PRUDENTIAL FINANCIAL INC

Our businesses are subject to comprehensive regulation and supervision. The purpose of these regulations is primarily to protect our customers and the overall financial system and not necessarily our shareholders or debt holders. Many of the laws and regulations to which we are subject are regularly re-examined. Existing or future laws and regulations may become more restrictive or otherwise adversely affect our operations or profitability, increase compliance costs, or increase potential regulatory exposure. In recent years we have experienced, and expect to continue to experience, extensive changes in the laws and regulations, and regulatory frameworks applicable to our businesses. We cannot predict how current or future initiatives will further impact existing laws, regulations and regulatory frameworks.

The primary regulatory frameworks applicable to the Company are described further below.

U.S. Insurance Operations

Insurance Holding Company Regulation

We are subject to the insurance holding company laws in the states where our insurance subsidiaries are domiciled, which currently include New Jersey, Arizona and Indiana, or are treated as commercially domiciled, such as New York. These laws generally require each insurance company directly or indirectly owned by the holding company to register with the insurance department in the insurance company’s state of domicile and to furnish annually financial and other information about the operations of companies within the holding company system, including an assessment of the group’s risk management and current and future solvency position. Generally, all transactions among affiliates, including an insurer in the holding company system, must be fair and reasonable and, if material, require prior notice and approval or non-disapproval by the state’s insurance department. In addition, most states, including the states where our U.S. insurance companies are domiciled, have insurance laws that require regulatory approval of a direct or indirect change of control of an insurer or an insurer’s holding company.

The New Jersey Department of Banking and Insurance (“NJDOBI”) acts as the group-wide supervisor of Prudential Financial pursuant to New Jersey legislation that authorizes group-wide supervision of internationally active insurance groups (“IAIGs”). The law, among other provisions, authorizes NJDOBI to examine Prudential Financial and its subsidiaries, including by ascertaining the financial condition of the insurance companies for purposes of assessing enterprise risk through, among other things, periodic examinations of the books and records, financial reporting, policy filings and market conduct. In accordance with this authority, NJDOBI receives information about the Company’s operations beyond those of its New Jersey domiciled insurance subsidiaries. The National Association of Insurance Commissioners (“NAIC”) has developed and implemented a group capital calculation that uses a risk-based capital (“RBC”) aggregation methodology to serve as an additional tool to help state regulators assess potential risks.

State Insurance Regulation

State insurance laws regulate every aspect of our U.S. insurance operations. The insurance departments of all fifty states, the District of Columbia, and various U.S. territories and possessions oversee our activities. PICA is domiciled in New Jersey, with its primary regulatory authority being NJDOBI. Our other U.S. insurance companies are regulated principally by the insurance departments of their respective domicile states. Typically, insurance products require approval from state regulators in the jurisdiction where they are marketed.

State insurance authorities possess broad administrative powers concerning all aspects of insurance business, including, among other things: (1) licensing for business operations; (2) agent licensing; (3) asset admittance to statutory surplus; (4) regulation of premium rates for specific products; (5) policy form approvals; (6) oversight of unfair trade and claims practices; (7) establishment of reserve requirements and solvency standards; (8) determination of maximum interest rates on life insurance policy loans and minimum accumulation or surrender values; (9) regulation of permissible investments by type, amount, and valuation; and (10) oversight of reinsurance transactions, including captive reinsurers.

Insurance laws and regulations, including the NAIC’s Insurance Holding Company Act Model #440, mandate that our U.S. insurers submit financial statements to domestic regulators pursuant to prescribed accounting practices and procedures. The operations and accounts of our insurance companies are subject to examination at any time by the domiciliary department. Under Model #440, most other states defer to the primary domestic supervisor for financial reporting and oversight, provided the supervisor’s state maintains accreditation.

Surplus and Capital

Insurers are required to sustain capital and surplus at or above the minimum thresholds prescribed by their respective jurisdictions. Regulatory authorities retain the discretionary power to restrict or suspend an insurer’s ability to offer policies if these requirements are not satisfied, or if continued operations are deemed potentially detrimental to policyholders.

Dividend Restrictions. State insurance laws generally limit the dividends and distributions an insurance subsidiary can pay its parent and restrict dealings with affiliates. Regulatory approval is required for dividends or affiliate transactions above set thresholds.

Risk-Based Capital. The majority of our U.S. insurance subsidiaries are governed by RBC requirements. RBC is calculated annually using a comprehensive formula that incorporates asset, premium, claim, expense, and statutory reserve factors, taking into account asset, insurance, interest rate, market, and business risk attributes.

Investments. U.S. state insurance laws restrict our subsidiaries' investments in certain assets and require portfolio diversification. Investments exceeding these limits are excluded from surplus calculations, and non-qualifying assets may need to be divested. Non-U.S. insurance subsidiaries also face investment regulations.

U.S. Federal and State Securities Regulation Affecting Insurance Operations

Our variable life insurance, variable annuity and mutual fund products generally are considered “securities” and therefore may be required to be registered and subject to regulation and reporting requirements under federal and/or state securities laws. Federal and state securities regulation may affect investment advice, sales and related activities with respect to these products.

Insurance Guaranty Association Assessments

Our U.S. and international insurance operations are subject to laws requiring insurers to be members and pay assessments covering certain obligations of insolvent insurers, typically based on each insurer’s share of business within the relevant jurisdiction. For our U.S. insurance operations, we paid $10 million, $71 million, and $0.7 million in assessments for 2025, 2024, and 2023, respectively, and we have established an estimated $5 million reserve as of December 31, 2025, for future assessments related to insurance companies currently subject to insolvency proceedings. For our Japan insurance operations, there were no payments made for 2025, 2024 or 2023.

ERISA

The Employee Retirement Income Security Act (“ERISA”) is a federal law regulating U.S. employee benefit plans sponsored by private employers and unions, covering pensions, profit-sharing, and welfare plans like health, life, and disability insurance. Certain provisions are also applicable to Individual Retirement Accounts (“IRAs”). ERISA sets rules for reporting and fiduciary conduct, and bans certain transactions, with civil and criminal penalties for violations. We offer services to ERISA plans and IRAs through our insurance, investment management and retirements businesses, including when acting as fiduciaries, and therefore we must comply with these rules, which can restrict business transactions with such plans and IRAs. Some services we provide rely on prohibited transaction exemptions such as the Qualified Professional Asset Manager (“QPAM”) exemption. Loss of QPAM status or disqualification under other applicable exemptions—due to criminal convictions or non-prosecution or deferred prosecution agreements—could negatively affect our investment management and Prudential Advisors business.

Fiduciary Rules and Other Standards of Care

The Company and our distributors are subject to rules regarding the standard of care applicable to sales of our products and the provision of advice to our customers, including, among others, the U.S. Department of Labor (“DOL”) fiduciary rule, the Securities and Exchange Commission (“SEC”) Regulation Best Interest, and the National Association of Insurance Commissioners (“NAIC”) and Japanese Financial Services Agency (“FSA”) Standard of Care regulations. Under certain circumstances and subject to certain conditions, these rules and standards of care may require us to act in our retail customers’ best interests and/or without placing our financial interest ahead of our customers’ interests. Complying with these rules and standards of care has resulted in and may continue to cause increased compliance costs.

U.S. Investment and Retirement Products and Investment Management Operations

Our retirement and investment products and services are subject to federal and state securities and fiduciary laws, ERISA, and other laws and regulations. The SEC, the Financial Industry Regulatory Authority (“FINRA”), the Commodity Futures Trading Commission (“CFTC”), National Futures Association (“NFA”), state securities commissions, state banking and insurance departments, DOL and the Department of the Treasury are the principal U.S. regulators that regulate our U.S. retirement and investment management operations. In some cases, our domestic U.S. investment operations are also subject to non-U.S. securities laws and regulations.

Some of the separate account, registered fund and other pooled investment products offered by our businesses, in addition to being registered under the Securities Act, are registered as investment companies under the Investment Company Act of 1940, as amended, and the shares of certain of these entities are qualified for sale in some states and the District of Columbia. Separate account investment products are also subject to state insurance regulation as described above. We also have several subsidiaries that are registered as broker-dealers under the Securities Exchange Act of 1934 (“Exchange Act”), as amended, and are subject to federal and state regulation. In addition, we have subsidiaries that are investment advisers registered under the Investment Advisers Act of 1940, as amended. Our employees, as well as third-party advisors and licensed sales professionals within Prudential Advisors, insofar as they sell products that are securities, are subject to the Exchange Act and to examination requirements and regulation by the SEC, FINRA and state securities commissioners. Regulation and examination requirements also extend to various Prudential entities that employ or control those individuals.

We are also subject to the Setting Every Community Up for Retirement Enhancement (“SECURE”) Act, together with SECURE 2.0 (collectively, the “SECURE Act”), designed to broaden retirement plan access and savings. The SECURE Act makes pooled employer plans easier for small businesses, mandates coverage for long-term part-time workers, raises auto-enrollment caps, increases the minimum withdrawal age, removes IRA contribution age limits, and streamlines options for guaranteed lifetime income through annuity provider provisions.

U.S. Securities and Commodity Operations

We have subsidiaries that are broker-dealers or investment advisers. The SEC, the CFTC, state securities authorities, FINRA, the NFA, the Municipal Securities Rulemaking Board, and similar authorities are, as applicable, the principal regulators of these subsidiaries.

Our broker-dealer and commodities affiliates, regulated by organizations like FINRA and the NFA, must comply with rules on sales methods, trading practices, investment suitability, customer asset protection, capital adequacy, recordkeeping, and conduct. State and federal agencies, as well as self-regulatory bodies, oversee these activities and can impose penalties such as fines, suspensions, or other restrictions. Additionally, our U.S. broker-dealer subsidiaries are subject to federal net capital requirements that may limit their dividend payments to Prudential Financial.

International Insurance Operations

Our international insurance operations are principally supervised by regulatory authorities in the jurisdictions in which they operate. Our insurance operations in Japan are regulated by the FSA. Our Bermuda entities, including Gibraltar Reinsurance Company Ltd. and Lotus Reinsurance Company Ltd., as well as Prismic, in which Prudential has a significant equity interest, are regulated by the Bermuda Monetary Authority (the “BMA”). In addition to Japan and Bermuda, we operate insurance companies in Brazil and Mexico, and have insurance operations in China, India and Indonesia through joint ventures. We also have strategic investments in insurance operations in Ghana, Kenya and South Africa. The insurance regulatory bodies for these businesses typically oversee such issues as: (1) company licensing; (2) the licensing of insurance sales staff; (3) insurance product approvals; (4) sales practices; (5) claims payment practices; (6) permissible investments; (7) solvency and capital adequacy (similar to the RBC ratios employed by U.S. insurance regulators); (8) insurance reserves; (9) privacy; and (10) anti-money laundering and financial crimes, among other items. In some jurisdictions, for certain products, regulators will also mandate premium rates (or components of pricing) or minimum guaranteed interest rates. Regulators employ methods such as periodic audits of insurance company books and records, financial reporting obligations, market conduct examinations, and policy submission requirements to oversee our international insurance operations. Finally, insurance regulatory authorities in certain jurisdictions in which our insurance companies are domiciled, including Japan, must approve any change of control of the insurance companies organized under their laws.

Our Japan insurance operations are currently subject to a market-based capital standard called the Economic Solvency Ratio (“ESR”), which became effective in April 2025, with disclosure under the new framework required in 2026.

International Investment and Retirement Products and Investment Management Operations

Our non-insurance international operations are supervised primarily by regulatory authorities in the countries in which they operate. We operate investment-related businesses in, among other jurisdictions, Japan, Taiwan, the U.K., Ireland, India, Hong Kong, Mexico, Germany, Luxembourg, the Netherlands, Switzerland, China and Singapore, and participate in investment-related joint ventures in China and South Africa and in a retirement related joint venture with operations in Chile, Peru and Colombia. These businesses may provide products such as investment management products and services, funds, separately managed accounts and retirement products. The regulatory authorities for these businesses typically oversee such issues as: (1) company licensing; (2) the licensing of investment product sales staff; (3) sales practices; (4) solvency and capital adequacy; (5) fund product approvals and related disclosures; and (6) securities, commodities, retirement, pension and related laws, among other items. In some cases, our international investment operations are also subject to U.S. securities laws and regulations.

Derivatives Regulation

Prudential Financial and our subsidiaries use derivatives for various purposes, including hedging interest rate, foreign currency, equity market and other exposures. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) established a framework for regulation by both the SEC and the CFTC of the over-the-counter derivatives markets. This framework sets out requirements regarding the clearing and reporting of derivatives transactions, as well as collateral posting requirements. Affiliated swaps entered into between our subsidiaries are generally exempt from most of these requirements.

Privacy, Data Protection and Cybersecurity Regulation

We are subject to U.S. federal and state laws, regulations, and directives that require (1) financial institutions and other businesses to protect the confidentiality, integrity, and availability of personal, proprietary, and other non-public information, including intellectual property, health-related and customer information; and (2) disclosure to customers and other appropriate individuals regarding the collection, disclosure and use of such information. We are also required to comply with international privacy laws, regulations and directives, including those affecting data privacy and protection and cross-border data transfers. Some countries mandate local data processing or storage, which may increase costs and affect operational efficiency and how products and services are offered in those countries. Generally, these U.S. and international laws, regulations and directives may require:

•protecting sensitive personal information, such as national identifier numbers (e.g., social security numbers) or racial or ethnic origin, from unauthorized use or disclosure;

•providing individuals with certain rights over their personal information, such as the right to access, correct, or delete their personal information;

•notifying affected individuals, regulators and others if there is a breach of the confidentiality, integrity, or availability of certain personal or confidential information;

•implementing programs to detect, prevent, and mitigate identity theft;

•identification of permissible uses for personal information, such as customer information and consumer report information and permissible telemarketing calls, e-mails, texts, and other consumers and customers communications;

•oversight of third parties that have access to, and handle, personal or confidential information;

Regulatory and legislative activity in the areas of privacy, data protection, and cybersecurity continues to increase worldwide. Financial regulators in the U.S. and international jurisdictions in which we operate continue to focus on data privacy and cybersecurity, including rulemaking and examinations of regulated entities, and have communicated heightened expectations. For example, the EU’s General Data Protection Regulation (“GDPR”) and UK’s Data Protection Act of 2018, as amended by the Data (Use and Access) Act of 2025, impose stringent rules and penalties. GDPR applies to any Prudential unit handling EU personal data. Other countries, such as Brazil, India, Japan, Argentina, and China, have adopted or are considering similar laws. In the U.S., new privacy laws are frequently proposed, including recent amendments to the Gramm-Leach-Bliley Act. The California Consumer Privacy Act and the California Privacy Rights Act grant broad rights and create strict obligations, with other states introducing similar laws and more expected nationwide and globally.

The NAIC Insurance Data Security Model Law, which has been adopted by more than 20 states, requires insurers to implement robust cybersecurity measures. In 2023, the NAIC released updated model privacy legislation, which states started adopting in 2024. New York, for example, has expanded its regulation, creating additional requirements. These laws increase compliance demands, noncompliance risks, and the potential for enforcement and reputational risk.

For additional information regarding our cybersecurity risk management and governance, see “Item 1C. Cybersecurity.”

Artificial Intelligence

Regulatory standards relating to the use of artificial intelligence (“AI”) are evolving in the countries where we do business, and our use of AI may increase risks associated with bias, unfair discrimination, transparency, and information security. For example, the E.U. is in the process of introducing new regulations applicable to certain AI technologies and to the data used to train, test and deploy them. U.S. state regulators have also shown increasing concern about the use of AI and the potential for discrimination and bias in insurance practices. For example, in July 2024, the New York Department of Financial Services adopted Insurance Circular Letter No. 7 Re: Use of Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing, which imposes obligations on insurers using AI or external consumer data and information sources. In May 2024, Colorado passed Senate Bill 24-205 (“the Colorado AI Law”), which becomes effective on February 1, 2026, regulates certain AI systems, and imposes obligations on AI system deployers and developers doing business in Colorado. The application of existing law and introduction of new or revised laws and regulations may require changes in our operations, increased compliance costs and reduce benefits from our adoption of artificial intelligence technologies.

Anti-Money Laundering and Anti-Bribery Laws

Our businesses are subject to various anti-money laundering and financial transparency laws and regulations that seek to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. In addition, under current U.S. law and regulations we may be prohibited from dealing with certain individuals or entities in certain circumstances and we may be required to monitor customer activities, which may affect our ability to attract and retain customers. We are also subject to various laws and regulations relating to corrupt and illegal payments to government officials and others, including the U.S. Foreign Corrupt Practices Act and the U.K.’s Anti-Bribery Law. The obligation of financial institutions, including the Company, to identify their clients, to monitor for and report suspicious transactions, to monitor dealings with government officials, to respond to requests for information by regulatory authorities and law enforcement agencies, and to share information with other financial institutions, has required the implementation and maintenance of internal practices, procedures and controls.

Environmental Laws and Regulations

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 risks of hidden environmental liabilities and the costs of any required clean-up. Although unexpected environmental liabilities can always arise, we seek to minimize this risk by undertaking environmental assessments, among other measures prior to taking title to real estate.

In addition, certain states, including California, and the NAIC, require us to publicly report information about the Company’s greenhouse gas emissions and climate-related risks and opportunities.

Unclaimed Property Laws

We are subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and we are subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see Note 25 to the Consolidated Financial Statements.

Taxation

We are subject to income, premium, employment, excise, sales and other taxes related to both our U.S. and international operations. In addition, the life insurance, annuity, retirement and investment products we sell are subject to income and other taxes. Changes in the tax laws in the U.S. and internationally could adversely impact our tax position, make our products less attractive to customers, and/or adversely impact the profitability of such products. See “Income Taxes” in Note 2 to the Consolidated Financial Statements and Note 17 to the Consolidated Financial Statements for a description of the Company’s tax position and the impact of certain tax regulation.

International and Global Regulatory Initiatives

The Group of Twenty nations (“G20”), the Financial Stability Board (“FSB”) and related bodies have developed proposals to address issues such as financial group supervision, capital and solvency standards, systemic risk, corporate governance including executive compensation, climate-related financial risks, and a host of related issues. The International Association of Insurance Supervisors (“IAIS”), the global standard setting body for the insurance sector, contributes to the work of G20 and FSB through the development of standards that are intended to promote effective and globally consistent supervision and maintain fair, safe and stable insurance markets. As a standard setting body, the IAIS does not have direct authority to require insurance companies to comply with the standards it develops. However, the Company and its businesses could become subject to them if they were adopted by their respective regulators, which could impact the manner in which we deploy our capital, structure and manage our businesses, and otherwise operate both within the U.S. and abroad.