FG 10-K & 10-Q changes, risk factors and insider trading

For the year ended December 31, 2024,2025, our top five states for the distribution of our products were California, Florida, California, Pennsylvania, Texas and Ohio,New Jersey, which together accounted for 38.7%40% of our premiums. Any adverse economic developments or catastrophes in these states could have an adverse impact on our business.

We cede material amounts of insurance to other insurance companies through reinsurance. Accordingly, we bear credit risk with respect to our reinsurers. The failure, insolvency, inability or unwillingness of any reinsurer to pay under the terms of reinsurance agreements with us could materially adversely affect our business, financial condition, liquidity and results of operations. We regularly monitor the credit rating and performance of our reinsurance parties. Aspida Re, Wilton Re, Somerset and Everlake represent our largest third-party reinsurance counterparty exposures. As of December 31, 2024,2025, the net amount recoverable from Aspida Re,Aspida, Somerset, Everlake and Wilton Re were $7,844$8,589 million, $2,822$5,071 million, $1,168$1,868 million and $1,066$1,032 million, respectively. The risk of non-performance is mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit.

Issues in the development and use of AI/ML/LLM, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations. As with many technological innovations, AI/ML/LLM presents risks and challenges that could impact our business. We have and may adopt and integrate generative artificial intelligence tools into our systems for specific use cases reviewed by legal and information security. Our vendors may incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and theThe providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience. If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of AI/ML/LLM, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.

Factors such as consumer spending, business investment, government spending, potential government shutdowns, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs and trade sanctions on goods, trade wars, United States-China relations and supply chain disruptions all affect the business and economic environment and, ultimately, the amount and profitability of our business. The use or threatened use of tariffs by the current administration may cause disruptions in global trade, which could negatively impact clients that we serve and reduce demand for our services. We have limited flexibility to combat these uncertainties and reduce expenses during economic downturns. In an economic downturn characterized by higher unemployment, lower family income, negative investor sentiment and lower consumer spending, the demand for our insurance products could be adversely affected. Under such conditions, we may also experience increased pricing pressures and an elevated incidence of policy lapses, policy loans, withdrawals and surrenders. We have limited flexibility to combat these uncertainties and reduce expenses during economic downturns. As a result, we may face increased pricing pressures during these periods. In addition, ourthe investmentsuse or threatened use of tariffs by the current administration may cause disruptions in global trade, which could benegatively adverselyimpact affectedclients asthat awe result of deteriorating financialserve and businessreduce conditionsdemand affecting the issuers of the securities infor our investment portfolio.services.

As of December 31, 2024,2025, current economic conditions, including highslightly elevated inflation rates, have not adversely affected our business, results of operations and financial condition. However, we cannot predict if it will impact our business, results of operations and financial condition in the future for the forgoing reasons.

Our investments are subject to geopolitical risk. The geopolitical events such as the on-going conflicts in Russia, Ukraine and the Middle East may adversely affect our business, financial condition, results of operations and cash flows.

Our operations and financial results may be adversely affected by geopolitical events, including conflicts, political instability, trade restrictions, sanctions, or other hostilities in the regions where we operate or in countries with which we do business. While we have no exposure to investments in Russia or Ukraine, we have de minimis exposure in the Middle East and the surrounding regions. If the conflicts and their inflationary impact leads to a wider recession or other restrictive actions by the United States and/or other countries, our investments could suffer losses, which could have a negative impact on our financial results.

Since March 2022, the Federal Reserve has increased the Federal Funds (“Fed Funds”) rate 11 times from approximately 0% to approximately 5.50% before pausing in the latter half of 2023. In September 2024, the Federal Reserve began reducing the Fed Funds rate ending 2024 at approximately 4.5%. By September 2025, the Fed Funds rate had declined to 4.00%–4.25%, and subsequent cuts in October and December 2025 brought the Fed Funds rate down further to approximately 3.75%–4.00%, with market expectations and Fed communications suggesting additional reductions into 2026. Over the period since March 2022, market rates across the yield curve have risen. During periods of increasing interest rates, we may offer higher crediting rates on interest-sensitive products, such as universal life insurance and fixed annuities, and we may increase crediting rates on in-forceinforce products to keep these products competitive. We may be required to accept lower spread income (the difference between the returns we earn on our investments and the amounts we credit to contract holders), thus reducing our profitability, as returns on our portfolio of invested assets may not increase as quickly as current interest rates. Rapidly rising interest rates may also expose us to the risk of financial disintermediation, which is an increase in policy surrenders, withdrawals and requests for policy loans as customers seek to achieve higher returns elsewhere, requiring us to liquidate assets in an unrealized loss position. If we experience unexpected withdrawal activity, we could exhaust our liquid assets and be forced to liquidate other less liquid assets such as limited partnership investments. We may have difficulty selling these investments in a timely manner and/or be forced to sell them for less than we otherwise would have been able to realize, which could have a material adverse effect on our business, financial condition or operating results. We have developed and maintain ALM programs and procedures that are, we believe, designed to mitigate interest rate risk by matching asset cash flows to expected liability cash flows, and robust inflows provide additional opportunities to allocate in forceinforce assets in support of news business, further mitigating potential losses due to disintermediation risk. In addition, we assess surrender charges on withdrawals in excess of allowable penalty-free amounts that occur during the surrender charge period. The significant new business written in recent years strengthens the surrender charge protection since the surrender charges are highest in the early years of a policy. There can be no assurance that actual withdrawals, contract benefits, and maturities will match our estimates. Despite our efforts to reduce the impact of rising interest rates, we may be required to sell assets to raise the cash necessary to respond to an increase in surrenders, withdrawals and loans, thereby realizing capital losses on the assets sold.

Natural and man-made catastrophes, pandemics (including COVID-19)but not limited to, pandemics, present risks that could materially adversely affect our results of operations or the mortality or morbidity experience of our business. In addition, our business operations may be adversely affected by the increased risk of malicious and terrorist acts, as evidenced by recent incidents such as the New Orleans attack and Las Vegas explosion, which could disrupt our operations or the safety of our employees or customers. Claims arising from such events could have a material adverse effect on our business, operations and financial condition, either directly or as a result of their effect on our reinsurers or other counterparties. Such events could also have an adverse effect on the rate and amount of lapses and surrenders of existing policies, as well as sales of new policies.

In December 2020, the DOL issued its final version of an investment advice rule replacing the previous “Fiduciary Rule” that had been challenged by industry participants and vacated in March 2018 by the United States Fifth Circuit Court of Appeals. The new investment advice rule reinstates the five-part test for determining whether a person is considered a fiduciary for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986, as amended (the “Code”), and sets forth a new exemption, referred to as prohibited transaction class exemption (“PTE”) 2020-02. The rule’s preamble also contains the DOL’s reinterpretation of elements of the five-part test that appears to encompass more insurance agents selling IRA products and withdraws the DOL’s longstanding position that rollover recommendations out of employer plans are not subject to ERISA. The new rule took effect on February 16, 2021. The DOL left in place PTE 84-24, which is a longstanding class exemption providing prohibited transaction relief for insurance agents selling annuity products, provided that certain disclosures are made to the plan fiduciary, which is the policyholder in the case of an IRA, and certain other conditions are met. Among other things, these disclosures include the agent’s relationship to the insurer and commissions received in connection with the annuity sale. We, along with FGL Insurance and FGL NY Insurance, designed and launched a compliance program in January 2022 requiring all agents selling IRA products to submit an acknowledgment with each IRA application indicating the agent has satisfied PTE 84-24 requirements on a precautionary basis in case the agent acted or is found to have acted as a fiduciary. Meanwhile, the DOL has publicly announced its intention to consider future rulemaking that may revoke or modify PTE 84-24.

On April 23, 2024, following previous attempts to expand fiduciary regulation for advisers, the DOL released a new rule, the “New Fiduciary Rule,Rule”, which significantly broadens the definition of “fiduciary” under ERISA and Section 4975 when advisers provide investment recommendations to plans subject to ERISA and Section 4975 of the Code. Among other requirements, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if such person provides investment advice or makes an investment recommendation to a retirement investor (i.e., a plan, a discretionary plan fiduciary, a plan participant or beneficiary, an IRA, an IRA owner or beneficiary, or an IRA fiduciary) for a fee or other compensation, the person makes professional investment recommendations to investors on a regular basis as part of their business, and the recommendation is provided under circumstances that would indicate to a reasonable investor in like circumstances that the recommendation is based on a review of the particular needs or individual investor circumstances of the retirement investor, reflects the application of professional or expert judgment to the retirement investor’s particular needs or individual circumstances, and may be relied upon by the retirement investor as intended to advance the retirement investor’s best interest. Unlike the current ERISA standard, the New Fiduciary Rule subjects non-discretionary investment advice to retirement plans and accounts under the care and loyalty standards that also apply to investment advisors with discretionary authority or control over such plans and accounts. In addition, on the same date, the DOL issued amended versions of PTE 2020-02 and PTE 84-24, either or both of which provide prohibited transaction exemptive relief to insurance companies and insurance producers who make insurance product recommendations to retirement investors, subject to certain conditions. The New Fiduciary Rule likely means that certain of the Company’s agents will be considered fiduciaries for purposes of ERISA and the Code, subjecting the Company, and the insurance industry on the whole, to greater regulatory risk.

The DOL’s newNew Fiduciary Rule, which was scheduled to become effective on September 23, 2024, has been challenged. On July 25, 2024, in the case of Federation of Americans for Consumer Choice, Inc., et al. v. United States Department of Labor, et al., (“Federation of Americans”) the United States District Court for the Eastern District of Texas issued an order staying the effective date of the DOL’s finalNew fiduciaryFiduciary ruleRule (and related amendments to PTE 84-24) that was issued in March 2024. The District Court, in part relying on the Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo, found that the plaintiffs (primarily insurance agents) were likely to succeed on their arguments that the FinalNew Fiduciary Rule improperly expanded the definition of an “investment advice fiduciary” under ERISA. As a result, the FinalNew Fiduciary Rule’s original effective date of September 23, 2024 has beenwas delayed until further notice.

In addition, on July 26, 2024, a companion case to Federation of Americans filed in the United States District Court for the Northern District of Texas, American Council of Life Insurers, et al. v. United States Dep’t of Labor, et al., held the remaining PTE amendments included in the FinalNew Fiduciary Rule (PTEs 2020-02, 75-1, 77-4, 80-83, 83-1 and 86-128) that were not challenged in Federation of Americans were also stayed, noting that the Northern District fully agreed with the Eastern District’s analysis and decision to stay the effective date of the FinalNew Fiduciary Rule.

On September 20, 2024, the DOL appealed both rulings to the Fifth Circuit Court of Appeals. OnIn February 11,early 2025, the DOL filed ansuccessive unopposed motionmotions to hold the appeals in abeyance to allow new agency officials time to become familiar with the issues in these cases and determine how they wish to proceed. The motionmotions waswere granted so the appeals arewere in abeyance. AIn November 2025, the DOL moved to voluntarily dismiss their appeals and the Fifth Circuit reversalagreed ofand remanded the cases to the District Courts. The DOL has moved the District Courts to allow until March 2026 to determine their position and next steps with the cases. Adverse Texas districtDistrict courtCourt rulings could have harmful effects on the insurance industry, creating additional hurdles to operate our business.

ManagementWe cannot predict the final outcome of the pending litigation regarding the New Fiduciary Rule, however, management believes these current and emerging developments relating to market conduct standards for the financial services industry may, over time, materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how we supervise our distribution force, compensation practices and liability exposure and costs.costs, all of which could adversely impact our business, results of operations and/or financial condition. In addition to implementing the compliance procedures described above, management is monitoring further developments closely and will be working with IMOs and distributors to adapt to these evolving regulatory requirements and risks.

From time to time, various tax law changes have been proposed that could have an adverse effect on our business, including the elimination of all or a portion of the income tax advantages described above for annuities and life insurance policies. For example, changes in tax law could reduce or eliminate the tax-deferred accumulation of earnings on the deposits paid by the holders of annuities and life insurance products, which could make such products less attractive to potential purchasers. Any such enactment, interpretation, change, repeal or modification could adversely affect us, possibly with retroactive effect. For example, on July 4, 2025, the U.S. government enacted Public Law 119-21 commonly referred to as the One Big Beautiful Bill Act, which (along with prior U.S. federal tax reform legislation) has resulted in significant changes to the taxation of business entities, including, among other changes, the imposition of minimum taxes and excise taxes, changes to the taxation of income derived from international operations, changes in the deduction and amortization of research and development expenditures, and limitations on the deductibility of business interest. Additionally, insurance products, including the tax favorable features of these products, generally must be approved by the insurance regulators in each state in which they are sold. This review could delay the introduction of new products or impact the features that provide for tax advantages and make such products less attractive to potential purchasers. A shift away from life insurance and annuity products could reduce FGL Insurance’s and FGL NY Insurance’s income from the sale of such products, as well as the assets upon which FGL Insurance and FGL NY Insurance earn investment income. If legislation were enacted to eliminate the tax deferral for annuities or life insurance policies, such a change would have a material adverse effect on our ability to sell non-qualified annuities or life insurance policies. In addition, it is uncertain if and to what extent various states will conform to federal law. We continue to evaluate the impact that these and other tax reforms may have on our business.

The historical information about us in this Annual Report on Form 10-K includes periods where we operated as a wholly owned subsidiary of FNF or as a stand-alone public company. Our historical financial information and summary historical financial information included in this Annual Report on Form 10-K is derived from the Consolidated Financial Statements and the accounting records of F&G and FNF. Accordingly, the historical financial information for periods prior to the separation and distribution included in this Annual Report on Form 10-K does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented, or those that we will achieve in the future, including:

We and our eligible subsidiaries are “affiliated” with FNF for U.S. federal income tax purposes and will join in filing with FNF a consolidated federal income tax return for the year ended December 31, 2025. Due to the share distribution on December 31, 2025, F&G will no longer be allowed to file a consolidated tax return with FNF starting in 2026. Therefore, the obligations described here will be ending with the 2025 tax return. There will be a settlement once the final tax return is filed, but our tax attributes might still be impacted by amended returns or carrybacks involving open prior years. Pursuant to the Tax Sharing Agreement, we are periodically obligated to make payments to FNF equal to the tax obligations of us and our subsidiaries for federal income taxes and certain state and local income taxes that are computed on a combined, consolidated or unitary method. In addition, are obligated to make payments to FNF for the use of certain tax attributes of FNF and its subsidiaries that are used to offset taxes by us and our subsidiaries. Certain tax attributes of us and our subsidiaries are also available for use by FNF, for which FNF will generally be obligated to make payments to us in compensation. To the extent such tax attributes are used by FNF and its subsidiaries, they will not be available to offset taxes of us and our subsidiaries.

MarketIn volatilitylight hasof affected,increasing uncertainty in the markets we serve, we are unable to predict how long the current environment will last or the significance of the financial and mayoperational continueimpacts to affect, our business and financial performance in varying ways. Volatility can pressure sales and reduce demand as consumers hesitate to make financial decisions.us. To enhance the attractiveness and profitability of our products and services, we continually monitor the behavior of our customers, as evidenced by annuitization rates and lapse rates, which vary in response to changes in market conditions. See “Part I. Item 1A. Risk Factors” in this Annual Report on Form 10-K for further discussion of risk factors that could affect market conditions.

We believe that the aging of the U.S. population will continue to increase thedemand for retirement savings, growth, and income solutions, including demand for our indexed annuity and indexed universal life (“IUL”) products. As the “baby boomer” generation prepares for retirement, we believe that demand for retirement savings, growth, and income products will grow. We serve a growing retirement population, with more than 10,00011,000 Americans turning 65 every day and a projected 23%30% increase in people age 65 and older65-100 over the next 25 years.years according to the U.S. Census Bureau. The impact of this growth may be offset to some extent by asset outflows as an increasing percentage of the population begins withdrawing assets to convert their savings into income.

We operate in the sector of the insurance industry that focuses on the needs of middle-income Americans. The underserved middle-income market represents a major growth opportunity for us. As a tool for addressing the unmet need for retirement planning, we believe that many middle-income Americans have grown to appreciate the financial certainty that we believe annuities such as our FIAindexed annuity products afford. For example, the fixed index annuity (“FIA”) market grew from nearly $12 billion of sales in 2002 to $97$130 billion of sales in 20232024 and the registered index-linked annuities (“RILA”) market grew from $11$17 billion of sales in 20182019 to $44$62 billion of sales in 2023.2024. Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual sales in 2002 to $3$2 billion of annual sales in 2023.2024.

IndexedWe have indexed annuities and IUL products contain an embedded derivative; a featurecontracts that permitspermit the holder to elect an interest rate return or an equity-indexequity index linked component, where interest credited to the contractcontracts is linked to the performance of various equity indices.indices, such as the S&P 500 Index. This feature represents an embedded derivative under GAAP. The indexed annuities/IUL embedded derivatives are valued at fair value and included in the liability for Contractholder funds in ourthe Consolidated Balance Sheets with changesthe ceded portion of the reinsured indexed crediting feature embedded derivatives recorded as a component of the Reinsurance recoverable in the Consolidated Balance Sheets. Changes in fair value are included as a component of Benefits and other changes in policy reserves in ourthe Consolidated Statements of Operations.

Valuation of Fixed Maturity, Preferred and Common Equity Securities, and Derivatives

Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive income (loss) (“AOCI”), net of deferred income taxes. Our equity securities are carried at fair value with unrealized gains and losses included in net income (loss). Realized gains and losses on the sale of investments are determined on the basisspecific of first-in first-out costidentification basis and are credited or charged to income on a trade date basis.

Management’s assessment of all available data when determining fair value of the AFSfixed maturity securities is necessary to appropriately apply fair value accounting. Management utilizes information from independent pricing services, who take into account perceived market movements and sector news, as well as a security’s terms and conditions, including any features specific to that issue that may influence risk and marketability. Depending on the security, the priority of the use of observable market inputs may change as some observable market inputs may not be relevant or additional inputs may be necessary. We generally obtain one value from our primary external pricing service. In situations where a price is not available from the independent pricing service, we may obtain broker quotes or prices from additional parties recognized to be market participants. We believe the broker quotes are prices at which trades could be executed based on historical trades executed at broker-quoted or slightly higher prices. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, including discounted cash flows, matrix pricing, or other similar techniques.

F&G cedes certain business on a coinsurance funds withheld basis. Assets supporting the arrangements are reported within Funds withheld for reinsurance liabilities on our Consolidated Balance Sheets. All assets within the Funds withheld for reinsurance liabilities are recorded in a manner consistent with each respective item of our accounting policies discussed in Note A - Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K. Investment results for the assets that support the coinsurance that are segregated within the funds withheld account are passed directly to the reinsurer pursuant to the contractual terms of the reinsurance arrangement, which creates embedded derivatives considered to be total return swaps. These totalembedded return swapsderivatives are not clearly and closely related to the underlying insurancereinsurance contractagreement and thus require bifurcation. The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account. For arrangements reinsuring indexed annuities products, the funds withheld account additionally contains an embedded derivative representing the index credit obligation due the reinsurer, resulting in a compound embedded derivative. TheseBeginning compoundin 2025, these embedded derivatives are reported in Funds withheld for reinsurance liabilitiesliabilities, irrespective if in a net asset position or a net liability position, on the Consolidated Balance Sheets and forprior allperiods otherhave arrangements,been embeddedreclassified derivatives are reported infrom Prepaid expenses and other assets ifto inconform a net gain position, or Accounts payable and accrued liabilities, if in a net loss position onwith the Consolidatedcurrent Balance Sheets.presentation. The related gains or losses are reported in Recognized gains and (losses), net on the Consolidated Statements of Operations. SeeRefer to Note B – Fair Value of Financial Instruments for descriptions of the fair value methodologies used for these and other derivative financial instruments and Note D - Derivatives and Note E - Reinsurance to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K.10-K for additional information.

We categorize our fixed maturity securities, preferred securities, common equity securities and derivatives into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. The following table presents the fair value of fixed maturity securities and equity securities by pricing source, hierarchy level and net asset value (“NAV”) as of December 31, 20242025 and December 31, 2023,2024, dollars in millions.

As of December 31, 20242025 and December 31, 2023,2024, goodwill was $2,179$2,180 million and $1,749$2,179 million. The goodwill was recorded in connection with the recent owned distribution acquisitions and the FNF Acquisition.

For the year ended December 31, 2024,2025, changes in market conditions, including changing interest rates, resulted in deferred tax assets related to the net unrealized capital losses in the Company’s investment portfolio. U.S. GAAP requires the evaluation of the recoverability of deferred tax assets and the establishment of a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not to be realized. When assessing the need for valuation allowance on the unrealized capital loss deferred tax assets, we assert a tax planning strategy to hold the vast majority of underlying securities to recovery or maturity. Our ability to assert such a tax planning strategy is dependent upon factors such as the Company’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs. In the event these estimates differ from our prior estimates due to the receipt of new information, we may be required to significantly change the income tax expense recorded in the Consolidated Financial Statements. This includes a further significant decline in value of assets incorporated into our tax planning strategies which could lead to an increase of our valuation allowance on deferred tax assets having an adverse effect on current and future results.

We are in three distinct retail channels and two institutional markets. Our three retail channels include agent-based Independent Marketing Organizations (“IMOs”), banks and broker-dealers. We have deep, long-tenured relationships with our network of leading IMOs and their agents to serve the needs of the middle-income market and develop competitive annuity and life products to align with their evolving needs. Upon FNF’s acquisition of F&G on June 1, 2020 (the “FNF Acquisition”), and F&G’s subsequent rating upgrades in mid-2020, we launched into banks and broker-dealers. Further, in 2021, we launched into two institutional markets to originate Funding Agreement Backed Notes (“FABN”) and pension risk transfer (“PRT”) transactions. The FABN Program offers funding agreements to institutional clients by means of capital markets transactions through investment banks. The funding agreements issued under the FABN Program are in addition to those issued to the Federal Home Loan Bank of Atlanta (“FHLB”). The PRT solutions business is supported by an experienced team, and we partner with brokers and institutional consultants for distribution. These markets leverage our existing team's spread-based capabilities as well as our strategic partnership with Blackstone ISG-I Advisors LLC (“Blackstone”).LLC.

Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (indexed annuities and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions. A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued. IUL insurance is a complementary type of contract that accumulates value in a cash value account and provides a payment to designated beneficiaries upon the policyholder’s death. An immediate annuity is a type of contract that begins making specified payments within one annuity period (e.g., one month or one year) and typically makes payments of principal and interest earnings over a period of time. As defined by the IID,Iowa Insurance Division, a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued. In essence, funding agreement providers issue fixed maturity contracts with fixed or floating interest rates in exchange for a single upfront premium. Our PRT products are comparable to income annuities, as we generally receive a single, upfront premium in exchange for paying a guaranteed stream of future income payments which are typically fixed in nature but may vary in duration based on participant mortality experience.

Under GAAP, premium collections for deferred annuities (indexed annuities and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues. Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses. Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of unearned revenue liabilities (“URL”)), and net realized gains (losses) on investments. Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization of VOBA,value of business acquired (“VOBA”), deferred acquisition costs (“DAC”) and DSI,deferred sales inducements (“DSI”), and other operating costs and expenses.

Market risk benefits (“MRBs”) are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk. MRBs (inclusive of reinsured MRBs) are measured at fair value using a risk neutral valuation method, which is based on current net amounts at risk, market data, internal and industry experience, and other factors. The change in fair value of MRBs generally reflects impacts from actual policyholder behavior (including surrenders of the benefit), changes in interest rates, and changes in equity market returns. Generally higher interest rates and equity returns result in gains whereas lower interest rates and equity returns result in losses. Reinsured MRBs are valued using a methodology consistent with direct MRBs, with the exception of the non-performance spread which reflects the credit of the reinsurer.

Yield on AAUM is calculated by dividing annualized GAAP net investment income by AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.

•Sales attributable to flow reinsurance to third partiesparties, including the reinsurance vehicle that went into effect August 1, 2025, were highermodestly lower during the yearsyear ended December 31, 2025 compared to the year ended December 31, 2024, and higher for the year ended December 31, 2024 andcompared to the year ended December 31, 2023, primarily reflecting the level of MYGA sales during the respective periods, the addition of new reinsurance, the higher level of MYGA sales,reinsurance and changes in the percentages ceded during the periods.

•Life-contingent pension risk transfer premiums increasedwere modestly lower during the year ended December 31, 2025 compared to the year ended December 31, 2024, and higher for the yearsyear ended December 31, 2024 andcompared to the year ended December 31, 2023, reflecting the timing of PRT transactions. As noted above, PRT premiums are subject to fluctuation period to period.

•Surrender charges increasedwere modestly lower for the yearsyear ended December 31, 2025 compared to the year ended December 31, 2024, and higher for the year ended December 31, 2024 andcompared 2023,to the year ended December 31, 2023. These charges primarily reflecting increases inreflect withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies.policies, Theand increaseare subject to changes in termination activity is primarily due to the higher interest rate environment. See “Item 1. Business – The Products We Offer – Withdrawal Option for Deferred Annuities,” in this Annual Report on Form 10-K for additional discussion on surrender charges and MVAs.

•Policyholder fees and other income increased for the years ended December 31, 20242025 and 2023,2024, primarily duereflecting tohigher guaranteed minimum withdrawal benefit (“GMWB”) rider fees and increased cost of insurance charges, net of changes in unearned revenue liabilities (“URL”) on IUL policies from growth in business and higher guaranteed minimum withdrawal benefit (“GMWB”) rider fees.business. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year. The increase for the year ended December 31, 2025 also includes a reinsurance true-up adjustment.

Our AAUM and yield on AAUM are summarized as follows (annualized) (dollars in millions) (see “Non-GAAP Financial Measures” above and “Reconciliation of total investments to AUM’ below):

•AAUM was higher for the years ended December 31, 20242025 and 2023,2024, reflecting net new business asset flows, stable inforce retention and net debtcapital transaction proceeds.

•Owned distribution revenues represent commissions received by our majority owned distribution partners generated from third-party annuity and life insurance sales. Override and bonus commissions are recognized as revenue at the effective date of each policy sold under a contract. Owned distribution revenues were higher for the year ended December 31, 20242025, representcompared revenues associated withto the 2024year acquisitionsended ofDecember Roar31, and PALH, and2024, primarily reflectreflecting higher commission revenues.

Recognized gains and (losses), net is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $(30154) million, $(12330) million and $381$(123) million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively.

•For the year ended December 31, 2024,2025, net realized and unrealized gains (losses) gains on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option gains on owned distribution investments and mark-to-market gainslosses on our preferredequity securities and equitynet realized losses on fixed maturity available-for-sale securities.

•The fair value of reinsurancethe relatedreinsurance-related embedded derivativederivatives isin our funds withheld (“FWH”) reinsurance agreements are estimated based onupon the change in fair value (for total return swaps), or the fair value (for the index credit obligation due the reinsurer), of the underlying assets held insupporting the funds withheld (“FWH”)from portfolio.reinsurance liabilities.

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments and we utilize foreign currency swaps to reduce market risks from fluctuations in foreign exchange rates that impact earnings associated with our foreign currency denominated investments.

The components of the realized and unrealized gains (losses) on certain derivative instruments hedging our indexed annuities, universal life products and floating rate investments are summarized in the table below (Dollars in millions):

•The net change in fair value of the foreign currency and interest rate swaps waswere primarily driven by fluctuations in the foreign currency exchange rate and interest rate indexindexes underlying the swap contracts.

•PRT agreementsagreements, primarily representing the change in reserves associated with PRT premiums during the periods, were modestly lower during the year ended December 31, 2025 compared to the year ended December 31, 2024, and increased for the yearsyear ended December 31, 2024 andcompared to the year ended December 31, 2023 reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

•The indexed annuities/IUL market related liability movements for all periods presented are mainly driven by changes in the equity markets, non-performance spreads, and risk-free rates during the respective periods. The change in risk free rates and non-performance spreads increased (decreased) the indexed annuities market related liability by approximately $138 million, $(203) million, $106 million and $(656)$106 million during the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts. See “Revenues — Recognized gains and (losses), net” above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

•During the third quarter of 2024 and forFor the year ended December 31, 2024,2025, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain FIAindexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholderContractholder funds. These changes resulted in decreasesa decrease in total benefits and other changes in policy reserves of approximately $89$20 million for the year ended December 31, 2024.2025.

•During the third quarter and forFor the year ended December 31, 2023,2024, based on increasespolicyholder inbehavior, experience and interest ratesrate movements, we reflected updates to surrender assumptions for recent and pricingexpected changes,near weterm policyholder behavior, as well as updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholderContractholder funds and also aligned reserves to actual policyholder behavior.funds. These changes, taken together,changes resulted in ana increasedecrease in total benefits and other changes in policy reserves of approximately $73$89 million.

•DuringFor the fourthyear quarterended ofDecember 2022,31, 2023, based on increases in interest rates and pricing changes during 2022,changes, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholderContractholder funds and thealso fairaligned valuereserves ofto marketactual riskpolicyholder benefits.behavior. These changes, taken together,changes resulted in an increase in contractholdertotal fundsbenefits and marketother riskchanges benefitsin policy reserves of approximately $99$73 million.

Market Risk Benefit Losses (Gains) Losses

Below is a summary of market risk benefit losses (gains) losses (in millions):

•Market risk benefit losses (gains) losses is primarily driven by issuances, attributed fees collected, effects of market related movements (including changes in equity markets and risk-free rates), actual policyholder behavior as compared with expected, changes in assumptions during the periods. Market risk benefit losses (gains) losses are reported net of reinsurance, reflecting an amended reinsurance agreement effective duringJuly the year ended December 31,1, 2024.

•Changes in market risk benefit losses (gains) losses for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily reflect more favorableunfavorable market related movements and favorableunfavorable actual policyholder behavior as compared to expected.

•Changes in market risk benefit losses (gains) losses for the year ended December 31, 2023,2024, compared to the year ended December 31, 2022,2023, primarily reflect lessmore favorable market related movements, a favorable GMWB utilization assumption change in 2022 (that did not recur in 2023)movements and higher attributed fees. These changes were partially offset byfavorable actual policyholder behavior for the year ended December 31, 2023 being more in line with expected, as compared to the year ended December 31, 2022, resulting in a favorable change to the market risk benefit (gains) losses.expected.

•DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Amortization of DAC, VOBADepreciation and DSIamortization increased for the years ended December 31, 20242025 and 2023,2024, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities. Amortization of VOBA also increased approximately $15 million for the year ended December 31, 2024, reflecting other actuarial model updates and refinements.

•Amortization of other intangible assets and fixed asset depreciation for the year ended December 31, 2025 and 2024 included amortization of other intangible assets from our majority owned interests in Roar and PALH.PALH that were acquired in 2024.

•Personnel costs and other operating expenses increased for the yearsyear ended December 31, 2024 andcompared 2023,to the year ended December 31, 2023 primarily reflecting costs in line with thesales volumes and growth in sales and assetsassets, along with continued investments in our operating platform. InThe addition,increase for the year ended December 31, 2024 includesalso included $39 million from our majority owned interests in Roar and PALH, $26 million related to the change in fair value of contingent consideration and $19 million of guaranty fund assessments.

•The income tax expense for the year ended December 31, 20242025 was $136$52 million compared to income tax expense of $23$136 million for the year ended December 31, 2023.2024. The effective tax rate was 17%16% and (66)%,17%, respectively, for the years ended December 31, 20242025 and December 31, 2023.2024. The effective tax rate for the year ended December 31, 2025 differs from the statutory rate of 21% primarily due to favorable permanent adjustments and valuation allowance release on unrealized losses and capital loss carryforwards. The effective tax rate for the year ended December 31, 2024 differs from the statutory rate of 21% primarily due to favorable permanent adjustments and valuation allowance release on unrealized losses and capital loss carryforwards. The effective tax rate for the year ended December 31, 2023 differs from the statutory rate of 21% primarily due to a tax valuation allowance expense recorded on unrealized losses and capital loss carryforwards. The effective tax rate for the year ended December 31, 2022 differs from the statutory rate of 21% primarily due to favorable permanent tax adjustments.

As of MarchJune 31,30, 2026 and December 31, 2025, our reserves, net of reinsurance, and weighted average crediting rate on our fixed rate annuities were $6.1$6.0 billion and 4.76%4.81% and $6.4 billion and 4.84%, respectively. Some of our products, most notably our fixed rate annuities, include guaranteed minimum crediting rates. We are required to pay the guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates for a longer period in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly. Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.

The accounting estimates described in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2025 are those we consider critical in preparing our unaudited Condensed Consolidated Financial Statements. There were no changes to the Company’s critical accounting policies or estimates during the threesix months ended MarchJune 31,30, 2026. Management is required to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures with respect to contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. See Note A - Basis of Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional description of certain significant accounting policies that have been followed in preparing our unaudited Condensed Consolidated Financial Statements.

F&G hedges certain portions of its exposure to product related equity market risk by entering into derivative transactions. We purchase derivatives consisting predominantly of equity options and, to a lesser degree, futures contracts (specifically for indexed annuity contracts) on the equity indices underlying the applicable policy. These derivatives are used to offset the reserve impact of the index credits due to policyholders under the indexed annuity and IUL contracts. The majority of all such equity options are one-year options purchased to match the funding requirements underlying the indexed annuity/IUL contracts. We attempt to manage the cost of these purchases through the terms of our indexed annuity/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained. The equity options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses). The change in fair value of the equity options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions. In addition, to reduce market risks from interest rate changes and foreign exchange rate fluctuations on our earnings associated with our floating rate and foreign currency denominated investments, we execute pay-float and receive-fixed interest rate swaps and utilize foreign currency swaps.derivatives, including foreign currency swaps and forwards.

(v) Other and “non-recurring,” “infrequent” or “unusual items”: Other adjustments include removing any charges associated with U.S. guaranty fund assessments as these charges neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, but result from external situations not controlled by the Company. Further, Management excludes certain items determined to be “non-recurring,” “infrequent” or “unusual” from adjusted net earnings when incurred if it is determined these expensesitems are not a reflection of the core business and when the nature of the item is such that it is not reasonably likely to recur within two years and/or there was not a similar item in the preceding two years;

The results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in millions):

•Gross sales were higherlower for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. Core sales of indexed annuities, IUL, and PRT increasedwere lower for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, primarilyrespectively, drivenreflecting increases in indexed annuities more than offset by indexeddecreases annuities.in PRT. Opportunistic sales of MYGA and funding agreements are subject to fluctuation period to period based on economics and market opportunity; we continue to prioritize pricing discipline and capital allocation to the highest return opportunities.

•Sales attributable to flow reinsurance to third parties, including the new reinsurance vehicle effective August 1, 2025, were higherlower during the three months ended MarchJune 31,30, 2026 and higher during the six months ended June 30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, respectively, primarily reflecting the addition of new reinsurance andreinsurance, changes in the percentages ceded during the periods,periods partially offset byand the levels of MYGA sales during the respective periods.

a) Reported net of ceded premiums of $20$19 million, and $22$21 million for the three months ended June 30, 2026 and 2025, and $39 million and ceded$43 million for the six months ended June 30, 2026 and 2025, respectively. Ceded product fees ofwere $24$29 million,million and $12 million for the three months ended MarchJune 31,30, 2026 and 20252025, and $53 million and $24 million for the six months ended June 30, 2026 and 2025, respectively.

•Life-contingent pension risk transfer premiums increasedwere lower for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, respectively, reflecting the timing of PRT transactions. PRT premiums are subject to fluctuation period to period.

•Surrender charges were relatively unchangedlower for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. These charges primarily reflect withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities and IUL policies, and are subject to changes in the interest rate environment.

•Policyholder fees and other income were relatively unchanged for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Policyholder fees and other income decreased for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, primarily reflecting the impact of a reinsurance true-up adjustment during the threesix months ended MarchJune 31,30, 2025, partially offset by higher guaranteed minimum withdrawal benefit (“GMWB”) rider fees, net of reinsurance. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.

Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $228$263 million and $184$491 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and March$189 31,million and $373 million for the three and six months ended June 30, 2025, respectively.

•AAUM was higher for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, reflecting net new business asset flows and stable inforce retention, partially offset by reinsurance to third parties.

•Interest and investment income was higher for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to $50$10 million from invested asset growthgrowth, and $35$4 million of higher returns on alternative investments,investments partiallyand offset by $(28)$22 million of all other rate and mix impacts.

•Owned distribution revenues represent commissions received by our majority owned distribution partners generated from third-party annuity and life insurance sales. Override and bonus commissions are recognized as revenue at the effective date of each policy sold under a contract. Owned distribution revenues were modestly higherlower for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025, primarily reflecting higherlower commission revenues.

Recognized gains and (losses), net is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $260$(82) million and $132 million for the three and six month periods ended MarchJune 31,30, 2026, and $(4257) million and $(99) million for the three and six month periods ended MarchJune 31,30, 2025, respectively.

•For the three and six months ended MarchJune 31,30, 2026, net realized and unrealized gains (losses) on fixed maturity securities, equity securities and other invested assets is primarily the result of net realized losses on fixed maturity securities.securities primarily reflecting portfolio repositioning.

•For the threesix months ended MarchJune 31,30, 2026, Recognized gains and (losses), net includes a pre-tax gain from the sale of F&G Life Re, to Ancient Financial Holdings, LP (“Ancient”) an unrelated third party, of $14 million, subject to certain post-closing adjustments that are expected to be finalized in the second or third quarter of 2026.

•For the three and six months ended MarchJune 31,30, 2025, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of mark-to-market losses on our equity securities.

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments and we utilize foreign currency swaps and foreign currency forwards to reduce market risks from fluctuations in foreign exchange rates that impact earnings associated with our foreign currency denominated investments.

•The net change in fair value of the foreign currency derivatives and interest rate swaps were primarily driven by fluctuations in the foreign currency exchange rates and interest rate indexes underlying the swap contracts.

(a) Reported net of ceded benefits and other changes in policy reserves of $50$76 million and $53$64 million for the three months ended MarchJune 31,30, 2026 and 2025, and $126 million and $117 million for the six months ended June 30, 2026 and 2025 respectively.

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, increaseddecreased for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

•The indexed annuities/IUL market related liability movements during the three and six months ended MarchJune 31,30, 2026 and 2025, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the respective periods. The change in risk free rates and non-performance spreads increased the direct indexed annuities market related liability by $10 million and $36 million during the three months ended June 30, 2026 and 2025, respectively. The change in risk free rates and non-performance spreads (decreased) increased the direct indexed annuities market related liability by $(145135) million and $47$83 million during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts. See “Revenues — Recognized gains and (losses), net” above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

◦During the the three and six months ended MarchJune 31,30, 2026 and 2025,2026, based on policyholder behavior, experience and interest rate movements,experience, we reflected updates to surrenderthe assumptionsoption forbudget recent and expected near term policyholder behavior, as well as updated certain indexed annuity assumptionsassumption used to calculate the fair value of the embedded derivative component within contractholderContractholder funds. These changes resulted in increases (decreases) in total benefits and other changes in policy reserves of approximately $(10)$4 million and $(21)$14 million for the three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively.

•Index credits, interest credited and bonuses for the three and six months ended MarchJune 31,30, 2026, were higher compared to the three and six months ended MarchJune 31,30, 2025, primarily reflecting higher index credits and interest credited on indexed annuities and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.

•Market risk benefit losses (gains) are primarily driven by issuances, attributed fees collected, effects of market related movements (including changes in equity markets and risk-free rates), and actual policyholder behavior as compared with expected changes in assumptions during the periods. Market risk benefit losses (gains) are reported net of reinsurance.

•Changes in market risk benefit losses (gains) for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily reflect unfavorable market related movements, partially offset by favorable actual policyholder behavior as compared to expected. Changes in market risk benefit losses (gains) for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily reflect favorable market related movements, partially offset by higher issuances and unfavorable actual policyholder behavior as compared to expected.

•DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Depreciation and amortization increased for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

•Personnel costs and other operating expenses were lowerrelatively unchanged for the three months ended MarchJune 31,30, 2026 and were lower for the six months ended June 30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, respectively, primarily reflecting costs in line with sales volumes and growth in assets, disciplined expense management, including one-time management actions taken in the second quarter of 2025, along with continued investments in our operating platform.

•Interest expense was relatively unchanged for the three and six months ended MarchJune 31,30, 2026, as compared to the three and six months ended MarchJune 31,30, 2025.

•Income tax expensebenefit for the three months ended MarchJune 31,30, 2026 was $74$19 million, compared to income tax benefitexpense of $5$15 million for the three months ended MarchJune 31,30, 2025. The effective tax rate was 23%20% and 19%26% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increasedecrease in income tax expense period over period is primarily related to the increasedecrease in pre-tax income.

•Adjusted net earnings of $91$85 million for the three months ended MarchJune 31,30, 2025 included income from a $16 million reinsurance true-up adjustment.2026. Investment income from alternative investments was $45$49 million below themanagement's midpoint of management'scurrent long-term expected return of approximately 12% to 14%.12%.

(a) Includes accrued investment income, receivable for sale of investments and low income housing tax credit assets (b) Includes derivative collateral and payable for purchase of investmentsassets.

As of MarchJune 31,30, 2026 and December 31, 2025, the fair value of our investment portfolio was approximately $69$70 billion for both periods,periods. andRefer to Note B - Fair Value of Financial Instruments for descriptions of the fair value methodologies used for financial instruments. The portfolio was divided among the following asset classes and sectors (dollars in millions):

(a)Includes investment grade non-redeemable preferred stocks ($196$167 million and $197 million at MarchJune 31,30, 2026 and December 31, 2025, respectively).

The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our fixed maturity AFS portfolio (dollars in millions) as of MarchJune 31,30, 2026 and December 31, 2025:

The following table shows the composition of our invested assets and cash and cash equivalents (in millions) at carrying value as of MarchJune 31,30, 2026 and December 31, 2025, a portion of which represent funds withheld backing reserves as part of coinsurance with funds withheld reinsurance arrangements.

The tables below present the top ten structured security and industry categories of our fixed maturity and equity securities including the fair value and percent of total fixed maturity and equity securities fair value as of MarchJune 31,30, 2026 and December 31, 2025 (dollars in millions).

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities as of MarchJune 31,30, 2026, (in millions) are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

The fair value of our investments in subprime securities and Alternative-A (“Alt-A") RMBS securities were $4 million and $47$46 million as of MarchJune 31,30, 2026, respectively, and $4 million and $48 million as of December 31, 2025, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, approximately 94%96% and 92%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

As of MarchJune 31,30, 2026, the CLO and ABS positions were trading at a net unrealized loss of $44$50 million and a net unrealized loss of $199 million, respectively. As of December 31, 2025, the CLO and ABS positions were trading at a net unrealized gain of $42 million and a net unrealized loss of $133 million, respectively.

The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our AFS ABS portfolio (dollars in millions) as of MarchJune 31,30, 2026 and December 31, 2025.

The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our AFS CLO portfolio (dollars in millions) as of MarchJune 31,30, 2026 and December 31, 2025.

The following table summarizes our municipal bond exposure as of MarchJune 31,30, 2026 and December 31, 2025 (in millions).

Across all municipal bonds, the largest issuer represented 5% and 4% respectively, of the category and less than 1% of the total portfolio for both MarchJune 31,30, 2026 and December 31, 2025, and is rated NAIC 1 as of MarchJune 31,30, 2026. Our focus within municipal bonds is on NAIC 1 rated instruments, with 99% and 98% respectively, of our municipal bond exposure rated NAIC 1 as of MarchJune 31,30, 2026 and December 31, 2025.

We diversify our commercial mortgage loans (“CMLs”) portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a level to secure the related debt. Loan-to-value (“LTV”) and debt-service coverage (“DSC”) ratios are utilized to assess the risk and quality of CMLs. As of MarchJune 31,30, 2026 and December 31, 2025, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.22.1 times and 2.3 times, respectively, and a weighted average LTV ratio of 57%56% forand both57%, periods.respectively.

We consider a CML delinquent when a loan payment is greater than 30 days past due. For mortgage loans that are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. As of MarchJune 31,30, 2026 and December 31, 2025, we had one CML that was delinquent in principal or interest payments. We had no CMLs in the process of foreclosure as of MarchJune 31,30, 2026 and December 31, 2025. See Note C - Investments to the unaudited Condensed Consolidated Financial Statements included in this report for additional information on our CMLs, including our distribution by property type, geographic region, LTV and DSC ratios.

Loans are placed on non-accrual status when they are over 90 days delinquent. If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current can be put in place. See Note C - Investments to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information on our RMLs.