to variable
consideration. Base fees, generally calculated as a percentage of AUM, are recognized as revenue at month-end when
the transaction price no longer is variable and the value of the consideration is determined. These fees are not subject
to claw back and there is minimal probability that a significant reversal of the revenue recorded will occur.
Certain investment advisory contracts of AB, including those associated with hedge funds or other alternative
investments, provide for a performance-based fee (including carried interest), in addition to a base advisory fee,
calculated either as a percentage of absolute investment results or a percentage of investment results in excess of a
stated benchmark over a specified period of time. These performance-based fees are forms of variable consideration
and, therefore, are excluded from the transaction price until it becomes probable there will not be significant reversal
of the cumulative revenue recognized. At each reporting date, the Company evaluates constraining factors surrounding
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
the variable consideration to determine the extent to which, if any, revenues associated with the performance-based fee
can be recognized. Constraining factors impacting the amount of variable consideration included in the transaction
price include contractual claw-back provisions, the length of time of the uncertainty, the number and range of possible
amounts, the probability of significant fluctuations in the fund’s market value and the level in which the fund’s value
exceeds the contractual threshold required to earn such a fee and the materiality of the amount being evaluated.
Sub-advisory and sub-administrative expenses associated with these services are calculated and recorded as the related
services are performed in other operating costs and expense in the consolidated statements of income (loss) as the
Company is acting in a principal capacity in these transactions and, as such, reflects these revenues and expenses on a
gross basis.
Research services
Research services revenue principally consists of brokerage transaction charges received by SCB LLC, SCBL and
AB’s other sell side subsidiaries for providing equity research services to institutional clients. Brokerage commissions
for trade execution services and related expenses may be used to pay for equity research services in accordance with
Section 28(e) of the Exchange Act and are recorded on a trade-date basis when the performance obligations are
satisfied. Generally, the transaction price is agreed upon at the point of each trade and based upon the number of shares
traded or the value of the consideration traded. Research revenues are recognized when the transaction price is
quantified, collectability is assured and significant reversal of such revenue is not probable.
Distribution services
Revenues from distribution services include fees received as partial reimbursement of expenses incurred in connection
with the sale of certain AB sponsored mutual funds and the 1290 Funds and for the distribution primarily of EQAT
Trust shares to separate accounts in connection with the sale of variable life and annuity contracts. The amount and
timing of revenues recognized from performance of these distribution services often is dependent upon the contractual
arrangements with the customer and the specific product sold as further described below.
Most open-end management investment companies, such as U.S. funds and the EQAT and the 1290 Funds, have
adopted a plan under Rule 12b-1 of the Investment Company Act that allows for certain share classes to pay out of
assets, distribution and service fees for the distribution and sale of its shares (“12b-1 Fees”). These open-end
management investment companies have such agreements with the Company, and the Company has selling and
distribution agreements pursuant to which it pays sales commissions to the financial intermediaries that distribute the
shares. These agreements may be terminated by either party upon notice (generally 30 days) and do not obligate the
financial intermediary to sell any specific amount of shares.
The Company records 12b-1 fees monthly based upon a percentage of the NAV of the funds. At month-end, the
variable consideration of the transaction price is no longer constrained as the NAV can be calculated and the value of
consideration is determined. These services are separate and distinct from other asset management services as the
customer can benefit from these services independently of other services. The Company accrues the corresponding
12b-1 fees paid to sub-distributors monthly as the expenses are incurred. The Company is acting in a principal capacity
in these transactions; as such, these revenues and expenses are recorded on a gross basis in the consolidated statements
of income (loss).
AB sponsored mutual funds offer back-end load shares in limited instances and charge the investor a CDSC if the
investment is redeemed within a certain period. The variable consideration for these contracts is contingent upon the
timing of the redemption by the investor and the value of the sales proceeds. Due to these constraining factors, the
Company excludes the CDSC fee from the transaction price until the investor redeems the investment. Upon
redemption, the cash consideration received for these contractual arrangements is recorded as a reduction of
unamortized deferred sales commissions.
AB’s Luxembourg subsidiary, the management company for most of its non-U.S. funds, earns a management fee
which is accrued daily and paid monthly, at an annual rate, based on the average daily net assets of the fund. With
respect to certain share classes, the management fee also may contain a component paid to distributors and other
financial intermediaries and service providers to cover shareholder servicing and other administrative expenses (also
referred to as an “All-in-Fee”). Based on the conclusion that asset management is distinct from distribution, the
Company allocates a portion of the investment and advisory fee to distribution revenues for the servicing component
based on standalone selling prices.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Also reported as investment management and service fees in the Company’s consolidated statements of income (loss)
are other revenues from contracts with customers, primarily consisting of shareholder servicing fees, mutual fund
reimbursements and other brokerage income.
Shareholder services, including transfer agency, administration and record-keeping are provided by AB to company-
sponsored mutual funds. The consideration for these services is based on a percentage of the NAV of the fund or a
fixed-fee based on the number of shareholder accounts being serviced. The revenues are recorded at month-end when
the constraining factors involved with determining NAV or the numbers of shareholders’ accounts are resolved.
Other income
Revenues from contracts with customers reported as other income in the Company’s consolidated statements of
income (loss) primarily consist of advisory account fees and brokerage commissions from the Company’s broker-
dealer operations and sales commissions from the Company’s general agents for the distribution of non-affiliate
insurers’ life insurance and annuity products. These revenues are recognized at month-end when constraining factors,
such as AUM and product mix, are resolved and the transaction pricing no longer is variable such that the value of
consideration can be determined. The change in deposit asset/liability accounts arising from reinsurance agreements
which do not expose the reinsurer to a reasonable possibility of significant loss from insurance risk is included in other
income.
Accounting and Consolidation of VIEs
For all new investment products and entities developed by the Company, the Company first determines whether the
entity is a VIE, which involves determining an entity’s variability and variable interests, identifying the holders of the
equity investment at risk and assessing the five characteristics of a VIE. Once an entity is determined to be a VIE, the
Company then determines whether it is the primary beneficiary of the VIE based on its beneficial interests. If the
Company is deemed to be the primary beneficiary of the VIE, the Company consolidates the entity.
Quarterly, management of the Company reviews its investment management agreements and its investments in, and
other financial arrangements with, certain entities that hold client AUM to determine the entities the Company is
required to consolidate under this guidance. These entities include certain mutual fund products, hedge funds,
structured products, group trusts, collective investment trusts, and limited partnerships.
The analysis performed to identify variable interests held, determine whether entities are VIEs or VOEs, and evaluate
whether the Company has a controlling financial interest in such entities requires the exercise of judgment and is
updated on a continuous basis as circumstances change or new entities are developed. The primary beneficiary
evaluation generally is performed qualitatively based on all facts and circumstances, including consideration of
economic interests in the VIE held directly and indirectly through related parties and entities under common control, as
well as quantitatively, as appropriate.
Consolidated VIEs
Consolidated CLOs
The Company is the investment manager of certain asset-backed investment vehicles, commonly referred to as CLOs,
and certain other vehicles for which the Company earns fee income for investment management services. The
Company may sell or syndicate investments through these vehicles, principally as part of the strategic investing
activity as part of its investment management businesses. Additionally, the Company may invest in securities issued by
these vehicles which are eliminated in consolidation of the CLOs.
As of December 31, 2023 and 2022, respectively, Equitable Financial holds $113 million and $85 million of equity
interests in the CLOs. The Company consolidated the CLOs as of December 31, 2023 and 2022 as it is the primary
beneficiary due to the combination of both its equity interest held by Equitable Financial and the majority ownership
of AB, which functions as the CLOs loan manager. The assets of the CLOs are legally isolated from the Company’s
creditors and can only be used to settle obligations of the CLOs. The liabilities of the CLOs are non-recourse to the
Company and the Company has no obligation to satisfy the liabilities of the CLOs. As of December 31, 2023,
Equitable Financial holds $23 million of equity interests in a SPE established to purchase loans from the market in
anticipation of a new CLO transaction. The Company consolidated the SPE as of December 31, 2023 as it is the
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
primary beneficiary due to the combination of both its equity interest held by Equitable Financial and the majority
ownership of AB, which functions as the SPE loan manager.
Resulting from this consolidation in the Company’s consolidated balance sheets are fixed maturities, at fair value using
the fair value option with total assets of $1.7 billion and $1.5 billion notes issued by consolidated variable interest
entities, at fair value using the fair value option with total liabilities of $1.6 billion and $1.2 billion at December 31,
2023 and 2022, respectively. The unpaid outstanding principal balance of the notes and short-term borrowing is $1.6
billion and $1.4 billion at December 31, 2023 and 2022.
Consolidated Limited Partnerships and LLCs
As of December 31, 2023 and 2022 the Company consolidated limited partnerships and LLCs for which it was
identified as the primary beneficiary under the VIE model. Included in other invested assets, mortgage loans on real
estate, other equity investments, trading securities, cash and other liabilities in the Company’s consolidated balance
sheets at December 31, 2023 and 2022 are total net assets of $1.8 billion and $644 million, respectively related to these
VIEs.
Consolidated AB-Sponsored Investment Funds
Included in the Company’s consolidated balance sheets as of December 31, 2023 and 2022 are assets of $309 million
and $581 million, liabilities of $10 million and $56 million, and redeemable noncontrolling interests of $203 million
and $369 million, respectively, associated with the consolidation of AB-sponsored investment funds under the VIE
model. Also included in the Company’s consolidated balance sheets as of December 31, 2023 and 2022 are assets of
$121 million and $0 million, liabilities of $3 million and $0 million, and redeemable noncontrolling interests of $7
million and $0 million, respectively, from consolidation of AB-sponsored investment funds under the VOE model.
Non-Consolidated VIEs
As of December 31, 2023 and 2022 respectively, the Company held approximately $2.6 billion and $2.4 billion of
investment assets in the form of equity interests issued by non-corporate legal entities determined under the guidance
to be VIEs, such as limited partnerships and limited liability companies, including CLOs, hedge funds, private equity
funds and real estate-related funds. The Company continues to reflect these equity interests in the consolidated balance
sheets as other equity investments and applies the equity method of accounting for these positions. The net assets of
these non-consolidated VIEs are approximately $268.6 billion and $282.5 billion as of December 31, 2023 and 2022
respectively. The Company’s maximum exposure to loss from its direct involvement with these VIEs is the carrying
value of its investment of $2.6 billion and $2.4 billion and approximately $1.3 billion and $1.3 billion of unfunded
commitments as of December 31, 2023 and 2022, respectively. The Company has no further economic interest in these
VIEs in the form of guarantees, derivatives, credit enhancements or similar instruments and obligations.
Non-Consolidated AB-Sponsored Investment Products
As of December 31, 2023 and 2022, the net assets of investment products sponsored by AB that are non-consolidated
VIEs are approximately $54.6 billion and $46.4 billion, respectively. The Company’s maximum exposure to loss from
its direct involvement with these VIEs is its investment of $10 million and $6 million as of December 31, 2023 and
2022. The Company has no further commitments to or economic interest in these VIEs.
Assumption Updates and Model Changes
The Company conducts its annual review of its assumptions and models during the third quarter of each year. The
annual review encompasses assumptions underlying the valuation of MRB, liabilities for future policyholder benefits
and additional liability update.
However, the Company updates its assumptions as needed in the event it becomes aware of economic conditions or
events that could require a change in assumptions that it believes may have a significant impact to the carrying value
of product liabilities and assets and consequently materially impact its earnings in the period of the change.
MRB Update
The Company updates its assumptions to reflect emerging experience for withdrawals, mortality and lapse election.
This includes actuarial judgement informed by actual experience of how policy holders are expected to use these
policies in the future. In addition, as part of the 2021 assumption update, the reference interest rate utilized in our
GAAP fair value calculations was updated from the LIBOR swap curve to the US Treasury curve due to the impending
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
cessation of LIBOR and our GAAP fair value liability risk margins. There were no other significant change to the
process used to calculate the MRB balances.
LFPB Update
The significant assumptions for the LFPB balances include mortality and lapses for our Traditional life businesses. The
primary assumption for the payout block of business is mortality. Impacts to expected net premiums and expected
future policy benefits due to assumption changes in 2021 can be observed in the liability for future policy benefit roll
forward tables.
Additional Liability Update
The significant assumptions for the additional insurance liability balances include mortality, lapses, premium payment
pattern, and interest crediting assumption.
Impact of Assumption Updates
The net impact of assumption changes during 2023 decreased other income by $9 million, increased remeasurement of
liability for future policy benefits by $51 million, decreased policy benefits by $2 million, and decreased the change in
market risk benefits and purchased market risk benefits by $53 million. This resulted in a decrease in income (loss)
from operations, before income taxes of $5 million and decreased net income (loss) by $4 million.
The net impact of this assumption update during 2022 increased remeasurement of liability for future policy benefits
by $14 million, decreased policyholders’ benefits by $13 million, increased change in market risk benefits and
purchased market risk benefits by $204 million and increased interest credited to policyholder’s account balances by
$1 million. This resulted in a decrease in income (loss) from operations, before income taxes of $206 million and
decreased net income (loss) by $163 million.
The net impact of this assumption update during 2021 increased remeasurement of liability for future policy benefits
by $33 million, increased policyholders’ benefits by $11 million, decreased change in market risk benefits and
purchased market risk benefits by $446 million, increased interest credited to policyholder’s account balances by
$1 million and increased amortization of DAC by $1 million. This resulted in an increase in income (loss) from
operations, before income taxes of $400 million and increased net income (loss) by $316 million.
Model Changes
There were no material model changes during 2023, 2022 and 2021.
Out of Period Adjustment
During the year ended December 31, 2023, the Company recorded an out of period adjustment to correct the Treasury
Inflation-Protected Securities (TIPS) hedging income. The hedging impact was incorrectly recorded in accumulated
other comprehensive income. The impact resulted in an increase of $46.4 million, net of taxes in net investment
income and a decrease in accumulated other comprehensive income. The correction was recorded in Corporate &
Other. The impact associated with this correction was not considered material to the financial statements of any
previously filed interim or annual periods.
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3)
INVESTMENTS
Fixed Maturities AFS
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The components of fair value and amortized cost for fixed maturities classified as AFS on the consolidated balance
sheets excludes accrued interest receivable because the Company elected to present accrued interest receivable within
other assets. Accrued interest receivable on AFS fixed maturities as of December 31, 2023 and 2022 was $626 million
and $591 million, respectively. There was no accrued interest written off for AFS fixed maturities for the years ended
December 31, 2023, 2022 and 2021.
The following tables provide information relating to the Company’s fixed maturities classified as AFS:
AFS Fixed Maturities by Classification
Amortized
Cost
Allowance
for Credit
Losses
Gross
Unrealized
Gains
(in millions)
Gross
Unrealized
Losses
Fair Value
December 31, 2023
Fixed Maturities:
Corporate (1)
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed (2)
Asset-backed (3)
Commercial mortgage-backed
Redeemable preferred stock
Total at December 31, 2023
December 31, 2022:
Fixed Maturities:
Corporate (1)
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed (2)
Asset-backed (3)
Commercial mortgage-backed
Redeemable preferred stock
Total at December 31, 2022
$ 49,786 $
5,735
614
719
2,470
11,058
3,595
56
$ 74,033 $
$ 50,712 $
7,054
609
985
908
8,859
3,823
41
$ 72,991 $
4 $
—
—
—
—
—
—
—
4 $
24 $
—
—
—
—
—
—
—
24 $
320 $
2
9
3
18
52
2
3
409 $
89 $
1
7
2
1
4
—
2
106 $
5,360 $ 44,742
4,631
1,106
549
74
611
111
2,355
133
11,001
109
3,082
515
59
—
7,408 $ 67,030
7,206 $ 43,571
5,837
1,218
527
89
836
151
822
87
8,490
373
3,235
588
43
—
9,712 $ 63,361
______________
(1) Corporate fixed maturities include both public and private issues.
(2) Includes publicly traded agency pass-through securities and collateralized obligations.
(3) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
The contractual maturities of AFS fixed maturities as of December 31, 2023 are shown in the table below. Bonds not
due at a single maturity date have been included in the table in the final year of maturity. Actual maturities may differ
from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or
pre-payment penalties.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Contractual Maturities of AFS Fixed Maturities
December 31, 2023
Contractual maturities:
Due in one year or less
Due in years two through five
Due in years six through ten
Due after ten years
Subtotal
Residential mortgage-backed
Asset-backed
Commercial mortgage-backed
Redeemable preferred stock
Total at December 31, 2023
Amortized Cost
(Less Allowance
for Credit Losses)
Fair Value
(in millions)
$
$
1,524 $
14,556
16,627
24,143
56,850
2,470
11,058
3,595
56
74,029 $
1,509
14,071
15,585
19,368
50,533
2,355
11,001
3,082
59
67,030
The following table shows proceeds from sales, gross gains (losses) from sales and allowance for credit losses for AFS
fixed maturities:
Proceeds from Sales, Gross Gains (Losses) from Sales and Allowance for Credit and Intent to Sell Losses for AFS Fixed
Maturities
Year Ended December 31,
2023
2022
(in millions)
2021
Proceeds from sales
Gross gains on sales
Gross losses on sales
Net (increase) decrease in Allowance for Credit and Intent to Sell losses
$
$
$
$
6,790 $ 11,932 $ 27,363
1,152
(195)
10 $
(504) $
45 $
(663) $
(70) $
(247) $
(16)
The following table sets forth the amount of credit loss impairments on AFS fixed maturities held by the Company at
the dates indicated and the corresponding changes in such amounts:
AFS Fixed Maturities - Credit and Intent to Sell Loss Impairments
Balance, beginning of year
Previously recognized impairments on securities that matured, paid, prepaid or sold
Recognized impairments on securities impaired to fair value this period (1) (2)
Credit losses recognized this period on securities for which credit losses were not
previously recognized
Additional credit losses this period on securities previously impaired
Balance, end of year
Year Ended December 31,
2023
2022
2021
(in millions)
$
36 $
44 $
(67)
(263)
52
246
15
12
48 $
—
9
36 $
$
32
(4)
—
9
7
44
______________
(1) Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than
not that it will be required to sell the security before recovery of the security’s amortized cost.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
(2) Amounts reflected for the year ended December 31, 2023 represent AFS fixed maturities in an unrealized loss position, which the
Company sold in anticipation of Equitable Financial’s ordinary dividend to Holdings. Amounts reflected for the year ended December 31,
2022 represent an impairment on AFS securities of $245 million related to the Global Atlantic Transaction. See Note 13 of the Notes to
these Consolidated Financial Statements for additional details on the Global Atlantic Transaction.
The tables below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI:
Net Unrealized Gains (Losses) on AFS Fixed Maturities
Year Ended December 31, 2023
Net
Unrealized
Gains
(Losses) on
Investments
DAC
Policyholders
’ Liabilities
(in millions)
AOCI Gain
(Loss) Related
to Net
Unrealized
Investment
Gains (Losses)
Deferred
Income
Tax Asset
(Liability)
Balance, beginning of year
$
(9,606) $
— $
41 $
440 $
(9,125)
Net investment gains (losses) arising during the period
Reclassification adjustment:
Included in net income (loss)
Impact of net unrealized investment gains (losses)
Net unrealized investment gains (losses) excluding
credit losses
Net unrealized investment gains (losses) with credit
losses
Balance, end of year
2,048
563
—
(6,995)
—
—
—
—
—
—
9
50
—
—
2,048
563
(551)
(542)
(111)
(7,056)
(4)
(6,999) $
$
—
— $
—
50 $
1
(110) $
(3)
(7,059)
$
4,809 $
(15,275)
867
—
—
(9,599)
(7)
(9,606) $
$
$
Balance, beginning of year
Net investment gains (losses) arising during the period
Reclassification adjustment:
Included in net income (loss)
Other (1)
Impact of net unrealized investment gains (losses)
Net unrealized investment gains (losses) excluding
credit losses
Net unrealized investment gains (losses) with credit
losses
Balance, end of year
Balance, beginning of year
Transition adjustment (2)
Net investment gains (losses) arising during the period
Reclassification adjustment:
Included in net income (loss)
Other (3)
Impact of net unrealized investment gains (losses)
Net unrealized investment gains (losses) excluding
credit losses
Year Ended December 31, 2022
— $
(169) $
(974) $
3,666
—
—
—
—
—
—
—
—
210
41
—
(15,275)
—
(1,569)
867
(1,569)
2,982
3,192
439
(9,119)
—
— $
—
41 $
1
440 $
(6)
(9,125)
Year Ended December 31, 2021
8,811 $
—
(1,548) $
1,548
(1,065) $
(77)
(1,302) $
—
4,896
1,471
—
—
—
—
—
—
—
—
—
—
—
(3,122)
(846)
(33)
973
328
1,301
(169)
(974)
3,667
(3,122)
(846)
(33)
—
4,810
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Net unrealized investment gains (losses) with credit
losses
Balance, end of year
(1)
4,809 $
$
—
— $
—
(169) $
—
(974) $
(1)
3,666
______________
(1) Reflects a Deferred Tax Asset valuation allowance of $1.6 billion recorded during the fourth quarter of 2022. See Note 18 of the Notes to
these Consolidated Financial Statements for additional details.
(2) Reflects transition adjustment of DAC and Policyholder Liabilities under the adoption of ASU 2018-12 effective January 1,
2021.Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments.
(3) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments.
The following tables disclose the fair values and gross unrealized losses of the 4,402 issues as of December 31, 2023
and the 5,209 issues as of December 31, 2022 that are not deemed to have credit losses, aggregated by investment
category and length of time that individual securities have been in a continuous unrealized loss position for the
specified periods at the dates indicated:
AFS Fixed Maturities in an Unrealized Loss Position for Which No Allowance Is Recorded
December 31, 2023
Fixed Maturities:
Corporate
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed
Asset-backed
Commercial mortgage-backed
Total at December 31, 2023
December 31, 2022:
Fixed Maturities:
Corporate
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed
Asset-backed
Commercial mortgage-backed
Total at December 31, 2022
Less Than 12 Months
12 Months or Longer
Total
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
(in millions)
$
$
2,228 $
111
10
15
210
528
92
3,194 $
126 $ 33,135 $
2
—
2
2
1
11
144 $ 47,821 $
4,447
300
517
1,044
5,522
2,856
5,231 $ 35,363 $
1,104
74
109
131
108
504
4,558
310
532
1,254
6,050
2,948
7,261 $ 51,015 $
$ 24,580 $
5,564
130
349
671
6,298
1,577
$ 39,169 $
2,668 $ 16,534 $
1,200
25
42
49
230
201
204
173
417
83
1,765
1,640
4,536 $ 41,114 $
18
64
109
38
143
387
5,768
303
766
754
8,063
3,217
4,415 $ 20,816 $
5,295 $ 59,985 $
5,357
1,106
74
111
133
109
515
7,405
7,204
1,218
89
151
87
373
588
9,710
The Company maintains a diversified portfolio of corporate securities across industries and issuers and does not have
exposure to any single issuer in excess of 0.8% of total corporate securities. The largest exposures to a single issuer of
corporate securities held as of December 31, 2023 and 2022 were $360 million and $327 million, respectively,
representing 8.2% and 10.4% of the consolidated equity of the Company.
Corporate high yield securities, consisting primarily of public high yield bonds, are classified as other than investment
grade by the various rating agencies, i.e., a rating below Baa3/BBB- or the NAIC designation of 3 (medium investment
grade), 4 or 5 (below investment grade) or 6 (in or near default). As of December 31, 2023 and 2022, respectively,
approximately $2.6 billion and $2.9 billion, or 3.5% and 4.0%, of the $74.0 billion and $73.0 billion aggregate
amortized cost of fixed maturities held by the Company were considered to be other than investment grade. These
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
securities had gross unrealized losses of $101 million and $208 million as of December 31, 2023 and 2022,
respectively.
As of December 31, 2023 and 2022, respectively, the $7.3 billion and $5.3 billion of gross unrealized losses of twelve
months or more were primarily concentrated in corporate securities. In accordance with the policy described in Note 2
of the Notes to these Consolidated Financial Statements, the Company concluded that an adjustment to the allowance
for credit losses for these securities was not warranted at either December 31, 2023 or December 31, 2022. As of
December 31, 2023 and 2022, the Company did not intend to sell the securities nor was it more likely than not be
required to dispose of the securities before the anticipated recovery of their remaining amortized cost basis.
Based on the Company’s evaluation both qualitatively and quantitatively of the drivers of the decline in fair value of
fixed maturity securities as of December 31, 2023, the Company determined that the unrealized loss was primarily due
to increases in interest rates and credit spreads.
Securities Lending
Beginning in 2023, the Company has entered into securities lending agreements with an agent bank whereby blocks of
securities are loaned to third parties, primarily major brokerage firms. As of December 31, 2023, the estimated fair
value of loaned securities was $113 million. The agreements require a minimum of 102% of the fair value of the
loaned securities to be held as cash collateral, calculated daily. To further minimize the credit risks related to these
programs, the financial condition of counterparties is monitored on a regular basis. As of December 31, 2023, cash
collateral received in the amount of $116 million, was invested by the agent bank. A securities lending payable for the
overnight and continuous loans is included in other liabilities in the amount of cash collateral received. Securities
lending transactions are used to generate income. Income and expenses associated with these transactions are reported
as net investment income and were not material for the year ended December 31, 2023.
Mortgage Loans on Real Estate
In September 2023, the Company began investing in residential mortgage loans. Accrued interest receivable on
commercial, agricultural and residential mortgage loans as of December 31, 2023 and 2022 was $82 million and $71
million, respectively. There was no accrued interest written off for commercial, agricultural and residential mortgage
loans for the years ended December 31, 2023 and 2022.
As of December 31, 2023, the Company had one commercial mortgage loan for which foreclosure was probable. That
loan has an amortized cost of $108 million and an associated allowance of $54 million.
Allowance for Credit Losses on Mortgage Loans
The change in the allowance for credit losses for commercial, agricultural and residential mortgage loans were as
follows:
2023
Year Ended December 31,
2022
(in millions)
2021
Allowance for credit losses on mortgage loans:
Commercial mortgages:
Balance, beginning of year
Current-period provision for expected credit losses
Write-offs charged against the allowance
Recoveries of amounts previously written off
Net change in allowance
Balance, end of year
Agricultural mortgages:
Balance, beginning of year
Current-period provision for expected credit losses
Write-offs charged against the allowance
154
$
$
$
123 $
149
—
—
149
272 $
57 $
66
—
—
66
123 $
77
(20)
—
—
(20)
57
6 $
—
—
5 $
1
—
4
1
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Recoveries of amounts previously written off
Net change in allowance
Balance, end of year
Residential mortgages:
Balance, beginning of year
Current-period provision for expected credit losses
Write-offs charged against the allowance
Recoveries of amounts previously written off
Net change in allowance
Balance, end of year
Total allowance for credit losses
$
$
$
$
2023
2021
Year Ended December 31,
2022
(in millions)
—
1
6 $
—
—
6 $
— $
1
—
—
1
1 $
— $
—
—
—
—
— $
—
1
5
—
—
—
—
—
—
279 $
129 $
62
The change in the allowance for credit losses is attributable to:
•
•
increases/decreases in the loan balance due to new originations, maturing mortgages, and loan amortization; and
changes in credit quality and economic assumptions.
Credit Quality Information
The Company’s commercial and agricultural mortgage loans segregated by risk rating exposure were as follows:
Loan to Value (“LTV”) Ratios (1) (3)
December 31, 2023
Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
Commercial and
agricultural mortgage
loans:
Commercial:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total commercial
Agricultural:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total agricultural
$
164 $
249 $
924
308
—
1,916
1,197
—
129 $
671
1,236
66
35 $ — $ 1,557 $ — $ — $ 2,134
7,438
750
96
4,965
523
35
1,070
54
—
131 $ 15,607
299
245
92
636 $ 6,118 $
463
37
—
500 $
2,319
1,384
858
$ 1,481 $ 3,277 $ 2,102 $ 1,362 $
$
$
102 $
60
—
—
162 $
162 $
146
—
—
308 $
191 $
152
—
—
343 $
235 $
201
—
—
436 $
802 $ — $ — $ 1,624
132 $
905
288
—
58
16
16
—
—
—
—
—
—
190 $ 1,106 $ — $ — $ 2,545
—
—
—
155
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
December 31, 2023
Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
Total commercial and
agricultural mortgage
loans:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total commercial and
agricultural mortgage
loans
$
326 $
351 $
984
308
—
2,062
1,197
—
320 $
823
1,236
66
270 $
951
523
54
132 $ 2,359 $ — $ — $ 3,758
8,343
463
357
4,981
37
245
1,070
—
92
2,607
1,400
858
96
35
—
$ 1,643 $ 3,585 $ 2,445 $ 1,798 $
826 $ 7,224 $
500 $
131 $ 18,152
Debt Service Coverage (“DSC”) Ratios (2) (3)
December 31, 2023
Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
Commercial and
agricultural mortgage
loans:
Commercial:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
$
175 $
—
80
690
528
8
693 $ 1,125 $ 1,135 $
—
1,060
687
668
169
167
—
—
—
60
182
234
457
38
66
Total commercial
$ 1,481 $ 3,277 $ 2,102 $ 1,362 $
$
Agricultural:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
Total agricultural
$
7 $
18
12
46
47
32
162 $
50 $
16
50
111
57
24
308 $
36 $
56
31
148
68
4
343 $
59 $
33
109
170
57
8
436 $
156
249 $ 3,273 $ — $ — $ 6,650
1,661
383
171
96
2,460
—
162
—
2,724
41
11
—
1,705
76
43
35
—
—
407
—
131 $ 15,607
500 $
636 $ 6,118 $
662
924
838
317
104
20 $
23
17
98
26
6
351
207
—
412
—
938
—
539
—
98
—
190 $ 1,106 $ — $ — $ 2,545
179 $ — $ — $
61
193
365
284
24
—
—
—
—
—
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
December 31, 2023
Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
$
182 $
743 $ 1,161 $ 1,194 $
269 $ 3,452 $ — $ — $ 7,001
18
92
736
575
40
16
1,110
798
725
193
238
265
605
106
70
200
109
170
57
68
194
179
109
69
6
723
1,117
1,203
601
128
383
—
41
76
—
96
—
—
35
—
1,868
2,872
3,662
2,244
505
$ 1,643 $ 3,585 $ 2,445 $ 1,798 $
826 $ 7,224 $
500 $
131 $ 18,152
Total commercial and
agricultural mortgage
loans:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
Total commercial and
agricultural mortgage
loans
______________
(1) The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial
properties is updated annually for each mortgage loan.
(2) The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt
service.
(3) Residential mortgage loans are excluded from the above tables.
LTV Ratios (1) (3)
December 31, 2022
Amortized Cost Basis by Origination Year
2022
2021
2020
2019
2018
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
Commercial and agricultural
mortgage loans:
Commercial:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total commercial
Agricultural:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total agricultural
130 $ — $ — $
624 $
$
2,285
363
—
1,569
415
—
$ 3,272 $ 2,114 $ 1,369 $
906
463
—
119 $ 1,259 $ — $ — $ 2,132
8,278
328
623
313
—
3,342
—
424
329
34
—
—
—
268
35
34 $ 14,020
328 $
642 $ 1,201 $ 5,060 $
2,254
1,314
233
$
$
163 $
190
—
—
353 $
182 $
185
—
—
367 $
228 $
222
—
—
450 $
129 $
68
—
—
197 $
725 $ — $ — $ 1,559
132 $
1,015
267
—
83
16
16
—
—
—
—
—
—
215 $ 1,008 $ — $ — $ 2,590
—
—
—
157
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
December 31, 2022
Amortized Cost Basis by Origination Year
2022
2021
2020
2019
2018
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
Total commercial and
agricultural mortgage loans:
0% - 50%
50% - 70%
70% - 90%
90% plus
Total commercial and
agricultural mortgage
loans
Commercial and
agricultural mortgage loans:
Commercial:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
Total commercial
787 $
312 $
228 $
$
2,475
363
—
1,754
415
—
1,128
463
—
129 $
381
329
—
251 $ 1,984 $ — $ — $ 3,691
9,293
328
706
3,358
—
424
268
—
35
2,521
1,330
233
—
34
—
$ 3,625 $ 2,481 $ 1,819 $
839 $ 1,416 $ 6,068 $
328 $
34 $ 16,610
DSC Ratios (2) (3)
December 31, 2022
Amortized Cost Basis by Origination Year
2022
2021
2020
2019
2018
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
$
771 $ 1,159 $ 1,113 $
158
337
1,041
507
458
215
390
259
43
48
$ 3,272 $ 2,114 $ 1,369 $
164
32
—
60
—
571 $ 1,923 $ — $ — $ 5,639
102 $
1,681
279
186
197
—
2,267
4
176
153
—
2,382
—
73
92
—
1,439
45
160
98
34
612
—
35
—
—
34 $ 14,020
328 $
642 $ 1,201 $ 5,060 $
482
1,175
917
492
71
158
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
December 31, 2022
Amortized Cost Basis by Origination Year
2022
2021
2020
2019
2018
Prior
(in millions)
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Amortized
Cost Basis
Total
$
Agricultural:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
Total agricultural
$
51 $
16
69
107
91
19
353 $
40 $
58
42
147
80
—
367 $
62 $
35
111
177
61
4
450 $
21 $
24
18
98
30
6
197 $
379
12 $
198
—
14
455
—
19
926
—
99
579
—
60
11
53
—
215 $ 1,008 $ — $ — $ 2,590
193 $ — $ — $
51
196
298
257
13
—
—
—
—
—
Total commercial and
agricultural mortgage loans:
Greater than 2.0x
1.8x to 2.0x
1.5x to 1.8x
1.2x to 1.5x
1.0x to 1.2x
Less than 1.0x
Total commercial and
agricultural mortgage
loans
$
822 $ 1,199 $ 1,175 $
174
406
1,148
598
477
273
432
406
123
48
199
143
177
121
4
123 $
221
171
190
128
6
583 $ 2,116 $ — $ — $ 6,018
1,879
279
200
2,722
4
195
3,308
—
172
2,018
45
220
665
—
46
533
1,371
1,215
749
84
—
—
—
34
—
$ 3,625 $ 2,481 $ 1,819 $
839 $ 1,416 $ 6,068 $
328 $
34 $ 16,610
______________
(1) The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial
properties is updated annually for each mortgage loan.
(2) The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt
service.
(3) Residential mortgage loans are excluded from the above tables.
The amortized cost of residential mortgage loans by credit quality indicator and origination year was as follows:
December 31, 2023
Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
Total
(in millions)
Performance indicators: (1)
Performing
Nonperforming
Total
$
$
98 $
—
98 $
121 $
—
121 $
74 $
—
74 $
2 $
—
2 $
1 $
—
1 $
2 $
—
2 $
298
—
298
______________
(1) The Company began investing in residential mortgages in 2023. Therefore, 2022 comparative information is not applicable.
159
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Past-Due and Nonaccrual Mortgage Loan Status
The aging analysis of past-due mortgage loans were as follows:
Age Analysis of Past Due Mortgage Loans (1)
Accruing Loans
Past Due
30-59
Days
60-89
Days
90
Days
or
More
Total
Current
Total
(in millions)
Non-
accruing
Loans
Total
Loans
Non-
accruing
Loans
with No
Allowance
Interest
Income
on Non-
accruing
Loans
December 31, 2023:
Mortgage loans:
Commercial
Agricultural
Residential
Total
December 31, 2022:
Mortgage loans:
Commercial
Agricultural
Residential
Total
$ 32 $ — $ — $ 32 $ 15,341 $ 15,373 $ 234 $ 15,607 $ — $
5
—
7
—
$ 39 $ 5 $ 40 $ 84 $ 18,113 $ 18,197 $ 253 $ 18,450 $ — $
2,526
298
2,474
298
2,545
298
19
—
52
—
40
—
—
—
7
—
—
7
$ 56 $ — $ — $ 56 $ 13,964 $ 14,020 $ — $ 14,020 $ — $ —
—
2,574
—
—
16 $ 16,610 $ — $ —
3
—
$ 59 $ 5 $ 13 $ 77 $ 16,517 $ 16,594 $
2,590
—
2,553
—
16
—
21
—
13
—
5
—
—
—
_______________
(1) Amounts presented at amortized cost basis.
As of December 31, 2023 and 2022, the amortized cost of problem mortgage loans that had been classified as non-
accrual loans were $127 million and $16 million, respectively.
Troubled Debt Restructuring
During 2023, the Company granted modification of interest rates on four commercial mortgage loans, but not to
market terms and required management of excess cash. The loans have an amortized cost of $234 million which
represents 1.5% of total commercial mortgage loans. Two of the four loans also have term extensions of 17 months to
4 years. The impact to Investment income or gains (losses) as a result of these modifications in 2023 was not material
to the consolidated financial statements. For the accounting policy pertaining to our TDRs see Note 2 of the Notes to
these Consolidated Financial Statements.
During the years ended December 31, 2022 and 2021 the Company identified an immaterial amount of TDRs.
Equity Securities
The breakdown of unrealized and realized gains and (losses) on equity securities was as follows:
Unrealized and Realized Gains (Losses) from Equity Securities
Net investment gains (losses) recognized during the period on securities held
at the end of the period
Net investment gains (losses) recognized on securities sold during the period
Unrealized and realized gains (losses) on equity securities
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
35 $
(114) $
(19)
(8)
27 $
(36)
(150) $
45
26
160
Table of Contents
Trading Securities
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
As of December 31, 2023 and 2022, respectively, the fair value of the Company’s trading securities was $1.1 billion
and $677 million. As of December 31, 2023 and 2022, respectively, trading securities included the General Account’s
investment in Separate Accounts had carrying values of $49 million and $39 million.
The breakdown of net investment income (loss) from trading securities was as follows:
Net Investment Income (Loss) from Trading Securities
Year Ended December 31,
2023
2022
2021
(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of
the period
Net investment gains (losses) recognized on securities sold during the period
Unrealized and realized gains (losses) on trading securities
Interest and dividend income from trading securities
Net investment income (loss) from trading securities
$
$
82 $
(5)
77
33
110 $
(198) $
—
(198)
29
(169) $
(274)
248
(26)
99
73
Fixed maturities, at fair value using the fair value option
The breakdown of net investment income (loss) from fixed maturities, at fair value using the fair value option were as
follows:
Net Investment Income (Loss) from Fixed Maturities, at Fair Value using the Fair Value Option
Year Ended December 31,
2023
2022
2021
(in millions)
Net investment gains (losses) recognized during the period on securities held at the
end of the period
$
23 $
(14) $
Net investment gains (losses) recognized on securities sold during the period
Unrealized and realized gains (losses) from fixed maturities
Interest and dividend income from fixed maturities
Net investment income (loss) from fixed maturities
(19)
4
10
14 $
2
(12)
7
(5) $
$
12
4
16
19
35
161
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Net Investment Income (Loss)
The following table breaks out net investment income (loss) by asset category:
Fixed maturities
Mortgage loans on real estate
Other equity investments
Policy loans
Trading securities
Other investment income
Fixed maturities, at fair value using the fair value option
Gross investment income (loss)
Investment expenses
Net investment income (loss)
Investment Gains (Losses), Net
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
3,107 $
806
77
216
110
98
14
4,428
(108)
4,320 $
2,625 $
587
134
215
(169)
33
(5)
3,420
(105)
3,315 $
2,440
546
609
203
73
17
35
3,923
(77)
3,846
Investment gains (losses), net, including changes in the valuation allowances and credit losses are as follows:
Fixed maturities
Mortgage loans on real estate
Other equity investments
Other
Investment gains (losses), net
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
(563) $
(151)
—
1
(713) $
(868) $
(66)
—
(11)
(945) $
847
19
—
2
868
For the years ended December 31, 2023, 2022 and 2021, respectively, investment results passed through to certain
participating group annuity contracts as interest credited to policyholders’ account balances totaled $1 million, $1
million and $2 million.
162
Table of Contents
4)
DERIVATIVES
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The Company uses derivatives as part of its overall asset/liability risk management primarily to reduce exposures to
equity market and interest rate risks. Derivative hedging strategies are designed to reduce these risks from an economic
perspective and are all executed within the framework of a “Derivative Use Plan” approved by applicable states’
insurance law. Derivatives are generally not accounted for using hedge accounting, with the exception of TIPS and
cash flow hedges, which are discussed further below. Operation of these hedging programs is based on models
involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal
rates, election rates, fund performance, market volatility and interest rates. A wide range of derivative contracts are
used in these hedging programs, including exchange traded equity, currency and interest rate futures contracts, total
return and/or other equity swaps, interest rate swap and floor contracts, bond and bond-index total return swaps,
swaptions, variance swaps and equity options, credit and foreign exchange derivatives, as well as bond and repo
transactions to support the hedging. The derivative contracts are collectively managed in an effort to reduce the
economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in capital
markets. In addition, as part of its hedging strategy, the Company targets an asset level for all variable annuity
products at or above a CTE98 level under most economic scenarios (CTE is a statistical measure of tail risk which
quantifies the total asset requirement to sustain a loss if an event outside a given probability level has occurred. CTE98
denotes the financial resources a company would need to cover the average of the worst 2% of scenarios.)
Derivatives Utilized to Hedge Exposure to Variable Annuities with Guarantee Features
The Company has issued and continues to offer variable annuity products with GMxB features which are accounted
for as market risk benefits. The risk associated with the GMDB feature is that under-performance of the financial
markets could result in GMDB benefits, in the event of death, being higher than what accumulated policyholders’
account balances would support. The risk associated with the GMIB feature is that under-performance of the financial
markets could result in the present value of GMIB, in the event of annuitization, being higher than what accumulated
policyholders’ account balances would support, taking into account the relationship between current annuity purchase
rates and the GMIB guaranteed annuity purchase rates. The risk associated with products that have a GMxB feature
and are accounted for as market risk benefits is that under-performance of the financial markets could result in the
GMxB features benefits being higher than what accumulated policyholders’ account balances would support.
For GMxB features, the Company retains certain risks including basis, credit spread, and some volatility risk and risk
associated with actual experience versus expected actuarial assumptions for mortality, lapse and surrender, withdrawal
and policyholder election rates, among other things. The derivative contracts are managed to correlate with changes in
the value of the GMxB features that result from financial markets movements. A portion of exposure to realized equity
volatility is hedged using equity options and variance swaps and a portion of exposure to credit risk is hedged using
total return swaps on fixed income indices. Additionally, the Company is party to total return swaps for which the
reference U.S. Treasury securities are contemporaneously purchased from the market and sold to the swap
counterparty. As these transactions result in a transfer of control of the U.S. Treasury securities to the swap
counterparty, the Company derecognizes these securities with consequent gain or loss from the sale. The Company has
also purchased reinsurance contracts to mitigate the risks associated with GMDB features and the impact of potential
market fluctuations on future policyholder elections of GMIB features contained in certain annuity contracts issued by
the Company. The reinsurance of these features is accounted for as purchased market risk benefits. In addition, on June
1, 2021, we ceded legacy variable annuity policies sold by Equitable Financial between 2006-2008 (the “Block”),
comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees to CS
Life. As this contract provides full risk transfer and thus has the same risk attributes as the underlying direct contracts,
the benefits of this treaty are accounted for in the same manner as the underlying gross reserves and therefore the
amounts due from reinsurers related to the GMIB with NLG are accounted for as purchased market risk benefits.
The Company has in place an economic hedge program using U.S. Treasury futures to partially protect the overall
profitability of future variable annuity sales against declining interest rates.
Derivatives Utilized to Hedge Crediting Rate Exposure on SCS, SIO, MSO and IUL Products/Investment Options
The Company hedges crediting rates in the SCS variable annuity, SIO in the EQUI-VEST variable annuity series,
MSO in the variable life insurance products and IUL insurance products. These products permit the contract owner to
participate in the performance of an index, ETF or commodity price movement up to a cap for a set period of time.
They also contain a protection feature, in which the Company will absorb, up to a certain percentage, the loss of value
in an index, ETF or commodity price, which varies by product segment.
163
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
In order to support the returns associated with these features, the Company enters into derivative contracts whose
payouts, in combination with fixed income investments, emulate those of the index, ETF or commodity price, subject
to caps and buffers, thereby substantially reducing any exposure to market-related earnings volatility.
Derivatives Used to Hedge Equity Market Risks Associated with the General Account’s Seed Money Investments in
Retail Mutual Funds
The Company’s General Account seed money investments in retail mutual funds expose us to market risk, including
equity market risk which is partially hedged through equity-index futures contracts to minimize such risk.
Derivatives Used for General Account Investment Portfolio
The Company purchased CDS to mitigate its exposure to a reference entity through cash positions. These positions do
not replicate credit spreads.
The Company purchased 30-year TIPS and other sovereign bonds, both inflation linked and non-inflation linked, as
General Account investments and enters into asset or cross-currency basis swaps, to result in payment of the given
bond’s coupons and principal at maturity in the bond’s specified currency to the swap counterparty in return for fixed
dollar amounts. These swaps, when considered in combination with the bonds, together result in a net position that is
intended to replicate a dollar-denominated fixed-coupon cash bond with a yield higher than a term-equivalent U.S.
Treasury bond.
Derivatives Utilized to Hedge Exposure to Foreign Currency Denominated Cash Flows
The Company purchases private placement debt securities and issues funding agreements in the FABN program in
currencies other than its functional U.S. dollar currency. The Company enters into cross currency swaps with external
counterparties to hedge the exposure of the foreign currency denominated cash flows of these instruments. The foreign
currency received from or paid to the cross currency swap counterparty is exchanged for fixed U.S. dollar amounts
with improved net investment yields or net product costs over equivalent U.S. dollar denominated instruments issued
at that time. The transactions are accounted for as cash flow hedges when they are designated in hedging relationships
and qualify for hedge accounting.
These cross currency swaps are for the period the foreign currency denominated private placement debt securities and
funding agreement are outstanding, with the longest cross currency swap expiring in 2033. Since these cross currency
swaps are designated and qualify as cash flow hedges, the corresponding interest accruals are recognized in net
investment income and in interest credited to policyholders’ account balances.
The tables below present quantitative disclosures about the Company’s derivative instruments designated in hedging
relationships and derivative instruments which have not been designated in hedging relationships, including those
embedded in other contracts required to be accounted for as derivative instruments.
164
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents the gross notional amount and fair value of the Company’s derivatives:
Derivative Instruments by Category
December 31, 2023
December 31, 2022
Notional
Amount
Derivative
Assets
Fair Value
Derivative
Liabilities
Net
Derivatives
Notional
Amount
Derivative
Assets
(in millions)
Fair Value
Derivative
Liabilities
Net
Derivatives
Derivatives: designated for
hedge accounting (1)
Cash flow hedges:
Currency swaps
Interest swaps
$ 2,358 $
952
79 $
—
90 $
311
(11) $ 1,431 $
(311)
955
99 $
—
85 $
294
14
(294)
3,310
79
401
(322)
2,386
99
379
(280)
Total: designated for hedge
accounting
Derivatives: not designated
for hedge accounting (1)
Equity contracts:
Futures
Swaps
Options
Interest rate contracts:
Futures
Swaps
Credit contracts:
Credit default swaps
Currency contracts:
Currency swaps
Currency forwards
Other freestanding contracts:
Margin
Collateral
Total: not designated for hedge
accounting
Embedded derivatives:
SCS, SIO, MSO and IUL
indexed features (2)
Total embedded derivatives
Total derivative
instruments
7,877
15,021
53,927
—
53
13,213
4
10
3,129
(4)
43
10,084
5,151
11,188
40,122
2
39
7,583
—
9
3,412
2
30
4,171
—
(166)
9
(9)
(1)
—
—
18
4
31
—
166
9
13
32
8,094
2,887
242
823
36
—
—
—
118
9
—
20
—
2
6
27
21
—
116
12,693
1,515
3
327
(27)
(1)
397
62
—
—
468
75
—
9,232
468
(9,157)
226
142
—
4,472
226
(4,330)
88,907
13,956
12,431
1,525
71,455
8,045
8,113
(68)
—
—
—
—
10,745
10,745
(10,745)
(10,745)
—
—
—
—
4,164
4,164
(4,164)
(4,164)
$ 92,217 $ 14,035 $ 23,577 $ (9,542) $ 73,841 $ 8,144 $ 12,656 $ (4,512)
___________
(1) Reported in other invested assets in the consolidated balance sheets.
(2) Reported in policyholders’ account balances in the consolidated balance sheets.
165
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents the effects of derivative instruments on the consolidated statements of income and
comprehensive income (loss):
Derivative Instruments by Category
Year Ended December 31, 2023
Year Ended December 31, 2022
Net
Derivatives
Gain
(Losses) (1)
Net
Investment
Income
Interest
Credited To
Policyholders
Account
Balances
AOCI
Net
Derivatives
Gain (Losses)
(1)
Net
Investment
Income
Interest
Credited To
Policyholders
Account
Balances
AOCI
(in millions)
Derivatives: designated
for hedge accounting
Cash flow hedges:
Currency swaps
Interest swaps
Total: designated for
hedge accounting
Derivatives: not
Designated for hedge
accounting
Equity contracts:
Futures
Swaps
Options
Interest rate contracts:
Futures
Swaps
Credit contracts:
Credit default swaps
Currency contracts:
Currency swaps
Currency forwards
Other freestanding
contracts:
Margin
Collateral
Total: not designated for
hedge accounting
Embedded derivatives:
SCS, SIO,MSO and
IUL indexed features
Total embedded
derivatives
Total derivative
instruments
$
(4) $
(18)
13 $
58
(23) $
—
(12) $
(40)
19 $
(86)
7 $
—
(4) $
—
24
206
(22)
71
(23)
(52)
(67)
7
(4)
230
(73)
(1,990)
5,711
39
12
—
—
—
—
—
—
—
—
—
—
—
285
2,644
(2,750)
—
—
—
—
(1,688)
(492)
(7)
—
—
—
(23)
—
—
—
3,669
(6,044)
(6,044)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7
10
3
—
—
—
—
(1,981)
—
—
2,955
—
—
2,955
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
(2,397) $
71 $
(23) $
(52) $
907 $
7 $
(4) $ 230
______________
(1) Reported in net derivative gains (losses) in the consolidated statements of income (loss).
166
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Derivatives: designated for hedge accounting
Cash flow hedges:
Currency swaps
Interest swaps
Total: designated for hedge accounting
Derivatives: not Designated for hedge accounting
Equity contracts:
Futures
Swaps
Options
Interest rate contracts:
Futures
Swaps
Credit contracts:
Credit default swaps
Currency contracts:
Currency swaps
Currency forwards
Total: not designated for hedge accounting
Embedded derivatives:
SCS, SIO,MSO and IUL indexed features
Total embedded derivatives
Year Ended December 31, 2021
Net
Derivatives
Gain (Losses)
(1)
Net
Investment
Income
Interest
Credited To
Policyholders
Account
Balances
AOCI
(in millions)
$
(2) $
— $
(45) $
5
(69)
(71)
(567)
(3,614)
3,886
(728)
(2,317)
—
—
—
—
—
—
—
—
(87)
(45)
(82)
—
—
—
—
—
—
—
—
—
—
(2)
—
—
—
3
2
(3,337)
(3,835)
(3,835)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total derivative instruments (2)
$
(7,243) $
— $
(45) $
(82)
(1) Reported in net derivative gains (losses) in the consolidated statements of income (loss).
(2) Excludes settlement fees of $45 million and attributed fees of $(7) million on CS Life reinsurance contract and ACS change in policy
reserves of $55 million for the year ended December 31, 2021.
.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents a roll-forward of cash flow hedges recognized in AOCI:
Roll-forward of Cash flow hedges in AOCI
Year Ended December 31,
2023
2022
2021
(in millions)
$
22 $
(208) $
(126)
(23)
(17)
(40)
11
(22)
(11)
(29) $
29
102
131
(5)
104
99
22 $
(35)
(183)
(218)
40
96
136
(208)
Balance, beginning of period
Amount recorded in AOCI
Currency swaps
Interest swaps
Total amount recorded in AOCI
Amount reclassified from (to) income to AOCI
Currency swaps (1)
Interest swaps (1)
Total amount reclassified from (to) income to AOCI
Balance, end of period (2)
$
_______________
(1) Currency swaps income is reported in net investment income in the consolidated statements of income (loss). Interest swaps income is
reported in net derivative gains (losses) in the consolidated statements of income (loss).
(2) The Company does not estimate the amount of the deferred losses in AOCI at December 31, 2023, 2022 and 2021 which will be released
and reclassified into net income (loss) over the next 12 months as the amounts cannot be reasonably estimated.
Equity-Based and Treasury Futures Contracts Margin
All outstanding equity-based and treasury futures contracts as of December 31, 2023 and 2022 are exchange-traded
and net settled daily in cash. As of December 31, 2023 and 2022, respectively, the Company had open exchange-
traded futures positions on: (i) the S&P 500, Nasdaq, Russell 2000 and Emerging Market indices, having initial margin
requirements of $369 million and $247 million, (ii) the 2-year, 5-year and 10-year U.S. Treasury Notes on U.S.
Treasury bonds and ultra-long bonds, having initial margin requirements of $120 million and $113 million, and (iii)
the Euro Stoxx, FTSE 100, Topix, ASX 200 and EAFE indices as well as corresponding currency futures on the Euro/
U.S. dollar, Pound/U.S. dollar, Australian dollar/U.S. dollar, and Yen/U.S. dollar, having initial margin requirements
of $14 million and $16 million.
Collateral Arrangements
The Company generally has executed a CSA under the ISDA Master Agreement it maintains with each of its OTC
derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality
securities, such as U.S. Treasury securities, U.S. government and government agency securities and investment grade
corporate bonds. The Company nets the fair value of all derivative financial instruments with counterparties for which
an ISDA Master Agreement and related CSA have been executed. As of December 31, 2023 and 2022, respectively,
the Company held $9.2 billion and $4.5 billion in cash and securities collateral delivered by trade counterparties,
representing the fair value of the related derivative agreements. The unrestricted cash collateral is reported in other
invested assets. The Company posted collateral of $75 million and $142 million as of December 31, 2023 and 2022,
respectively, in the normal operation of its collateral arrangements. The Company is exposed to losses in the event of
non-performance by counterparties to financial derivative transactions with a positive fair value. The Company
manages credit risk by: (i) entering into derivative transactions with highly rated major international financial
institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading
through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and
(iv) setting limits on single party credit exposures which are subject to periodic management review.
Substantially all of the Company’s derivative agreements have zero thresholds which require daily full
collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements
contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to
fall below a certain level, the party with positive fair value could request termination at the then fair value or demand
immediate full collateralization from the party whose credit rating fell and is in a net liability position.
168
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
As of December 31, 2023 and 2022, there were no net liability derivative positions with counterparties with credit risk-
related contingent features whose credit rating has fallen. All derivatives have been appropriately collateralized by the
Company or the counterparty in accordance with the terms of the derivative agreements.
The following tables present information about the Company’s offsetting of financial assets and liabilities and
derivative instruments:
Offsetting of Financial Assets and Liabilities and Derivative Instruments
As of December 31, 2023
Assets:
Derivative assets (1)
Secured lending
Other financial assets
Other invested assets
Liabilities:
Derivative liabilities (2)
Secured lending
Other financial liabilities
Other liabilities
Gross Amount
Recognized
Gross Amount
Offset in the
Balance Sheets
Net Amount
Presented in the
Balance Sheets
(in millions)
Gross Amount not
Offset in the
Balance Sheets (3)
Net Amount
$
$
$
$
14,036 $
116
2,110
16,262 $
9,579 $
116
5,936
15,631 $
9,543 $
—
—
9,543 $
9,543 $
— $
—
9,543 $
4,493 $
116
2,110
6,719 $
36 $
116
5,936
6,088 $
(3,254) $
—
—
(3,254) $
— $
—
—
— $
1,239
116
2,110
3,465
36
116
5,936
6,088
______________
(1) Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2) Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3) Financial instruments/collateral sent (held).
As of December 31, 2022
Gross Amount
Recognized
Gross Amount
Offset in the
Balance Sheets
Net Amount
Presented in the
Balance Sheets
(in millions)
Gross Amount not
Offset in the
Balance Sheets (3)
Net Amount
$
$
$
$
8,143 $
2,789
10,932 $
7,047 $
—
7,047 $
1,096 $
2,789
3,885 $
(848) $
—
(848) $
7,645 $
6,510
14,155 $
7,047 $
—
7,047 $
598 $
6,510
7,108 $
— $
—
— $
248
2,789
3,037
598
6,510
7,108
Assets:
Derivative assets (1)
Other financial assets
Other invested assets
Liabilities:
Derivative liabilities (2)
Other financial liabilities
Other liabilities
______________
(1) Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2) Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3) Financial instruments sent (held).
169
Table of Contents
5)
GOODWILL AND OTHER INTANGIBLE ASSETS
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Goodwill
Goodwill represents the excess of purchase price over the estimated fair value of identifiable net assets acquired in a
business combination. The Company tests goodwill for recoverability each annual reporting period at December 31
and at interim periods if facts or circumstances are indicative of potential impairment.
The carrying value of goodwill from the Company’s Investment Management reporting unit totaled $5.1 billion and
$5.1 billion at December 31, 2023 and 2022, resulting from its investment in AB as well as direct strategic acquisitions
of AB, including its purchases of Sanford C. Bernstein, Inc and CarVal.
On November 22, 2022, AB and Société Générale, a leading European bank, announced plans to form a joint venture
combining their respective cash equities and research businesses, as such AB’s Bernstein Research Services business
was classified as held-for-sale and $170 million of goodwill recorded was allocated to the held-for-sale disposal group.
See Note 25 of the Notes to these Consolidated Financial Statements for additional information.
As of December 31, 2023 and 2022, the Company’s annual testing resulted in no impairment of this goodwill, as the
fair value of the reporting unit exceeded its carrying amount at each respective date.
Other Intangible Assets
The Company’s intangible assets primarily relate to amounts assigned to acquired investment management contracts
based on their estimated fair values at the time of acquisition, less accumulated amortization.
The gross carrying amount of AB-related intangible assets was $1.2 billion as of December 31, 2023 and $1.2 billion
as of December 31, 2022, and the accumulated amortization of these intangible assets was $911 million and
$853 million as of December 31, 2023 and 2022, respectively. Amortization expense for AB-related intangible assets
totaled $58 million, $43 million, and $21 million for 2023, 2022 and 2021, respectively. Estimated annual
amortization expense for each of the next five years is approximately $59 million, $59 million, $59 million,
$38 million and $38 million, respectively.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
6)
CLOSED BLOCK
As a result of demutualization, the Company’s Closed Block was established in 1992 for the benefit of certain
individual participating policies that were in force on that date. Assets, liabilities and earnings of the Closed Block are
specifically identified to support its participating policyholders.
Assets allocated to the Closed Block inure solely to the benefit of the Closed Block policyholders and will not revert to
the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed
Block and other portions of the Company’s General Account, any of its Separate Accounts or any affiliate of the
Company without the approval of the NYDFS. Closed Block assets and liabilities are carried on the same basis as
similar assets and liabilities held in the General Account.
The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in
AOCI) represents the expected maximum future post-tax earnings from the Closed Block that would be recognized in
income from continuing operations over the period the policies and contracts in the Closed Block remain in force. As
of January 1, 2001, the Company has developed an actuarial calculation of the expected timing of the Closed Block’s
earnings.
If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the
expected earnings will be recognized in net income. Actual cumulative earnings in excess of expected cumulative
earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to
Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less
favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual
Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder
dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed
Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative
earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has
insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the
Closed Block.
Many expenses related to Closed Block operations, including amortization of DAC, are charged to operations outside
of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to
the business outside of the Closed Block.
Summarized financial information for the Company’s Closed Block is as follows:
Closed Block Liabilities:
Future policy benefits, policyholders’ account balances and other
Other liabilities
Total Closed Block liabilities
December 31,
2023
2022
(in millions)
$
5,461 $
57
5,518
Assets Designated to the Closed Block:
Fixed maturities AFS, at fair value (amortized cost of $2,945 and $3,171) (allowance for
credit losses of $0 and $0)
Mortgage loans on real estate (net of allowance for credit losses of $13 and $4)
Policy loans
Cash and other invested assets
Other assets
Total assets designated to the Closed Block
2,800
1,612
554
58
150
5,174
5,692
68
5,760
2,948
1,645
569
—
187
5,349
171
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Excess of Closed Block liabilities over assets designated to the Closed Block
Amounts included in AOCI:
December 31,
2023
2022
344
411
Net unrealized investment gains (losses), net of policyholders’ dividend obligation: $0
and $0; and net of income tax: $31 and $47
Maximum future earnings to be recognized from Closed Block assets and liabilities
$
(115)
229 $
(177)
234
The Company’s Closed Block revenues and expenses were as follows:
Revenues:
Premiums and other income
Net investment income (loss)
Investment gains (losses), net
Total revenues
Benefits and Other Deductions:
Policyholders’ benefits and dividends
Other operating costs and expenses
Total benefits and other deductions
Net income (loss), before income taxes
Income tax (expense) benefit
Net income (loss)
7)
DAC AND OTHER DEFERRED ASSETS/LIABILITIES
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
115 $
209
(8)
316
309
—
309
7
(2)
5 $
125 $
221
(3)
343
330
2
332
11
3
14 $
144
237
4
385
375
3
378
7
(3)
4
172
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents a reconciliation of DAC to the consolidated balance sheets:
Protection Solutions
Term
Universal Life
Variable Universal Life
Indexed Universal Life
Individual Retirement
GMxB Core
EQUI-VEST Individual
Investment Edge
SCS
Legacy Segment
GMxB Legacy
Group Retirement
EQUI-VEST Group
Momentum
Corporate and Other
Other
Total
December 31,
2023
2022
(in millions)
337 $
174
987
188
1,602
155
172
1,571
555
742
82
116
24
6,705 $
362
179
889
185
1,625
156
148
1,279
593
710
89
127
27
6,369
$
$
Annually, or as circumstances warrant, we review the associated decrements assumptions (i.e., mortality and lapse)
based on our multi-year average of companies experience with actuarial judgements to reflect other observable
industry trends. In addition to DAC, the unearned revenue liability and sales inducement asset (“SIA”) use similar
techniques and quarterly update processes for balance amortization.
During the third quarter of 2023, 2022 and 2021, we completed our annual assumption update and the impact to the
current period amortization of DAC and DAC like balances due to the new assumptions is immaterial. There were as
no other material changes to the inputs, judgements or calculation processes used in the DAC calculation this period or
year.
Changes in the DAC asset were as follows:
Year Ended December 31, 2023
Protection Solutions
Individual Retirement
Term
UL
VUL
IUL
GMxB
Core
EI
IE
SCS
(in millions)
Legacy
GMxB
Legacy
Group Retirement
Corporate
and Other
EG Momentum
CB (1)
Total
Balance,
beginning of
year
Capitalization
Amortization (2)
Balance, end of
year
$ 362 $ 179 $ 889 $ 185 $ 1,625 $ 156 $ 148 $ 1,279 $ 593 $ 710 $
14
11
(39) (12) (57) (11) (144) (12) (14) (215)
26
(64) (41)
121
507
155
38
73
14
7
89 $
10
(17)
127 $ 6,342
—
976
(11) (637)
$ 337 $ 174 $ 987 $ 188 $ 1,602 $ 155 $ 172 $ 1,571 $ 555 $ 742 $
82 $
116 $ 6,681
______________
(1) “CB” defined as Closed Block.
(2) DAC amortization of $4 million related to Other not reflected in table above.
173
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31, 2022
Protection Solutions
Individual Retirement
Term
UL
VUL
IUL
GMxB
Core
EI
IE
SCS
(in millions)
Legacy
GMxB
Legacy
Group Retirement
Corporate
and Other
EG Momentum
CB
Total
Balance,
beginning of
year
Capitalization
Amortization (1)
Balance, end of
year
$ 385 $ 180 $ 799 $ 180 $ 1,653 $ 156 $ 121 $ 1,070 $ 631 $ 677 $
94 $
138 $ 6,084
18
11
142
16
109
12
40
378
27
74
14
—
841
(41) (12) (52) (11) (137) (12) (13) (169)
(65) (41)
(19)
(11) (583)
$ 362 $ 179 $ 889 $ 185 $ 1,625 $ 156 $ 148 $ 1,279 $ 593 $ 710 $
89 $
127 $ 6,342
______________
(1) DAC amortization of $3 million related to Other not reflected in table above.
Year Ended December 31, 2021
Protection
Solutions
Individual Retirement
Legacy
Group Retirement
Corporate
and Other
Term
UL
VUL IUL
GMxB
Core
EI
IE
SCS
GMxB
Legacy
EG Momentum
CB
Total
(in millions)
Balance beginning of
the year
Capitalization
Amortization (2)
Balance, December
31, 2021
$ 403 $ 177 $ 714 $ 162 $ 1,646 $ 154 $ 94 $ 855 $
26
141 15 38 350
15 133 28
667 $ 634 $
84
30
101 $
16
150 $ 5,757
— 876
(44)
(12) (48) (10) (134) (13) (11) (135)
(66) (41)
(23)
(12) (549)
$ 385 $ 180 $ 799 $ 180 $ 1,653 $ 156 $ 121 $ 1,070 $
631 $ 677 $
94 $
138 $ 6,084
______________
(1) DAC amortization of $3 million related to Other not reflected in table above.
Changes in the Individual Retirement sales inducement assets were as follows:
2023
2022
2021
GMxB Core
GMxB Legacy
GMxB Core
GMxB Legacy
GMxB Core
GMxB Legacy
Year Ended December 31,
Balance, beginning of year
Capitalization
Amortization
Balance, end of year
$
$
137 $
2
(12)
127 $
200 $
—
(21)
179 $
(in millions)
147 $
2
(12)
137 $
222 $
—
(22)
200 $
158 $
1
(12)
147 $
246
—
(24)
222
174
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Changes in the Protection Solutions unearned revenue liability were as follows:
UL
2023
VUL
IUL
UL
2022
VUL
IUL
UL
2021
VUL
IUL
Year Ended December 31,
Balance, beginning of year
Capitalization
Amortization
Balance, end of year
$
$
95 $
19
(7)
107 $
684 $
115
(45)
754 $
157 $
64
(11)
210 $
(in millions)
80 $
21
(6)
95 $
619 $
105
(40)
684 $
8)
FAIR VALUE DISCLOSURES
25
94 $ 60 $ 566 $ 24
74
71
(4)
(8)
157 $ 80 $ 619 $ 94
92
(5) (39)
U.S. GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be
used to measure fair value:
Level 1 Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are
supported by market transactions that occur with sufficient frequency and volume to provide pricing
information on an ongoing basis.
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in
markets that are not active, and inputs to model-derived valuations that are directly observable or can be
corroborated by observable market data.
Level 3 Unobservable inputs supported by little or no market activity and often requiring significant management
judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant
components of value that market participants would use in pricing the asset or liability.
The Company uses unadjusted quoted market prices to measure fair value for those instruments that are actively traded
in financial markets. In cases where quoted market prices are not available, fair values are measured using present
value or other valuation techniques. The fair value determinations are made at a specific point in time, based on
available market information and judgments about the financial instrument, including estimates of the timing and
amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any
premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular
financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases,
the fair value cannot be substantiated by direct comparison to independent markets, nor can the disclosed value be
realized in immediate settlement of the instrument.
Management is responsible for the determination of the value of investments carried at fair value and the supporting
methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes
independent valuation service providers to gather, analyze, and interpret market information and derive fair values
based upon relevant methodologies and assumptions for individual securities. These independent valuation service
providers typically obtain data about market transactions and other key valuation model inputs from multiple sources
and, through the use of widely accepted valuation models, provide a single fair value measurement for individual
securities for which a fair value has been requested. As further described below with respect to specific asset classes,
these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities,
benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-
observable information, as applicable. Specific attributes of the security being valued are also considered, including its
term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-
specific information. When insufficient market observable information is available upon which to measure fair value,
the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will
employ internal valuation models. Fair values received from independent valuation service providers and brokers and
those internally modeled or otherwise estimated are assessed for reasonableness.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value measurements are required on a non-recurring basis for certain assets only when an impairment or other
events occur. For the periods ended December 31, 2023 and December 31, 2022, the Company recognized impairment
adjustments and impairment losses, respectively, to adjust the carrying value of held-for-sale asset and liabilities to
their fair value less cost to sell. The value is measured on a nonrecurring basis and categorized within Level 3 of the
fair value hierarchy. The fair value was determined using a market approach, estimated based on the negotiated value
of the asset and liabilities. See Note 25 of the Notes to these Consolidated Financial Statements for additional details
of the Held-for-Sale assets and liabilities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis are summarized below:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Fair Value Measurements as of December 31, 2023
Assets:
Investments
Fixed maturities, AFS:
Corporate (1)
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed (2)
Asset-backed (3)
Commercial mortgage-backed
Redeemable preferred stock
Total fixed maturities, AFS
Fixed maturities, at fair value using the fair value option
Other equity investments (4)
Trading securities
Other invested assets:
Short-term investments
Assets of consolidated VIEs/VOEs
Swaps
Credit default swaps
Futures
Options
Total other invested assets
Cash equivalents
Segregated securities
Purchased market risk benefits
Assets for market risk benefits
Separate Accounts assets (5)
Total Assets
Liabilities:
Notes issued by consolidated VIE’s, at fair value using the
fair value option (6)
SCS, SIO, MSO and IUL indexed features’ liability
Liabilities of consolidated VIEs and VOEs
Liabilities for market risk benefits
Contingent payment arrangements
Total Liabilities
Level 1
Level 2
Level 3
Total
(in millions)
$
$
$
$
— $
—
—
—
—
—
—
—
—
—
217
321
—
61
—
—
(4)
—
57
5,901
—
—
—
124,099
130,595 $
— $
—
1
—
—
1 $
42,584 $
4,631
522
611
2,355
10,954
3,075
59
64,791
1,473
464
675
429
350
(190)
3
—
10,084
10,676
694
868
—
—
2,624
82,265 $
1,539 $
10,745
2
—
—
12,286 $
2,158 $
—
27
—
—
47
7
—
2,239
181
54
61
—
3
—
—
—
—
3
—
—
9,427
591
—
12,556 $
— $
—
—
14,612
253
14,865 $
44,742
4,631
549
611
2,355
11,001
3,082
59
67,030
1,654
735
1,057
429
414
(190)
3
(4)
10,084
10,736
6,595
868
9,427
591
126,723
225,416
1,539
10,745
3
14,612
253
27,152
______________
(1) Corporate fixed maturities includes both public and private issues.
(2)
(3)
(4)
(5) Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its
Includes publicly traded agency pass-through securities and collateralized obligations.
Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
Includes short position equity securities of $4 million that are reported in other liabilities.
equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate. As of
December 31, 2023, the fair value of such investments was $371 million.
(6) Accrued interest payable of $20 million is reported in Notes issued by consolidated VIE’s, at fair value using the fair value option in the
consolidated balance sheets, which is not required to be measured at fair value on a recurring basis.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Fair Value Measurements as of December 31, 2022
Assets:
Investments
Fixed maturities, AFS:
Corporate (1)
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Residential mortgage-backed (2)
Asset-backed (3)
Commercial mortgage-backed (2)
Redeemable preferred stock
Total fixed maturities, AFS
Fixed maturities, at fair value using the fair value option
Other equity investments (4)
Trading securities
Other invested assets:
Short-term investments
Assets of consolidated VIEs/VOEs
Swaps
Credit default swaps
Futures
Options
Total other invested assets
Cash equivalents
Segregated securities
Purchased market risk benefits
Assets for market risk benefits
Separate Accounts assets (5)
Total Assets
Liabilities:
Notes issued by consolidated VIE’s, at fair value using the
fair value option (6)
SCS, SIO, MSO and IUL indexed features’ liability
Liabilities of consolidated VIEs and VOEs
Liabilities for market risk benefits
Contingent payment arrangements
Total Liabilities
Level 1
Level 2
Level 3
Total
(in millions)
$
$
$
$
— $
—
—
—
—
—
—
—
—
—
214
290
—
131
—
—
2
—
133
2,386
—
—
—
111,744
114,767 $
— $
—
15
—
—
15 $
41,450 $
5,837
499
836
788
8,490
3,203
43
61,146
1,284
497
332
943
393
(425)
9
—
4,171
5,091
501
1,522
—
—
2,436
72,809 $
1,374 $
4,164
7
—
—
5,545 $
2,121 $
—
28
—
34
—
32
—
2,215
224
12
55
—
5
—
—
—
—
5
—
—
10,423
490
1
13,425 $
— $
—
—
15,766
247
16,013 $
43,571
5,837
527
836
822
8,490
3,235
43
63,361
1,508
723
677
943
529
(425)
9
2
4,171
5,229
2,887
1,522
10,423
490
114,181
201,001
1,374
4,164
22
15,766
247
21,573
______________
(1) Corporate fixed maturities includes both public and private issues.
Includes publicly traded agency pass-through securities and collateralized obligations.
(2)
(3)
Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
(4) Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its
equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate. As of
December 31, 2022, the fair value of such investments was $456 million.
Includes CLO short-term debt of $239 million, which is inclusive as fair valued within Notes issued by consolidated VIE’s, at fair value
using the fair value option. Accrued interest payable of $15 million is reported in Notes issued by consolidated VIE’s, at fair value using
the fair value option in the consolidated balance sheets, which is not required to be measured at fair value on a recurring basis.
Includes short position equity securities of $12 million that are reported in other liabilities.
(5)
(6)
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Public Fixed Maturities
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The fair values of the Company’s public fixed maturities, including those accounted for using the fair value option are
generally based on prices obtained from independent valuation service providers and for which the Company
maintains a vendor hierarchy by asset type based on historical pricing experience and vendor expertise. Although each
security generally is priced by multiple independent valuation service providers, the Company ultimately uses the price
received from the independent valuation service provider highest in the vendor hierarchy based on the respective asset
type, with limited exception. To validate reasonableness, prices also are internally reviewed by those with relevant
expertise through comparison with directly observed recent market trades. Consistent with the fair value hierarchy,
public fixed maturities validated in this manner generally are reflected within Level 2, as they are primarily based on
observable pricing for similar assets and/or other market observable inputs.
Private Fixed Maturities
The fair values of the Company’s private fixed maturities, including those accounted for using the fair value option are
determined from prices obtained from independent valuation service providers. Prices not obtained from an
independent valuation service provider are determined by using a discounted cash flow model or a market comparable
company valuation technique. In certain cases, these models use observable inputs with a discount rate based upon the
average of spread surveys collected from private market intermediaries who are active in both primary and secondary
transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the
reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2.
For certain private fixed maturities, the discounted cash flow model or a market comparable company valuation
technique may also incorporate unobservable inputs, which reflect the Company’s own assumptions about the inputs
market participants would use in pricing the asset. To the extent management determines that such unobservable inputs
are significant to the fair value measurement of a security, a Level 3 classification generally is made.
Notes issued by consolidated VIE’s, at fair value using the fair value option
These notes are based on the fair values of corresponding fixed maturity collateral. The CLO liabilities are also
reduced by the fair value of the beneficial interests the Company retains in the CLO and the carrying value of any
beneficial interests that represent compensation for services. As the notes are valued based on the reference collateral,
they are classified as Level 2 or 3.
Freestanding Derivative Positions
The net fair value of the Company’s freestanding derivative positions as disclosed in Note 4 of the Notes to these
Consolidated Financial Statements are generally based on prices obtained either from independent valuation service
providers or derived by applying market inputs from recognized vendors into industry standard pricing models. The
majority of these derivative contracts are traded in the OTC derivative market and are classified in Level 2. The fair
values of derivative assets and liabilities traded in the OTC market are determined using quantitative models that
require use of the contractual terms of the derivative instruments and multiple market inputs, including interest rates,
prices, and indices to generate continuous yield or pricing curves, including overnight index swap curves, and
volatility factors, which then are applied to value the positions. The predominance of market inputs is actively quoted
and can be validated through external sources or reliably interpolated if less observable.
Level Classifications of the Company’s Financial Instruments
Financial Instruments Classified as Level 1
Investments classified as Level 1 primarily include redeemable preferred stock, trading securities, cash equivalents and
Separate Accounts assets. Fair value measurements classified as Level 1 include exchange-traded prices of fixed
maturities, equity securities and derivative contracts, and net asset values for transacting subscriptions and redemptions
of mutual fund shares held by Separate Accounts. Cash equivalents classified as Level 1 include money market
accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three
months or less and are carried at cost as a proxy for fair value measurement due to their short-term nature.
Financial Instruments Classified as Level 2
Investments classified as Level 2 are measured at fair value on a recurring basis and primarily include U.S.
government and agency securities, certain corporate debt securities and financial assets and liabilities accounted for
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
using the fair value option, such as public and private fixed maturities. As market quotes generally are not readily
available or accessible for these securities, their fair value measures are determined utilizing relevant information
generated by market transactions involving comparable securities and often are based on model pricing techniques that
effectively discount prospective cash flows to present value using appropriate sector-adjusted credit spreads
commensurate with the security’s duration, also taking into consideration issuer-specific credit quality and liquidity.
Segregated securities classified as Level 2 are U.S. Treasury bills segregated by AB in a special reserve bank custody
account for the exclusive benefit of brokerage customers, as required by Rule 15c3-3 of the Exchange Act and for
which fair values are based on quoted yields in secondary markets.
Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields,
reported secondary trades, issuer spreads, benchmark securities and other reference data. Additional observable inputs
are used when available, and as may be appropriate, for certain security types, such as pre-payment, default, and
collateral information for the purpose of measuring the fair value of mortgage- and asset-backed securities. The
Company’s AAA-rated mortgage- and asset-backed securities are classified as Level 2 for which the observability of
market inputs to their pricing models is supported by sufficient, albeit more recently contracted, market activity in
these sectors.
Certain Company products, such as the SCS, EQUI-VEST variable annuity products, IUL and the MSO fund available
in some life contracts, offer investment options which permit the contract owner to participate in the performance of an
index, ETF or commodity price. These investment options, which depending on the product and on the index selected,
can currently have one, three, five or six year terms, provide for participation in the performance of specified indices,
ETF or commodity price movement up to a segment-specific declared maximum rate. Under certain conditions that
vary by product, e.g., holding these segments for the full term, these segments also shield policyholders from some or
all negative investment performance associated with these indices, ETF or commodity prices. These investment
options have defined formulaic liability amounts, and the current values of the option component of these segment
reserves are classified as Level 2 embedded derivatives. The fair values of these embedded derivatives are based on
data obtained from independent valuation service providers.
Financial Instruments Classified as Level 3
The Company’s investments classified as Level 3 primarily include corporate debt securities and financial assets and
liabilities accounted for using the fair value option, such as private fixed maturities and asset-backed securities.
Determinations to classify fair value measures within Level 3 of the valuation hierarchy generally are based upon the
significance of the unobservable factors to the overall fair value measurement. Included in the Level 3 classification
are fixed maturities with indicative pricing obtained from brokers that otherwise could not be corroborated to market
observable data.
The Company has certain variable annuity contracts with GMDB, GMIB, GIB and GWBL and other features in-force
that guarantee one of the following:
•
•
•
•
Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for
withdrawals);
Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the
highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);
Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals)
accumulated at contractually specified interest rates up to specified ages;
Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five
year or an annual reset; or
• Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life.
The Company also issues certain benefits on its variable annuity products that are accounted for as Market Risk
Benefits carried at fair value and are also considered Level 3 for fair value leveling.
The GMIBNLG feature allows the policyholder to receive guaranteed minimum lifetime annuity payments based on
predetermined annuity purchase rates applied to the contract’s benefit base if and when the contract account value is
depleted and the NLG feature is activated. The optional GMIB feature allows the policyholder to receive guaranteed
minimum lifetime annuity payments based on predetermined annuity purchase rates.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The GMWB feature allows the policyholder to withdraw at a minimum, over the life of the contract, an amount based
on the contract’s benefit base. The GWBL feature allows the policyholder to withdraw, each year for the life of the
contract, a specified annual percentage of an amount based on the contract’s benefit base. The GMAB feature
increases the contract account value at the end of a specified period to a GMAB base. The GIB feature provides a
lifetime annuity based on predetermined annuity purchase rates if and when the contract account value is depleted.
This lifetime annuity is based on predetermined annuity purchase rates applied to a GIB base. The GMDB feature
guarantees that the benefit paid upon death will not be less than a guaranteed benefit base. If the contract’s account
value is less than the benefit base at the time a death claim is paid, the amount payable will be equal to the benefit
base.
The market risk benefits fair value will be equal to the present value of benefits less the present value of ascribed fees.
Considerable judgment is utilized by management in determining the assumptions used in determining present value of
benefits and ascribed fees related to lapse rates, withdrawal rates, utilization rates, non-performance risk, volatility
rates, annuitization rates and mortality (collectively, the significant MRB assumptions).
Purchased MRB assets, which are accounted for as market risk benefits carried at fair value are also considered Level
3 for fair value leveling. The purchased MRB asset fair value reflects the present value of reinsurance premiums, net of
recoveries, adjusted for risk margins and nonperformance risk over a range of market consistent economic scenarios
while the MRB asset and liability reflects the present value of expected future payments (benefits) less fees, adjusted
for risk margins and nonperformance risk, attributable to the MRB asset and liability over a range of market-consistent
economic scenarios.
The valuations of the MRBs and purchased MRB assets incorporate significant non-observable assumptions related to
policyholder behavior, risk margins and projections of equity Separate Accounts funds. The credit risks of the
counterparty and of the Company are considered in determining the fair values of its MRBs and purchased MRB assets
after taking into account the effects of collateral arrangements. Incremental adjustment to the risk-free curve for
counterparty non-performance risk is made to the fair values of the purchased MRB assets. Risk margins were applied
to the non-capital markets inputs to the MRBs and purchased MRB valuations.
After giving consideration to collateral arrangements, the Company reduced the fair value of its purchased MRB asset
by $687 million and $1.1 billion as of December 31, 2023 and 2022, respectively, to recognize incremental
counterparty non-performance risk.
The Company’s Level 3 liabilities include contingent payment arrangements associated with acquisitions in 2020 and
2022 by AB. At each reporting date, AB estimates the fair values of the contingent consideration expected to be paid
based upon revenue and discount rate projections, using unobservable market data inputs, which are included in
Level 3 of the valuation hierarchy. The Company’s consolidated VIEs/VOEs hold investments that are classified as
Level 3, primarily corporate bonds that are vendor priced with no ratings available, bank loans, non-agency
collateralized mortgage obligations and asset-backed securities.
Transfers of Financial Instruments Between Levels 2 and 3
During the year ended December 31, 2023, fixed maturities with fair values of $517 million were transferred out of
Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to
measure and validate their fair values. In addition, fixed maturities with fair value of $36 million were transferred from
Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 12.6% of total equity
as of December 31, 2023.
During the year ended December 31, 2022, fixed maturities with fair values of $200 million were transferred out of
Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to
measure and validate their fair values. In addition, fixed maturities with fair value of $213 million were transferred
from Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 13.1% of total
equity as of December 31, 2022.
The tables below present reconciliations for all Level 3 assets and liabilities and changes in unrealized gains (losses).
Not included below are the changes in balances related to market risk benefits and purchased market risk benefits level
3 assets and liabilities, which are included in Note 10 of the Notes to these Consolidated Financial Statements.
181
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Balance, beginning of year
Total gains and (losses), realized and unrealized, included
in:
Net income (loss) as:
Net investment income (loss)
Investment gains (losses), net
Subtotal
Other comprehensive income (loss)
Purchases
Sales
Settlements
Other
Activity related to consolidated VIEs/VOEs
Transfers into Level 3 (1)
Transfers out of Level 3 (1)
Balance, end of year
Change in unrealized gains or losses for the period included
in earnings for instruments held at the end of the reporting
period (2)
Change in unrealized gains or losses for the period included
in other comprehensive income for instruments held at the
end of the reporting period (2)
$
$
$
Year Ended December 31, 2023
Corporate
State and
Political
Subdivisions
Asset-
backed
(in millions)
RMBS
CMBS
$
2,121 $
28 $
— $
34 $
32
6
(17)
(11)
50
594
(272)
—
—
—
11
(335)
2,158 $
—
—
—
—
—
(1)
—
—
—
—
—
27 $
—
—
—
—
55
(8)
—
—
—
—
—
47 $
—
—
—
—
—
—
—
—
—
—
(34)
— $
—
—
—
(1)
3
—
—
—
—
—
(27)
7
— $
— $
— $
— $
—
4 $
— $
— $
— $
(1)
______________
(1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.
(2) For instruments held as of December 31, 2023, amounts are included in net investment income or net derivative gains (losses) in the
consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive
income.
Balance, beginning of year
Total gains and (losses), realized and unrealized, included
in:
Net income (loss) as:
Net investment income (loss)
Investment gains (losses), net
Subtotal
Other comprehensive income (loss)
Purchases
Sales
Settlements
Other
Activity related to consolidated VIEs/VOEs
Transfers into Level 3 (1)
Transfers out of Level 3 (1)
Year Ended December 31, 2023
Fixed
maturities,
at FVO
Other
Equity
Investments
(3)
Trading
Securities, at
Fair Value
(in millions)
Separate
Accounts
Assets
Contingent
Payment
Arrangement
$
224 $
17 $
55 $
1 $
(247)
6
(1)
5
—
95
(47)
—
—
—
25
(121)
(2)
—
(2)
—
85
(42)
—
—
(1)
—
—
—
6
6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1)
—
—
—
—
—
—
1
(7)
—
—
—
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31, 2023
Fixed
maturities,
at FVO
Other
Equity
Investments
(3)
Trading
Securities, at
Fair Value
(in millions)
Separate
Accounts
Assets
Contingent
Payment
Arrangement
Balance, end of year
Change in unrealized gains or losses for the period included
in earnings for instruments held at the end of the reporting
period (2)
Change in unrealized gains or losses for the period included
in other comprehensive income for instruments held at the
end of the reporting period (2)
$
$
$
181 $
57 $
61 $
— $
(253)
— $
(2) $
6 $
— $
—
16 $
— $
— $
— $
—
______________
(1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.
(2) For instruments held as of December 31, 2023, amounts are included in net investment income or net derivative gains (losses) in the
consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive
income.
(3) Other Equity Investments include other invested assets.
Balance, beginning of year
Total gains and (losses), realized and unrealized, included
in:
Net income (loss) as:
Net investment income (loss)
Investment gains (losses), net
Subtotal
Other comprehensive income (loss)
Purchases
Sales
Settlements
Other
Activity related to consolidated VIEs/VOEs
Transfers into Level 3 (1)
Transfers out of Level 3 (1)
Balance, end of year
Change in unrealized gains or losses for the period included
in earnings for instruments held at the end of the reporting
period (2)
Change in unrealized gains or losses for the period included
in other comprehensive income for instruments held at the
end of the reporting period (2)
Year Ended December 31, 2022
Corporate
State and
Political
Subdivisions
Asset-backed
RMBS
CMBS
(in millions)
$
1,504 $
35 $
8 $
— $
20
5
(5)
—
(159)
1,107
(378)
—
—
—
168
(121)
2,121 $
—
—
—
(5)
—
(2)
—
—
—
—
—
28 $
—
—
—
—
—
(2)
—
—
—
—
(6)
— $
—
—
—
—
34
—
—
—
—
—
—
34 $
—
—
—
(2)
14
—
—
—
—
—
—
32
— $
— $
— $
— $
—
$
$
$
(156) $
(5) $
— $
— $
(2)
______________
(1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.
(2) For instruments held as of December 31, 2022, amounts are included in net investment income or net derivative gains (losses) in the
consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive
income.
183
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Balance, beginning of year
Total gains and (losses), realized and unrealized, included
in:
Net income (loss) as:
Net investment income (loss)
Investment gains (losses), net
Subtotal
Other comprehensive income (loss)
Purchases
Sales
Settlements
Other
Activity related to consolidated VIEs/VOEs
Transfers into Level 3 (1)
Transfers out of Level 3 (1)
Balance, end of year
Change in unrealized gains or losses for the period included
in earnings for instruments held at the end of the reporting
period (2)
Change in unrealized gains or losses for the period included
in other comprehensive income for instruments held at the
end of the reporting period (2)
$
$
$
_____________
Year Ended December 31, 2022
Fixed
maturities, at
FVO
Other
Equity
Investments
(3)
Trading
Securities, at
Fair Value
Separate
Accounts
Assets
Contingent
Payment
Arrangement
(in millions)
$
201 $
16 $
65 $
1 $
(38)
(11)
—
(11)
—
98
(36)
—
—
—
45
(73)
224 $
(1)
—
(1)
—
8
—
—
—
(3)
—
(3)
17 $
—
(10)
(10)
—
—
—
—
—
—
—
—
55 $
—
—
—
—
—
—
—
—
—
—
—
1 $
—
—
—
—
(231)
—
—
22
—
—
—
(247)
(2) $
(1) $
(10) $
— $
—
— $
— $
— $
— $
—
(1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.
(2) For instruments held as of December 31, 2022, amounts are included in net investment income or net derivative gains (losses) in the
consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive
income.
(3) Other Equity Investments include other invested assets.
Quantitative and Qualitative Information about Level 3 Fair Value Measurements
The following tables disclose quantitative information about Level 3 fair value measurements by category for assets
and liabilities:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2023
Fair
Value
Valuation
Technique
Significant
Unobservable Input
Range
Weighted Average (2)
(Dollars in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate
$ 373 Matrix
pricing model
979
Market
comparable
companies
Trading securities, at fair
value
61 Discounted
cash flow
Other equity investments
2 Discounted
cash flow
Purchased MRB asset (1) (2)
(4)
9,427 Discounted
cash flow
Spread over Benchmark
20 bps - 747 bps
181 bps
EBITDA multiples
Discount rate
Cash flow multiples
Loan to value
3.3x - 29.0x
0.0% - 22.8%
0.8x - 10.0x
3.4% - 61.0%
13.6x
3.9%
6.3x
13.8%
Earnings multiple
Discount factor
Discount years
9.1x
10.0%
7
Earnings Multiple
3.9x - 8.4x
6.5x
Lapse rates
Withdrawal rates
GMIB Utilization rates
Non-performance risk
Volatility rates - Equity
Mortality: Ages 0-40
Ages 41-60
Ages 61-115
0.21%-12.38%
0.07%-14.97%
0.04%-66.21%
35 bps - 97 bps
11%-28%
0.01%-0.18%
0.07%-0.53%
0.33%-42.00%
1.79%
0.46%
7.44%
45 bps
23%
3.07%
(same for all ages)
(same for all ages)
Liabilities:
AB Contingent consideration
payable
$ 253 Discounted
cash flow
Expected revenue growth rates
Discount rate
2.0% - 83.9%
1.9% - 10.4%
10.3%
4.6%
Direct MRB (1) (2) (3) (4)
14,021 Discounted
cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Annuitization rates
Mortality: Ages 0-40
Ages 41-60
Ages 61-115
118 bps
0.21%-29.37%
0.00%-14.97%
0.04%-100.00%
0.01%-0.18%
0.07%-0.53%
0.33%-42.00%
118 bps
3.07%
0.64%
5.38%
2.50%
(same for all ages)
(same for all ages)
______________
(1) Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of
company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary
throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.
(2) Lapses and pro-rata withdrawal rates were developed as a function of the policy account value. Dollar for dollar withdrawal rates were
developed as a function of the dollar for dollar threshold, the dollar for dollar limit. Utilization rates were developed as a function of the
benefit base.
(3) MRB liabilities are shown net of MRB assets. Net amount is made up of $14.6 billion of MRB liabilities and $591 million of MRB
assets.
Includes Legacy and Core products.
(4)
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2022
Fair
Value
Valuation
Technique
Significant
Unobservable Input
Range
Weighted Average (2)
(Dollars in millions)
Assets:
Investments:
Fixed maturities,
AFS:
Corporate
$ 417
Matrix pricing
model
1,029
Market
comparable
companies
Trading securities, at
fair value
55
Discounted
cash flow
Other equity
investments
4
Market
comparable
companies
Purchased MRB asset
(1) (2) (4)
10,423
Discounted
cash flow
Spread over benchmark
20 bps - 797 bps
EBITDA multiples
Discount rate
Cash flow multiples
Loan to value
Earnings multiple
Discounts factor
Discount years
5.3x - 35.8x
9.0% - 45.7%
0.0x-10.3x
0.0%-40.4%
8.3x
10.00%
7
205 bps
13.6x
11.9%
6.1x
12.0%
Revenue multiple
0.5x - 10.8x
2.4x
Lapse rates
Withdrawal rates
GMIB Utilization rates
Non-performance risk
Volatility rates - Equity
Mortality: Ages 0-40
Ages 41-60
Ages 61-115
0.26% - 26.23%
0.06% - 10.93%
0.04% - 66.66%
54 bps - 124 bps
14% - 32%
0.01% - 0.17%
0.06% - 0.52%
0.32% - 40.00%
1.58%
0.69%
7.39%
69 bps
24%
2.87%
(same for all ages)
(same for all ages)
Liabilities:
AB Contingent
consideration payable
$ 247
Discounted
cash flow
Expected revenue growth rates
Discount rate
2.0% - 83.9%
1.9% - 10.4%
11.5%
4.5%
Direct MRB (1) (2)
(3) (4)
15,276
Discounted
cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Annuitization rates
Mortality: Ages 0-40
Ages 41-60
Ages 61-115
157 bps
0.26% - 35.42%
0.00% - 10.93%
0.04% - 100.00%
0.01% - 0.17%
0.06% - 0.52%
0.32% - 40.00%
157 bps
3.01%
0.68%
5.53%
2.43%
(same for all ages)
(same for all ages)
______________
(1) Mortality rates vary by age and demographic characteristic such as gender and benefits elected with the policy. Mortality rate
assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For
any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the
embedded derivatives.
(2) Lapses and pro-rata withdrawal rates were developed as a function of the policy account value. Dollar for dollar withdrawal rates were
developed as a function of the dollar for dollar threshold, the dollar for dollar limit. Utilization rates were developed as a function of the
benefit base.
(3) MRB liabilities are shown net of MRB assets. Net amount is made up of $15.8 billion of MRB liabilities and $490 million of MRB
assets.
Includes Legacy and Core products.
(4)
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Level 3 Financial Instruments for which Quantitative Inputs are Not Available
Certain Privately Placed Debt Securities with Limited Trading Activity
Excluded from the tables above as of December 31, 2023 and 2022, respectively, are approximately $1.1 billion and
$1.0 billion of Level 3 fair value measurements of investments for which the underlying quantitative inputs are not
developed by the Company and are not readily available. These investments primarily consist of certain privately
placed debt securities with limited trading activity, including residential mortgage- and asset-backed instruments, and
their fair values generally reflect unadjusted prices obtained from independent valuation service providers and
indicative, non-binding quotes obtained from third-party broker-dealers recognized as market participants. Significant
increases or decreases in the fair value amounts received from these pricing sources may result in the Company
reporting significantly higher or lower fair value measurements for these Level 3 investments.
•
•
•
The fair value of private placement securities is determined by application of a matrix pricing model or a
market comparable company value technique. The significant unobservable input to the matrix pricing model
valuation technique is the spread over the industry-specific benchmark yield curve. Generally, an increase or
decrease in spreads would lead to directionally inverse movement in the fair value measurements of these
securities. The significant unobservable input to the market comparable company valuation technique is the
discount rate. Generally, a significant increase (decrease) in the discount rate would result in significantly
lower (higher) fair value measurements of these securities.
Residential mortgage-backed securities classified as Level 3 primarily consist of non-agency paper with low
trading activity. Included in the tables above as of December 31, 2023 and 2022, there were no Level 3
securities that were determined by application of a matrix pricing model and for which the spread over the
U.S. Treasury curve is the most significant unobservable input to the pricing result. Generally, a change in
spreads would lead to directionally inverse movement in the fair value measurements of these securities.
Asset-backed securities classified as Level 3 primarily consist of non-agency mortgage loan trust certificates,
including subprime and Alt-A paper, credit risk transfer securities, and equipment financings. Included in the
tables above as of December 31, 2023 and 2022, there were no securities that were determined by the
application of matrix-pricing for which the spread over the U.S. Treasury curve is the most significant
unobservable input to the pricing result. Significant increases (decreases) in spreads would have resulted in
significantly lower (higher) fair value measurements.
Other Equity Investments
Included in other equity investments classified as Level 3 are venture capital securities in the Technology, Media and
Telecommunications industries. The fair value measurements of these securities include significant unobservable
inputs including an enterprise value to revenue multiples and a discount rate to account for liquidity and various risk
factors. Significant increases (decreases) in the enterprise value to revenue multiple inputs in isolation would have
resulted in a significantly higher (lower) fair value measurement. Significant increases (decreases) in the discount rate
would have resulted in a significantly lower (higher) fair value measurement.
Market Risk Benefits
Significant unobservable inputs with respect to the fair value measurement of the purchased MRB assets and MRB
liabilities identified in the table above are developed using Company data. Future policyholder behavior is an
unobservable market assumption and, as such, all aspects of policyholder behavior are derived based on recent
historical experience. These policyholder behaviors include lapses, pro-rata withdrawals, dollar for dollar withdrawals,
GMIB utilization, deferred mortality and payout phase mortality. Many of these policyholder behaviors have dynamic
adjustment factors based on the relative value of the rider as compared to the account value in different economic
environments. This applies to all variable annuity related products; products with GMxB riders including but not
limited to GMIB, GMDB, and GWL.
Lapse rates are adjusted at the contract level based on a comparison of the value of the GMxB rider and the current
policyholder account value, which include other factors such as considering surrender charges. Generally, lapse rates
are assumed to be lower in periods when a surrender charge applies. A dynamic lapse function reduces the base lapse
rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse.
For valuing purchased MRB assets and MRB liabilities, lapse rates vary throughout the period over which cash flows
are projected.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Carrying Value of Financial Instruments Not Otherwise Disclosed in Note 3 and Note 4 of the Notes to these
Consolidated Financial Statements
The carrying values and fair values for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes
to these Consolidated Financial Statements were as follows:
Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed
Carrying
Value
Level 1
Fair Value
Level 2
(in millions)
Level 3
Total
December 31, 2023:
$
Mortgage loans on real estate
$
Policy loans
$
Policyholders’ liabilities: Investment contracts
$
FHLB funding agreements
FABN funding agreements
$
Funding agreement-backed commercial paper (FABCP) $
$
Short-term debt (1)
$
Long-term debt
$
Separate Accounts liabilities
18,171 $
4,158 $
1,663 $
7,618 $
6,267 $
939 $
— $
3,820 $
10,715 $
December 31, 2022:
Mortgage loans on real estate
Policy loans
Policyholders’ liabilities: Investment contracts
FHLB funding agreements
FABN funding agreements
Short-term debt (1)
Long-term debt
Separate Accounts liabilities
$
$
$
$
$
$
$
$
16,481 $
4,033 $
1,916 $
8,505 $
7,095 $
520 $
3,322 $
10,236 $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $ 16,471 $ 16,471
4,485
4,485 $
— $
1,634
1,634 $
— $
7,567
— $
7,567 $
5,840
— $
5,840 $
948
— $
948 $
—
— $
— $
3,742
— $
3,742 $
— $ 10,715 $ 10,715
— $ 14,690 $ 14,690
4,349
4,349 $
— $
1,750
1,750 $
— $
8,390
— $
8,390 $
6,384
— $
6,384 $
518
— $
518 $
3,130
— $
3,130 $
— $ 10,236 $ 10,236
_____________
(1) As of December 31, 2023 and 2022, excludes CLO short-term debt of $0 million and $239 million, respectively which is inclusive as fair
valued within notes issued by consolidated VIE’s, at fair value using the fair value option.
Mortgage Loans on Real Estate
Fair values for commercial, agricultural and residential mortgage loans on real estate are measured by discounting
future contractual cash flows to be received on the mortgage loan using interest rates at which loans with similar
characteristics and credit quality would be made. The discount rate is derived based on the appropriate U.S. Treasury
rate with a like term to the remaining term of the loan to which a spread reflective of the risk premium associated with
the specific loan is added. Fair values for mortgage loans anticipated to be foreclosed and problem mortgage loans are
limited to the fair value of the underlying collateral, if lower.
Policy Loans
The fair value of policy loans is calculated by discounting expected cash flows based upon the U.S. Treasury yield
curve and historical loan repayment patterns.
Policyholder Liabilities - Investment Contracts and Separate Accounts Liabilities
The fair values for deferred annuities and certain annuities, which are included in policyholders’ account balances, and
liabilities for investment contracts with fund investments in Separate Accounts, are estimated using projected cash
flows discounted at rates reflecting current market rates. Significant unobservable inputs reflected in the cash flows
include lapse rates and withdrawal rates. Incremental adjustments may be made to the fair value to reflect non-
188
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
performance risk. Certain other products such as the Company’s association plans contracts, supplementary contracts
not involving life contingencies, Access Accounts and Escrow Shield Plus product reserves are held at book value.
FHLB Funding Agreements
The fair values of Equitable Financial’s FHLB long term funding agreements’ fair values are determined based on
indicative market rates published by the FHLB, provided to AB and modeled for each note’s FMV. FHLB short-term
funding agreements’ fair values are reflective of notional/par value plus accrued interest.
FABN Funding Agreements
The fair values of Equitable Financial’s FABN funding agreements are determined by Bloomberg’s evaluated pricing
service, which uses direct observations or observed comparables.
FABCP Funding Agreements
The fair value of Equitable Financial’s FABCP funding agreements are reflective of the notional/par value
outstanding.
Short-term Debt
The Company’s short-term debt primarily includes long-term debt that has been reclassified to short-term due to an
upcoming maturity date within one year. The fair values for the Company’s short-term debt are determined by
Bloomberg’s evaluated pricing service, which uses direct observations or observed comparables.
Long-term Debt
The fair values for the Company’s long-term debt are determined by Bloomberg’s evaluated pricing service, which
uses direct observations or observed comparables.
Financial Instruments Exempt from Fair Value Disclosure or Otherwise Not Required to be Disclosed
Exempt from Fair Value Disclosure Requirements
Certain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities
other than financial guarantees and investment contracts, limited partnerships accounted for under the equity method
and pension and other postretirement obligations.
Otherwise Not Required to be Included in the Table Above
The Company’s investment in COLI policies are recorded at their cash surrender value and therefore are not required
to be included in the table above. See Note 2 of the Notes to these Consolidated Financial Statements for further
description of the Company’s accounting policy related to its investment in COLI policies.
9)
LIABILITIES FOR FUTURE POLICYHOLDER BENEFITS
189
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table reconciles the net liability for future policy benefits and liability of death benefits to the liability
for future policy benefits in the consolidated balance sheets:
December 31,
2023
2022
(in millions)
Reconciliation
Term
Individual Retirement - Payout
Legacy - Payout
Group Pension - Benefit Reserve & DPL
Health
UL
Subtotal
Whole Life Closed Block and Open Block products
Other (1)
Future policyholder benefits total
$
1,348 $
844
3,620
490
1,505
1,193
9,000
5,444
970
15,414
1,949
17,363 $
1,365
828
2,689
523
1,558
1,109
8,072
5,664
908
14,644
1,959
16,603
Other policyholder funds and dividends payable
Total
_____________
(1) Primarily consists of future policy benefits related to Protective Life and Annuity, Assumed Life and Disability, Group Life Run off,
$
Variable Interest Sensitive Life rider and Employee Benefits.
The following table summarizes balances and changes in the liability for future policy benefits for nonparticipating
traditional and limited pay contracts:
Year Ended December 31,
2023
2022
Protection
Solutions
Individual
Retirement Legacy
Corporate &
Other
Protection
Solutions
Individual
Retirement
Legacy Corporate & Other
Term
Payout
Payout
Group
Pension Health
Term
Payout
Payout
Group
Pension
Health
(in millions)
Present Value of Expected Net Premiums
Balance, beginning of
year
$ 2,100 $
— $ — $ — $
(5) $ 2,485 $ — $ — $ — $ 22
Beginning balance at
original discount rate
Effect of changes in cash
flow assumptions
Effect of actual variances
from expected experience
2,078
—
—
—
(5) 1,864
—
—
—
19
47
—
—
—
(6)
204
—
—
—
(10)
(37)
—
—
—
(12)
31
—
—
—
(15)
Adjusted beginning of
period balance
Issuances
Interest accrual
Net premiums collected
Ending Balance at original
discount rate
2,088
65
100
(195)
—
—
—
—
—
—
—
—
—
—
—
—
—
(23) 2,099
76
97
(194)
(1)
2
—
—
—
—
—
—
—
—
—
—
—
—
(6)
—
—
1
2,058
—
—
—
(22) 2,078
—
—
—
(5)
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31,
2023
2022
Protection
Solutions
Individual
Retirement Legacy
Corporate &
Other
Protection
Solutions
Individual
Retirement
Legacy Corporate & Other
Term
Payout
Payout
Group
Pension Health
Term
Payout
Payout
Group
Pension
Health
(in millions)
Effect of changes in
discount rate assumptions
Balance, end of year
75
$ 2,133 $
—
—
— $ — $ — $ (21) $ 2,100 $ — $ — $ — $
—
—
—
—
(5)
22
—
1
Present Value of Expected Future Policy Benefits
Balance, beginning of
year
Beginning balance of
original discount rate
$ 3,465 $
828 $ 2,689 $ 523 $ 1,553 $ 4,294 $ 1,114 $ 2,547 $ 683 $ 2,092
3,391
845
3,024
583
1,795
3,241
883
2,400
632
1,915
Effect of changes in cash
flow assumptions
Effect of actual variances
from expected experience
59
—
—
—
(6)
222
(2)
(1) —
(5)
(45)
—
(4) —
(22)
31
(1)
(4)
1
(13)
Adjusted beginning of
period balance
Issuances
Interest accrual
Benefits payments
Ending Balance at
original discount rate
Effect of changes in
discount rate assumptions
Balance, end of year
Impact of flooring LFPB
at zero
Net liability for future
policy benefits
Less: Reinsurance
recoverable
Net liability for future
policy benefits, after
reinsurance recoverable
Weighted-average
duration of liability for
future policyholder
benefits (years)
3,405
70
167
(312)
3,020
997
88
845
47
39
(91) (265)
1,767
—
57
583
—
20
(67) (152)
3,494
82
168
(353)
2,395
758
63
880
23
40
(98) (192)
1,897
633
—
—
21
61
(71) (163)
3,330
840
3,840
536
1,672
3,391
845
3,024
583
1,795
150
$ 3,480 $
4
(220)
(46) (188)
74
844 $ 3,620 $ 490 $ 1,484 $ 3,465 $
(17) (335)
(60) (242)
828 $ 2,689 $ 523 $ 1,553
1
—
—
—
—
—
—
—
—
—
$ 1,348
844
3,620
490
1,505
1,365
828
2,689
523
1,558
25
(1) (968) —
(1,191)
21
—
(465) —
(1,242)
$ 1,373 $
843 $ 2,652 $ 490 $ 314 $ 1,386 $
828 $ 2,224 $ 523 $ 316
7.0
9.3
7.7
7.1
8.7
7.0
9.5
8.1
7.2
8.7
191
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31, 2021
Protection Solutions
Individual Retirement
Legacy
Corporate & Other
Term
Payout
Payout
Group Pension
Health
Present Value of Expected Net Premiums
Balance, beginning of year
Beginning balance at original discount rate
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of year balance
Issuances
$
Interest accrual
Net premiums collected
Ending Balance at original discount rate
Effect of changes in discount rate assumptions
Balance, end of year
$
Present Value of Expected Future Policy Benefits
$
Balance, beginning of year
Beginning balance of original discount rate
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of year balance
Issuances
Interest accrual
Benefits payments
Ending Balance at original discount rate
Effect of changes in discount rate assumptions
Balance, end of year
Net liability for future policy benefits
Less: Reinsurance recoverable
Net liability for future policy benefits, after
reinsurance recoverable
Weighted-average duration of liability for future
policyholder benefits (years)
$
$
$
2,492 $
1,762
69
15
1,846
111
92
(185)
1,864
621
2,485 $
4,475 $
3,184
69
11
3,264
117
168
(308)
3,241
1,053
4,294 $
1,809 $
(42)
— $ — $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $ — $
1,158 $ 2,250 $
883
34
(8)
909
26
40
(92)
883
231
1,993
4
9
2,006
490
61
(157)
2,400
147
1,114 $ 2,547 $
— $
—
—
—
—
—
—
—
—
—
— $
780 $
686
(2)
1
685
—
23
(76)
632
51
683 $
35
29
—
(8)
21
—
1
(3)
19
3
22
2,334
2,028
—
(4)
2,024
—
65
(174)
1,915
177
2,092
1,114 $ 2,547 $
(143)
—
683 $
—
2,070
(1,641)
1,767 $
1,114 $ 2,404 $
683 $
429
7.5
9.6
8.4
7.2
8.9
The following table provides the amount of undiscounted and discounted expected gross premiums and expected
future benefits and expenses related to nonparticipating traditional and limited payment contracts:
Term
Expected future benefit payments and expenses (undiscounted)
Expected future gross premiums (undiscounted)
Expected future benefit payments and expenses (discounted; AOCI basis)
$
5,878 $
6,979
3,480
6,022
7,273
3,465
192
December 31,
2023
2022
(in millions)
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Expected future gross premiums (discounted; AOCI basis)
Payout - Legacy
Expected future benefit payments and expenses (undiscounted)
Expected future gross premiums (undiscounted)
Expected future benefit payments and expenses (discounted; AOCI basis)
Expected future gross premiums (discounted; AOCI basis)
Payout
Expected future benefit payments and expenses (undiscounted)
Expected future gross premiums (undiscounted)
Expected future benefit payments and expenses (discounted; AOCI basis)
Expected future gross premiums (discounted; AOCI basis)
Group Pension
Expected future benefit payments and expenses (undiscounted)
Expected future gross premiums (undiscounted)
Expected future benefit payments and expenses (discounted; AOCI basis)
Expected future gross premiums (discounted; AOCI basis)
Health
Expected future benefit payments and expenses (undiscounted)
Expected future gross premiums (undiscounted)
Expected future benefit payments and expenses (discounted; AOCI basis)
Expected future gross premiums (discounted; AOCI basis)
December 31,
2023
2022
3,879
3,904
5,204
—
3,538
—
1,426
—
812
—
668
—
471
—
2,318
85
1,468
$
68 $
3,947
—
2,607
—
1,460
—
801
—
730
—
563
—
2,510
99
1,533
78
The table below summarizes the revenue and interest related to nonparticipating traditional and limited payment
contracts:
Revenue and Interest Accretion
Term
Payout - Legacy
Payout
Group Pension
Health
Total
Year Ended December 31,
2023
2022
2021
2023
2022
2021
Gross Premium
Interest Accretion
$
$
352 $
220
46
—
15
633 $
275 $
101
22
—
9
407 $
(in millions)
282 $
106
—
—
10
398 $
67 $
109
39
20
58
293 $
70 $
63
40
21
61
255 $
75
60
40
24
64
263
193
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table provides the weighted average interest rates for the liability for future policy benefits:
Weighted Average Interest Rate
Term
Interest accretion rate
Current discount rate
Payout - Legacy
Interest accretion rate
Current discount rate
Payout
Interest accretion rate
Current discount rate
Group Pension
Interest accretion rate
Current discount rate
Health
Interest accretion rate
Current discount rate
December 31,
2023
2022
5.6 %
4.8 %
4.0 %
4.9 %
5.0 %
4.9 %
3.3 %
4.8 %
3.4 %
4.9 %
5.7 %
5.1 %
3.4 %
5.0 %
4.9 %
5.2 %
3.4 %
5.1 %
3.3 %
5.2 %
The following table provides the balance, changes in and the weighted average durations of the additional insurance
liabilities:
Balance, beginning of year
Beginning balance before AOCI adjustments
Effect of changes in interest rate & cash flow assumptions and model changes
Effect of actual variances from expected experience
Adjusted beginning of period balance
Interest accrual
Net assessments collected
Benefit payments
Ending balance before shadow reserve adjustments
Effect of reserve adjustment recorded in AOCI
Balance, end of year
Net liability for additional liability
Less: Reinsurance recoverable
Net liability for additional liability, after reinsurance recoverable
Year Ended December 31,
2023
2022
2021
Protection Solutions
UL
(Dollars in millions)
1,087 $
1,076
8
25
1,109
49
68
(91)
1,109 $
1,135
21
10
1,166
52
69
(57)
1,230
(37)
1,193 $
1,135
(26)
1,109 $
1,021
1,005
(4)
8
1,009
45
85
(63)
1,076
11
1,087
1,193 $
—
1,193 $
1,109 $
—
1,109 $
1,087
—
1,087
$
$
$
$
Weighted-average duration of additional liability - death benefit (years)
19.9
22.0
23.2
194
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following tables provide the revenue, interest and weighted average interest rates, related to the additional
insurance liabilities:
2023
2022
Assessments
Year Ended December 31,
2021
2023
(in millions)
2022
Interest Accretion
2021
Revenue and Interest Accretion
UL
Total
$
$
670 $
670 $
666 $
666 $
850 $
850 $
51 $
51 $
49 $
49 $
45
45
Weighted Average Interest Rate
UL
Interest accretion rate
Year Ended December 31,
2023
2022
2021
4.5 %
4.5 %
4.5 %
4.5 %
4.5 %
4.5 %
The discount rate used for additional insurance liabilities reserve is based on the crediting rate at issue.
195
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
10)
MARKET RISK BENEFITS
The following table presents the balances and changes to the balances for market risk benefits for the GMxB benefits
on deferred variable annuities:
Year Ended December 31,
2023
2022
Individual
Retirement
GMxB
Core
GMxB
Legacy
Legacy
Purchased
MRB (3)
Net
Legacy
Individual
Retirement
GMxB
Core
GMxB
Legacy
Legacy
Purchased
MRB (3)
Net
Legacy
(in millions)
Balance, beginning of year
Balance BOP before changes in
the instrument specific credit risk
$
Model changes and effect of
changes in cash flow assumptions
Actual market movement effect
Interest accrual
Attributed fees accrued (1)
Benefit payments
Actual policyholder behavior
different from expected behavior
Changes in future economic
assumptions
Issuances
Balance EOP before changes in
the instrument-specific credit risk
Changes in the instrument-specific
credit risk (2)
530 $ 14,699 $ (10,415) $ 4,284 $ 1,061 $ 20,236 $ (14,059) $ 6,177
529
15,314
(10,358) 4,956
666
19,719
(14,051) 5,668
20
(481)
73
407
(47)
(11)
(1,847)
770
843
(1,354)
(33)
986
(555)
(284)
768
(44)
(861)
215
559
(586)
(5)
1,074
37
399
(37)
317
3,402
731
882
(1,179)
(143)
174
(1,226) 2,176
242
587
(510)
(489)
(295)
669
23
(14)
(41)
(55)
24
142
(102)
40
(203)
1
(673)
—
130
—
(543)
—
(1,626)
(3)
(8,700)
—
5,279
—
(3,421)
—
322
13,028
(9,387) 3,641
529
15,314
(10,358) 4,956
268
390
(33)
357
1
(615)
(57)
(672)
Balance, end of year
$
590 $ 13,418 $ (9,420) $ 3,998 $
530 $ 14,699 $ (10,415) $ 4,284
Weighted-average age of
policyholders (years)
64.4
73.0
72.6
N/A
63.5
72.5
72.1
Net amount at risk (4)
$ 2,995 $ 21,136 $ 11,343
N/A $ 3,530 $ 22,631 $ 11,755
N/A
N/A
_____________
(1) Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.
(2) Changes are recorded in OCI except for reinsurer credit which is reflected in the consolidated income statement.
(3) Purchased MRB is the impact of non-affiliated reinsurance.
(4) GMxB legacy and Purchased MRB prior period amounts have been revised for errors deemed immaterial to previously issued financial
statements.
196
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Individual Retirement
Legacy
December 31, 2021
GMxB Core
GMxB Legacy
Purchased MRB (3)
Net Legacy
Balance, beginning of the period (“BOP”)
Balance BOP before changes in the instrument specific
credit risk
$
$
2,143 $
24,405 $
(2,763) $
21,642
1,639
23,944
(2,766)
21,178
Model changes and effect of changes in cash flow
assumptions
Actual market movement effect
Interest accrual
Attributed fees accrued (1)
Benefit payments
Actual policyholder behavior different from expected
behavior
Changes in future economic assumptions
Issuances
Balance EOP before changes in the instrument-specific
credit risk
Changes in the instrument-specific credit risk (2)
Balance, end of the period (“EOP”)
Weighted-average age of policyholders (years)
Net amount at risk (4)
______________
(280)
(665)
7
386
(14)
(9)
(397)
(1)
(196)
(3,026)
197
918
(902)
135
(1,351)
—
36
799
(122)
(194)
350
(160)
(2,227)
75
724
(552)
(56)
(950)
(11,148)
79
(2,301)
(11,148)
$
$
$
666
395
1,061 $
19,719
517
20,236 $
(14,051)
(8)
(14,059) $
62.6
1,115 $
71.9
15,901 $
71.5
9,055
5,668
509
6,177
N/A
N/A
(1) Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.
(2) Changes are recorded in OCI.
(3) Purchased MRB is the impact of non-affiliated reinsurance.
(4) GMxB legacy and Purchased MRB prior period amounts have been revised for errors deemed immaterial to previously issued financial
statements.
The following table reconciles market risk benefits by the amounts in an asset position and amounts in a liability
position to the market risk benefit amounts in the consolidated balance sheets:
Direct
Asset
Direct
Liability
2023
Net Direct
MRB
Year Ended December 31,
Purchased
MRB
Total
Direct
Asset
Direct
Liability
(in millions)
2022
Net Direct
MRB
Purchased
MRB
Total
$ (418) $ 1,008 $
590 $ — $ 590 $ (387) $
917 $
530 $ — $ 530
(102) 13,520
84
(10,412) 4,287
36
(11)
$ (591) $ 14,612 $ 14,021 $ (9,427) $ 4,594 $ (490) $ 15,766 $ 15,276 $ (10,423) $ 4,853
(9,420) 3,998
6
(7)
(51) 14,749
100
(52)
13,418
13
14,699
47
(71)
Individual Retirement
GMxB Core
Legacy Segment
GMxB Legacy
Other (1)
Total
______________
(1) Other primarily includes Individual EQUI-VEST MRB.
197
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
11)
POLICYHOLDER ACCOUNT BALANCES
The following table reconciles the policyholders account balances to the policyholders’ account balance liability in the
consolidated balance sheets:
Policyholders’ account balance reconciliation
Protection Solutions
Universal Life
Variable Universal Life
Legacy Segment
GMxB Legacy
Individual Retirement
GMxB Core
SCS
EQUI-VEST Individual
Group Retirement
EQUI-VEST Group
Momentum
Other (1)
December 31,
2023
2022
(in millions)
$
5,202 $
4,862
618
36
49,002
2,322
5,340
4,909
688
69
35,702
2,652
11,563
608
5,707
79,920
15,753
95,673 $
12,045
702
6,118
68,225
15,641
83,866
Balance (exclusive of Funding Agreements)
Funding Agreements
Balance, end of year
_____________
(1) Primarily reflects products IR Payout, IR Other, Indexed Universal Life, Investment Edge, Group Pension, Closed Block and Corporate
$
and Other.
The following table summarizes the balances and changes in policyholder’s account balances:
Year Ended December 31, 2023
Protection Solutions
Legacy
Individual Retirement
Group Retirement
Universal
Life
Variable
Universal
Life
GMxB
Legacy
GMxB
Core
SCS (1)
(Dollars in millions)
EQUI-
VEST
Individual
EQUI-
VEST
Group
Momentum
Balance, beginning of year
$ 5,340 $ 4,909 $
Premiums received
Policy charges
Surrenders and withdrawals
Benefit payments
Net transfers from (to) separate
account
Interest credited (2)
Other
698
(760)
(80)
(218)
134
(256)
(46)
(114)
—
222
—
24
211
—
Balance, end of year
$ 5,202 $ 4,862 $
688 $
98
9
(97)
(103)
(4)
27
—
618 $
69 $ 35,702 $ 2,652 $ 12,045 $
222
626
10
(4)
(9)
(33) (2,882)
(256)
(2)
36
—
(378)
(70)
(4)
(1,703)
(71)
(222) 10,155
6,282
—
6
—
36 $ 49,002 $ 2,322 $ 11,563 $
272
387
11
6
72
4
Weighted-average crediting rate
Net amount at risk (3)
Cash surrender value
3.77 % 3.72 % 2.71 % 1.59 %
N/A
$ 35,490 $ 115,550 $ 21,136 $ 2,995 $
$ 3,423 $ 3,194 $
10 $
265 $ 45,738 $ 2,315 $ 11,506 $
572 $
1 $
2.84 % 2.66 %
109 $
702
70
(1)
(152)
(4)
(21)
14
—
608
2.33 %
—
609
______________
(1) SCS sales are recorded as a Separate Account liability until they are swept into the General Account. This sweep is recorded as Net
Transfers from (to) separate account.
(2) SCS and EQUI-VEST Group includes amounts related to the change in embedded derivative.
(3) For life insurance products the net amount at risk is death benefit less account value for the policyholder. For variable annuity products
the net amount at risk is the maximum GMxB NAR for the policyholder.
198
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31, 2022
Protection Solutions
Legacy
Individual Retirement
Group Retirement
Universal
Life
Variable
Universal
Life
GMxB
Legacy
GMxB
Core
SCS (1)
EQUI-
VEST
Individual
EQUI-
VEST
Group
Momentum
Balance, beginning of year
$ 5,462 $ 4,807 $
Premiums received
Policy charges
Surrenders and withdrawals
Benefit payments
Net transfers from (to) separate
account
Interest credited (2)
Other
730
(789)
(86)
(200)
—
223
—
160
(245)
(12)
(92)
124
167
—
Balance, end of year
$ 5,340 $ 4,909 $
745 $
72
6
(71)
(99)
(Dollars in millions)
112 $ 33,443
2
151
(22)
—
(2,452)
(31)
(209)
(2)
5
30
—
688 $
7,474
(145)
(2,556)
6
—
—
69 $ 35,702
$ 2,784 $ 11,951 $
46
(1)
(225)
(59)
28
79
—
610
(5)
(995)
(70)
303
251
—
$ 2,652 $ 12,045 $
704
79
—
(148)
(2)
54
15
—
702
Weighted-average crediting rate
Net amount at risk (3)
Cash surrender value
3.62 %
3.81 %
1.80 %
$ 37,555 $ 115,152 $ 22,631 $ 3,530 $
$ 3,483 $ 3,366 $
980 $
1.05 %
1.12 %
92
293 $ 32,080
3.00 %
2.85 %
143 $
$
$ 2,645 $ 11,961 $
2.02 %
138 $ —
702
______________
(1) SCS sales are recorded as a Separate Account liability until they are swept into the General Account. This sweep is recorded as Net
Transfers from (to) separate account.
(2) SCS and EQUI-VEST includes amounts related to the change in embedded derivative.
(3) For life insurance products, the net amount at risk is the death benefit less account value for the policyholder. For variable annuity
products, the net amount at risk is the maximum GMxB NAR for the policyholder.
Year Ended December 31, 2021
Protection Solutions
Legacy
Individual Retirement
Group Retirement
Universal
Life
Variable
Universal
Life
GMxB
Legacy
GMxB
Core
SCS (1)
(Dollars in millions)
EQUI-
VEST
Individual
EQUI-
VEST
Group
$ 5,564
787
(828)
(89)
(202)
—
230
—
$ 5,462
$ 4,835
170
(244)
(186)
(78)
125
185
—
$ 4,807
$ 815
58
—
(100)
(77)
18
31
—
$ 745
$ 99
184
(6)
(31)
(1)
(148)
15
—
$ 112
$ 25,654 $ 2,862
55
(1)
(209)
(63)
1
—
(2,474)
(187)
58
6,692
82
3,757
—
—
$ 33,443 $ 2,784
$ 11,665
602
(4)
(877)
(73)
310
328
—
$ 11,951
Momentum
$ 761
83
(1)
(152)
(2)
—
15
—
$ 704
Balance, beginning of year
Premiums received
Policy charges
Surrenders and withdrawals
Benefit payments
Net transfers from (to) separate
account
Interest credited (2)
Other
Balance, end of year
Weighted-average crediting rate
Net amount at risk (3)
Cash surrender value
3.56 % 3.84 % 1.82 % 1.05 % 1.14 % 2.87 % 2.37 %
2.06 %
$ 40,138
$ 3,529
$ 111,286 $ 15,901
$ 1,048
$ 3,396
$ 1,115
$ 315
$ 92
$ —
$ 31,488 $ 2,776
7
$
$ 11,878
$ —
$ 704
______________
(1) SCS sales are recorded as a Separate Account liability until they are swept into the General Account. This sweep is recorded as Net
Transfers from (to) separate account.
(2) SCS and EQUI-VEST Group includes amounts related to the change in embedded derivative.
(3) For life insurance products the net amount at risk is death benefit less account value for the policyholder. For variable annuity products
the net amount risk is the maximum GMxB NAR for the policyholder.
199
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents the account values by range of guaranteed minimum crediting rates and the related range
of the difference in basis points, between rates being credited policyholders and the respective guaranteed minimums:
Product
(1)
Range of
Guaranteed
Minimum
Crediting Rate
At Guaranteed
Minimum
1 Basis Point - 50
Basis Points
Above
51 Basis Points -
150 Basis Points
Above
Greater Than 150
Basis Points
Above
Total
December 31, 2023
Universal Life
Variable Universal
Life
GMxB Legacy
GMxB Core
EQUI-VEST
Individual
EQUI-VEST
Group
Momentum
0.00% - 1.50% $
1.51% - 2.50%
Greater
than2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
0.00% - 1.50% $
1.51% - 2.50%
Greater than
2.50%
Total
$
( in millions)
Protection Solutions
— $
61
3,515
3,576 $
16 $
35
3,712
3,763 $
— $
69
627
696 $
33 $
495
—
528 $
Legacy Segment
75 $
21
461
557 $
16 $
—
—
16 $
Individual Retirement
13 $
13
55
81 $
49 $
43
2,011
2,103 $
192 $
—
—
192 $
218 $
—
—
218 $
Group Retirement
772 $
345
6,610
7,727 $
— $
138
68
206 $
2,338 $
—
—
2,338 $
12 $
1
—
13 $
200
— $
462
—
462 $
53 $
28
13
94 $
— $
—
—
— $
— $
—
—
— $
— $
—
—
— $
36 $
—
—
36 $
330 $
—
5
335 $
6 $
430
—
436 $
9 $
—
5
14 $
— $
—
—
— $
— $
—
—
— $
— $
—
—
— $
315 $
—
—
315 $
53 $
—
—
53 $
6
1,022
4,142
5,170
111
558
3,730
4,399
91
21
461
573
205
13
55
273
267
43
2,011
2,321
3,461
345
6,610
10,416
395
139
73
607
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
December 31, 2022
Range of
Guaranteed
Minimum Crediting
Rate
Product
(1)
At Guaranteed
Minimum
1 Basis Point - 50
Basis Points Above
51 Basis Points -
150 Basis Points
Above
Greater Than 150
Basis Points Above
Total
Universal Life
Variable Universal
Life
GMxB Legacy
GMxB Core
EQUI-VEST
Individual
SCS
EQUI-VEST Group
Momentum
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
Products with either
a fixed rate or no
guaranteed
minimum
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
0.00% - 1.50%
$
1.51% - 2.50%
Greater than 2.50%
$
Total
( in millions)
Protection Solutions
— $
181
3,615
3,796 $
30 $
485
3,900
4,415 $
— $
197
657
854 $
40 $
53
—
93 $
Legacy Segment
386 $
560
35
981 $
— $
—
—
— $
Individual Retirement
289 $
14
—
303 $
345 $
46
2,199
2,590 $
— $
—
—
— $
— $
—
—
— $
5 $
605
—
610 $
7 $
—
2
9 $
— $
—
—
— $
— $
—
—
— $
— $
—
62
62 $
1 $
47
—
48 $
1 $
—
—
1 $
— $
—
—
— $
— $
—
—
— $
— $
—
—
— $
6
1,030
4,272
5,308
78
538
3,902
4,518
386
560
35
981
289
14
—
303
345
46
2,261
2,652
N/A
N/A
N/A
N/A
N/A
Group Retirement
109 $
11
6,949
7,069 $
15 $
178
73
266 $
5 $
2
21
28 $
301 $
1
—
302 $
366 $
889
330
1,585 $
122 $
—
5
127 $
3,112 $
—
—
3,112 $
7 $
—
—
7 $
3,592
902
7,300
11,794
445
179
78
702
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Separate Account - Summary
The following table reconciles the Separate Account liabilities to the Separate Account liability balance in the
consolidated balance sheets:
Separate Account Reconciliation
Protection Solutions
Variable Universal Life
Legacy Segment
GMxB Legacy
Individual Retirement
GMxB Core
EQUI-VEST Individual
Investment Edge
Group Retirement
EQUI-VEST Group
Momentum
December 31,
2023
2022
(in millions)
$
15,821 $
13,187
33,794
29,829
4,582
4,275
32,616
27,772
4,161
3,798
26,959
4,421
7,570
127,251 $
22,393
3,885
7,041
114,853
Other (1)
Total
______________
(1) Primarily reflects Corporate and Other products and Group Retirement products including Association and Group Retirement Other.
$
The following table presents the balances of and changes in Separate Account liabilities:
Year Ended December 31, 2023
Protection
Solutions
VUL
Legacy
GMxB
Legacy
Individual Retirement
EQUI-
VEST
Individual
Investment
Edge
GMxB Core
Group Retirement
EQUI-
VEST
Group Momentum
Balance, beginning of period
$ 13,187 $ 32,616 $ 27,772 $ 4,161 $
(in millions)
Premiums and deposits
Policy charges
Surrenders and withdrawals
Benefit payments
Investment performance (1)
Net transfers from (to) General
Account
Other charges (2)
Balance, end of year
1,195
(562)
(558)
(71)
2,654
(24)
—
219
(655)
(2,826)
(728)
5,164
1,590
(484)
(2,603)
(226)
3,558
4
—
222
—
93
(2)
(428)
(57)
817
(6)
4
$ 15,821 $ 33,794 $ 29,829 $ 4,582 $
2,174
844
—
3,798 $ 22,393 $ 3,885
644
(21)
(820)
(13)
725
(18)
(412) (1,750)
(39)
(55)
543
4,463
(459)
—
21
(273)
—
25
4,275 $ 26,959 $ 4,421
Cash surrender value
$ 15,478 $ 33,512 $ 28,991 $ 4,549 $
4,188 $ 26,683 $ 4,414
Investment performance is reflected net of M&E fees.
_____________
(1)
(2) EQUI-VEST Individual and EQUI-VEST Group for the year ended December 31, 2023, amounts reflect a total special payment applied
to the accounts of active clients as part of a previously disclosed settlement agreement between Equitable Financial and the Securities &
Exchange Commission.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Year Ended December 31, 2022
Protection
Solutions
VUL
Legacy
GMxB
Legacy
Individual Retirement
EQUI-
VEST
Individual
Investment
Edge
GMxB Core
Group Retirement
EQUI-
VEST
Group
Momentum
Balance, beginning of year
Premiums and deposits
Policy charges
Surrenders and withdrawals
Benefit payments
Investment performance (1)
Net transfers from (to) General
Account
Balance, end of year
$ 16,405 $ 44,912 $ 35,288 $ 5,583 $
(in millions)
1,115
(538)
(408)
(111)
(3,152)
240
(682)
(2,825)
(702)
(8,322)
1,479
(487)
(2,315)
(216)
(6,122)
124
(2)
(328)
(52)
(1,136)
(124)
(28)
$ 13,187 $ 32,616 $ 27,772 $ 4,161 $
(5)
145
(1)
2,104
4,287 $ 27,509 $ 4,975
668
1,035
(20)
(753)
(14)
(917)
(17)
(327) (1,359)
(34)
(60)
(733) (5,481)
(54)
(303)
(429)
3,798 $ 22,393 $ 3,885
Cash surrender value
$ 12,893 $ 32,320 $ 26,888 $ 4,129 $
3,704 $ 22,163 $ 3,879
______________
(1) Investment performance is reflected net of M&E fees.
Year Ended December 31, 2021
Protection
Solutions
Legacy
Individual Retirement
Group Retirement
VUL
GMxB
Legacy
GMxB Core
EQUI-
VEST
Individual
Investment
Edge
EQUI-
VEST
Group
Momentum
Balance, beginning of year
Premiums and deposits
Policy charges
Surrenders and withdrawals
Benefit payments
Investment performance (1)
Net transfers from (to) General Account
Other charges (2)
Balance, end of year
$ 14,155 $ 43,747 $ 33,754 $ 5,051 $
(in millions)
1,060
(503)
(449)
(188)
2,455
(125)
—
225
(705)
(3,610)
(818)
6,091
(18)
—
1,776
(490)
(3,250)
(223)
3,573
148
—
158
(5)
(421)
(56)
859
(58)
55
$ 16,405 $ 44,912 $ 35,288 $ 5,583 $
(1)
2,014
3,245 $ 23,530 $ 4,424
788
1,048
(22)
(892)
(11)
688
—
(310)
—
(55)
4,287 $ 27,509 $ 4,975
(16)
(256) (1,605)
(63)
(24)
407
(132)
—
4,014
Cash surrender value
$ 16,069 $ 44,603 $ 34,332 $ 5,547 $
4,199 $ 27,265 $ 4,968
_________________
(1)
(2) EQUI-VEST Group and EQUI-VEST Individual reflects AV transfer of GMxB closed block business from Group Retirement to
Investment performance is reflected net of M&E fees.
Individual Retirement.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table presents the aggregate fair value of Separate Account assets by major asset category:
Protection
Solutions
Individual
Retirement
December 31, 2023
Group
Retirement
Corp &
Other
(in millions)
Legacy
Segment
Total
Asset Type
Debt securities
Common Stock
Mutual Funds
Bonds and Notes
Total
Asset Type
Debt securities
Common Stock
Mutual Funds
Bonds and Notes
Total
12)
LEASES
$
48 $
65
16,199
91
76
21 $
2,213
447
123,583
32,780
1,379
1
$ 16,403 $ 40,152 $ 33,249 $ 3,645 $ 33,802 $ 127,251
— $
—
33,802
—
1 $
34
40,113
4
1,667
689
1,283
6 $
Protection
Solutions
Individual
Retirement
December 31, 2022
Group
Retirement
Corp &
Other
(in millions)
Legacy
Segment
Total
$
58 $
41
13,498
119
84
17 $
2,189
430
111,395
27,639
1,185
1
$ 13,716 $ 36,896 $ 28,087 $ 3,529 $ 32,625 $ 114,853
— $
—
32,625
—
1 $
32
36,860
3
1,686
773
1,062
8 $
The Company's operating leases primarily consist of real estate leases for office space. The Company also has
operating leases for various types of office furniture and equipment. For certain equipment leases, the Company
applies a portfolio approach to effectively account for the RoU operating lease assets and liabilities. For lease
agreements for which the lease term or classification was reassessed after the occurrence of a change in the lease terms
or a modification of the lease that did not result in a separate contract, the Company elected to combine the lease and
related non-lease components for its operating leases; however, the non-lease components associated with the
Company’s operating leases are primarily variable in nature and as such are not included in the determination of the
RoU operating lease asset and lease liability, but are recognized in the period in which the obligation for those
payments is incurred.
The Company’s operating leases may include options to extend or terminate the lease, which are not included in the
determination of the RoU operating asset or lease liability unless they are reasonably certain to be exercised. The
Company's operating leases have remaining lease terms of 1 year to 15 years, some of which include options to extend
the leases. The Company typically does not include its renewal options in its lease terms for calculating its RoU
operating lease asset and lease liability as the renewal options allow the Company to maintain operational flexibility
and the Company is not reasonably certain it will exercise these renewal options until close to the initial end date of the
lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive
covenants.
As the Company's operating leases do not provide an implicit rate, the Company’s incremental borrowing rate, based
on the information available at the lease commencement date, is used in determining the present value of lease
payments.
The Company primarily subleases floor space within its New Jersey and New York lease properties to various third
parties. The lease term for these subleases typically corresponds to the original lease term.
204
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Balance Sheet Classification of Operating Lease Assets and Liabilities
Assets:
Operating lease assets
Liabilities:
Operating lease liabilities
Balance Sheet Line Item
2023
2022
December 31,
(in millions)
Other assets
Other liabilities
$
$
516 $
520
579 $
618
The table below summarizes the components of lease costs:
Lease Costs
Operating lease cost
Variable operating lease cost
Sublease income
Short-term lease expense
Net lease cost
Maturities of lease liabilities are as follows:
Maturities of Lease Liabilities
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
161 $
51
(53)
—
159 $
179 $
52
(53)
—
178 $
173
49
(55)
—
167
Operating Leases:
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities
December 31, 2023
(in millions)
$
$
156
86
78
69
59
224
672
(93)
579
AB signed a lease which commences in 2024, relating to approximately 166,000 square feet of space in New York
City. AB estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20 year lease
term is approximately $393 million. Additionally, AB signed a lease for 100,000 square feet of space in Pune, India
under a lease expiring in 2033.
Equitable Financial signed a 15-year lease which commenced in 2023, relating to approximately 89,000 square feet of
space in New York City. Additionally, during December 2021, Equitable Financial amended its Syracuse office lease.
The amendment included extending for an additional 5-year period, commencing January 1, 2024, approximately
143,000 square feet of space in Syracuse, NY.
The below table presents the Company’s weighted-average remaining operating lease term and weighted-average
discount rate.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Weighted Averages - Remaining Operating Lease Term and Discount Rate
Weighted-average remaining operating lease term
Weighted-average discount rate for operating leases
Supplemental cash flow information related to leases was as follows:
Lease Liabilities Information
December 31,
2023
2022
8 years
3.40 %
7 years
2.77 %
Year Ended December 31,
2022
2021
2023
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Non-cash transactions:
Leased assets obtained in exchange for new operating lease liabilities
$
$
190 $
202 $
209
124 $
46 $
109
206
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13)
REINSURANCE
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The Company assumes and cedes reinsurance with other insurance companies. The Company evaluates the financial
condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Ceded
reinsurance does not relieve the originating insurer of liability.
The following table summarizes the effect of reinsurance. The impact of the transactions described above results in a
decrease to reinsurance assumed and an increase in reinsurance ceded.
Direct charges and fee income
Reinsurance assumed
Reinsurance ceded
Policy charges and fee income
Direct premiums
Reinsurance assumed
Reinsurance ceded
Premiums
Direct policyholders’ benefits
Reinsurance assumed
Reinsurance ceded
Policyholders’ benefits
Direct interest credited to policyholders’ account balances
Reinsurance ceded
Interest credited to policyholders’ account balances
Year Ended December 31,
2023
2022
(in millions)
2021
3,093 $
3
(716)
2,380 $
1,175 $
174
(245)
1,104 $
3,315 $
157
(718)
2,754 $
2,174 $
(91)
2,083 $
3,145 $
— $
(691)
2,454 $
1,042 $
180
(228)
994 $
3,262 $
179
(725)
2,716 $
1,440 $
(30)
1,410 $
3,380
—
(613)
2,767
970
189
(199)
960
3,297
212
(721)
2,788
1,226
(7)
1,219
$
$
$
$
$
$
$
$
Ceded Reinsurance
The Company reinsures most of its new variable life, UL and term life policies on an excess of retention basis. The
Company generally retains on a per life basis up to $25 million for single lives and $30 million for joint lives with the
excess 100% reinsured. The Company also reinsures risk on certain substandard underwriting risks and in certain
other cases.
On October 3, 2022, Equitable Financial ceded to First Allmerica Financial Life Insurance Company, a wholly owned
subsidiary of Global Atlantic Financial Group, on a combined coinsurance and modified coinsurance basis, a 50%
quota share of approximately 360,000 legacy Group EQUI-VEST deferred variable annuity contracts issued by
Equitable Financial between 1980 and 2008.
In addition to the above, the Company cedes a portion of its group health, extended term insurance, and paid-up life
insurance and substantially all of its individual disability income business through various coinsurance agreements.
Assumed Reinsurance
In addition to the sale of insurance products, the Company currently assumes risk from professional reinsurers. The
Company also had a run-off portfolio of assumed reinsurance liabilities at CSLRC which was sold to Venerable in
June 2021. The Company assumes accident, life, health, annuity (including products covering GMDB and GMIB
benefits), aviation, special risk and space risks by participating in or reinsuring various reinsurance pools and
arrangements.
207
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The following table summarizes the ceded reinsurance GMIB reinsurance contracts, third-party recoverables, amount
due to reinsurance and assumed reserves:
Ceded Reinsurance:
Estimated net fair values of purchased market risk benefits (1)
Third-party reinsurance recoverables related to insurance contracts
Top reinsurers:
First Allmerica-GAF
Zurich Life Insurance Company, Ltd.
RGA Reinsurance Company
Ceded group health reserves
Amount due to reinsurers
Top reinsurers:
RGA Reinsurance Company
First Allmerica-GAF
Protective Life Insurance Company
Assumed Reinsurance:
Reinsurance assumed reserves
December 31,
2023
2022
(in millions)
$
9,427 $
8,352
10,423
8,471
3,606
1,326
1,228
56
1,450
1,151
73
99
4,005
1,416
1,272
47
1,533
1,171
147
104
$
731 $
701
_____________
(1) The estimated fair values of purchased MRB risks decreased $(996) million and $(3.7) billion for the years ended December 31, 2023
and 2022.
14)
SHORT-TERM AND LONG-TERM DEBT
The following table sets forth the Company’s total consolidated borrowings. Short-term and long-term debt consists of
the following:
Short-term debt:
AB commercial paper
CLO short-term debt (5.74%) (1)
Current portion of Long-term debt (2)
Total short-term debt
Long-term debt:
Senior Notes (5.00%, due 2048)
Senior Notes (4.35%, due 2028)
Senior Notes (5.59%, due 2033)
Senior Debentures, 7.00%, due 2028)
Total long-term debt
Total borrowings
December 31,
2023
2022
(in millions)
$
$
254 $
—
—
254
1,481
1,493
497
349
3,820
4,074 $
—
239
520
759
1,481
1,491
—
350
3,322
4,081
______________
(1) CLO Warehousing Debt related to VIE consolidation of CLO investment.
(2) Current portion of long-term debt has been reclassified to short-term debt for the year ended December 31, 2022 as the maturity date was
within one year of year ended December 31, 2023.
As of December 31, 2023, the Company is in compliance with all debt covenants.
208
Table of Contents
Short-term Debt
AB Commercial Paper
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
As of December 31, 2023, AB had $254 million of commercial paper outstanding with an interest rate of 5.4% As of
December 31, 2022, AB had no commercial paper outstanding. The commercial paper is short term in nature, and as
such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value
hierarchy). Average daily borrowings for the commercial paper outstanding in 2023 were $268 million with a
weighted average interest rate of 5.2%. Average daily borrowings for the commercial paper in 2022 were $190 million
with a weighted average interest rate of 1.5%.
Holdings Senior Notes and Senior Debentures
On April 20, 2018, Holdings issued $800 million aggregate principal amount of 3.9% Senior Notes due 2023,
$1.5 billion aggregate principal amount of 4.35% Senior Notes due 2028 and $1.5 billion aggregate principal amount
of 5.0% Senior Notes due 2048 (together the “Notes”). These amounts are recorded net of original issue discount and
issuance costs. During 2021 Holdings made a principal prepayment of $280 million on the 3.9% Senior Notes due. As
of December 31, 2022, the 3.9% Senior Notes due 2023 are classified as short-term as their maturity date is within one
year.
As of December 31, 2023 and 2022, Holdings had outstanding $349 million and $350 million aggregate principal
amount of 7.0% Senior Debentures due 2028 (the “Senior Debentures”). On October 1, 2018, AXA Financial merged
with and into its direct parent, Holdings, with Holdings continuing as the surviving entity ( the “AXA Financial
Merger”). As a result of the AXA Financial merger, Holdings assumed AXA Financial’s obligations under the Senior
Debentures.
On January 11, 2023, the Company issued $500 million aggregate principal amount of senior notes (the “Senior
Notes”). These amounts were recorded net of the underwriting discount and issuance costs of $5 million. The
Company will pay semiannual interest on the Senior Notes on January 11 and July 11 of each year, commencing on
July 11, 2023, and the Senior Notes will mature on January 11, 2033. The Senior Notes bear interest at 5.59% per
annum. On any date prior to October 11, 2032, the Company may redeem some or all of the Senior Notes, subject to a
make-whole provision. At any time on or after October 11, 2032, the Company may, at its option, redeem the Notes in
whole or in part, at a price equal to 100% of the principal amount of the Senior Notes being redeemed plus accrued and
unpaid interest thereon to the redemption date.
The Notes, Senior Notes and Senior Debentures contain customary affirmative and negative covenants, including a
limitation on certain liens and a limit on the Company’s ability to consolidate, merge or sell or otherwise dispose of all
or substantially all of its assets. The Notes, Senior Notes and Senior Debentures also include customary events of
default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an
event of default, all outstanding Notes, Senior Notes and Senior Debentures may be accelerated. As of December 31,
2023, the Company was not in breach of any of the covenants.
Contingent Funding Arrangements
For information regarding activity pertaining to our contingent funding arrangements, see Note 19 of the Notes to
these Consolidated Financial Statements.
Credit Facilities
Holdings Revolving Credit Facility
In February 2018, Holdings entered into a $2.5 billion five-year senior unsecured revolving credit facility with a
syndicate of banks. In June 2021, Holdings entered into an amended and restated revolving credit agreement, which
lowered the facility amount to $1.5 billion and extended the maturity date to June 24, 2026, among other changes. The
revolving credit facility has a sub-limit of $1.5 billion for the issuance of letters of credit to support the life insurance
business reinsured by EQ AZ Life Re. As of December 31, 2023, the Company had $95 million of undrawn letters of
credit issued out of the $1.5 billion sub-limit for Equitable Financial as beneficiary. On December 15, 2023, the
Company added a $75 million commitment from TD Bank to the Credit Facility, raising the facility amount to
$1.6 billion.
Bilateral Letter of Credit Facilities
209
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
In February 2018, the Company entered into bilateral letter of credit facilities, each guaranteed by Holdings, with an
aggregate principal amount of approximately $1.9 billion, with multiple counterparties. In June 2021, Holdings entered
into amendments with each of the issuers of its bilateral letter of credit facilities to effect changes similar to those
effected in the amended and restated revolving credit agreement. The respective facility limits of the bilateral letter of
credit facilities remained unchanged. These facilities support the life insurance business reinsured by EQ AZ Life Re.
The HSBC facility matures on February 16, 2024 and the rest of the facilities mature on February 16, 2026 and
February 2028. The bilateral letter of credit facilities were not drawn upon during December 31, 2023 and 2022.
AB Credit Facility
AB has a $800 million committed, unsecured senior revolving credit facility (the “AB Credit Facility”) with a group of
commercial banks and other lenders which matures on October 13, 2026. The Credit Facility was amended and
restated on February 9, 2023, to reflect the transition from US LIBOR, which was retired June 30, 2023, to the Secured
Overnight Financial Rate (“SOFR”). Other than this immaterial change. there were no other significant changes
included in the amendment. The credit facility provides for possible increases in the principal amount by up to an
aggregate incremental amount of $200 million. Any such increase is subject to the consent of the affected lenders. The
AB Credit Facility is available for AB and SCB LLC for business purposes, including the support of AB’s commercial
paper program. Both AB and SCB LLC can draw directly under the AB Credit Facility and AB management may draw
on the AB Credit Facility from time to time. AB has agreed to guarantee the obligations of SCB LLC under the AB
Credit Facility.
The AB Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of
this type, including, restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a
maximum leverage ratio. As of December 31, 2023, AB was in compliance with these covenants. The AB Credit
Facility also includes customary events of default (with customary grace periods, as applicable), including provisions
under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s
commitments may be terminated. Also, under such provisions, upon the occurrence of certain insolvency- or
bankruptcy-related events of default, all amounts payable under the AB Credit Facility would automatically become
immediately due and payable, and the lender’s commitments would automatically terminate.
Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity
of the facility. Voluntary prepayments and commitment reductions requested by AB are permitted at any time without
a fee (other than customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and
subject to a minimum dollar requirement. Borrowings under the AB Credit Facility bear interest at a rate per annum,
which will be, at AB’s option, a rate equal to an applicable margin, which is subject to adjustment based on the credit
ratings of AB, plus one of the following indices: LIBOR; a floating base rate; or the Federal Funds rate.
As of December 31, 2023 and 2022, AB had no amounts outstanding under the AB Credit Facility. During the years
ended the December 31, 2023 and 2022, AB and SCB LLC did not draw upon the AB Credit Facility.
In addition, SCB LLC currently has five uncommitted lines of credit with five financial institutions. Four of these lines
of credit permit borrowing up to an aggregate of approximately $315 million, with AB named as an additional
borrower, while the other line has no stated limit. As of December 31, 2023 and 2022, SCB LLC had no outstanding
balance on these lines of credit. Average daily borrowings during the years ended December 31, 2023 and 2022 were
$1 million and $1 million with weighted average interest rates of approximately 7.8% and 3.7%, respectively.
15)
RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability to control or exercise significant influence over the other
party in making financial or operating decisions.
Investment Management and Related Services Provided by AB to Related Mutual Funds
210
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
AB provides investment management and related services to mutual funds sponsored by AB. Revenues earned by AB
from providing these services were as follows:
Investment management and services fees
Distribution revenues
Other revenues - shareholder servicing fees
Other revenues - other
Total
2023
Year Ended December 31,
2022
(in millions)
2021
$
$
1,378 $
576
76
9
2,039 $
1,453 $
591
79
8
2,131 $
1,645
637
86
8
2,376
Investment Management and Administrative Services Provided by EIM and EIMG to Related Trusts
EIMG and EIM provide investment management and administrative services to EQAT, 1290 Funds and the Other
AXA Trusts, all of which are considered related parties. Investment management and service fees earned are
calculated as a percentage of assets under management and are recorded as revenue as the related services are
performed.
The table below summarizes the expenses reimbursed to/from the Company and the fees received/paid by the
Company in connection with certain services described above:
Year Ended December 31,
2023
2022
(in millions)
2021
Revenue received or accrued for:
Investment management and administrative services provided to
EQAT and 1290 Funds (1)
Total
$
$
692 $
692 $
708 $
708 $
840
840
_______
(1) For year ended 2021, amount included fees received from Other AXA Trusts of $4 million.
16)
EMPLOYEE BENEFIT PLANS
Pension Plans
Holdings and Equitable Financial Retirement Plans
Equitable Financial sponsors the Equitable 401(k) Plan, a qualified defined contribution plan for eligible employees
and financial professionals. The plan provides for a company contribution, a company matching contribution, and a
discretionary profit-sharing contribution. Expenses associated with this 401(k) Plan were $58 million, $38 million and
$64 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Holdings sponsors the MONY Life Retirement Income Security Plan for Employees and Equitable Financial sponsors
the Equitable Retirement Plan (the “ Equitable Financial QP”), both of which are frozen qualified defined benefit plans
covering eligible employees and financial professionals. These pension plans are non-contributory, and their benefits
are generally based on a cash balance formula and/or, for certain participants, years of service and average earnings
over a specified period. Holdings has assumed primary liability for both plans. Equitable Financial remains secondarily
liable for its obligations under the Equitable Financial QP and would recognize such liability in the event Holdings
does not perform. Holdings and Equitable Financial also sponsor certain nonqualified deferred compensation plans,
including the Equitable Excess Retirement Plan, that provide retirement benefits in excess of the amount permitted
under the tax law for the qualified plans.
Holdings and Equitable Financial use a December 31 measurement date for their pension plans.
AB Retirement Plans
AB maintains the Profit Sharing Plan for Employees of AB, a tax-qualified retirement plan for U.S. employees.
Employer contributions under this plan are discretionary and generally are limited to the amount deductible for federal
income tax purposes.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
AB also maintains a qualified, non-contributory, defined benefit retirement plan covering current and former
employees who were employed by AB in the United States prior to October 2, 2000 (the “AB Plan”). Benefits under
the AB Plan are based on years of credited service, average final base salary, and primary Social Security benefits.
AB uses a December 31 measurement date for the AB Plan.
Net Periodic Pension Expense (Benefit)
Components of net periodic pension expense for the Company’s qualified and non-qualified plans were as follows:
Service cost
Interest cost
Expected return on assets
Prior Period Svc Cost Amortization
Actuarial (gain) loss
Net amortization
Impact of settlement
Net periodic pension expense (benefit)
2023
Year Ended December 31,
2022
(in millions)
2021
$
$
8 $
119
(150)
(3)
—
43
—
17 $
6 $
57
(159)
—
1
65
6
(24) $
6
46
(154)
—
1
99
6
4
Changes in Projected Benefit Obligation (PBO)
Changes in the PBO of the Company’s qualified and non-qualified plans were comprised of:
Projected benefit obligation, beginning of year
Interest cost
Actuarial (gains)/losses (1)
Benefits paid
Settlements
Projected benefit obligation, end of year
Year Ended December 31,
2022
2023
(in millions)
2,254 $
107
60
(191)
(12)
2,218 $
2,900
57
(487)
(190)
(26)
2,254
$
$
______________
(1) Actuarial gains and losses are a product of changes in the discount rate as shown below.
The following table discloses the change in plan assets and the funded status of the Company’s qualified pension plans
and non-qualified pension plans:
Pension plan assets at fair value, beginning of year
Actual return on plan assets
Benefits paid and fees
Settlements
Other
Pension plan assets at fair value, end of year
PBO
Excess of PBO Over Pension Plan Assets
Year Ended December 31,
2022
2023
(in millions)
2,110 $
149
(159)
(12)
18
2,106
2,218
112 $
2,808
(515)
(158)
(25)
—
2,110
2,254
144
$
$
Accrued pension costs of $112 million and $144 million as of December 31, 2023 and 2022, respectively, were
recognized in the accompanying consolidated balance sheets to reflect the unfunded status of these plans.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Unrecognized Net Actuarial (Gain) Loss
December 31,
2023
2022
(in millions)
2,218 $
2,218 $
2,106 $
2,254
2,254
2,110
$
$
$
The following table discloses the amounts included in AOCI that have not yet been recognized as components of net
periodic pension cost.
Unrecognized net actuarial (gain) loss
Unrecognized prior service cost (credit)
Total
Pension Plan Assets
December 31,
2023
2022
(in millions)
759 $
(1)
758 $
744
(1)
743
$
$
The fair values of qualified pension plan assets are measured and ascribed to levels within the fair value hierarchy in a
manner consistent with the fair values of the Company’s invested assets that are measured at fair value on a recurring
basis. See Note 8 of the Notes to these Consolidated Financial Statements for a description of the fair value hierarchy.
The following table discloses the allocation of the fair value of total qualified pension plan assets:
Fixed maturities
Equity securities
Equity real estate
Cash and short-term investments
Other
Total
December 31,
2023
2022
49.3 %
24.1
19.6
1.9
5.1
100.0 %
46.4 %
21.4
22.6
4.0
5.6
100.0 %
Qualified pension plan assets are invested with the primary objective of return, giving consideration to prudent risk.
Guidelines regarding the allocation of plan assets are established by the respective Investment Committees for the
plans and are designed with a long-term investment horizon. As of December 31, 2023, the qualified pension plans
continued their investment allocation strategy to target a 50% - 50% mix of long-duration bonds and “return-seeking”
assets, including public equities, real estate, hedge funds, and private equity.
The following tables disclose the fair values of qualified pension plan assets and their level of observability within the
fair value hierarchy:
December 31, 2023:
Fixed Maturities:
Corporate
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Common equity, REITs and preferred equity
Mutual funds
Level 1
Level 2
(in millions)
Total
$
— $
—
656 $
367
—
—
327
14
7
15
89
—
656
367
7
15
416
14
213
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Collective Trust
Cash and cash equivalents
Short-term investments
Total Assets at Fair Value
Investments measured at NAV
Total Investments at Fair Value
December 31, 2022:
Fixed Maturities:
Corporate
U.S. Treasury, government and agency
States and political subdivisions
Foreign governments
Common equity, REITs and preferred equity
Mutual funds
Collective Trust
Cash and cash equivalents
Short-term investments
Total Assets at Fair Value
Investments measured at NAV
Total Investments at Fair Value
Level 1
Level 2
(in millions)
Total
—
12
—
353
—
72
—
27
1,233
—
353 $
1,233 $
— $
—
—
—
308
30
—
47
—
385
—
385 $
619 $
336
8
15
59
—
61
—
34
1,132
—
1,132 $
72
12
27
1,586
520
2,106
619
336
8
15
367
30
61
47
34
1,517
600
2,117
$
$
$
As of December 31, 2023, assets classified as Level 1, Level 2 and Level 3 comprise approximately 16.8%, 58.5% and
0.0%, respectively, of qualified pension plan assets. As of December 31, 2022, assets classified as Level 1, Level 2 and
Level 3 comprised approximately 18.2%, 53.5% and 0.0%, respectively, of qualified pension plan assets. There are no
significant concentrations of credit risk arising within or across categories of qualified pension plan assets.
In addition to the plan assets above, the Company and certain subsidiaries purchased COLI policies on the lives of
certain key employees. Under the terms of these polices the Company and these subsidiaries are named as
beneficiaries. The purpose of the COLI policies is to provide the Company additional funds with which to satisfy
various employee benefit obligations held by the Company, including those associated with its nonqualified defined
benefit plans and post-retirement benefit plans. As of December 31, 2023 and 2022, the carrying value of COLI was
$921 million and $886 million, respectively.
The following table lists investments for which NAV is calculated; NAV is used as a practical expedient to determine
the fair value of these investments:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Practical Expedient Disclosure as of December 31, 2023 and 2022
Investment
Fair Value
Redemption
Frequency
(If currently eligible)
Redemption Notice
Period
Unfunded
Commitments
(in millions)
December 31, 2023:
Private Equity Fund
Private Real Estate Investment Trust
Hedge Fund
Total (4)
December 31, 2022:
Private Equity Fund
Private Real Estate Investment Trust
Hedge Fund
Total (4)
$
$
$
$
71
399
50
520
79
468
53
600
N/A (1) (2)
Quarterly
Calendar
Quarters (3)
N/A
One Quarter
Previous Quarter
End
$
$
N/A (1)(2)
Quarterly
Calendar
Quarters (3)
N/A
One Quarter
Previous Quarter
End
$
$
14
—
17
16
—
10
_______________
(1) Cannot sell or transfer ownership interest without prior written consent to transfer, and by meeting several criteria (e.g., does not
adversely affect other investors).
(2) Cannot sell interest in the vehicle without prior written consent of the managing member.
(3) March, June, September and December.
(4)
Includes equity method investments of $96 million and $111 million as of December 31, 2023 and 2022, respectively.
Assumptions
Discount Rate
The benefits obligations and related net periodic costs of the Company’s qualified and non-qualified pension plans are
measured using discount rate assumptions that reflect the rates at which the plans’ benefits could be effectively settled.
Projected nominal cash outflows to fund expected annual benefits payments under each of the plans are discounted
using a published high-quality bond yield curve as a practical expedient for a matching bond approach. Beginning in
2014, the Company uses the Citigroup Pension Above-Median-AA Curve (the “Citigroup Curve”) for this purpose.
The Company has concluded that an adjustment to the Citigroup Curve is not required after comparing the projected
benefit streams of the plans to the cash flows and duration of the reference bonds.
Mortality
In October 2016, the Society of Actuaries (“SOA”) released MP-2016, its second annual update to the “gold standard”
mortality projection scale issued by the SOA in 2014, reflecting three additional years of historical U.S. population
historical mortality data (2012 through 2014). Similar to its predecessor (MP-2015), MP-2016 indicated that, while
mortality data continued to show longer lives, longevity was increasing at a slower rate and lagging behind that
previously suggested both by MP-2015 and MP-2014. The Company considered this new data as well as observations
made from current practice regarding how to best estimate improved trends in life expectancies and concluded to
continue using the RP-2000 base mortality table projected on a full generational basis with Scale BB mortality
improvements for purposes of measuring and reporting its consolidated defined benefit plan obligations as of
December 31, 2023.
The following table discloses assumptions used to measure the Company’s pension benefit obligations and net
periodic pension cost:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Discount rates:
Equitable Financial QP
Equitable Excess Retirement Plan
MONY Life Retirement Income Security Plan for Employees
AB Qualified Retirement Plan
Other defined benefit plans
Periodic cost
Cash balance interest crediting rate for pre-April 1, 2012 accruals
Cash balance interest crediting rate for post-April 1, 2012 accruals
Rates of compensation increase:
Benefit obligation
Periodic cost
Expected long-term rates of return on pension plan assets (periodic cost)
December 31,
2023
2022
4.92%
4.88%
5.00%
5.40%
5.13%
5.09%
5.22%
5.50%
4.74% - 5.00% 4.93% - 5.22%
4.70% - 5.71% 4.84% - 5.20%
4.00%
2.50%
5.91%
6.36%
7.00%
4.00%
0.25%
5.96%
6.37%
6.25%
The expected long-term rate of return assumption on plan assets is based upon the target asset allocation of the plan
portfolio and is determined using forward-looking assumptions in the context of historical returns and volatilities for
each asset class. Prior to 1987, participants’ benefits under the Equitable Financial QP were funded through the
purchase of non-participating annuity contracts from Equitable Financial. Benefit payments under these contracts were
approximately $2 million and $3 million for 2023 and 2022, respectively.
Post-Retirement Benefits
The Company eliminated any subsidy for post-retirement medical and dental coverage for individuals retiring on or
after May 1, 2012. The Company continues to contribute to the cost of post-retirement medical and dental coverage for
certain individuals who retired prior to May 1, 2012 based on years of service and age, subject to rights reserved in the
plans to change or eliminate these benefits. The Company funds these post-retirement benefits on a pay-as-you-go
basis.
The Company sponsors the Equitable Executive Survivor Benefits Plan (the “ESB Plan”) which provides post-
retirement life insurance benefits to eligible executives. Eligible executives may choose up to four levels of coverage
with each level providing a benefit equal to the executive’s compensation, subject to an overall $25 million cap. Aside
from the ESB Plan, the Company does not currently offer post-retirement life insurance benefits but continues to
provide post-retirement life insurance benefits to certain active and retired employees who were eligible for such
benefits under discontinued plans. The ESB Plan was closed to new participants on January 1, 2019.
For 2023 and 2022, post-retirement benefits payments were $19 million and $20 million, respectively, net of employee
contributions.
The Company uses a December 31 measurement date for its post-retirement plans.
Components of Net Post-Retirement Benefits Costs
Service cost
Interest cost
Net amortization
Net periodic post-retirement benefits costs
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
1 $
17
(3)
15 $
2 $
10
6
18 $
2
8
9
19
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Changes in the accumulated benefits obligation of the Company’s post-retirement plans recognized in the
accompanying consolidated financial statements are described in the following table:
Accumulated Post-Retirement Benefits Obligation
Accumulated post-retirement benefits obligation, beginning of year
Service cost
Interest cost
Contributions and benefits paid
Actuarial (gains) losses
Accumulated post-retirement benefits obligation, end of year
December 31,
2023
2022
(in millions)
349 $
1
17
(19)
5
353 $
466
2
10
(20)
(109)
349
$
$
The post-retirement medical plan obligations of the Company are offset by an anticipated subsidy from Medicare Part
D, which is assumed to increase with the healthcare cost trend.
Assumed Healthcare Cost Trend Rates used to Measure the Expected Cost of Benefits
Following year
Ultimate rate to which cost increase is assumed to decline
Year in which the ultimate trend rate is reached
December 31,
2023
7.0%
3.9%
2098
2022
5.4%
3.9%
2096
The following table discloses the amounts included in AOCI that have not yet been recognized as components of net
periodic post-retirement benefits cost:
Unrecognized net actuarial (gains) losses
Unrecognized prior service (credit)
Total
December 31,
2023
2022
(in millions)
22 $
(21)
1 $
17
(24)
(7)
$
$
The assumed discount rates for measuring the post-retirement benefit obligations as of December 31, 2023 and 2022
were determined in substantially the same manner as described above for measuring the pension benefit obligations.
The following table discloses the range of discrete single equivalent discount rates and related net periodic cost at and
for the years ended December 31, 2023 and 2022.
Discount rates:
Benefit obligation
Periodic cost
December 31,
2023
2022
4.87% - 4.98% 5.07% - 5.20%
5.07% - 5.20% 2.71% - 4.58%
The Company provides post-employment medical and life insurance coverage for certain disabled former employees.
The accrued liabilities for these post-employment benefits were $2 million and $2 million, respectively, as of
December 31, 2023 and 2022. Components of net post-employment benefits costs follow:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Service cost
Interest cost
Net amortization
Net (gain) loss
Net periodic post-employment benefits costs
2023
Year Ended December 31,
2022
(in millions)
2021
$
$
— $
—
—
—
— $
1 $
—
—
—
1 $
1
—
—
—
1
The following table provides an estimate of future benefits expected to be paid in each of the next five years,
beginning January 1, 2024, and in the aggregate for the five years thereafter. These estimates are based on the same
assumptions used to measure the respective benefit obligations as of December 31, 2023 and include benefits
attributable to estimated future employee service.
Calendar Year
2024
2025
2026
2027
2028
2029 to 2033
Postretirement
Benefits
Pension Benefits
(in millions)
209,009
$
242,979
$
191,808
$
184,396
$
177,961
$
$ 2,130,383
Effective December 31, 2020, the current health plan coverages through the Equitable Retiree Group Health Plan were
terminated. Medicare-eligible retirees and their Medicare-eligible dependents were given the opportunity to elect a
Medicare plan through the Aon Retiree Health Exchange effective January 1, 2021 and certain eligible retirees were
offered a retiree health reimbursement account contribution to help pay for premiums and out-of-pocket expenses.
Pre-65 retirees and their pre-65 dependents were given the opportunity to elect health coverage under the Aon Active
Health Exchange effective January 1, 2021. Even though the effective date of the change in benefits doesn’t
commence until January 1, 2021, the effect of the amendment was recognized immediately and is reflected in the
measurement of the accumulated postretirement benefit obligations as of December 31, 2020.
17)
SHARE-BASED COMPENSATION PROGRAMS
Compensation costs for share-based payment arrangements as further described herein are as follows:
Performance Shares
Stock Options
Restricted Stock Units
Other compensation plans
Total compensation expenses
Income Tax Benefit
2023
(in millions)
$
$
$
Year Ended December 31,
2022
2021
15 $
—
278
1
294 $
58 $
31 $
1
296
—
328 $
68 $
17
—
257
—
274
58
Since 2018, Holdings has granted equity awards under the Equitable Holdings, Inc. 2018 Omnibus Incentive Plan and
the Equitable Holdings, Inc. 2019 Omnibus Incentive Plan (together the “Omnibus Plans”) which were adopted by
Holdings on April 25, 2018 and February 28, 2019 respectively. Awards under the Omnibus Plans are linked to
Holdings’ common stock. As of December 31, 2023, the common stock reserved and available for issuance under the
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Omnibus Plans was 18 million shares. Holdings may issue new shares or use common stock held in treasury for
awards linked to Holdings’ common stock.
Retirement and Protection
Equity awards for R&P employees, financial professionals and directors in 2023, 2022 and 2021 were granted under
the Omnibus Plans. All grants discussed in this section will be settled in shares of Holdings’ common stock.
For awards with graded vesting schedules and service-only vesting conditions, including Holdings RSUs and other
forms of share-based payment awards, the Company applies a straight-line expense attribution policy for the
recognition of compensation cost. Actual forfeitures with respect to the 2023, 2022, and 2021 grants were considered
immaterial in the recognition of compensation cost.
Annual Awards
Each year, the Compensation Committee of the Holdings’ Board of Directors approves an equity-based award program
with awards under the program granted at its regularly scheduled meeting in February. Annual awards under Holdings’
equity programs for 2022, 2021 and 2020 consisted of a mix of equity vehicles including Holdings RSUs, Holdings
stock options and Holdings performance shares. If Holdings pays any ordinary dividend in cash, all outstanding
Holdings RSUs and performance shares will accrue dividend equivalents in the form of additional Holdings RSUs or
performance shares to be settled or forfeited consistent with the terms of the related award.
Holdings RSUs
Holdings RSUs granted to R&P employees under an annual program vest ratably in equal annual installments over a
three-year period. The fair value of the awards was measured using the closing price of the Holdings share on the grant
date, and the resulting compensation expense will be recognized over the shorter of the vesting term or the period up to
the date at which the participant becomes retirement eligible, but not less than one year.
Holdings Stock Options
Holdings stock options granted to R&P employees have a three-year graded vesting schedule, with one-third vesting
on each of the three anniversaries. The total grant date fair value of Holdings stock options will be charged to expense
over the shorter of the vesting period or the period up to the date at which the participant becomes retirement eligible,
but not less than one year.
Holdings Performance Shares
Holdings performance shares granted to R&P employees are subject to performance conditions and a three-year cliff-
vesting. The performance shares consist of two distinct tranches; one based on the Company’s return-on-equity targets
(the “ROE Performance Shares”) and the other based on the Holdings’ relative total shareholder return targets (the
“TSR Performance Shares”), each comprising approximately one-half of the award. Participants may receive from
0% to 200% of the unearned performance shares granted. The grant-date fair value of the ROE Performance Shares is
established once all applicable Non-GAAP ROE targets are determined and approved. The fair value of the awards
was measured using the closing price of the Holdings share on the grant date.
The grant-date fair value of the TSR Performance Shares was measured using a Monte Carlo approach. Under the
Monte Carlo approach, stock returns were simulated for Holdings and the selected peer companies to estimate the
payout percentages established by the conditions of the award. The aggregate grant-date fair value of the unearned
TSR Performance Shares will be recognized as compensation expense over the shorter of the cliff-vesting period or the
period up to the date at which the participant becomes retirement eligible, but not less than one year.
Director Awards
Holdings makes annual grants of unrestricted Holdings shares to non-employee directors of Holdings, Equitable
Financial and Equitable America. The fair value of these awards was measured using the closing price of Holdings
shares on the grant date. These awards immediately vest and all compensation expense is recognized at the grant date.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Prior Equity Award Grants
In 2017 and prior years, equity awards for employees, financial professional and directors in our businesses were
available under the umbrella of AXA’s global equity program. Accordingly, equity awards granted in 2017 and prior
years were linked to AXA’s stock.
The fair values of these prior awards are measured at the grant date by reference to the closing price of the AXA
ordinary share, and the result, as adjusted for achievement of performance targets and pre-vesting forfeitures, generally
is attributed over the shorter of the requisite service period, the performance period, if any, or to the date at which
retirement eligibility is achieved and subsequent service no longer is required for continued vesting of the award.
Investment Management and Research
Employees and directors in our Investment Management and Research business participate in several unfunded long-
term incentive compensation plans maintained by AB. Awards under these plans are linked to AB Holding Units.
Under the AB 2017 Long Term Incentive Plan (“2017 Plan”), which was adopted at a special meeting of AB Holding
Unit holders held on September 29, 2017, the following forms of awards may be granted to AB employees and
Directors: (i) restricted AB Holding Units or phantom restricted AB Holding Units (a “phantom” award is a
contractual right to receive AB Holding Units at a later date or upon a specified event); (ii) options to buy AB Holding
Units; and (iii) other AB Holding Unit-based awards (including, without limitation, AB Holding Unit appreciation
rights and performance awards). The 2017 Plan will expire on September 30, 2027, and no awards under the 2017 Plan
will be made after that date. Under the 2017 Plan, the aggregate number of AB Holding Units with respect to which
awards may be granted is 60 million, including no more than 30 million newly-issued AB Holding Units.
AB engages in open-market purchases of AB Holding Units to help fund anticipated obligations under its long-term
incentive compensation plans and for other corporate purposes. During 2023, 2022, and 2021 AB purchased
4.7 million, 5.2 million and 5.6 million AB Holding Units for $144 million, $212 million and $262 million,
respectively. These amounts reflect open-market purchases of 2.0 million, 2.3 million and 2.6 million AB Holding
Units for $62.6 million, $92.7 million and $117.9 million, respectively, with the remainder relating to purchases of AB
Holding Units from AB employees to allow them to fulfill statutory tax withholding requirements at the time of
distribution of long-term incentive compensation awards, offset by AB Holding Units purchased by AB employees as
part of a distribution reinvestment election.
During 2023, 2022, and 2021 AB granted 6 million, 5 million and 7 million restricted AB Holding units to AB
employees and directors, respectively.
During 2023, 2022, and 2021 AB Holding issued 0 thousand, 6 thousand and 100 thousand AB Holding Units,
respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of $0 thousand, $100
thousand and $3 million respectively, received from employees as payment in cash for the exercise price to purchase
the equivalent number of newly-issued AB Holding Units.
As of December 31, 2023, no options to buy AB Holding Units had been granted and 33 million AB Holding Units,
net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or an
equity compensation plan with similar terms that was canceled in 2017. AB Holding Unit-based awards (including
options) in respect of 27 million AB Holding Units were available for grant as of December 31, 2023.
As of December 31, 2022, no options to buy AB Holding Units had been granted and 29.8 million AB Holding Units,
net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or an
equity compensation plan with similar terms that was canceled in 2017. AB Holding Unit-based awards (including
options) in respect of 30.2 million AB Holding Units were available for grant as of December 31, 2022.
Summary of Stock Option Activity
A summary of activity in the Holdings and AXA option plans during 2023 as follows:
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Options outstanding as of beginning of year
Options granted
Options exercised
Options forfeited, net
Options expired
Options outstanding as of end of year
Aggregate intrinsic value (1)
Weighted average remaining contractual term (in years)
Options exercisable at December 31, 2023
Aggregate intrinsic value (1)
Weighted average remaining contractual term (in years)
_______________
Options Outstanding
EQH Shares
AXA Ordinary Shares
Number
Outstanding
(in 000’s)
Weighted
Average
Exercise
Price
Number
Outstanding
(in 000’s)
Weighted
Average
Exercise
Price
1,943 $
21.75
666 €
22.95
—
(188)
—
—
—
14.04
—
—
1,755 $
21.94
$
19,928
5.59
—
23.48
—
—
22.56
2,634
—
(286)
—
—
380 €
€
3.26
1,755 $
21.94
$
19,928
343 €
€
22.66
2,345
5.59
3.13
(1) Aggregate intrinsic value, presented in thousands, is calculated as the excess of the closing market price on December 31,
2023 of the respective underlying shares over the strike prices of the option awards. For awards with strike prices higher than
market prices, intrinsic value is shown as zero.
During years ended December 31, 2023, 2022, and 2021, there were no stock options granted.
Summary of Restricted Stock Unit Award Activity
The market price of a Holdings share is used as the basis for the fair value measure of a Holdings RSU. For purposes
of determining compensation cost for stock-settled Holdings RSUs, fair value is fixed at the grant date until settlement,
absent modification to the terms of the award. For liability-classified cash-settled Holdings and AXA RSUs, fair value
is remeasured at the end of each reporting period.
As of December 31, 2023, approximately 3 million Holdings RSUs remain unvested. Unrecognized compensation cost
related to these awards totaled approximately $34 million and is expected to be recognized over a weighted-average
period of 1.6 years.
As of December 31, 2023, approximately 13 million AB Holding Unit awards remain unvested. Unrecognized
compensation cost related to these awards totaled approximately $91 million is expected to be recognized over a
weighted-average period of 5.9 years.
The following table summarizes Holdings restricted share units activity for 2023.
Unvested, beginning of year
Granted
Forfeited
Vested
Unvested as of December 31, 2023
221
Shares of Holdings
Restricted Stock
Units
2,789,165 $
1,487,714
(128,089)
(1,417,323)
2,731,467 $
Weighted-Average
Grant Date
Fair Value
29.46
32.35
31.45
28.12
32.18
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Summary of Performance Award Activity
As of December 31, 2023, approximately 1.3 million Holdings awards remain unvested. Unrecognized compensation
cost related to these awards totaled approximately $10 million and is expected to be recognized over a weighted-
average period of 1.6 years.
The following table summarizes Holdings performance awards activity for 2023.
Unvested, beginning of year
Granted
Forfeited
Vested
Unvested as of December 31, 2023
18)
INCOME TAXES
Shares of Holdings
Performance
Awards
Weighted-Average
Grant Date
Fair Value
1,327,595 $
434,080
(1,565)
(447,436)
1,312,674 $
32.98
39.07
29.00
29.08
36.32
Income from operations before income taxes included income (loss) from domestic operations of $0.6 billion, $2.9
billion and $2.4 billion for the years ended December 31, 2023, 2022 and 2021, and income from foreign operations of
$105 million, $135 million and $223 million for the years ended December 31, 2023, 2022 and 2021. Approximately
$37 million, $35 million and $59 million of the Company’s income tax expense is attributed to foreign jurisdictions for
the years ended December 31, 2023, 2022 and 2021.
A summary of the income tax (expense) benefit in the consolidated statements of income (loss) follows:
Income tax (expense) benefit:
Current (expense) benefit
Deferred (expense) benefit
Total
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
(29) $
934
905 $
(5) $
(593)
(598) $
(129)
(310)
(439)
The Federal income taxes attributable to consolidated operations are different from the amounts determined by
multiplying the earnings before income taxes and noncontrolling interest by the expected Federal income tax rate of
21%. The sources of the difference and their tax effects were as follows:
Expected income tax (expense) benefit
Noncontrolling interest
Non-taxable investment income
Tax audit interest
State income taxes
Tax settlements/uncertain tax position release
Tax credits
Valuation allowance
Other
Income tax (expense) benefit
2023
Year Ended December 31,
2022
(in millions)
2021
$
$
(155) $
62
64
(23)
(42)
(4)
15
1,000
(12)
905 $
(630) $
40
53
(13)
(63)
—
22
—
(7)
(598) $
(548)
69
80
(14)
(47)
—
28
—
(7)
(439)
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The components of the net deferred income taxes are as follows:
Compensation and related benefits
Net operating loss and credits
Reserves and reinsurance
DAC
Unrealized investment gains/losses
Investments
Other
Valuation allowance
Total
December 31,
2023
2022
Assets
Liabilities
Assets
Liabilities
$
$
230 $
151
1,581
—
1,472
—
187
(234)
3,387 $
(in millions)
— $
—
—
1,078
—
217
—
—
1,295 $
226 $
240
1,299
—
2,012
—
92
(1,570)
2,299 $
—
—
—
1,029
—
235
—
—
1,264
During the fourth quarter of 2022, the Company established a valuation allowance of $1.6 billion against its deferred
tax asset related to unrealized capital losses in the available for sale securities portfolio. Due to the potential need for
liquidity in a macro stress environment the Company was not able to assert that it would hold the underlying securities
to recovery. Adjustments to the valuation allowance due to changes in the portfolio’s unrealized capital loss are
recorded in other comprehensive income. Adjustments to the valuation allowance due to new facts or evidence are
recorded in net income.
As of each reporting date, management considers new evidence, both positive and negative, that could affect its view
of the future realization of deferred tax assets. During the year ended December 31, 2023, management took actions to
increase its available liquidity so that the Company has the ability and intent to hold the majority of securities in its
available for sale portfolio to recovery. For liquidity and other purposes, the Company maintains a smaller pool of
securities that it does not intend to hold to recovery. Based on all available evidence, as of December 31, 2023, the
Company concluded that the deferred tax asset related to unrealized tax capital losses on securities that the Company
intends to hold to recovery is more-likely-than-not to be realized and a valuation allowance is not necessary. The
company maintains a valuation allowance against the deferred tax asset on available for sale securities that will not be
held to recovery.
For the year ended December 31, 2023, the Company recorded a decrease to the valuation allowance of $336 million
in other comprehensive income. For the year ended December 31, 2023, the Company recorded a decrease to the
valuation allowance of $1 billion in net income. A valuation allowance of $234 million remains against the portion of
the deferred tax asset that is still not more-likely-than-not to be realized.
The Company uses the aggregate portfolio approach related to the stranded or disproportionate income tax effects in
accumulated other comprehensive income related to available for sale securities. Under this approach, the
disproportionate tax effect remains intact as long as the investment portfolio remains.
The Company has Federal net operating loss carryforwards of $279 million and $810 million, for the years ending
December 31, 2023 and 2022, respectively, which do not expire.
The Company provides income taxes on the unremitted earnings of non-U.S. corporate subsidiaries except to the
extent that such earnings are indefinitely reinvested outside the United States. As of December 31, 2023, $30 million
of undistributed earnings of non-U.S. corporate subsidiaries were permanently invested outside the United States. At
existing applicable income tax rates, additional taxes of approximately $8 million would need to be provided if such
earnings are remitted.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows:
Balance, beginning of year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Additions for tax positions of current year
Settlements with tax authorities
Balance, end of year
Unrecognized tax benefits that, if recognized, would impact the
effective rate
Year Ended December 31,
2023
2022
(in millions)
2021
314 $
11
(3)
—
—
322 $
323 $
(9)
—
—
—
314 $
316
11
(4)
—
—
323
59 $
58 $
67
$
$
$
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in tax expense. Interest
and penalties included in the amounts of unrecognized tax benefits as of December 31, 2023 and 2022 were $86
million and $63 million, respectively. For 2023, 2022 and 2021, respectively, there were $23 million, $13 million and
$14 million in interest expense (benefit) related to unrecognized tax benefits.
It is reasonably possible that the total amount of unrecognized tax benefits will change within the next 12 months due
to the conclusion of IRS proceedings and the addition of new issues for open tax years. The possible change in the
amount of unrecognized tax benefits cannot be estimated at this time.
As of December 31, 2023, tax years 2014 and subsequent remain subject to examination by the IRS.
19)
COMMITMENTS AND CONTINGENT LIABILITIES
Litigation and Regulatory Matters
Litigation, regulatory and other loss contingencies arise in the ordinary course of the Company’s activities as a
diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the
conduct of its business. In some of these matters, claimants seek to recover very large or indeterminate amounts,
including compensatory, punitive, treble and exemplary damages. Modern pleading practice permits considerable
variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the
monetary damages they seek, or they may be required only to state an amount sufficient to meet a court’s jurisdictional
requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any
reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the
monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or
potential value of a claim. Litigation against the Company includes a variety of claims including, among other things,
insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract
administration, product design, features and accompanying disclosure, cost of insurance increases, payments of death
benefits and the reporting and escheatment of unclaimed property, alleged breach of fiduciary duties, alleged
mismanagement of client funds and other matters.
The outcome of a litigation or regulatory matter is difficult to predict, and the amount or range of potential losses
associated with these or other loss contingencies requires significant management judgment. It is not possible to
predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory
matters, litigation and other loss contingencies. While it is possible that an adverse outcome in certain cases could have
a material adverse effect upon the Company’s financial position, based on information currently known, management
believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with
other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought
in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in
certain of the Company’s litigation or regulatory matters, or liabilities arising from other loss contingencies, could,
from time to time, have a material adverse effect upon the Company’s results of operations or cash flows in a
particular quarterly or annual period.
224
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
For some matters, the Company is able to estimate a range of loss. For such matters in which a loss is probable, an
accrual has been made. For matters where the Company believes a loss is reasonably possible, but not probable, no
accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of
loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate
of the unaccrued amounts of the reasonably possible range of losses. As of December 31, 2023, the Company
estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of
such date, to be up to approximately $150 million.
For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The
Company is often unable to estimate the possible loss or range of loss until developments in such matters have
provided sufficient information to support an assessment of the range of possible loss, such as quantification of a
damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings
by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and
annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and
updates the Company’s accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.
In February 2016, a lawsuit was filed in the Southern District of New York entitled Brach Family Foundation, Inc. v.
AXA Equitable Life Insurance Company. This lawsuit is a putative class action brought on behalf of all owners of UL
policies subject to Equitable Financial’s COI rate increase. In early 2016, Equitable Financial raised COI rates for
certain UL policies issued between 2004 and 2008, which had both issue ages 70 and above and a current face value
amount of $1 million and above. A second putative class action was filed in the District of Arizona in 2017 and
consolidated with the Brach matter in federal court in New York. The consolidated amended class action complaint
alleged the following claims: breach of contract; misrepresentations in violation of Section 4226 of the New York
Insurance Law; violations of New York General Business Law Section 349; and violations of the California Unfair
Competition Law, and the California Elder Abuse Statute. Plaintiffs sought: (a) compensatory damages, costs, and,
pre- and post-judgment interest; (b) with respect to their claim concerning Section 4226, a penalty in the amount of
premiums paid by the plaintiffs and the putative class; and (c) injunctive relief and attorneys’ fees in connection with
their statutory claims. In August 2020, the federal district court issued a decision certifying nationwide breach of
contract and Section 4226 classes, and a New York State Section 349 class. Owners of a substantial number of policies
opted out of the Brach class action. Most have settled pre-litigation, but a minority of opt-out policies are not yet the
subject of litigation. Others filed suit previously, including three pending individual federal actions that were
coordinated with the Brach action and contained similar allegations. In May 2023, the Brach class action and Equitable
Financial informed the federal district court that they had mutually agreed to settle the class action, and in October
2023, the federal district court entered an order of final approval of the settlement agreement. Equitable Financial is
fully accrued for the class settlement, which will have no impact on earnings or distributable cash projections. In
October 2023, Equitable Financial and the three plaintiffs with individual federal actions coordinated with the Brach
action informed the court that they had reached a settlement, and those actions were dismissed. Equitable Financial is
likewise fully accrued for those individual settlements, which will have no impact on earnings or distributable cash
projections. Equitable Financial has settled other actual and threatened litigations challenging the COI increase by
individual policy owners and entities.
Finally, two actions are also pending against Equitable Financial in New York state court. In July 2022, the trial court
in one of the New York state court actions, Hobish v. AXA Equitable Life Insurance Company, granted in significant
part Equitable Financial’s motion for summary judgment and denied plaintiff’s cross motion. That plaintiff appealed
but its appeal was denied by the state appellate court. Equitable Financial is vigorously defending each of these
matters.
As with other financial services companies, Equitable Financial periodically receives informal and formal requests for
information from various state and federal governmental agencies and self-regulatory organizations in connection with
inquiries and investigations of the products and practices of the Company or the financial services industry. It is the
practice of the Company to cooperate fully in these matters.
Obligations under Funding Agreements
Pre-Capitalized Trust Securities (“P-Caps”)
In April 2019, pursuant to separate Purchase Agreements among Holdings, Credit Suisse Securities (USA) LLC, as
representative of the several initial purchasers, and the Trusts (as defined below), Pine Street Trust I, a Delaware
statutory trust (the “2029 Trust”), completed the issuance and sale of 600,000 of its Pre-Capitalized Trust Securities
redeemable February 15, 2029 (the “2029 P-Caps”) for an aggregate purchase price of $600 million and Pine Street
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Trust II, a Delaware statutory trust (the “2049 Trust” and, together with the 2029 Trust, the “Trusts”), completed the
issuance and sale of 400,000 of its Pre-Capitalized Trust Securities redeemable February 15, 2049 (the “2049 P-Caps”
and, together with the 2029 P-Caps, the “P-Caps”) for an aggregate purchase price of $400 million in each case to
qualified institutional buyers in reliance on Rule 144A that are also “qualified purchasers” for purposes of Section
3(c)(7) of the Investment Company Act of 1940, as amended.
The P-Caps are an off-balance sheet contingent funding arrangement that, upon Holdings’ election, gives Holdings the
right over a ten-year period (in the case of the 2029 Trust) or over a thirty-year period (in the case of the 2049 Trust) to
issue senior notes to these Trusts. The Trusts each invested the proceeds from the sale of their P-Caps in separate
portfolios of principal and/or interest strips of U.S. Treasury securities. In return, Holdings will pay a semi-annual
facility fee to the 2029 Trust and 2049 Trust calculated at a rate of 2.125% and 2.715% per annum, respectively, which
will be applied to the unexercised portion of the contingent funding arrangement and Holdings will reimburse the
Trusts for certain expenses. The facility fees are recorded in other operating costs and expenses in the consolidated
statements of income (loss).
Federal Home Loan Bank (“FHLB”)
As a member of the FHLB, Equitable Financial has access to collateralized borrowings. It also may issue funding
agreements to the FHLB. Both the collateralized borrowings and funding agreements would require Equitable
Financial to pledge qualified mortgage-backed assets and/or government securities as collateral. Equitable Financial
issues short-term funding agreements to the FHLB and uses the funds for asset, liability, and cash management
purposes. Equitable Financial issues long-term funding agreements to the FHLB and uses the funds for spread lending
purposes.
Entering into FHLB membership, borrowings and funding agreements requires the ownership of FHLB stock and the
pledge of assets as collateral. Equitable Financial has purchased FHLB stock of $357 million and pledged collateral
with a carrying value of $10.3 billion as of December 31, 2023.
Funding agreements are reported in policyholders’ account balances in the consolidated balance sheets. For other
instruments used for asset/liability and cash management purposes, see “Offsetting of Financial Assets and Liabilities
and Derivative Instruments” included in Note 4 of the Notes to these Consolidated Financial Statements. The table
below summarizes the Company’s activity of funding agreements with the FHLB.
Change in FHLB Funding Agreements during the Year Ended December 31, 2023
Outstanding
Balance at
December 31,
2022
Issued
During the
Period
Repaid
During the
Period
Long-term
Agreements
Maturing Within
One Year
(in millions)
Long-term
Agreements
Maturing
Within Five
Years
Outstanding
Balance at
December 31,
2023
Short-term funding agreements:
Due in one year or less
$
6,130 $ 59,957 $ (60,843) $
924 $
— $
6,168
Long-term funding agreements:
Due in years two through five
Due in more than five years
Total long-term funding
agreements
Total funding agreements (1)
$
1,679
692
—
—
—
—
2,371
—
8,501 $ 59,957 $ (60,843) $
—
(880)
(44)
(924)
— $
—
—
799
648
—
— $
1,447
7,615
_____________
(1) The $3 million and $4 million difference between the funding agreements carrying value shown in fair value table for December 31,
2023 and 2022, respectively, reflects the remaining amortization of a hedge implemented and closed, which locked in the funding
agreements borrowing rates.
Funding Agreement-Backed Notes Program (“FABN”)
Under the FABN program, Equitable Financial may issue funding agreements in U.S. dollar or other foreign
currencies to a Delaware special purpose statutory trust (the “Trust”) in exchange for the proceeds from issuances of
fixed and floating rate medium-term marketable notes issued by the Trust from time to time (the “Trust Notes”). The
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
funding agreements have matching interest, maturity and currency payment terms to the applicable Trust Notes. The
Company hedges the foreign currency exposure of foreign currency denominated funding agreements using cross
currency swaps as discussed in Note 4 of the Notes to these Consolidated Financial Statements. As of December 31,
2023, the maximum aggregate principal amount of Trust Notes permitted to be outstanding at any one time is $10.0
billion. Funding agreements issued to the Trust, including any foreign currency transaction adjustments, are reported in
policyholders’ account balances in the consolidated balance sheets. Foreign currency transaction adjustments to
policyholder’s account balances are recognized in net income (loss) as an adjustment to interest credited to
policyholders’ account balances and are offset in interest credited to policyholders’ account balances by a release of
AOCI from deferred changes in fair value of designated and qualifying cross currency swap cash flow hedges. The
table below summarizes Equitable Financial’s activity of funding agreements under the FABN program.
Change in FABN Funding Agreements during the Year Ended December 31, 2023
Outstanding
Balance at
December 31,
2022
Issued
During
the Period
Repaid
During
the
Period
Long-term
Agreements
Maturing
Within One
Year
Long-term
Agreements
Maturing
Within Five
Years
(in millions)
Foreign
Currency
Transaction
Adjustment
Outstanding
Balance at
December 31,
2023
Short-term funding agreements:
Due in one year or less
$
1,500 $ — $ (1,500) $ 1,000 $
— $
— $
1,000
Long-term funding agreements:
Due in years two through five
Due in more than five years
4,000
1,585
671
—
—
—
(1,000)
—
1,285
(1,285)
28
—
Total long-term funding agreements
Total funding agreements (1)
$
5,585
7,085 $
671
—
671 $ (1,500) $
(1,000)
— $
—
— $
28
28 $
4,984
300
5,284
6,284
_____________
(1) The $17 million and $66 million difference between the funding agreements notional value shown and carrying value table as of
December 31, 2023 and 2022, respectively, reflects the remaining amortization of the issuance cost of the funding agreements and the
foreign currency transaction adjustment.
Funding Agreement-Backed Commercial Paper Program
In May 2023, Equitable Financial and Equitable America established a FABCP program, pursuant to which a SPLLC
may issue commercial paper and deposit the proceeds with Equitable Financial or Equitable America pursuant to a
funding agreement issued by Equitable Financial or Equitable America to the SPLLC. The current maximum
aggregate principal amount permitted to be outstanding at any one time under the FABCP program is $3.0 billion for
Equitable Financial and $1.0 billion for Equitable America. As of December 31, 2023, Equitable Financial and
Equitable America had $948 million and $0 million outstanding under the program, respectively.
Credit Facilities
For information regarding activity pertaining to our credit facilities arrangements, see Note 14 of the Notes to these
Consolidated Financial Statements.
Guarantees and Other Commitments
The Company provides certain guarantees or commitments to affiliates and others. As of December 31, 2023, these
arrangements include commitments by the Company to provide equity financing of $1.3 billion to certain limited
partnerships and real estate joint ventures under certain conditions. Management believes the Company will not incur
material losses as a result of these commitments.
The Company had $17 million of undrawn letters of credit related to reinsurance as of December 31, 2023. The
Company had $813 million of commitments under existing mortgage loan agreements as of December 31, 2023.
The Company is the obligor under certain structured settlement agreements it had entered into with unaffiliated
insurance companies and beneficiaries. To satisfy its obligations under these agreements, the Company owns single
premium annuities issued by previously wholly-owned life insurance subsidiaries. The Company has directed payment
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
under these annuities to be made directly to the beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously wholly-owned subsidiaries be unable to meet
their obligations. Management believes the need for the Company to satisfy those obligations is remote.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
20)
INSURANCE STATUTORY FINANCIAL INFORMATION
In accordance with statutory accounting practices, the following table presents the combined statutory net income
(loss), surplus, capital stock & AVR, and securities on deposits for Equitable Financial, Equitable America, Equitable
L&A and CS Life.
Years Ended December 31,
Combined statutory net income (loss) (1)
As of December 31,
2023
2022
(in millions)
2021
$
(1,549) $
148 $
(936)
Combined surplus, capital stock and AVR
Combined securities on deposits in accordance with various government
and state regulations
$
$
6,776 $
7,125
18 $
17
_____________
(1) For 2021, excludes CS Life which was sold June 1, 2021.
In 2023 and 2022, Equitable Financial paid to its direct parent, which subsequently distributed such amount to
Holdings, an ordinary shareholder dividend of $1.7 billion and $930 million, respectively. Equitable Financial did not
pay ordinary dividends during 2021 due to operating losses.
Dividend Restrictions
As domestic insurance subsidiaries regulated by insurance laws of their respective domiciliary states, Equitable
Financial and Equitable America are subject to restrictions as to the amounts they may pay as dividends and amounts
they may repay of surplus notes to Holdings.
State insurance statutes also typically place restrictions and limitations on the amount of dividends or other
distributions payable by insurance company subsidiaries to their parent companies, as well as on transactions between
an insurer and its affiliates. Under New York’s insurance laws, which are applicable to Equitable Financial, a domestic
stock life insurer may not, without prior approval of the NYDFS, pay an ordinary dividend to its stockholders
exceeding an amount calculated based on a statutory formula (“Ordinary Dividend”). Dividends in excess of this
amount require the insurer to file a notice of its intent to declare the dividends with the NYDFS and obtain prior
approval or non-disapproval from the NYDFS with respect to such dividends (“Extraordinary Dividend”). Due to a
permitted statutory accounting practice agreed to with the NYDFS, Equitable Financial will need the prior approval of
the NYDFS to pay the portion, if any, of any Ordinary Dividend that exceeds the Ordinary Dividend that Equitable
Financial would be permitted to pay under New York’s insurance laws absent the application of such permitted
practice (such excess, the “Permitted Practice Ordinary Dividend”).
Applying the formulas above, Equitable Financial is not permitted to pay an Ordinary Dividend in 2024.
Under Arizona Insurance Law, which are applicable to Equitable America, a domestic life insurer may without prior
approval of the Arizona Superintendent, pay a dividend to its shareholders not exceeding an amount calculated based
on a statutory formula. Based on this formula, the Company could pay an ordinary dividend of up to approximately
$440 million during 2024.
Intercompany Reinsurance
Equitable Financial and Equitable America cede a portion of their statutory reserves to EQ AZ Life Re, a captive
reinsurer, as part of the Company’s capital management strategy. EQ AZ Life Re prepares financial statements in a
special purpose framework for statutory reporting. Equitable Financial and Equitable America receive statutory reserve
credits for reinsurance treaties with EQ AZ Life Re to the extent EQ AZ Life Re holds assets in an irrevocable trust
(the “EQ AZ Life Re Trust”). As of December 31, 2023, EQ AZ Life Re holds $1.3 billion of assets in the EQ AZ Life
Re Trust and letters of credit of $2.0 billion that are guaranteed by Holdings. Under the reinsurance transactions, EQ
AZ Life Re is permitted to transfer assets from the EQ AZ Life Re Trust under certain circumstances. The level of
statutory reserves held by EQ AZ Life Re fluctuate based on market movements, mortality experience and
policyholder behavior. Increasing reserve requirements may necessitate that additional assets be placed in trust and/or
additional letters of credit be secured, which could adversely impact EQ AZ Life Re’s liquidity.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
In May 17, 2023, Equitable Financial entered into a reinsurance agreement (the “Reinsurance Treaty”) with its
affiliate, Equitable America, effective April 1, 2023. Pursuant to the Reinsurance Treaty, virtually all of Equitable
Financial’s net retained General Account liabilities, including all of its net retained liabilities relating to the living
benefit and death riders related to (i) its variable annuity contracts issued outside the State of New York prior to
October 1, 2022 (and with respect to its EQUI-VEST variable annuity contracts, issued outside the State of New York
prior to February 1, 2023) and (ii) certain universal life insurance policies issued outside the State of New York prior
to October 1, 2022, were reinsured to Equitable America on a coinsurance funds withheld basis. In addition, all of the
Separate Accounts liabilities relating to such variable annuity contracts were reinsured to Equitable America on a
modified coinsurance basis. Equitable America’s obligations under the Reinsurance Treaty are secured through
Equitable Financial’s retention of certain assets supporting the reinsured liabilities. This reinsurance treaty has no
impact to the consolidated financial statements of the Company. The NYDFS and the Arizona Department of
Insurance and Financial Institutions each approved the Reinsurance Treaty.
Prescribed and Permitted Accounting Practices
As of December 31, 2023, the following five prescribed and permitted practices resulted in net income (loss) and
capital and surplus that is different from the statutory surplus that would have been reported had NAIC statutory
accounting practices been applied.
Equitable Financial was granted a permitted practice by the NYDFS to apply SSAP 108, Derivatives Hedging Variable
Annuity Guarantees on a retroactive basis from January 1, 2021 through June 30, 2021, after reflecting the impacts of
our reinsurance transaction with Venerable. The permitted practice was amended to also permit Equitable Financial to
adopt SSAP 108 prospectively as of July 1, 2021 and to consider the impact of both the interest rate derivatives and the
General Account assets used to fully hedge the interest rate risk inherent in its variable annuity guarantees when
determining the amount of the deferred asset or liability under SSAP 108. Application of the permitted practice
partially mitigates the New York Insurance Regulation 213 (“Reg 213”) impact of the Venerable Transaction on
Equitable Financial’s statutory capital and surplus and enables Equitable Financial to more effectively neutralize the
impact of interest rates on its statutory surplus and to better align with our economic hedging program. The impact of
applying this permitted practice relative to SSAP 108 as written was a decrease of approximately $64 million in
statutory special surplus funds as of December 31, 2023. The Reinsurance Treaty reduced the amount of interest rate
hedging needed at Equitable Financial going forward, affecting future deferrals, but leaves our historical SSAP 108
deferred amounts unchanged. The permitted practice also reset Equitable Financial’s unassigned surplus to zero as of
June 30, 2021 to reflect the transformative nature of the Venerable Transaction.
The NAIC Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of
prescribed or permitted practices by the State of New York. However, Reg 213 adopted in May of 2019 and as
amended in February 2020 and March 2021, differs from the NAIC variable annuity reserve and capital framework.
Reg 213 requires Equitable Financial to carry statutory basis reserves for its variable annuity contract obligations equal
to the greater of those required under (i) the NAIC standard or (ii) a revised version of the NYDFS requirement in
effect prior to the adoption of the first amendment for contracts issued prior to January 1, 2020, and for policies issued
after that date a new standard that in current market conditions imposes more conservative reserving requirements for
variable annuity contracts than the NAIC standard.
The impact of the application of Reg 213 was a decrease of approximately $251 million in statutory surplus as of
December 31, 2023 compared to statutory surplus under the NAIC variable annuity framework. Our hedging program
is designed to hedge the economics of our insurance liabilities and largely offsets Reg 213 and NAIC framework
reserve movements due to interest rates and equities. The NYDFS allows domestic insurance companies a five year
phase-in provision for Reg 213 reserves. As of September 30, 2022, Equitable Financial’s Reg 213 reserves were
100% phased-in. As of December 31, 2023, given the prevailing market conditions and business mix, there are
$241 million Reg 213 redundant reserves over the US RBC CTE 98 total asset requirement (“TAR”).
During the fourth quarter 2020, Equitable Financial received approval from NYDFS for its proposed amended Plan of
Operation for Separate Account No. 68 (“SA 68”) for our Structured Capital Strategies product and Separate Account
No. 69 (“SA 69”) for our EQUI-VEST product Structured Investment Option, to change the accounting basis of these
two non-insulated Separate Accounts from fair value to book value in accordance with Section 1414 of the Insurance
Law to align with how we manage and measure our overall General Account asset portfolio. In order to facilitate this
change and comply with Section 4240(a)(10), the Company also sought approval to amend the Plans to remove the
requirement to comply with Section 4240(a)(5)(iii) and substitute it with a commitment to comply with Section
4240(a)(5)(i). Similarly, the Company updated the reserves section of each Plan to reflect the fact that Regulation 128
would no longer be applicable upon the change in accounting basis. We applied this change effective January 1, 2021.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The impact of the application is an increase of approximately $1.9 billion in statutory surplus as of December 31,
2023.
During 2022, Equitable America received approval from the Arizona Department of Insurance and Financial
Institutions pursuant to A.R.S. 20-515 for Separate Account No. 68A (“SA 68A”) for our Structured Capital Strategies
product, Separate Account No. 69A (“SA 69A”) for our EQUI-VEST product Structured Investment Option and
Separate Account No. 71A (“SA 71A”) for our Investment Edge Structured Investment Option, to permit us to use
book value as the accounting basis of these three non-insulated Separate Accounts instead of fair value in accordance
with the NAIC Accounting and Practices and Procedures Manual to align with how we manage and measure our
overall General Account asset portfolio. The impact of the application is a decrease of approximately $94 million in
statutory surplus as of December 31, 2023.
The Arizona Department of Insurance and Financial Institutions granted to Equitable America a permitted practice to
deviate from SSAP No. 108 by applying special accounting treatment for specific derivatives hedging variable annuity
benefits subject to fluctuations as a result of interest rate sensitivities. The permitted practice expands on SSAP No.
108 hedge accounting to include equity risks for the full scope of Variable Annuity (VA) contracts (i.e., not just the
rider guarantees but for the VA total contract). The permitted practice allows Equitable America to adopt SSAP 108
retroactively from October 1, 2023 and applies to both directly held VA hedges as well as VA hedges in the Equitable
America funds withheld asset that resulted from the Reinsurance Treaty. In the calculation of the amount of excess VA
equity and interest rate derivative hedging gains gains/losses to defer (including Net investment income on our Equity
Total Return Swaps), the permitted practice allows us to compare our total equity and interest derivatives gains and
losses to 100% of our target liability change. Any hedge gain or loss deferrals will follow SSAP No. 108 amortization
rules (i.e. 10-year straight line).
The impact of applying this revised permitted practice relative to SSAP 108 was an increase of approximately
$621 million in statutory special surplus funds as of December 31, 2023. If the reporting entity had not used the above
permitted practice that differs from the NAIC basis of accounting, a risk-based capital regulatory event would not have
been triggered.
Differences between Statutory Accounting Principles and U.S. GAAP
Accounting practices used to prepare statutory financial statements for regulatory filings of stock life insurance
companies differ in certain instances from U.S. GAAP. The differences between statutory surplus and capital stock
determined in accordance with SAP and total equity under U.S. GAAP are primarily: (a) the inclusion in SAP of an
AVR intended to stabilize surplus from fluctuations in the value of the investment portfolio; (b) future policy benefits
and policyholders’ account balances under SAP differ from U.S. GAAP due to differences between actuarial
assumptions and reserving methodologies; (c) certain policy acquisition costs are expensed under SAP but deferred
under U.S. GAAP and amortized over future periods to achieve a matching of revenues and expenses; (d) under SAP,
Federal income taxes are provided on the basis of amounts currently payable with limited recognition of deferred tax
assets while under U.S. GAAP, deferred taxes are recorded for temporary differences between the financial statements
and tax basis of assets and liabilities where the probability of realization is reasonably assured; (e) the valuation of
assets under SAP and U.S. GAAP differ due to different investment valuation and depreciation methodologies, as well
as the deferral of interest-related realized capital gains and losses on fixed income investments; (f) the valuation of the
investment in AB and AB Holding under SAP reflects a portion of the market value appreciation rather than the equity
in the underlying net assets as required under U.S. GAAP; (g) reporting the surplus notes as a component of surplus in
SAP but as a liability in U.S. GAAP; (h) computer software development costs are capitalized under U.S. GAAP but
expensed under SAP; (i) certain assets, primarily prepaid assets, are not admissible under SAP but are admissible
under U.S. GAAP; and (j) cost of reinsurance which is recognized as expense under SAP and amortized over the life
of the underlying reinsured policies under U.S. GAAP.
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21)
BUSINESS SEGMENT INFORMATION
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
As previously announced, effective January 1, 2023, our financial reporting presentation was revised to reflect the
reorganization of the Company’s reportable segments to reflect how the Company’s chief operating decision maker
now makes operating decisions and assesses performance. We now have six reportable segments. Prior period results
have been revised in connection with updates to our reportable segments.
The six reportable segments are: Individual Retirement, Group Retirement, Investment Management and Research,
Protection Solutions, Wealth Management and Legacy.
These segments reflect the manner by which the Company’s chief operating decision maker views and manages the
business. A brief description of these segments follows:
•
•
•
•
•
•
The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily
sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans
sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-
sized businesses.
The Investment Management and Research segment provides diversified investment management, research,
and related solutions globally to a broad range of clients through three main client channels - Institutional,
Retail and Private Wealth - and distributes its institutional research products and solutions through Bernstein
Research Services.
The Protection Solutions segment includes our life insurance and group employee benefits businesses. Our
life insurance business offers a variety of VUL, UL and term life products to help affluent and high net worth
individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer
and corporate needs. Our group employee benefits business offers a suite of life, and short- and long-term
disability, dental and vision insurance products to small and medium-size businesses across the United States.
The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts,
financial planning and advice, life insurance, and annuity products through Equitable Advisors.
The Legacy segment primarily consists of the capital intensive fixed-rate GMxB business written in the
Individual Retirement market prior to 2011. This business offered GMDB features in isolation or together
with GMLB features. This business also historically offered variable annuities with four types of guaranteed
living benefit riders: GMIB, GWBL/GMWB, and GMAB.
Measurement
Operating earnings (loss) is the financial measure which primarily focuses on the Company’s segments’ results of
operations as well as the underlying profitability of the Company’s core business. By excluding items that can be
distortive and unpredictable such as investment gains (losses) and investment income (loss) from derivative
instruments, the Company believes operating earnings (loss) by segment enhances the understanding of the
Company’s underlying drivers of profitability and trends in the Company’s segments.
Operating earnings is calculated by adjusting each segment’s net income (loss) attributable to Holdings for the
following items:
•
•
•
Items related to variable annuity product features, which include: (i) changes in the fair value of market risk
benefits and purchased market risk benefits, including the related attributed fees and claims, offset by
derivatives and other securities used to hedge the market risk benefits which result in residual net income
volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital
hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance
agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance
risk;
Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals
of securities/investments, realized capital gains/losses and valuation allowances;
Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual
and expected experience on pension plan assets or projected benefit obligation during a given period related
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined
benefit obligation;
•
•
Other adjustments, which primarily include restructuring costs related to severance and separation, lease
write-offs related to non-recurring restructuring activities, COVID-19 related impacts, net derivative gains
(losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated
VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses and realized capital gains/
losses from sales or disposals of select securities, certain legal accruals; a bespoke deal to repurchase UL
policies from one entity that had invested in numerous policies purchased in the life settlement market, which
disposed of the risk of additional COI litigation by that entity related to those UL policies, impact of the
annual actuarial assumption updates attributable to LFPB; and
Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect
of uncertain tax positions for a given audit period and a decrease of deferred tax valuation allowance.
The General Account investment portfolio is used to support the insurance and annuity liabilities of our Individual
Retirement, Group Retirement, Protection Solutions and Legacy business segments.
In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual
actuarial assumption update attributable to LFPB as the majority of the earnings volatility attributable to these
assumption updates relate to the Company’s Legacy and non-business segment products and as such do not represent
the Company’s ongoing revenue generating activities or future business strategy, and impede comparability of
operating results period over period. Operating earnings were favorably impacted by this change in the amount of
$61 million for the year ended December 31, 2023. The presentation of operating earnings in prior periods was not
revised to reflect this modification because the impact to those periods was immaterial.
Also, in the fourth quarter of 2023, the Company updated its operating earnings measure to exclude the impact of
realized amounts related to equity classified instruments. The recognition of the realized capital gains and losses from
investments in current net investment income is generally considered distortive and not reflective of the ongoing core
business activities of the segments. Operating earnings were favorably impacted in the amount of $8 million for the
year ended December 31, 2023. The presentation of operating earnings in prior periods was not revised to reflect this
modification. The impact to operating earnings would have been $36 million favorable for the year ended December
31, 2022 and $50 million unfavorable for the year ended December 31, 2021.
Revenues derived from any customer did not exceed 10% of revenues for the years ended December 31, 2023, 2022
and 2021.
The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at
current market prices.
The table below presents operating earnings (loss) by segment and Corporate and Other and a reconciliation to net
income (loss) attributable to Holdings:
Net income (loss) attributable to Holdings
Adjustments related to:
Variable annuity product features (6)
Investment (gains) losses
Net actuarial (gains) losses related to pension and other postretirement benefit
obligations
Other adjustments (1) (2) (3)
Income tax expense (benefit) related to above adjustments
Non-recurring tax items (5)
Non-GAAP Operating Earnings
Year Ended December 31,
2023
2022
(in millions)
2021
$
1,302 $
2,153 $
1,755
607
713
(2,193)
945
39
351
(359)
(959)
1,694 $
82
605
118
16
1,726 $
$
1,115
(867)
120
628
(208)
12
2,555
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Operating earnings (loss) by segment:
Individual Retirement
Group Retirement
Investment Management and Research
Protection Solutions
Wealth Management
Legacy
Corporate and Other (4)
Year Ended December 31,
2023
2022
(in millions)
2021
$
$
$
$
$
$
$
850 $
399 $
411 $
51 $
159 $
186 $
(362) $
762 $
446 $
424 $
97 $
101 $
235 $
(339) $
794
579
564
262
58
522
(224)
______________
(1)
(2)
Includes separation costs of $82 million for the years ended December 31, 2021. Separation costs were completed during 2021.
Includes certain legal accruals related to the COI litigation of $144 million, $218 million and $207 million for the years ended December
31, 2023, 2022 and 2021, respectively. Includes policyholder benefit costs of $75 million for the year ended December 31, 2022
stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement
market. Includes the impact of annual actuarial assumptions updates related to LFPB of $61 million for the year ended December 31,
2023. Prior period impact was immaterial and was not revised.
Includes Non-GMxB related derivative hedge gains and losses of $26 million, $(34) million and $0 million for the years ended
December 31, 2023, 2022 and 2021, respectively.
Includes interest expense and financing fees of $229 million, $205 million and $242 million for the year ended December 31, 2023, 2022
and 2021, respectively.
(3)
(4)
(5) For the year ended December 31, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit
(6)
period and a decrease of the deferred tax valuation allowance of $1.0 billion.
Includes the impact of favorable assumption updates of $40 million for the year ended December 31, 2023. Includes the impact of
unfavorable assumption updates of $204 million for the year ended December 31, 2022.
Segment revenues is a measure of the Company’s revenue by segment as adjusted to exclude certain items. The
following table reconciles segment revenues to total revenues by excluding the following items:
•
•
•
Items related to variable annuity product features, which include certain changes in the fair value of the
derivatives and other securities we use to hedge these features and changes in the fair value of the embedded
derivatives reflected within the net derivative results of variable annuity product features;
Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals
of securities/investments, realized capital gains/losses and valuation allowances;
Other adjustments, which primarily includes net derivative gains (losses) on certain Non-GMxB derivatives
and net investment income from certain items including consolidated VIE investments, seed capital mark-to-
market adjustments and unrealized gain/losses associated with equity securities.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
The table below presents revenues by segment and Corporate and Other:
Segment revenues:
Individual Retirement (1)
Group Retirement (1)
Investment Management and Research (2)
Protection Solutions (1)
Wealth Management (3)
Legacy (1)
Corporate and Other (1)
Eliminations
Adjustments related to:
Variable annuity product features
Investment gains (losses), net
Other adjustments to segment revenues
Total revenues
Year Ended December 31,
2023
2022
2021
(in millions)
$
2,643 $
1,021
4,117
3,180
1,551
801
1,118
(810)
2,028 $
1,158
4,105
3,120
1,446
819
1,989
1,371
4,430
3,179
1,437
1,229
910
(760)
1,021
(779)
(607)
(713)
(1,773)
2,193
(945)
(1,430)
$ 10,528 $ 12,644 $
1,115
(867)
(6,511)
7,614
______________
(1)
Includes investment expenses charged by AB of $140 million, $110 million and $96 million for the years ended December 31, 2023,
2022 and 2021, respectively, for services provided to the Company.
Inter-segment investment management and other fees of $160 million, $134 million and $126 million for the years ended December 31,
2023, 2022 and 2021, respectively, are included in segment revenues of the Investment Management and Research segment.
Inter-segment distribution fees of $752 million, $736 million and $748 million for the years ended December 31, 2023, 2022 and 2021,
respectively, are included in segment revenues of the Wealth Management segment.
(2)
(3)
Total assets by segment were as follows:
Total assets by segment:
Individual Retirement
Group Retirement
Investment Management and Research
Protection Solutions
Wealth Management
Legacy
Corporate and Other
Total assets
22)
EQUITY
December 31,
2023
2022
(in millions)
$
$
90,805 $
47,260
11,088
38,933
144
49,487
39,097
276,814 $
77,641
42,421
12,633
37,224
137
48,231
34,415
252,702
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Preferred Stock
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Preferred stock authorized, issued and outstanding was as follows:
Series
Series A
Series B
Series C
Total
2023
Shares
Issued
32,000
20,000
12,000
64,000
December 31,
Shares
Outstanding
32,000
20,000
12,000
64,000
Shares
Authorized
32,000
20,000
12,000
64,000
Shares
Authorized
32,000
20,000
12,000
64,000
2022
Shares
Issued
32,000
20,000
12,000
64,000
Shares
Outstanding
32,000
20,000
12,000
64,000
Series A Fixed Rate Noncumulative Perpetual Preferred Stock
In November and December 2019, Holdings’ issued a total of 32 million depositary shares, each representing a
1/1,000th interest in share of Series A Preferred Stock, $1.00 par value per share, with a liquidation preference of
$25,000 per share, for aggregate net cash proceeds of $775 million ($800 million gross). The preferred stock ranks
senior to Holdings’ common stock with respect to the payment of dividends and liquidation. Holdings’ will pay
dividends on the Series A Preferred Stock on a noncumulative basis only when, as and if declared by the Company’s
Board of Directors (or a duly authorized committee of the Board) and will be payable quarterly in arrears, at an annual
rate of 5.25% on the stated amount per share. In connection with the issuance of the depositary shares and the
underlying Series A Preferred Stock, Holdings’ incurred $25 million of issuance costs, which has been recorded as a
reduction of additional paid-in capital. The Series A Preferred Stock is redeemable at Holdings’ option in whole or in
part, on or after December 15, 2024, at a redemption price of $25,000 per share of preferred stock, plus declared and
unpaid dividends. Prior to December 25, 2024, the preferred stock is redeemable at Holdings’ option, in whole but not
in part, within 90 days of the occurrence of certain rating agency events at a redemption price equal to $25,500 per
share, plus declared and unpaid dividends or certain regulatory capital events at a redemption price equal to $25,000
per share, plus any declared and unpaid dividends.
Series B Fixed Rate Reset Noncumulative Perpetual Preferred Stock
On August 11, 2020, Holdings issued 500,000 depositary shares, each representing a 1/25th interest in a share of
Series B Preferred Stock, $1.00 par value per share and liquidation preference of $25,000 per share, for aggregate net
cash proceeds of $494 million ($500 million gross). The Series B Preferred Stock ranks senior to Holdings’ common
stock and on parity with Holdings’ Series A Preferred Stock with respect to the payment of dividends and liquidation.
Holdings will pay dividends on the Series B Preferred Stock on a noncumulative basis only when, as and if declared
by the Company’s Board of Directors (or a duly authorized committee of the Board) and will be payable semi-annually
in arrears, at an annual rate equal to the fixed rate of 4.950%, which is reset every 5 years starting on December 15,
2025 (“Reset Date”), at a rate per annum equal to the five-year U.S. Treasury Rate plus 4.736%.
In connection with the issuance of the depositary shares and the underlying Series B Preferred Stock, Holdings
incurred $6 million of issuance costs, which have been recorded as a reduction of additional paid-in capital. The Series
B Preferred Stock is redeemable at Holdings’ option in whole or in part, from time to time, during the three-month
period prior to, and including, each Reset Date, at a redemption price equal to $25,000 per share of preferred stock,
plus any declared and unpaid dividends. Furthermore, the preferred stock is redeemable at Holdings’ option, in whole
but not in part at any time, within 90 days after the occurrence of certain rating agency events at a redemption price
equal to $25,500 per share, plus any declared and unpaid dividends or after the occurrence of certain regulatory capital
events at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends.
Series C Fixed Rate Reset Noncumulative Perpetual Preferred Stock
On January 8, 2021, Holdings issued 12,000,000 depositary shares, each representing a 1/1,000th interest in a share of
the Company’s Series C Fixed Rate Noncumulative Perpetual Preferred Stock (“Series C Preferred Stock”), $1.00 par
value per share and liquidation preference of $25,000 per share, for aggregate net cash proceeds of $293 million ($300
million gross). The Series C Preferred Stock ranks senior to Holdings’ common stock and on parity with Holdings’
Series A Preferred Stock and Series B Preferred Stock with respect to the payment of dividends and liquidation.
Holdings will pay dividends on the Series C Preferred Stock on a noncumulative basis only when, as and if declared
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
by the Company’s Board of Directors (or a duly authorized committee of the Board) and will be payable quarterly in
arrears, at an annual rate equal to the fixed rate of 4.3%.
Dividends to Shareholders
Dividends declared per share were as follows for the periods indicated:
Series A dividends declared
Series B dividends declared
Series C dividends declared
Common Stock
Year ended December 31,
2023
2022
2021
$
$
$
1,313 $
1,238 $
1,075 $
1,313 $
1,238 $
1,075 $
1,313
1,238
1,006
Dividends declared per share of common stock were as follows for the periods indicated:
Dividends declared
Share Repurchase
Year Ended December 31,
2023
2022
2021
$
0.86 $
0.78 $
0.71
On February 5, 2024, the Company’s Board of Directors authorized a new $1.3 billion share repurchase program. The
$1.3 billion authorization is in addition to the previously authorized $700 million share repurchase program, which as
of December 31, 2023 had $158 million of authorized capacity remaining. Under these programs, the Company may,
from time to time purchase shares of its common stock through various means. The Company may choose to suspend
or discontinue the repurchase program at any time. The repurchase program does not obligate the Company to
purchase any particular number of shares.
For the years ended December 31, 2023, 2022 and 2021, the Company repurchased approximately 32.8 million, 28.2
million and 51.9 million shares of its common stock at a total cost of approximately $0.9 billion, $0.8 billion and $1.6
billion, respectively through open market repurchases, ASRs and privately negotiated transactions. The repurchased
common stock was recorded as treasury stock in the consolidated balance sheets. For the years ended December 31,
2023, 2022 and 2021, the Company reissued approximately 1.5 million, 2.0 million and 2.3 million shares of its
treasury stock, respectively. For the year ended December 31, 2023, 2022 and 2021, the Company retired
approximately 17.4 million, 12.5 million, and 32.0 million shares of its treasury stock, respectively.
The timing and amount of share repurchases are determined by management based upon market conditions and other
considerations. Numerous factors could affect the timing and amount of any future repurchases under the share
repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital
requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.
Accelerated Share Repurchase Agreement
In December 2023 Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$39 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a pre-payment of $39 million and
received initial delivery of 0.9 million Holdings’ shares. The ASR terminated in January 2024, at which time an
additional 256,197 shares of common stock were received.
In September 2023, Holdings established an obligation to enter into an ASR with a third-party financial institution to
repurchase an aggregate of $80 million of Holdings’ common stock. Pursuant to the ASR, on October 4, 2023,
Holdings made a pre-payment of $80 million and received initial delivery of 2.3 million shares. The ASR terminated
in October 2023, at which time an additional 596,000 shares of common stock were received.
In September 2023, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$70 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a pre-payment of $70 million and
received initial delivery of 2.0 million Holdings’ shares. The ASR terminated in October 2023, at which time an
additional 555,000 shares of common stock were received.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
In June 2023, Holdings established an obligation to enter into an ASR with a third-party financial institution to
repurchase an aggregate of $70 million of Holdings’ common stock. Pursuant to the ASR, on July 6, 2023, Holdings
made a pre-payment of $70 million and received initial delivery of 2.0 million shares. The ASR terminated in August
2023, at which time an additional 464,000 shares of common stock were received.
In June 2023, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$75 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a pre-payment of $75 million and
received initial delivery of 2.4 million Holdings’ shares. The ASR terminated in July 2023, at which time an additional
369,000 shares of common stock were received.
In April 2023, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$75 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a pre-payment of $75 million and
received initial delivery of 2.4 million Holdings’ shares. The ASR terminated in May 2023, at which time an additional
598,000 shares of common stock were received.
In January 2023, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$75 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a pre-payment of $75 million and
received initial delivery of 2 million Holdings’ shares. The ASR terminated in February 2023, at which time an
additional 424,000 shares of common stock were received.
In April 2022, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of $100
million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $100 million and initially
received 2.6 million shares. The ASR terminated during April 2022, at which time 684,700 additional shares of
common stock were received.
In May 2022, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of $150
million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $150 million and initially
received 4.3 million shares. The ASR terminated during July 2022, at which time 1.2 million additional shares of
common stock were received.
In September 2022, Holdings entered into an ASR contract with a third-party financial institution to repurchase an
aggregate of $37.5 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $37.5
million and received initial delivery of 1.1 million shares. The ASR terminated during November 2022, at which time
0.2 million additional shares of common stock were received.
In December 2022, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$61 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $61 million and
initially received 1.7 million shares. The ASR terminated during February 2023, at which time an additional
0.3 million shares of common stock were received.
In January 2021, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of
$170 million of Holdings’ common stock. The ASR terminated during the first quarter of 2021, for a total of 6.3
million shares delivered. Shares repurchased under the ASR were retired upon receipt resulting in a reduction of
Holdings’ total issued shares as of March 31, 2021.
238
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
In March 2021, Holdings entered into an ASR contract with a third-party financial institution to repurchase an
aggregate of $200 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $200
million and received initial delivery of 4.9 million shares. The ASR terminated during May 2021, at which time
additional shares of 1.1 million were received.
On June 30, 2021, Holdings established an obligation to enter into an ASR with a third-party financial institution to
repurchase an aggregate of $300 million of Holdings’ common stock. Pursuant to the ASR, on July 2, 2021, Holdings
made a prepayment of $300 million to receive initial delivery of shares. The ASR terminated during the third quarter
of 2021 and a total of 9.9 million shares were received. Shares repurchased under the ASR were retired upon receipt
resulting in a reduction of Holdings’ total issued shares as of September 30, 2021.
In September 2021, Holdings entered into an ASR contract with a third-party financial institution to repurchase an
aggregate of $200 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $200
million and received initial delivery of 5.6 million shares. The ASR terminated during November 2021, at which time
additional shares of 0.6 million were received.
On December 22, 2021, Holdings entered into an ASR contract with a third-party financial institution to repurchase an
aggregate of $140 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $140
million and received initial delivery of 3.4 million shares. The ASR terminated during January 2022, at which time
additional shares of 0.7 million were received. Shares repurchased under the ASR were retired upon receipt resulting
in a reduction of Holdings’ total issued shares as of December 31, 2021.
Accumulated Other Comprehensive Income (Loss)
AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances were as
follows:
Unrealized gains (losses) on investments
Market risk benefits - instrument-specific credit risk component
Liability for future policy benefits - current discount rate component
Defined benefit pension plans
Foreign currency translation adjustments
Total accumulated other comprehensive income (loss)
$
Less: Accumulated other comprehensive income (loss) attributable to noncontrolling interest
Accumulated other comprehensive income (loss) attributable to Holdings
$
The components of OCI, net of taxes were as follows:
December 31,
2023
2022
(in millions)
(6,638) $
(633)
182
(652)
(76)
(7,817)
(40)
(7,777) $
(9,324)
668
355
(650)
(91)
(9,042)
(50)
(8,992)
Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period (1)
(Gains) losses reclassified into net income (loss) during the period (2)
Net unrealized gains (losses) on investments
Adjustments for policyholders’ liabilities, insurance liability loss recognition and
other
Change in unrealized gains (losses), net of adjustments (net of
deferred income tax expense (benefit) of $206,$(1,364) and $(654))
Change in LFPB discount rate and MRB credit risk, net of tax
Changes in market risk benefits - instrument-specific credit risk (net of
deferred income tax expense (benefit) of $(273), $332 and $13)
Changes in liability for future policy benefits - current discount rate (net of
deferred income tax expense (benefit) of $(36), $285 and $74)
239
Year Ended December 31,
2023
2022
2021
(in millions)
$
1,954 $ (13,637) $
445
2,399
685
(12,952)
(2,467)
(698)
(3,165)
(22)
346
704
2,377
(12,606)
(2,461)
(1,027)
1,249
(137)
1,074
50
279
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
Change in defined benefit plans:
Reclassification to Net income (loss) of amortization of net prior service credit
included in net periodic cost (3)
Change in defined benefit plans (net of deferred income tax expense
(benefit) of $3, $(1) and $68)
Foreign currency translation adjustments:
Foreign currency translation gains (losses) arising during the period
Foreign currency translation adjustment
Total other comprehensive income (loss), net of income taxes
Less: Other comprehensive income (loss) attributable to noncontrolling interest
Other comprehensive income (loss) attributable to Holdings
Cumulative effect of adoption of ASU 2018-02, Long Duration Targeted
Improvements (net of deferred income tax expense (benefit) of $0, $0 and $(181))
Change in accumulated other comprehensive income (loss) attributable to
Holdings
Year Ended December 31,
2023
2022
2021
(in millions)
(3)
(3)
18
18
266
266
15
15
1,225
10
(46)
(46)
(10,311)
(16)
1,215 $ (10,295) $
(11)
(11)
(1,877)
1
(1,878)
$
—
—
(682)
$
1,215 $ (10,295) $
(2,560)
______________
(1) For 2022, unrealized gains (losses) arising during the period is presented net of a valuation allowance of $1.6 billion established during
the fourth quarter of 2022. The Company established the valuation allowance against its deferred tax assets related to unrealized capital
losses in the available for sale securities portfolio.As of December 31, 2023, a valuation allowance of $234 million remains against the
portion of the deferred tax asset that is still not more-likely-than-not to be realized. See Note 18 of the Notes to these Consolidated
Financial Statements for details on the valuation allowance.
(2) See “Reclassification adjustment” in Note 3 of the Notes to these Consolidated Financial Statements. Reclassification amounts presented
net of income tax expense (benefit) of $(118) million, $(182) million, and $186 million for the years ended December 31, 2023, 2022
and 2021, respectively.
(3) These AOCI components are included in the computation of net periodic costs. See Note 16 of the Notes to these Consolidated Financial
Statements.
Investment gains and losses reclassified from AOCI to net income (loss) primarily consist of realized gains (losses) on
sales and credit losses of AFS securities and are included in total investment gains (losses), net on the consolidated
statements of income (loss). Amounts reclassified from AOCI to net income (loss) as related to defined benefit plans
primarily consist of amortization of net (gains) losses and net prior service cost (credit) recognized as a component of
net periodic cost and reported in compensation and benefits in the consolidated statements of income (loss). Amounts
presented in the table above are net of tax.
240
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
23)
EARNINGS PER COMMON SHARE
The following table presents a reconciliation of net income (loss) and weighted-average common shares used in calculating
basic and diluted EPS for the periods indicated:
Weighted-average common shares outstanding:
Weighted-average common shares outstanding — basic
Effect of dilutive securities:
Employee share awards (1)
Weighted-average common shares outstanding — diluted
Net income (loss):
Net income (loss)
Less: Net income (loss) attributable to the noncontrolling interest
Net income (loss) attributable to Holdings
Less: Preferred stock dividends
Net income (loss) available to Holdings’ common shareholders
EPS:
Basic
Diluted
_____________
(1) Calculated using the treasury stock method.
Year Ended December 31,
2023
2022
(in millions)
2021
350.1
377.6
417.4
1.5
351.6
2.3
379.9
1,643 $
341
1,302
80
1,222 $
2,394 $
241
2,153
80
2,073 $
3.8
421.2
2,170
415
1,755
79
1,676
3.49 $
3.48 $
5.49 $
5.46 $
4.02
3.98
$
$
$
$
For the years ended December 31, 2023, 2022 and 2021, 3.5 million, 3.9 million, and 4.4 million of outstanding stock
awards, respectively, were not included in the computation of diluted EPS because their effect was anti-dilutive.
24)
REDEEMABLE NONCONTROLLING INTEREST
The changes in the components of redeemable noncontrolling interests were as follows:
Balance, beginning of period
Net earnings (loss) attributable to redeemable noncontrolling interests
Purchase/change of redeemable noncontrolling interests
Balance, end of period
25)
HELD-FOR-SALE
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
455 $
44
271
770 $
468 $
(59)
46
455 $
143
5
320
468
Assets and liabilities related to the business classified as HFS are separately reported in the consolidated balance sheets
beginning in the period in which the business is classified as HFS.
AB Bernstein Research Services
On November 22, 2022, AB and Société Générale, a leading European bank, announced plans to form a joint venture
combining their respective cash equities and research businesses (the “Initial Plan”). In the Initial Plan, AB would own
a 49% interest in the joint venture and Société Générale would own a 51% interest in the joint venture, with an option
to reach 100% ownership after five years.
241
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements, Continued
During the fourth quarter of 2023, AB and Société Générale negotiated a revised plan (the “Revised Plan”) to form a
North American joint venture (the “NA JV”) and an International joint venture (the “International JV”). Under the
Revised plan, AB would own a majority economic and voting interest in the NA JV and a 49% economic and voting
interest in the International JV. The Revised Plan, as compared to the Initial Plan, will not have a significant impact on
results of operations or financial condition.
Société Générale will continue to have an option to reach 100% ownership in the International JV after five years and
AB would have an option to sell its share in both joint ventures to Société Générale, subject to regulatory approval.
The consummation of the joint ventures is subject to customary closing conditions, including regulatory clearances.
The closings are expected to occur in the first half of 2024. The structure of the Board of Directors of the NA JV
Holding Company, which will include two independent directors, precludes AB from controlling the Board and
therefore from having a controlling financial interest in the entity. Upon review of the consolidation guidance under
U.S. GAAP, AB has concluded they will not consolidate the NA JV Holding Company and will maintain an equity
method investment in both the NA JV and the International JV Holding companies.
Accordingly, the assets and liabilities of AB's research services business recorded at fair value, less cost to sell have
been classified as held-for-sale in our Consolidated Financial Statements. As a result of classifying these assets as
held-for-sale, AB recognized a non-cash valuation adjustment of $7 million and $7 million on the consolidated
statement of income, to recognize the net carrying value at lower of cost or fair value, less costs to sell for the years
ended December 31, 2023 and as of December 31, 2022, respectively. Approximately $7 million in costs to sell have
been paid as of December 31, 2023.
The following table summarizes the assets and liabilities classified as held-for-sale on the Company’s consolidated
balance sheets:
Cash and cash equivalents
Broker-dealer related receivables
Trading securities, at fair value
Goodwill and other intangible assets ,net
Other assets (2)
Total assets held-for-sale
Broker-dealer related payables
Customers related payables
Other liabilities
Total liabilities held-for-sale
December 31,
2023 (1)
2022 (1)
(in millions)
153 $
107
17
164
124
565 $
39 $
17
97
153 $
159
74
25
175
129
562
33
10
65
108
$
$
$
$
____________
(1) The assets and liabilities classified as held-for-sale are reported within our Investment Management & Research segment.
(2) Other assets includes a valuation adjustment decrease of $7 million and $7 million, as of December 31, 2023 and 2022,
respectively.
These assets and liabilities are reported under the Investment Management & Research segment. The Company has
determined that AB’s exit from the research business did not represent a strategic shift that had a major effect on AB’s
or the Company’s consolidated results of operations, and therefore, are not classified as discontinued operations.
26)
SUBSEQUENT EVENTS
In December 2023, Holdings established an obligation to enter into an ASR with a third-party financial institution to
repurchase an aggregate of $95 million of Holdings’ common stock. Pursuant to the ASR, on January 4, 2024,
Holdings made a pre-payment of $95 million and received initial delivery of 2.3 million shares. The ASR terminated
in January 2024, at which time an additional 625,040 shares of common stock were received.
242
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EQUITABLE HOLDINGS, INC.
SCHEDULE I
SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN RELATED PARTIES
AS OF DECEMBER 31, 2023
Fixed maturities, AFS:
U.S. government, agencies and authorities
State, municipalities and political subdivisions
Foreign governments
Public utilities
All other corporate bonds
Residential mortgage-backed
Asset-backed
Commercial mortgage-backed
Redeemable preferred stocks
Total fixed maturities, AFS
Fixed maturities, at fair value using the fair value option
Mortgage loans on real estate (2)
Policy loans
Other equity investments
Trading securities
Other invested assets
Total Investments
Cost (1)
Fair Value
(in millions)
Carrying
Value
$
$
5,735 $
614
719
6,859
42,927
2,470
11,058
3,595
56
74,033
1,692
18,152
4,158
3,126
1,005
6,719
108,885 $
4,631 $
549
611
6,075
38,667
2,355
11,001
3,082
59
67,030
1,654
16,471
4,485
3,384
1,057
6,719
100,800 $
4,631
549
611
6,075
38,667
2,355
11,001
3,082
59
67,030
1,654
18,171
4,158
3,384
1,057
6,719
102,173
______________
(1) Cost for fixed maturities represents original cost, reduced by repayments and write-downs and adjusted for amortization of premiums or
accretion of discount; cost for equity securities represents original cost reduced by write-downs; cost for other limited partnership
interests represents original cost adjusted for equity in earnings and reduced by distributions.
(2) Carrying value for mortgage loans on real estate represents original cost adjusted for amortization of premiums or accretion of discount
and reduced by credit loss allowance.
243
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EQUITABLE HOLDINGS, INC.
SCHEDULE II
Balance Sheets (Parent Company)
December 31, 2023 and 2022
ASSETS
Investment in consolidated subsidiaries
Fixed maturities available-for-sale, at fair value (amortized cost of $507 and $737)
Other equity investments
Other invested assets
Total investments
Cash and cash equivalents
Goodwill and other intangible assets, net
Loans to affiliates
Receivable from affiliates
Current and deferred income taxes assets
Other assets
Total Assets
LIABILITIES
Short-term debt
Long-term debt
Employee benefits liabilities
Loans from affiliates
Payable to affiliates
Other liabilities
Total Liabilities
December 31,
2023
2022
(in millions, except share amounts)
$
$
$
$
3,972 $
487
119
—
4,578
1,392
1,229
900
728
696
168
9,691 $
— $
3,820
798
1,900
494
30
7,042 $
2,652
693
139
448
3,932
711
1,242
990
714
541
265
8,395
520
3,322
777
1,900
394
81
6,994
EQUITY ATTRIBUTABLE TO HOLDINGS
Preferred stock and additional paid-in capital, $1 par value and $25,000 liquidation
preference
Common stock, $0.01 par value, 2,000,000,000 shares authorized; 491,003,966 and
508,418,442 shares issued, respectively; 333,877,990 and 365,081,940 shares
outstanding, respectively
Additional paid-in capital
Treasury stock, at cost, 157,125,976 and 143,336,502 shares, respectively
Retained earnings
Accumulated other comprehensive income (loss)
Total equity attributable to Holdings
Total Liabilities and Equity Attributable to Holdings
$
1,562 $
1,562
5
2,328
(3,712)
10,243
(7,777)
2,649
9,691 $
$
4
2,299
(3,297)
9,825
(8,992)
1,401
8,395
The financial information of Equitable Holdings, Inc. should be read in conjunction with the Consolidated Financial Statements
and Notes thereto.
244
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EQUITABLE HOLDINGS, INC.
SCHEDULE II
STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (PARENT COMPANY)
YEARS ENDED DECEMBER 31, 2023, 2022, AND 2021
Year Ended December 31,
2023
2022
(in millions)
2021
REVENUES
Equity in income (losses) from continuing operations of consolidated subsidiaries
Net investment income (loss)
Investment gains (losses), net
Total revenues
$
1,355 $
106
—
1,461
2,282 $
66
—
2,348
EXPENSES
Interest expense
Other operating costs and expenses
Total expenses
Income (loss) from continuing operations, before income taxes
Income tax (expense) benefit
Net income (loss) attributable to Holdings
Less: Preferred stock dividends
Net income (loss) available to Holdings' common shareholders
291
37
328
1,133
169
1,302
80
1,222 $
248
33
281
2,067
86
2,153
80
2,073 $
$
2,042
26
(12)
2,056
241
58
299
1,757
(2)
1,755
79
1,676
COMPREHENSIVE INCOME (LOSS)
Net income (loss)
Other comprehensive income (loss) net of income taxes:
Change in net unrealized gains (losses) on investments
Change in defined benefit plans
Equity in net other comprehensive income (loss) from continuing operations of
consolidated subsidiaries
Total other comprehensive income (loss), net of income taxes
Comprehensive income (loss)
$
1,302 $
2,153 $
1,755
24
(10)
(6)
10
(85)
251
1,201
1,215
2,517 $
(10,299)
(10,295)
(8,142) $
(2,726)
(2,560)
(805)
$
The financial information of Equitable Holdings, Inc. should be read in conjunction with the Consolidated Financial Statements
and Notes thereto.
245
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EQUITABLE HOLDINGS, INC.
SCHEDULE II
STATEMENTS OF CASH FLOWS (PARENT COMPANY)
YEARS ENDED DECEMBER 31, 2023, 2022, AND 2021
Net income (loss) attributable to Holdings
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Equity in net (earnings) loss of subsidiaries
Non-cash long term incentive compensation expense
Amortization and depreciation
Equity (income) loss limited partnerships
Dividends from subsidiaries
Changes in:
Current and deferred taxes
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale
Short-term investments
Other
Payment for the purchase/origination of:
Fixed maturities, available-for-sale
Short-term investments
Other
Net issuance on credit facilities to affiliates
Proceeds from the sale of subsidiary
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Issuance of preferred stock
Issuance of long-term debt
Change in short-term financings
Repayment of long-term debt
Proceeds from loans from affiliates
Shareholder dividends paid
Preferred dividends paid
Purchase of treasury shares
Capital contribution to subsidiaries
Other, net
Net cash provided by (used in) financing activities
Change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental cash flow information:
Interest paid
Income taxes (refunded) paid
Non-cash transactions from investing and financing activities:
Change in investment in subsidiary from issuance of AB Units for CarVal acquisition
Non-cash dividends from subsidiaries
Dividend of AB Units from subsidiary
2023
Year Ended December 31,
2022
(in millions)
2021
$
1,302 $
2,153 $
1,755
(1,355)
13
46
6
2,442
(2,282)
64
57
(29)
1,801
(150)
90
2,394 $
83
(23)
1,824 $
228 $
1,000
—
(10)
(544)
(10)
90
—
754 $
— $
497
(520)
—
—
(301)
(80)
(919)
(1,142)
(2)
(2,467) $
681
711
1,392 $
131 $
550
5
—
(1,000)
(16)
(235)
—
(565) $
— $
—
—
—
—
(294)
(80)
(849)
(225)
33
(1,415) $
(156)
867
711 $
185 $
2 $
185 $
153 $
— $
— $
— $
314 $
22 $
— $
(2,042)
15
60
(19)
792
(151)
14
424
210
—
—
—
—
(7)
(80)
215
338
293
—
—
(280)
1,000
(296)
(79)
(1,637)
(815)
(53)
(1,867)
(1,105)
1,972
867
209
153
—
—
23
$
$
$
$
$
$
$
$
$
$
$
The financial information of Equitable Holdings, Inc. should be read in conjunction with the Consolidated Financial Statements
and Notes thereto.
246
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EQUITABLE HOLDINGS, INC.
SCHEDULE II
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
1)
BASIS OF PRESENTATION
The financial information of Holdings should be read in conjunction with the Consolidated Financial Statements and
Notes thereto. The Company is the holding company for a diversified financial services organization.
2)
LOANS TO AFFILIATES
On November 4, 2019, Holdings made available to AB a $900 million committed, unsecured senior credit facility (the
“EQH Facility”). The EQH Facility matures on November 4, 2024 and is available for AB's general business purposes.
Borrowings by AB under the EQH Facility generally bear interest at a rate per annum based on prevailing overnight
commercial paper rates. The EQH Facility contains affirmative, negative and financial covenants which are
substantially similar to those in AB’s committed bank facilities. The EQH Facility also includes customary events of
default substantially similar to those in AB’s committed bank facilities, including provisions under which, upon the
occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment may be
terminated. Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by AB from time to time until
the maturity of the facility. AB or Holdings may reduce or terminate the commitment at any time without penalty upon
proper notice. Holdings also may terminate the facility immediately upon a change of control of the general partner. In
As of both December 31, 2023 and 2022, $900 million was outstanding under the EQH Facility with interest rates of
approximately 5.3% and 4.3%, respectively.
3)
LOANS FROM AFFILIATES
In June 2021, Holdings received a $1.0 billion 10-year term loan from Equitable Financial. The loan has an interest
rate of 3.23% and matures in June 2031. The amount outstanding on the loan at both December 31, 2023 and 2022,
was $1.0 billion.
In November 2019, Holdings received a $900 million loan from Equitable Financial. The loan has an interest rate of
one- month LIBOR plus 1.33%. The loan matures on November 4, 2024. The amount outstanding on the loan at both
December 31, 2023 and 2022 was $900 million.
Interest cost related to loans from affiliates totaled $90 million, $60 million and $30 million for the years ended
December 31, 2023, 2022 and 2021, respectively.
4)
INCOME TAXES
Holdings and certain of its consolidated subsidiaries and affiliates file a consolidated federal income tax return.
Holdings has tax sharing agreements with certain of its subsidiaries and generally will either receive or pay these
subsidiaries for utilization of the subsidiaries’ tax benefits or expense. Holdings settles these amounts annually.
5)
ISSUANCE OF SERIES A, SERIES B AND SERIES C FIXED RATE NONCUMULATIVE PERPETUAL
PREFERRED STOCK
See Note 22 of the Notes to the Consolidated Financial Statements.
6)
SHARE REPURCHASE
See Note 22 of the Notes to the Consolidated Financial Statements.
247
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EQUITABLE HOLDINGS, INC.
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2023
Deferred policy acquisition
costs
Policyholders’ account
balances
Future policy benefits and
other policyholders'
liabilities
Policy charges and
premium revenue
Net derivative gains
(losses)
Net investment income
(loss)
Policyholders’ benefits and
interest credited
Amortization of deferred
policy acquisition costs
All other operating
expenses (1)
Deferred policy acquisition
costs
Policyholders’ account
balances
Future policy benefits and
other policyholders'
liabilities
Policy charges and
premium revenue
Net derivative gains
(losses)
Net investment income
(loss)
Policyholders’ benefits and
interest credited
Amortization of deferred
policy acquisition costs
All other operating
expenses (1)
Individual
Retirement
Group
Retirement
Investment
Management
and Research
Protection
Solutions
Wealth
Management Legacy
Corporate
and Other
Elim-
inations
Total
(in millions)
$ 3,508 $
825 $
— $ 1,700 $
— $ 555 $
117 $ — $ 6,705
53,447
12,520
—
14,844
—
618
14,244
—
95,673
906
660
—
268
—
4,984
—
3,633
7,840
—
17,363
—
2,104
—
155
297
—
3,484
(2,333)
(5)
(16)
(19)
—
—
(43)
19
(2,397)
1,653
781
388
498
215
59
49
938
13
242
844
83
4,320
—
2,488
—
262
1,091
—
4,837
(145)
267
3,350
—
120
665
—
63
11
—
641
1,343
(954)
596
(810) 4,312
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2022
Individual
Retirement
Group
Retirement
Investment
Management
and Research
Protection
Solutions
Wealth
Management Legacy
Corporate
and Other
Elim-
inations
Total
(in millions)
$ 3,219 $
800 $
— $ 1,630 $
— $ 593 $
127 $ — $ 6,369
40,102
13,141
—
14,939
—
688
14,996
—
83,866
891
655
851
997
374
334
1
318
—
4,870
—
2,700
8,141
—
16,603
—
2,018
—
139
318
—
3,448
(20)
41
(16)
—
—
36
15
907
605
281
59
(108)
961
2
242
521
95
3,315
—
2,477
—
216
759
—
4,107
—
117
685
—
65
11
—
586
1,311
(428)
721
(760) 4,959
(102)
277
3,255
248
Table of Contents
EQUITABLE HOLDINGS, INC.
SCHEDULE III
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2021
Individual
Retirement
Group
Retirement
Investment
Management
and Research
Protection
Solutions
Wealth
Management Legacy
Corporate
and Other
Elim-
inations
Total
771 $
13,050
(in millions)
— $ 1,559 $
15,028
—
— $ 631 $
746
—
139 $ — $ 6,113
79,361
—
12,820
1,196
$ 3,013 $
37,717
Deferred policy acquisition
costs
Policyholders’ account
balances
Future policy benefits and
other policyholders'
liabilities
Policy charges and
premium revenue
Net derivative gains
(losses)
Net investment income
(loss)
Policyholders’ benefits and
interest credited
Amortization of deferred
policy acquisition costs
All other operating
expenses (1)
_____________
(1) Operating expenses are allocated to segments.
726
(7,060)
796
294
(857)
291
—
—
5,283
—
2,553
9,146
—
18,178
370
(39)
751
303
64
354
—
(14)
25
1,950
(29)
1,095
335
—
—
—
(1) 424
347
(21)
674
—
14
82
3,728
(7,149)
3,846
—
2,451
—
227
735
—
4,007
—
3,238
116
590
—
1,390
66
(4,227)
12
736
—
(778)
552
446
249
Table of Contents
EQUITABLE HOLDINGS, INC.
SCHEDULE IV
REINSURANCE (1)
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
2023
Life insurance in-force
Premiums:
Life insurance and annuities
Accident and health
Total premiums
2022
Life insurance in-force
Premiums:
Life insurance and annuities
Accident and health
Total premiums
2021
Life insurance in-force
Premiums:
Life insurance and annuities
Accident and health
Total premiums
Gross Amount
Ceded to Other
Companies
Assumed from
Other
Companies
(in millions)
Net Amount
Percentage
of Amount
Assumed to Net
$
485,692 $
166,167 $
30,706 $
350,231
8.8 %
$
$
905 $
270
1,175 $
197 $
48
245 $
166 $
8
174 $
874
230
1,104
19.0 %
3.5 %
15.8 %
$
483,069 $
174,819 $
31,337 $
339,587
9.2 %
$
$
822 $
220
1,042 $
182 $
46
228 $
172 $
8
180 $
812
182
994
21.2 %
4.4 %
18.1 %
$
484,082 $
185,203 $
31,971 $
330,850
9.7 %
$
$
802 $
168
970 $
155 $
44
199 $
181 $
8
189 $
828
132
960
21.9 %
6.1 %
19.7 %
______________
(1)
Includes amounts related to the discontinued group life and health business.
250
Table of Contents
Part II, Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
Part II, Item 9A
Evaluation of Disclosure Controls and Procedures
CONTROLS AND PROCEDURES
The management of the Company, with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended) as of December 31, 2023. This evaluation is
performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that (i)
information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange
Act of 1934, as amended, is accumulated and communicated to management, including the Company’s CEO and CFO, as
appropriate, to allow timely decisions regarding required disclosure and (ii) such information is recorded, processed,
summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms.
Based on this evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures
were effective as of December 31, 2023.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Management evaluated the design and operating effectiveness of the Company’s internal control over financial reporting based
on the criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the “COSO framework”). Based on the evaluation, management concluded that
the Company’s internal control over financial reporting was effective as of December 31, 2023. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included in
this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act during the quarter ended December 31, 2023, that have affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Part II, Item 9B.
Securities Trading Plans of Directors and Executive Officers
OTHER INFORMATION
A significant portion of the compensation of our executive officers is delivered in the form of equity awards, including
restricted stock units and performance shares. All vehicles contain vesting requirements related to service, with performance
shares also requiring the satisfaction of certain performance criteria related to corporate performance to obtain a payout. This
compensation design is intended to align executive compensation with the performance experienced by our shareholders.
Following the delivery of shares of our common stock under those equity awards, once any applicable service- or performance-
based vesting standards have been satisfied, our executive officers from time to time engage in the open-market sale of some of
those shares. Our executive officers may also engage from time to time in other transactions involving our securities.
251
Table of Contents
Transactions in our securities by our executive officers are required to be made in accordance with our Insider Trading
Policy, which, among other things, requires that the transactions be in accordance with applicable U.S. federal securities laws
that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an
affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating
transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits
our executive officers to enter into trading plans designed to comply with Rule 10b5-1.
The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted by
our executive officers during the three months ended December 31, 2023, which is intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c), referred to as Rule 10b5-1 trading plans. The plan listed below is only executed when the stock
price reaches a required minimum. In addition, the executives identified in the table below are required to maintain an
ownership of the Company’s common stock with a value equal to at least a multiple of their annual base salary (three times for
Mr. Hurd).
Name and Title
Jeffrey J. Hurd
Chief Operating
Officer
Date of Adoption of
Rule 10b5-1 Trading
Plan
11/17/2023
Scheduled Start Date
of Rule 10b5-1 Trading
Plan
2/16/2024
Scheduled Expiration
Date of Rule 10b5-1
Trading Plan(1)
8/15/2024
Aggregate Number of Securities to be
Purchased or Sold
Sale of up to 59,814 shares(2) of
common stock in several transactions
through the scheduled expiration date
in 2024.
(1)
In each case, a Rule 10b5-1 trading plan may also expire on such earlier date as all transactions under the Rule 10b5-1 trading plan are
completed.
(2) 59,814 of Mr. Hurd’s shares consist of common stock already owned.
During the three months ended December 31, 2023, none of the Company’s directors adopted, terminated or modified a
Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation
S-K of the Securities Act of 1933 (“Regulation S-K”).
Part II, Item 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
Part III, Item 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is incorporated by reference to, and will be contained in, the Company’s 2024 Proxy
Statement.
Part III, Item 11.
The information required by this item (other than the disclosure responsive to Item 202(v) of Regulation S-K) is
incorporated by reference to, and will be contained in, the Company’s 2024 Proxy Statement.
EXECUTIVE COMPENSATION
Part III, Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Equity Compensation Plan Information
The following table provides information as of December 31, 2023, regarding securities authorized for issuance under our
equity compensation plans. All outstanding awards relate to our common stock. For additional information about our equity
compensation plans, see Note 17 of Notes to the Consolidated Financial Statements.
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Table of Contents
Plan category
Equity compensation plans approved by
security holders
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
(a)
(b)
(c)
Omnibus Plan .......................................................
7,266,052
(1)
21.94
(2)
Stock Purchase Plan (3) (4) ..................................
Equity compensation plans not approved by
security holders
Total
—
7,266,052
18,256,124
4,471,351
—
22,727,475
_____________
(1) Represents 1,754,554 outstanding options, 2,808,002 outstanding RSUs and 2,703,496 outstanding performance shares as
of December 31, 2023 under the 2018 & 2019 Omnibus Plan. Totals include dividend equivalents on performance shares of 73,938 and
on RSUs of 124,296. The number of performance shares represents the number of shares that would be received based on maximum
performance, reduced for cancellations through December 31, 2023. The actual number of shares the Compensation Committee will
award at the end of each performance period will range between 0% and 200% of the target number of units granted, based upon a
measure of the reported performance of the Company relative to stated goals.
(2) Represents the weighted average exercise price of the options disclosed in column (a).
(3) The Equitable Holdings, Inc. Stock Purchase Plan is a non-qualified Employee Stock Purchase Plan to which up to 8,000,000 shares of
common stock were authorized for issuance, all of which have been registered on Form S-8.
(4) Through December 31, 2021, eligible participants received a 15% match on Holdings share purchases up to a maximum of $3,750 per
calendar year. Beginning January 1, 2022, eligible participants will receive a 10% match on Holdings share purchases, up to a maximum
of $1,000 per calendar year. Employer matching contributions will be used to purchase additional shares for the participant. Participants
may not contribute more than $50,000 through payroll deductions during any calendar year.
All of the other information required by this item is incorporated by reference to, and will be contained in, the Company’s
2024 Proxy Statement.
Part III, Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to, and will be contained in, the Company’s 2024 Proxy
Statement.
Part III, Item 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to, and will be contained in, the Company’s 2024 Proxy
Statement.
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Table of Contents
Part IV, Item 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed as part of this report:
Page Number
1.
2.
Financial Statements—Item 8. Financial Statements and Supplementary Data
Financial Statement Schedules:
Schedule I—Summary of Investments Other Than Investments in Related Parties as of December
31, 2023
Schedule II—Condensed Financial Information of Parent Company as of December 31, 2023 and
2022, and for the Years Ended December 31, 2023, 2022 and 2021
Schedule III—Supplementary Insurance Information as of December 31, 2023 and 2022 and for the
Years Ended December 31, 2023, 2022 and 2021
Schedule IV—Reinsurance for the Years Ended December 31, 2023, 2022 and 2021
3.
Exhibits: See the accompanying Index to Exhibits.
119
243
244
248
250
261
Part IV, Item 16.
None.
Selected Financial Terms
Account Value (“AV”)
FORM 10-K SUMMARY
GLOSSARY
Generally equals the aggregate policy account value of our retirement and protection
products. General Account AV refers to account balances in investment options that
are backed by the General Account while Separate Accounts AV refers to Separate
Accounts investment assets.
Alternative investments
Investments in real estate and real estate joint ventures and other limited
partnerships.
Assets under administration (“AUA”)
Includes non-insurance client assets that are invested in our savings and investment
products or serviced by our Equitable Advisors platform. We provide administrative
services for these assets and generally record the revenues received as distribution
fees.
Annualized Premium
100% of first year recurring premiums (up to target) and 10% of excess first year
premiums or first year premiums from single premium products.
Assets under management (“AUM”)
Combined RBC Ratio
Conditional tail expectation (“CTE”)
Deferred policy acquisition cost (“DAC”)
Investment assets that are managed by one of our subsidiaries and includes: (i)
assets managed by AB, (ii) the assets in our GAIA portfolio and (iii) the Separate
Account assets of our retirement and protection businesses. Total AUM reflects
exclusions between segments to avoid double counting.
Calculated as the overall aggregate RBC ratio for the Company’s insurance
subsidiaries including capital held for its life insurance and variable annuity
liabilities and non-variable annuity insurance liabilities.
Calculated as the average amount of total assets required to satisfy obligations over
the life of the contract or policy in the worst x% of scenarios. Represented as CTE
(100 less x). Example: CTE95 represents the worst five percent of scenarios.
Represents the incremental costs related directly to the successful acquisition of new
and certain renewal insurance policies and annuity contracts and which have been
deferred on the balance sheet as an asset.
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Table of Contents
Deferred sales inducements (“DSI”)
Fee-Type Revenue
Gross Premiums
Invested assets
Premium and deposits
Represent amounts that are credited to a policyholder’s account balance that are
higher than the expected crediting rates on similar contracts without such an
inducement and that are an incentive to purchase a contract and also meet the
accounting criteria to be deferred as an asset that is amortized over the life of the
contract.
Revenue from fees and related items, including policy charges and fee income,
premiums, investment management and service fees, and other income.
FYP and Renewal premium and deposits.
Includes fixed maturity securities, equity securities, mortgage loans, policy loans,
alternative investments and short-term investments.
Amounts a policyholder agrees to pay for an insurance policy or annuity contract
that may be paid in one or a series of payments as defined by the terms of the policy
or contract.
Protection Solutions Reserves
Equals the aggregate value of Policyholders’ account balances and Future policy
benefits for policies in our Protection Solutions segment.
Reinsurance
Insurance policies purchased by insurers to limit the total loss they would
experience from an insurance claim.
Renewal premium and deposits
Premiums and deposits after the first twelve months of the policy or contract.
Risk-based capital (“RBC”)
Rules to determine insurance company statutory capital requirements. It is based on
rules published by the National Association of Insurance Commissioners (“NAIC”).
Total adjusted capital (“TAC”)
Primarily consists of capital and surplus, and the asset valuation reserve.
Product Terms
401(k)
403(b)
457(b)
Affluent
Annuitant
Annuitization
Benefit base
Cash surrender value
Deferred annuity
Fixed annuity
A tax-deferred retirement savings plan sponsored by an employer. 401(k) refers to
the section of the Internal Revenue Code of 1986, as amended (the “Code”)
pursuant to which these plans are established.
A tax-deferred retirement savings plan available to certain employees of public
schools and certain tax-exempt organizations. 403(b) refers to the section of the
Code pursuant to which these plans are established.
A deferred compensation plan that is available to governmental and certain non-
governmental employers. 457(b) refers to the section of the Code pursuant to which
these plans are established.
Refers to individuals with $250,000 to $999,999 of investable assets.
The person who receives annuity payments or the person whose life expectancy
determines the amount of variable annuity payments upon annuitization of an
annuity to be paid for life.
The process of converting an annuity investment into a series of periodic income
payments, generally for life.
A notional amount (not actual cash value) used to calculate the owner’s guaranteed
benefits within an annuity contract. The death benefit and living benefit within the
same contract may not have the same benefit base.
The amount an insurance company pays (minus any surrender charge) to the
policyholder when the contract or policy is voluntarily terminated prematurely.
An annuity purchased with premiums paid either over a period of years or as a lump
sum, for which savings accumulate prior to annuitization or surrender, and upon
annuitization, such savings are exchanged for either a future lump sum or periodic
payments for a specified length of time or for a lifetime.
An annuity that guarantees a set annual rate of return with interest at rates we
determine, subject to specified minimums. Credited interest rates are guaranteed not
to change for certain limited periods of time.
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Table of Contents
Fixed-Rate GMxB
Floating-Rate GMxB
Future policy benefits
Guarantees on our individual variable annuity products that are based on a rate that
is fixed at issue.
Guarantees on our individual variable annuity products that are based on a rate that
varies with a specified index rate, subject to a cap and floor.
Future policy benefits for the annuities business are comprised mainly of liabilities
for life-contingent income annuities, and liabilities for the variable annuity
guaranteed minimum benefits accounted for as insurance.
Future policy benefits for the life business are comprised mainly of liabilities for
traditional life and certain liabilities for universal and variable life insurance
contracts (other than the Policyholders’ account balance).
General Account Investment Portfolio
The invested assets held in the General Account.
General Account (“GA”)
Global Atlantic Reinsurance Transaction
GMxB
Guaranteed income benefit (“GIB”)
Guaranteed minimum accumulation benefits
(“GMAB”)
The assets held in the general accounts of our insurance companies as well as assets
held in our Separate Accounts on which we bear the investment risk.
Equitable Financial completed the transactions (the “Global Atlantic Transaction”)
contemplated by the previously announced Master Transaction Agreement, and
between Equitable Financial and First Allmerica Financial Life Insurance Company,
a Massachusetts-domiciled insurance company (the “Reinsurer”), a wholly owned
subsidiary of Global Atlantic Financial Group.
A general reference to all forms of variable annuity guaranteed benefits, including
guaranteed minimum living benefits, or GMLBs (such as GMIBs, GMWBs and
GMABs), and guaranteed minimum death benefits, or GMDBs (inclusive of return
of premium death benefit guarantees).
An optional benefit which provides the policyholder with a guaranteed lifetime
annuity based on predetermined annuity purchase rates applied to a GIB benefit
base, with annuitization automatically triggered if and when the contract AV falls to
zero.
An optional benefit (available for an additional cost) which entitles an annuitant to a
minimum payment, typically in lump-sum, after a set period of time, typically
referred to as the accumulation period. The minimum payment is based on the
benefit base, which could be greater than the underlying AV.
Guaranteed minimum death
benefits (“GMDB”)
An optional benefit (available for an additional cost) that guarantees an annuitant’s
beneficiaries are entitled to a minimum payment based on the benefit base, which
could be greater than the underlying AV, upon the death of the annuitant.
Guaranteed minimum income benefits
(“GMIB”)
An optional benefit (available for an additional cost) where an annuitant is entitled
to annuitize the policy and receive a minimum payment stream based on the benefit
base, which could be greater than the underlying AV.
Guaranteed minimum living
benefits (“GMLB”)
A reference to all forms of guaranteed minimum living benefits, including GMIBs,
GMWBs and GMABs (does not include GMDBs).
Guaranteed minimum withdrawal benefits
(“GMWB”)
An optional benefit (available for an additional cost) where an annuitant is entitled
to withdraw a maximum amount of their benefit base each year, for which
cumulative payments to the annuitant could be greater than the underlying AV.
Guaranteed Universal Life (“GUL”)
A universal life insurance offering with a lifetime no lapse guarantee rider,
otherwise known as a guaranteed UL policy. With a GUL policy, the premiums are
guaranteed to last the life of the policy.
Guaranteed withdrawal benefit for life
(“GWBL”)
An optional benefit (available for an additional cost) where an annuitant is entitled
to withdraw a maximum amount of their benefit base each year, for the duration of
the policyholder’s life, regardless of account performance.
High net worth
Index-linked annuities
Refers to individuals with $1,000,000 or more of investable assets.
An annuity that provides for asset accumulation and asset distribution needs with an
ability to share in the upside from certain financial markets such as equity indices,
or an interest rate benchmark. With an index-linked annuity, the policyholder’s AV
can grow or decline due to various external financial market indices performance.
256
Table of Contents
Indexed Universal Life (“IUL”)
A permanent life insurance offering built on a universal life insurance framework
that uses an equity-linked approach for generating policy investment returns.
Living benefits
Optional benefits (available at an additional cost) that guarantee that the
policyholder will get back at least his original investment when the money is
withdrawn.
Mortality and expense risk fee (“M&E fee”)
A fee charged by insurance companies to compensate for the risk they take by
issuing life insurance and variable annuity contracts.
Net flows
Policyholder account balances
Return of premium (“ROP”) death benefit
Rider
Roll-up rate
Separate Account
Surrender charge
Net change in customer account balances in a period including, but not limited to,
gross premiums, surrenders, withdrawals and benefits. It excludes investment
performance, interest credited to customer accounts and policy charges.
Annuities. Policyholder account balances are held for fixed deferred annuities, the
fixed account portion of variable annuities and non-life contingent income
annuities. Interest is credited to the policyholder’s account at interest rates we
determine which are influenced by current market rates, subject to specified
minimums.
Life Insurance Policies. Policyholder account balances are held for retained asset
accounts, universal life policies and the fixed account of universal variable life
insurance policies. Interest is credited to the policyholder’s account at interest rates
we determine which are influenced by current market rates, subject to specified
minimums.
This death benefit pays the greater of the account value at the time of a claim
following the owner’s death or the total contributions to the contract (subject to
adjustment for withdrawals). The charge for this benefit is usually included in the
M&E fee that is deducted daily from the net assets in each variable investment
option. We also refer to this death benefit as the Return of Principal death benefit.
An optional feature or benefit that a policyholder can purchase at an additional cost.
The guaranteed percentage that the benefit base increases by each year.
Refers to the separate account investment assets of our insurance subsidiaries
excluding the assets held in those Separate Accounts on which we bear the
investment risk.
A fee paid by a contract owner for the early withdrawal of an amount that exceeds a
specific percentage or for cancellation of the contract within a specified amount of
time after purchase.
Surrender rate
Represents annualized surrenders and withdrawals as a percentage of average AV.
Universal life (“UL”) products
Variable annuity
Variable Universal Life (“VUL”)
Whole Life (“WL”)
Life insurance products that provide a death benefit in return for payment of
specified annual policy charges that are generally related to specific costs, which
may change over time. To the extent that the policyholder chooses to pay more than
the charges required in any given year to keep the policy in-force, the excess
premium will be placed into the AV of the policy and credited with a stated interest
rate on a monthly basis.
A type of annuity that offers guaranteed periodic payments for a defined period of
time or for life and gives purchasers the ability to invest in various markets though
the underlying investment options, which may result in potentially higher, but
variable, returns.
Universal life products where the excess amount paid over policy charges can be
directed by the policyholder into a variety of Separate Account investment options.
In the Separate Account investment options, the policyholder bears the entire risk
and returns of the investment results.
A life insurance policy that is guaranteed to remain in-force for the policyholder’s
lifetime, provided the required premiums are paid.
ACRONYMS
•
“AB” or “AllianceBernstein” means AB Holding
and ABLP.
•
“AB Holding” means AllianceBernstein Holding
L.P., a Delaware limited partnership.
257
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Table of Contents
“AB Holding Units” means units representing
assignments of beneficial ownership of limited
partnership interests in AB Holding.
“AB Units” means units of limited partnership
interests in ABLP.
a
“ABLP” means AllianceBernstein L.P.,
Delaware limited partnership and the operating
partnership for the AB business.
“AFS” means available-for-sale.
“AOCI” means accumulated other comprehensive
income.
“ASR” means accelerated share repurchase
“ASU” means Accounting Standards Update
“ASX” means Australian Securities Exchange
“AVR” means asset valuation reserve
“AXA” means AXA S.A., a société anonyme
organized under the laws of France, and formerly
our controlling stockholder.
“AXA Financial” means AXA Financial, Inc., a
Delaware corporation and a former wholly-owned
direct subsidiary of Holdings. On October 1,
2018, AXA Financial merged with and into
Holdings, with Holdings assuming the obligations
of AXA Financial.
“bps” means basis points
“CDS” means credit default swaps
“CDSC” means
commissions
contingent deferred
sales
“CEA” means Commodity Exchange Act
“CECL” means current expected credit losses
“CEI” means Corporate Equity Index
“CEO” means Chief Executive Officer
“CFTC” means U.S. Commodity Futures Trading
Commission
“CLO” means collateralized loan obligation
“CMBS” means commercial mortgage-backed
security
“COI” means cost of insurance
“COLI” means corporate owned life insurance
“Company” means Equitable Holdings, Inc. with
its consolidated subsidiaries
“COVID-19” means coronavirus disease of 2019
“CS Life” means Corporate Solutions Life
Reinsurance Company, a Delaware corporation
subsidiary of
and a wholly-owned direct
Holdings.
258
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
“CSA” means credit support annex
“CSLRC” means Corporate Solutions Life
Reinsurance Company
“DCO” means designated clearing organization
“DEI” means Disability Equity Index
“DI” means disability income
“Dodd-Frank Act” means Dodd-Frank Wall Street
Reform and Consumer Protection Act
“DOL” means U.S. Department of Labor
“DSC” means debt service coverage
“DTI” means debt-to-income
“EAFE” means European, Australasia, and Far
East
“EBITDA” means earnings before interest, taxes,
depreciation and amortization
“EDP” means electronic data processing
“EFS” means Equitable Financial Services, LLC,
a Delaware corporation and a wholly-owned
direct subsidiary of Holdings
“EFIM” means Equitable Financial Investment
Management, LLC, a Delaware limited liability
company and a wholly-owned indirect subsidiary
of Holdings.
EFIMA” means Equitable Financial Investment
Management America, LLC, a Delaware limited
liability company and a wholly-owned indirect
subsidiary of Holdings.
“EIM LLC” means Equitable
Investment
Management, LLC, a Delaware limited liability
company and a wholly-owned indirect subsidiary
of Holdings.
means
Equitable
“EIMG”
Investment
Management Group, LLC, a Delaware limited
liability company and a wholly-owned indirect
subsidiary of Holdings.
“EPS” means earnings per share
“Equitable Advisors” means Equitable Advisors,
LLC, a Delaware limited liability company, our
retail broker/dealer
retirement and
protection businesses and a wholly-owned indirect
subsidiary of Holdings.
for our
“Equitable America” means Equitable Financial
Life Insurance Company of America (f/k/a
MONY Life Insurance Company of America), an
Arizona corporation and a wholly-owned indirect
subsidiary of Holdings.
“Equitable Distributors” means Equitable
Distributors, LLC, a Delaware limited liability
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company, our wholesale broker/dealer for our
retirement and protection businesses and a
wholly-owned indirect subsidiary of Holdings.
“Equitable L&A” means Equitable Financial Life
and Annuity Company, a Colorado corporation
and a wholly-owned
indirect subsidiary of
Holdings.
Insurance Company,
“Equitable Financial” means Equitable Financial
Life
a New York
corporation, a life insurance company and a
wholly-owned subsidiary of EFS.
“EQ Premier VIP Trust” means EQ Premier VIP
Trust, a series trust that is a Delaware statutory
trust and is registered under the Investment
Company Act of 1940, as amended
(the
“Investment Company Act”), as an open-end
management investment company.
“EQAT” means EQ Advisors Trust, a series trust
that is a Delaware statutory trust and is registered
under the Investment Company Act as an open-
end management investment company.
“EQ AZ Life Re” means EQ AZ Life Re
Company, an Arizona corporation and a wholly-
owned indirect subsidiary of Holdings.
“ERISA” means Employee Retirement Income
Security Act of 1974
“ESB Plan” means Executive Survivor Benefits
Plan
“ESG” means
governance
environmental,
social
and
“ETF” means exchange traded funds
“ETR” means effective tax rate
“Exchange Act” means Securities Exchange Act
of 1934, as amended
“FABCP” means Funding Agreement Backed
Commercial Paper
“FABN” means Funding Agreement Backed
Notes
“FASB” means Financial Accounting Standards
Board
“FDIC” means Federal Deposit
Corporation
Insurance
“FHLB” means Federal Home Loan Bank
“FINRA” means Financial Industry Regulatory
Authority, Inc.
“FIO” means Federal Insurance Office
“FMV” means fair market value
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“FSOC” means Financial Stability Oversight
Council
“FTSE” means Financial Times Stock Exchange
“FVO” means fair value option
“FYP” means first year premium and deposits
“GCC” means group capital calculation tool
“GLB” means guaranteed living benefits
The “General Partner” means AllianceBernstein
Corporation, a Delaware corporation and the
general partner of AB Holding and ABLP.
“GIO” means guaranteed interest option
“HFS” means held-for-sale
“Holdings” means Equitable Holdings, Inc.
“HTM” means held-to-maturity
“HR” means Human Resources
“IMR” means interest maintenance reserve
“International JV” means
venture
international
joint
“IPO” means initial public offering
“IRS” means Internal Revenue Service
“ISDA Master Agreement” means International
Swaps and Derivatives Association Master
Agreement
“IT” means information technology
“IUS” means Investments Under Surveillance
“K-12 education market” means individuals in the
kindergarten, primary and secondary education
market
“LDTI” means
improvements
long
duration
targeted
“LGD” means loss given default
“LIBOR” means London Interbank Offered Rate
“LTV” means loan-to-value
“Manual” means Accounting Practices and
Procedures Manual as established by the NAIC
“MD&A” means Management’s Discussion and
Analysis of Financial Condition and Results of
Operations
“MRBs” means market risk benefits
“MSO” means Market Stabilizer Option
“NAIC” means National Association of Insurance
Commissioners
“NAIC SAP” means NAIC Accounting Practices
and Procedures manual
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“Series A Preferred Stock” means Holdings’
Series A Fixed Rate Noncumulative Perpetual
Preferred Stock
“Series B Preferred Stock” means Holdings’
Series B Fixed Rate Reset Noncumulative
Perpetual Preferred Stock
“Series C Preferred Stock” means Holdings’
Series C Fixed Rate Reset Noncumulative
Perpetual Preferred Stock
“SIA” means sales inducement asset
“SIO” means structured investment option
“SOA” means Society of Actuaries
“SPE” means special purpose entity
“SPLLC” means special purpose limited liability
company
“SSAP” means
Accounting Practice
Statements
of
Standard
The “Standard” means NAIC accreditation
standards
“SVO” means Securities Valuation Office
“TDRs” means troubled debt restructurings
“TIPS” means
securities
treasury
inflation-protected
“Topix” means Tokyo Stock Price Index
“TSR” means total share return
“U.S.” means United States
“U.S. GAAP” means accounting principles
generally accepted
the United States of
America
in
“U.S. JV” means North American joint venture
“Venerable” means Venerable Holdings, Inc., a
Delaware corporation
“VIE” means variable interest entity
“VISL” means variable interest-sensitive life
“VOE” means voting interest entity
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“NAR” means net amount at risk
“NASAA” means North American Securities
Administrators Association
“NAV” means net asset value
“NFA” means National Futures Association
“NGEs” means non-guaranteed elements
“NLG” means no-lapse guarantee
“NMS” means National Market System
“NYDFS” means New York State Department of
Financial Services
“NYSE” means New York Stock Exchange
“NWOW” means New Ways of Working
“OCI” means other comprehensive income
“OKRs” means Outcomes Objectives & Key
Results
“OTC” means over-the-counter
“PBO” means projected benefit obligation
“PD” means probability of default
“PFBL” means profits followed by losses
“PPWG” means privacy protection working group
“PTP” means publicly traded partnership
“R&P” means retirement and protection
“RBG” means the Retirement Benefits Group, a
specialized division of Equitable Advisors
“REIT” means real estate investment trusts
“RIC” means
company
SEC-registered
investment
“RoU” means right of use
“RMBS” means
security
residential mortgage-backed
“ROE” means return on equity
“RSUs” means restricted stock units
“SAP” means statutory accounting principles
“SCB LLC” means Sanford C. Bernstein & Co.,
LLC, a registered investment adviser and broker-
dealer
“SCBL” means Sanford C. Bernstein Limited
“SCS” means Structured Capital Strategies
“SEC” means U.S. Securities and Exchange
Commission
“SECURE” means Setting Every Community Up
for Retirement Enhancement
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INDEX TO EXHIBITS
Exhibit Description
Second Amended and Restated Certificate of Incorporation of Equitable Holdings, Inc., effective May 19, 2022
(incorporated by reference to Exhibit 3.1 to our Form 8-K, filed on May 20, 2022).
Equitable Holdings, Inc. Sixth Amended and Restated By-laws, effective February 15, 2023 (incorporated by
reference to Exhibit 3.2 to our Form 10-K, filed on February 21, 2023).
Certificate of Designations with respect to the Series A Preferred Stock of the Company, dated November 21,
2019 (incorporated by reference to Exhibit 3.1 to our Form 8-K filed on November 21, 2019).
Certificate of Designations with respect to the Series B Preferred Stock of the Company, filed August 7, 2020
(incorporated by reference to Exhibit 3.1 to our Form 8-K filed on August 11, 2020).
Certificate of Designation with respect to the Series C Preferred Stock of the Company, dated January 6, 2021
(incorporated by reference to Exhibit 3.1 to our Form 8-K filed on January 6, 2021).
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on
Form S-1, File No. 333-221521 (the “IPO Form S-1”)).
Indenture, dated as of December 1, 1993 from AXA Financial, Inc. to The Bank of NY Mellon Trust Company,
N.A. (formerly known as Chemical Bank), as Trustee (incorporated by reference to Exhibit 4.2 to the IPO
Form S-1).
Fourth Supplemental Indenture, dated April 1, 1998, from AXA Financial, Inc. to The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee, together with forms of global Senior Note and global Senior
Indenture (incorporated by reference to Exhibit 4.3 to the IPO Form S-1).
Fifth Supplemental Indenture, dated October 1, 2018, among AXA Equitable Holdings, Inc. AXA Financial, Inc.
and The Bank of NY Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K, filed on October 1, 2018).
Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer, Wilmington Saving Fund
Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent (incorporated by reference to
Exhibit 4.4 to the IPO Form S-1).
First Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer,
Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent
(incorporated by reference to Exhibit 4.5 to the IPO Form S-1).
Second Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer,
Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent
(incorporated by reference to Exhibit 4.6 to the IPO Form S-1).
Third Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer,
Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent
(incorporated by reference to Exhibit 4.7 to the IPO Form S-1).
Exhibit
Number
3.1
3.2
3.3
3.4
3.5
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.10
4.11
4.12#
4.13
10.1
Indenture, dated as of April 5, 2019, between Equitable Holdings, Inc., as issuer, and The Bank of New York
Mellon, as trustee (incorporated by reference to Exhibit 4.4 to Form S-3ASR filed on November 20, 2019).
Third Supplemental Indenture, dated January 11, 2023, between Equitable Holdings, Inc., as issuer, and The Bank
of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to our Current Report on
Form 8-K, filed on January 11, 2023).
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of
1934.
Form of Senior Note (included as Exhibit A to Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the
Company’s Current Report on Form 8-K dated January 11, 2023).
Master Agreement, dated as of April 10, 2013, by and among AXA Equitable Financial Services, LLC, AXA
Financial, Inc. and Protective Life Insurance Company (incorporated by reference to Exhibit 10.5 to the IPO
Form S-1).
10.2†
Employment Agreement, dated as of March 9, 2011, by and between AXA Financial, Inc. and Mark Pearson
(incorporated by reference to Exhibit 10.7 to the IPO Form S-1).
10.2.1† Letter Agreement, dated February 19, 2013, between AXA Financial, Inc., AXA Equitable Life Insurance
Company and Mark Pearson (incorporated by reference to Exhibit 10.7.1 to the IPO Form S-1).
10.2.2† Letter Agreement, dated May 14, 2015, between AXA Financial, Inc., AXA Equitable Life Insurance Company
10.2.3†
and Mark Pearson (incorporated by reference to Exhibit 10.7.2 to the IPO Form S-1).
Letter Agreement, dated February 27, 2019, between AXA Equitable Holdings, Inc., AXA Equitable Life
Insurance Company and Mark Pearson. (incorporated by reference to Exhibit 10.7.3 to our Form 10-K for the
fiscal year ended December 31, 2018, (the “2018 Form 10-K”)).
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10.2.4† Waiver Agreement, dated May 9, 2019, to Mark Pearson’s Employment Agreement dated March 9, 2011
(incorporated by reference to Exhibit 10.1 to AXA Equitable Holdings, Inc.’s Form 10-Q for the quarterly period
ending June 30, 2019.
10.2.5†
10.2.6†
10.3†
10.4
10.5
10.6
10.7
10.8†
Letter Agreement, dated December 18, 2019, between AXA Equitable Holdings, Inc., AXA Equitable Life
Insurance Company and Mark Pearson (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on
December 19, 2019).
Letter Agreement, dated February 14, 2023, between Equitable Holdings, Inc., Equitable Financial Life Insurance
Company and Mark Pearson (incorporated by reference to Exhibit 10.2.6 to our Form 10-K, filed on February 21,
2023).
Director Indemnification Agreement, dated May 4, 2018, between AXA Equitable Holdings, Inc. and each of its
directors (incorporated by reference to Exhibit 10.6 to our Form 10-Q for the quarterly period ending March 31,
2018).
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P.,
as Issuer, and Citigroup Global Markets Inc., as Dealer (incorporated by reference to Exhibit 10.08 to AB
Holding’s Form 10-K for the fiscal year ended December 31, 2015).
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P.,
as Issuer, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer (incorporated by reference to
Exhibit 10.10 to AB Holding’s Form 10-K for the fiscal year ended December 31, 2015).
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of November 1, 2023, between AllianceBernstein
L.P., as Issuer, and Barclays Capital Inc., as Dealer (incorporated by reference to Exhibit 10.27 to AB Holding’s
Form 10-K for the fiscal year ended December 31, 2023).
Amendment No. 1 to the Restated Revolving Credit Agreement, originally dated October 13, 2021 and amended
as of February 9, 2023 (incorporated by reference to Exhibit 10.12 of AB Holding’s Form 10-K for the fiscal year
ended December 31, 2023).
Profit Sharing Plan for Employees of AllianceBernstein L.P., as amended and restated as of January 1, 2015 and
as further amended as of January 1, 2017 (incorporated by reference to Exhibit 10.05 to AB Holding’s Form 10-
K for the fiscal year ended December 31, 2015).
10.8.1† Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of October 20, 2016 and
effective as of January 1, 2017 (incorporated by reference to Exhibit 10.06 to AB Holding’s Form 10-K for the
fiscal year ended December 31, 2017).
10.8.2† Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of April 1, 2018
(incorporated by reference to Exhibit 10.12 to AB Holding’s Form 10-K for the fiscal year ended December 31,
2018).
10.9†
Employment Agreement, dated as of April 28, 2017, among Seth Bernstein, AllianceBernstein Holding L.P.,
AllianceBernstein L.P. and AllianceBernstein Corporation (incorporated by reference to Exhibit 10.3 to AB
Holding’s Form 8-K filed on May 1, 2017).
10.9.1† Amendment to Seth P. Bernstein’s Employment Agreement (incorporated by reference to Exhibit 10.01 to AB
Holding’s Form 10-K for the fiscal year ended December 31, 2018).
10.9.2† Amendment No. 2 to Seth P. Bernstein’s Employment Agreement (incorporated by reference to Exhibit 10.2 to
10.10†
10.11
our Form 8-K filed on December 19, 2019).
AB 2017 Long Term Incentive Plan (incorporated by reference to Exhibit 10.06 to AB Holding’s Form 10-K for
the fiscal year ended December 31, 2017).
Amended and Restated Revolving Credit Agreement, dated as of June 24, 2021, by and among the Company, the
Subsidiary Account Parties party thereto, the banks party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on June 29, 2021).
10.11.1 Amendment No. 1 to Amended and Restated Revolving Credit Agreement, dated as of May 12, 2023, among
10.12
Equitable Holdings, Inc., certain Subsidiary Account Parties, certain Banks and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.1 to our Form 8-K filed May 15, 2023).
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Natixis, New York Branch (incorporated by reference to Exhibit 10.25 to the
IPO Form S-1 ).
10.12.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Natixis, New York Branch (incorporated by reference to Exhibit
10.2 to our Form 8-K filed on March 26, 2021).
10.12.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Natixis, New York Branch (incorporated by reference to Exhibit
10.2 to our Form 8-K filed on June 29, 2021).
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10.12.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Natixis, New York Branch (incorporated by reference to Exhibit
10.2 to our Form 8-K filed on May 15, 2023).
10.13
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Citibank Europe PLC (incorporated by reference to Exhibit 10.27 to the IPO
Form S-1).
10.13.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Citibank Europe PLC (incorporated by reference to Exhibit 10.4 to
our Form 8-K filed on March 26, 2021).
10.13.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Citibank Europe PLC (incorporated by reference to Exhibit 10.4 to
our Form 8-K filed on June 29, 2021).
10.13.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Citibank Europe PLC. (incorporated by reference to Exhibit 10.4 to
our Form 8-K filed on May 15, 2023).
10.14
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Credit Agricole Corporate and Investment Bank (incorporated by reference to
Exhibit 10.28 to the IPO Form S-1).
10.14.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Credit Agricole Corporate and Investment Bank (incorporated by
reference to Exhibit 10.5 to our Form 8-K filed on March 26, 2021).
10.14.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Credit Agricole Corporate and Investment Bank (incorporated by
reference to Exhibit 10.5 to our Form 8-K filed on June 29, 2021).
10.14.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Credit Agricole Corporate and Investment Bank (incorporated by
reference to Exhibit 10.5 to our Form 8-K filed on May 15, 2023).
10.15
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Barclays Bank PLC (incorporated by reference to Exhibit 10.29 to the IPO
Form S-1).
10.15.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Barclays Bank PLC (incorporated by reference to Exhibit 10.6 to our
Form 8-K filed on March 26, 2021).
10.15.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Barclays Bank PLC (incorporated by reference to Exhibit 10.6 to our
Form 8-K filed on June 29, 2021).
10.15.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Barclays Bank PLC (incorporated by reference to Exhibit 10.6 to our
Form 8-K filed on May 15, 2023).
10.16
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and JPMorgan Chase Bank, N.A (incorporated by reference to Exhibit 10.30 to the
IPO Form S-1).
10.16.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and JPMorgan Chase Bank, N.A (incorporated by reference to Exhibit
10.7 to our Form 8-K filed on March 26, 2021).
10.16.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit
10.7 to our Form 8-K filed on June 29, 2021).
10.16.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit
10.7 to our Form 8-K filed on May 15, 2023).
10.17
10.17.1
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through its New York
Branch (incorporated by reference to Exhibit 10.31 to the IPO Form S-1).
Second Amendment to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary
Account Parties (as defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through
its New York Branch (incorporated by reference to Exhibit 10.8 to our Form 8-K filed on March 26, 2021).
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10.17.2
10.17.3
10.17.4
10.18
Third Amendment to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through its New
York Branch (incorporated by reference to Exhibit 10.8 to our Form 8-K filed on June 29, 2021).
Fourth Amendment to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary
Account Parties (as defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through
its New York Branch (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on December 16, 2021).
Fifth Amendment to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through its New
York Branch (incorporated by reference to Exhibit 10.8 to our Form 8-K filed on May 15, 2023).
Reimbursement Agreement by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as
defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to Exhibit
10.32 to the IPO Form S-1).
10.18.1 Amendment No. 1 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to
Exhibit 10.9 to our Form 8-K filed on March 26, 2021).
10.18.2 Amendment No. 2 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to
Exhibit 10.9 to our Form 8-K filed on June 29, 2021).
10.18.3 Amendment No. 3 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to
Exhibit 10.1 to our Form 8-K filed on June 10, 2022).
10.18.4 Amendment No. 4 to Reimbursement Agreement by and among Equitable Holdings, Inc., the Subsidiary Account
Parties (as defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to
Exhibit 10.9 to our Form 8-K filed on May 15, 2023).
Reimbursement Agreement, dated as of January 23, 2024, by and among Equitable Holdings, Inc., the Subsidiary
Account Parties (as defined therein) party thereto and MUFG Bank Ltd.
Equitable Severance Benefit Plan (incorporated by reference to Exhibit 10.45 to the IPO Form S-1).
10.19#
10.20†
10.21†
10.22†
Equitable Supplemental Severance Plan for Executives (incorporated by reference to Exhibit 10.25 to our Form
10-Q for the quarterly period ending March 31, 2018).
Equitable Supplemental Severance Plan for Executives, as amended and restated as of August 9, 2019
(incorporated by reference to Exhibit 10.2 to our Form 10-Q for the quarterly period ending June 30, 2019).
10.23†
Equitable Executive Survivor Benefits Plan (incorporated by reference to Exhibit 10.47 to the IPO Form S-1).
10.24†
10.25†
10.26†
10.27†
10.28†
10.29†
10.30†
10.31†
10.32†
10.33†
10.34†
10.35†
Amended and Restated Variable Deferred Compensation Plan for Executives (incorporated by reference to
Exhibit 10.48 to the IPO Form S-1).
Amended and Restated Equitable Post-2004 Variable Deferred Compensation Plan for Executives (incorporated
by reference to Exhibit 10.49 to the IPO Form S-1).
Amendment to the Equitable Post-2004 Variable Deferred Compensation Plan for Executives, effective as of
January 1, 2019 (incorporated by reference to Exhibit 10.69 to the 2018 Form 10-K).
Equitable Excess Retirement Plan (incorporated by reference to Exhibit 10.50 to the IPO Form S-1).
Equitable Holdings, Inc. Equity Plan for Directors (incorporated by reference to Exhibit 10.51 to the IPO
Form S-1).
Form of Stock Option Agreement under the Equitable Holdings, Inc. Equity Plan for Directors (incorporated by
reference to Exhibit 10.52 to the IPO Form S-1).
Form of Restricted Stock Agreement under the Equitable Holdings, Inc. Equity Plan for Directors (incorporated
by reference to Exhibit 10.53 to the IPO Form S-1).
Equitable Post-2004 Variable Deferred Compensation Plan for Directors (incorporated by reference to Exhibit
10.54 to the IPO Form S-1).
Equitable Holdings, Inc. Charitable Award Program for Directors (incorporated by reference to Exhibit 10.55 to
the IPO Form S-1).
Equitable Holdings, Inc. Short-Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.56 to
the IPO Form S-1).
AXA Equitable Holdings, Inc. 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.57 to the
IPO Form S-1).
Equitable Holdings, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Appendix B of the Equitable
Holdings, Inc. DEF 14A, as filed on April 8, 2020).
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10.36†
10.37#
10.38#
10.39†
10.40†
10.41†
10.42†
10.43†
10.44†
10.45
10.46
10.47
10.48
21.1#
23.1#
31.1#
31.2#
32.1#
32.2#
97#
Equitable Holdings, Inc. Stock Purchase Plan (incorporated by reference to Exhibit 10.62 to the 2018 Form 10-
K).
Form of 2024 Performance Shares Agreement under the 2019 Omnibus Incentive Plan, effective February 14,
2024.
Form of 2024 Restricted Stock Unit Agreement under the 2019 Omnibus Incentive Plan, effective February 14,
2024.
Form of Stock Option Award Agreement under the 2019 Omnibus Incentive Plan for awards granted before
February 16, 2022 (incorporated by reference to Exhibit 10.58 to our Form 10-K for the fiscal period ended
December 31, 2020 (the “2020 Form 10-K”)).
AllianceBernstein 2023 Incentive Compensation Award Program (incorporated by reference to Exhibit 10.01 to
AB Holding’s Form 10-K for the fiscal year ended December 31, 2023).
AllianceBernstein 2023 Deferred Cash Compensation Program (incorporated by reference to Exhibit 10.02 to AB
Holding’s Form 10-K for the fiscal year ended December 31, 2023).
Form of Award Agreement, dated as of December 31, 2023, under Incentive Compensation Award Program,
Deferred Cash Compensation Program and AB 2017 Long Term Incentive Plan (incorporated by reference to
Exhibit 10.03 to AB Holding’s Form 10-K for the fiscal year ended December 31, 2023).
Form of Award Agreement under AB 2017 Long Term Incentive Plan relating to equity compensation awards to
Independent Directors (incorporated by reference to Exhibit 10.04 to AB Holding’s Form 10-K for the fiscal year
ended December 31, 2023).
AllianceBernstein Change in Control Plan for Executive Officers (incorporated by reference to Exhibit 99.01 to
AB Holding’s Form 8-K, as filed December 14, 2020).
Master Transaction Agreement, dated as of October 27, 2020 among Equitable Holdings, Inc., Venerable
Insurance and Annuity Company and solely with respect to Article XIV, Venerable Holdings, Inc. (incorporated
by reference to Exhibit 10.64 to the 2020 Form 10-K).
Coinsurance and Modified Coinsurance Agreement, dated as of June 1, 2021, between Equitable Financial Life
Insurance Company and Corporate Solutions Life Reinsurance Company (redacted) (incorporated by reference to
Exhibit 10.1 to the on Form 8-K filed by Equitable Financial Life Insurance Company on June 1, 2021).
Master Transaction Agreement, dated as of August 16, 2022 among Equitable Financial Life Insurance Company
and First Allmerica Financial Life Insurance Company (redacted) (incorporated by reference to Exhibit 10.1 to
our Form 10-Q for the quarterly period ending September 30, 2022).
Coinsurance and Modified Coinsurance Agreement, dated as of October 3, 2022, between Equitable Financial
Life Insurance Company and First Allmerica Financial Life Insurance Company (redacted) (incorporated by
reference to Exhibit 10.2 to our Form 10-Q for the quarterly period ending September 30, 2022).
List of Subsidiaries of Equitable Holdings, Inc.
Consent of PricewaterhouseCoopers LLP.
Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of the Registrant’s Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification of the Registrant’s Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Clawback and Forfeiture Policy.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101)
#
†
Filed herewith.
Identifies each management contract or compensatory plan or arrangement.
SIGNATURES
265
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Equitable Holdings, Inc. has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 26, 2024.
EQUITABLE HOLDINGS, INC.
By:
/s/ Mark Pearson
Name: Mark Pearson
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant, and in the capacities indicated, on February 26, 2024.
Signature
/s/ Mark Pearson
Mark Pearson
/s/ Robin M. Raju
Robin M. Raju
/s/ William Eckert
William Eckert
/s/ Francis Hondal
Francis Hondal
/s/ Arlene Isaacs-Lowe
Arlene Isaacs-Lowe
/s/ Daniel G. Kaye
Daniel G. Kaye
/s/ Joan M. Lamm-Tennant
Joan M. Lamm-Tennant
/s/ Craig MacKay
Craig MacKay
/s/ Bertram L. Scott
Bertram L. Scott
/s/ George H. Stansfield
George H. Stansfield
/s/ Charles G. T. Stonehill
Charles G. T. Stonehill
Title
President and Chief Executive Officer and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
Chief Accounting Officer
(Principal Accounting Officer)
Director
Director
Director
Chair of the Board
Director
Director
Director
Director
266
© 2024 Equitable Holdings, Inc. All rights reserved.