PRUDENTIAL FINANCIAL INC

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of our businesses, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our businesses, general economic conditions and our access to the capital markets and the alternate sources of liquidity and capital described herein.

Effective and prudent liquidity and capital management is a priority across the Company. Management monitors the liquidity of Prudential Financial and its subsidiaries on a daily basis and projects borrowing and capital needs over a multi-year time horizon. We use a Risk Appetite Framework (“RAF”) to ensure that all risks taken across the Company align with our capacity and willingness to take those risks. The RAF provides a dynamic assessment of capital and liquidity stress impacts and is intended to ensure that sufficient resources are available to absorb those impacts. We believe that our capital and liquidity resources are sufficient to satisfy the capital and liquidity requirements of Prudential Financial and its subsidiaries.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include requirements (many of which are the subject of ongoing rule-making) relating to capital and liquidity management. For information regarding these regulatory initiatives and their potential impact on us, see “Business—Regulation” and “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

From the beginning of 2026 through the date of this report, we took the following significant actions that have impacted, or are expected to impact, our liquidity and capital positions:

•In June, we issued $750 million of junior subordinated notes. We intend to use these proceeds for general corporate purposes, which may include the redemption or repurchase of our $750 million of junior subordinated notes due 2047.

•In October, we entered into an agreement with Prismic Re International to reinsure approximately $6 billion of policyholders’ account balances for certain USD-denominated Japanese whole life insurance policies originated by our Japanese insurance subsidiaries. The value of the reinsurance transaction is estimated to be $600 million, which includes release of capital, taxes, and the net present value of future income.

Capital

The primary components of the Company’s capitalization consist of equity and outstanding capital debt, including junior subordinated debt. As shown in the table below, as of September 30, 2026, the Company had $50.7 billion in capital, all of which was available to support the aggregate capital requirements of its businesses and its Corporate and Other operations. Based on our assessment of these businesses and operations, we believe this level of capital is consistent with our ratings targets.

(1)Amounts attributable to Prudential Financial, excluding AOCI.

We manage PICA, The Prudential Life Insurance Company, Ltd. (“Prudential of Japan”), The Gibraltar Life Insurance Co., Ltd. (“Gibraltar Life”), and other significant insurance subsidiaries to regulatory capital levels consistent with our “AA” ratings targets. We utilize the risk-based capital (“RBC”) ratio as a primary measure of the capital adequacy of our domestic insurance subsidiaries and the Economic Solvency Ratio (“ESR”) as a primary measure of the capital adequacy of our Japanese insurance subsidiaries.

RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public.

PICA’s RBC ratio as of December 31, 2025, its most recent statutory fiscal year-end and RBC reporting date, was 415%. PICA’s RBC ratio is calculated on a consolidated basis and included Pruco Life Insurance Company (“Pruco Life”), Pruco Life Insurance Company of New Jersey (“PLNJ”), which is a subsidiary of Pruco Life, and Prudential Legacy Insurance Company of New Jersey (“PLIC”).

Similar to the RBC ratios that are employed by U.S. insurance regulators, regulatory authorities in the international jurisdictions in which we operate generally establish some form of minimum solvency requirements for insurance companies based on local statutory accounting practices. For our insurance subsidiaries in Japan, the Japanese Financial Services Agency (“FSA”) utilizes the ESR, a market-based capital standard that is required to be disclosed to the public and therefore can impact the public perception of an insurer’s financial strength. The ESR became effective in April 2025, for reporting as of March 31, 2026, replacing the solvency margin ratio which was last disclosed for reporting as of December 31, 2025.

The table below presents the ESR of Prudential of Japan and Gibraltar Life, our two most significant international insurance subsidiaries, along with the consolidated ratio representing our total Japanese operations, as of March 31, 2026, the most recent date for which this information is publicly available.

(1)Includes Prudential of Japan, Gibraltar Life and Prudential Gibraltar Financial Life Insurance Co., Ltd. (“PGFL”).

All of our domestic and significant international insurance subsidiaries have capital levels that substantially exceed the minimum level required by applicable insurance regulations. The statutory capital of our insurance companies and our overall capital flexibility could be impacted by, among other things, market conditions and changes in insurance reserves, including those stemming from updates to our actuarial assumptions. Our regulatory capital levels also may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators. For additional information regarding the calculation of RBC, as well as regulatory minimums, see Note 20 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Captive Reinsurance Companies

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital—Captive Reinsurance Companies” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of our use of captive reinsurance companies.

Shareholder Distributions

Share Repurchase Program and Shareholder Dividends

In December 2025, Prudential Financial’s Board of Directors authorized the Company to repurchase, at management’s discretion, up to $1.0 billion of its outstanding Common Stock during the period from January 1, 2026 through December 31, 2026. In general, the timing and amount of share repurchases are determined by management based on market conditions and other considerations, including compliance with applicable laws and any increased capital needs of our businesses due to, among other things, credit migration and losses in our investment portfolio, changes in regulatory capital requirements and opportunities for growth and acquisitions. Repurchases may be executed in the open market, through derivative, accelerated repurchase and other negotiated transactions and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended.

The following table sets forth information about declarations of Common Stock dividends, as well as repurchases of shares of Prudential Financial’s Common Stock, for the periods indicated:

Liquidity

Liquidity management and stress testing are performed on a legal entity basis as the ability to transfer funds between subsidiaries is limited due in part to regulatory restrictions. Liquidity needs are determined through daily and quarterly cash flow forecasting at the holding company and within our operating subsidiaries. We seek to maintain a minimum balance of highly liquid assets to ensure that adequate liquidity is available at Prudential Financial to cover fixed expenses in the event that we experience reduced cash flows from our operating subsidiaries at a time when access to capital markets is also not available.

We seek to mitigate the risk of having limited or no access to financing due to stressed market conditions by generally pre-funding debt in advance of maturity. We mitigate the refinancing risk associated with our debt that is used to fund operating needs by matching the term of debt with the assets financed. To ensure adequate liquidity in stress scenarios, stress testing is performed for our major operating subsidiaries. We seek to further mitigate liquidity risk by maintaining our access to alternative sources of liquidity, as discussed below.

Liquidity of Prudential Financial

The principal sources of funds available to Prudential Financial, the parent holding company, are dividends, returns of capital and loans from subsidiaries, and proceeds from debt issuances and certain stock-based compensation activity. These sources of funds may be supplemented by Prudential Financial’s access to the capital markets as well as the “—Alternative Sources of Liquidity” described below.

The primary uses of funds at Prudential Financial include servicing debt, making capital contributions and loans to subsidiaries, making acquisitions, paying declared shareholder dividends and repurchasing outstanding shares of Common Stock executed under authority from the Board.

As of September 30, 2026, Prudential Financial had highly liquid assets with a carrying value totaling $5,596 million, an increase of $864 million from December 31, 2025. Highly liquid assets predominantly include cash, short-term investments, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds. We maintain an intercompany liquidity account that is designed to optimize the use of cash by facilitating the lending and borrowing of funds between Prudential Financial and its subsidiaries on a daily basis. Excluding the net borrowings from this intercompany liquidity account, Prudential Financial had highly liquid assets of $4,010 million as of September 30, 2026, an increase of $193 million from December 31, 2025.

The following table sets forth Prudential Financial’s principal sources and uses of highly liquid assets, excluding net borrowings from our intercompany liquidity account, for the periods indicated:

(1)2026 includes $1,750 million from PICA, $752 million from international insurance subsidiaries and $190 million from PGIM subsidiaries. 2025 includes $575 million from international insurance subsidiaries, $500 million from Individual Life insurance captives, $300 million from PICA, $147 million from PGIM subsidiaries, and $10 million from other subsidiaries.

(2)Represents loans to and from subsidiaries made for capital management purposes.

(3)2026 includes capital contributions of $199 million to international insurance subsidiaries and $41 million to other subsidiaries. 2025 includes capital contributions of $61 million to other subsidiaries and $6 million to PICA.

(4)2026 “Total Business Capital Activity” includes segment inflows of $1,169 million from Japan Businesses, $783 million from U.S. Businesses, $327 million from PGIM, and $174 million from Corporate and Other operations. 2025 “Total Business Capital Activity” includes segment inflows of $1,584 million from U.S. Businesses, $992 million from Japan Businesses, $353 million from PGIM, and outflows of $1,464 million to Corporate and Other operations. In addition, Corporate & Other operations had net inflows of $422 million and $383 million, respectively, from “Tax cash flows,” “Other corporate cash flows” and “Share issuances for employee stock purchases and other,” as shown within this table.

(5)Excludes cash payments made on trades that settled in the subsequent period.

(6)Includes cash payments made on dividends declared in prior periods.

(7)Includes $267 million and $243 million of proceeds from the issuance of retail medium-term notes that were used exclusively to purchase funding agreements from PICA in 2026 and 2025, respectively.

(8)Represents loans to and from subsidiaries to support business operating needs.

Dividends and Returns of Capital from Subsidiaries

Domestic insurance subsidiaries. During the first nine months of 2026, Prudential Financial received dividends of $1.8 billion from PICA. In addition to paying Common Stock dividends, our domestic insurance operations may return capital to Prudential Financial by other means, such as affiliated lending, and reinsurance with Bermuda-based affiliates.

International insurance subsidiaries. During the first nine months of 2026, Prudential Financial received dividends of $752 million from its international insurance subsidiaries. In addition to paying Common Stock dividends, our international insurance operations may return capital to Prudential Financial by other means, such as the repayment of preferred stock obligations held by Prudential Financial or other affiliates, affiliated lending, affiliated derivatives and reinsurance with U.S.- and Bermuda-based affiliates.

Other subsidiaries. During the first nine months of 2026, Prudential Financial received dividends of $190 million from PGIM subsidiaries.

Restriction on dividends and returns of capital from subsidiaries. Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Prudential Financial and other affiliates under applicable insurance law and regulation. Further, market conditions could negatively impact capital positions of our insurance companies, which could further restrict their ability to pay dividends. More generally, the payment of dividends by any of our subsidiaries is subject to declaration by their Board of Directors and can be affected by market conditions and other factors.

With respect to our domestic insurance subsidiaries, PICA is permitted to pay ordinary dividends based on calculations specified under New Jersey insurance law, subject to prior notification to the New Jersey Department of Banking and Insurance (“NJDOBI”). Any distributions above this amount in any twelve-month period are considered to be “extraordinary” dividends, and the approval of the NJDOBI is required prior to payment. The laws regulating dividends of the states where our other domestic insurance companies are domiciled are similar, but not identical, to those of New Jersey.

Capital redeployment from our international insurance subsidiaries is subject to local regulatory requirements in the international jurisdictions in which they operate. Our most significant international insurance subsidiaries, Prudential of Japan and Gibraltar Life, are permitted to pay Common Stock dividends based on calculations specified by Japanese insurance business law. Dividends in excess of these amounts and other forms of capital distribution may require the prior approval of the FSA. The regulatory fiscal year end for both Prudential of Japan and Gibraltar Life is March 31, after which time the Common Stock dividend amount permitted to be paid without prior approval from the FSA can be determined.

The ability of our PGIM subsidiaries and the majority of our other operating subsidiaries to pay dividends is largely unrestricted from a regulatory standpoint.

See Note 20 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for information regarding specific dividend restrictions.

Liquidity of Insurance Subsidiaries

We manage the liquidity of our insurance operations to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity within each of our insurance subsidiaries is provided by a variety of sources, including portfolios of liquid assets. The investment portfolios of our subsidiaries are integral to the overall liquidity of our insurance operations. We segment our investment portfolios and employ an asset/liability management approach specific to the requirements of each of our product lines. This enhances the discipline applied in managing the liquidity, as well as the interest rate and credit risk profiles, of each portfolio in a manner consistent with the unique characteristics of the product liabilities.

Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our insurance operations’ liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.

The principal sources of liquidity for our insurance subsidiaries are premiums, investment and fee income, investment maturities, sales of investments, and sales associated with our insurance and annuity operations, as well as internal and external borrowings. The principal uses of liquidity include benefits, claims and dividends paid to policyholders, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity may include commissions, general and administrative expenses, purchases of investments, the payment of dividends to the parent holding company, hedging and reinsurance activity and payments in connection with financing activities.

The following table sets forth the fair value of certain of our domestic insurance operations’ portfolio of liquid assets, as of the dates indicated:

(1)Represents legal entity view and as such includes both domestic and international activity.

(2)Credit quality is based on NAIC or equivalent rating.

The following table sets forth the fair value of our international insurance operations’ portfolio of liquid assets, as of the dates indicated:

(1)Credit quality is based on NAIC or equivalent rating.

(2)As of September 30, 2026, $48.2 billion, or 52%, were invested in government or government agency bonds.

(3)Prudential Holdings of Japan, Inc., including its subsidiaries, had liquid assets of $74.3 billion and $82.7 billion as of September 30, 2026 and December 31, 2025, respectively.

Liquidity associated with other activities

Hedging activities associated with variable annuities

For the portion of our U.S. Legacy Products’ variable annuities ALM strategy executed through hedging, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives in order to hedge certain capital market risks related to more severe market conditions. This portion of our ALM strategy requires access to liquidity to meet payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior. For a full discussion of our U.S. Legacy Products’ variable annuities risk management strategy, see “—Results of Operations by Segment—U.S. Legacy Products.”

The hedging portion of our U.S. Legacy Products’ ALM strategy may also result in derivative related collateral postings to (when we are in a net post position) or from (when we are in a net receive position) counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs when we are in a net post position.

Foreign exchange hedging activities

We employ various hedging strategies to manage potential exposure to foreign currency exchange rate movements, particularly those associated with the yen. Our overall yen hedging strategy calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company’s overall return on equity on a leverage neutral basis.

We hold both internal and external hedges primarily to hedge our USD-equivalent equity. These hedges also mitigate volatility in the solvency measures of yen-based subsidiaries resulting from changes in the market value of their USD-denominated investments hedging our USD-equivalent equity attributable to changes in the yen-USD exchange rate.

For additional information regarding our hedging strategy, see “—External and Economic Factors—Impact of Foreign Currency Exchange Rates.”

Cash settlements from these hedging activities result in cash flows between subsidiaries of Prudential Financial and either international-based subsidiaries or external parties. The cash flows are dependent on changes in foreign currency exchange rates and the notional amount of the exposures hedged. For example, a significant yen depreciation over an extended period of time could result in net cash inflows, while a significant yen appreciation could result in net cash outflows. The following tables set forth information about net cash settlements and the net asset or liability resulting from these hedging activities related to the yen and other currencies for the periods indicated:

(1)Represents internal transactions between international-based and U.S.-based entities. Amounts noted are from the U.S.-based entities’ perspectives.

(2)Includes non-yen related cash settlements received (paid) of ($45) million, primarily denominated in Brazilian real, Chilean peso and Australian dollar and ($4) million, primarily denominated in Brazilian real, Australian dollar and Chilean peso for the nine months ended September 30, 2026 and 2025, respectively.

(3)Includes non-yen related assets (liabilities) of ($93) million, primarily denominated in Brazilian real and Chilean peso as of September 30, 2026 and ($44) million, primarily denominated in Brazilian real, Chilean peso and Australian dollar, as of December 31, 2025.

(4)As of September 30, 2026, approximately $78 million, $331 million, $280 million and $312 million of the net market values are scheduled to settle in 2026, 2027, 2028, and thereafter, respectively. The net market value of the assets (liabilities) will vary with changing market conditions to the extent there are no corresponding offsetting positions.

PGIM operations

The principal sources of liquidity for our fee-based PGIM businesses include cash flows from asset management, commercial mortgage origination and servicing activities, and internal and external funding facilities. The principal uses of liquidity for our fee-based PGIM businesses include general and administrative expenses, facilitating our commercial mortgage loan business, funding needs of our seed and co-investment portfolio and distributions of dividends and returns of capital to Prudential Financial. The primary liquidity risks for our fee-based PGIM businesses relate to their profitability, which is impacted by market conditions, our investment management performance and client redemptions. We believe the cash flows from our fee-based PGIM businesses are adequate to satisfy the current liquidity requirements of these operations, as well as requirements that could arise under reasonably foreseeable stress scenarios, which are monitored through the use of internal measures.

The principal sources of liquidity for our seed and co-investments held in our PGIM businesses are cash flows from investments, cash flows from our fee-based businesses, as described above, borrowing lines from internal sources, including Prudential Financial and Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of PICA, and external sources, including PGIM’s limited-recourse credit facility. The principal uses of liquidity for our seed and co-investments include making investments to support business growth and paying interest expense from the internal and external borrowings used to fund those investments. The primary liquidity risks include the inability to sell assets in a timely manner, declines in the value of assets and credit defaults.

There have been no material changes to the liquidity position of our PGIM operations since December 31, 2025.

Alternative Sources of Liquidity

In addition to asset-based financing as discussed below, Prudential Financial and certain subsidiaries have access to other sources of liquidity, including syndicated, unsecured committed credit facilities, membership in the Federal Home Loan Bank of New York (“FHLBNY”), a funding agreement facility with Federal Agricultural Mortgage Corporation (“Farmer Mac”), commercial paper programs and contingent financing facilities in the form of facility agreements. For additional information regarding these sources of liquidity, see Note 15 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Asset-based Financing

We conduct asset-based or secured financing within our insurance and other subsidiaries, including transactions such as securities lending, committed and uncommitted repurchase agreements and mortgage dollar rolls, to earn spread income, to borrow funds, or to facilitate trading activity. These programs are primarily driven by portfolio holdings of securities that are lendable based on counterparty demand for these securities in the marketplace. The collateral received in connection with these programs is primarily used to purchase securities in the short-term spread portfolios of our insurance entities. Investments held in the short-term spread portfolios include cash and cash equivalents, short-term investments (primarily corporate bonds), mortgage loans, private placements, and other fixed and floating rate structured credit assets (CLOs), with a weighted average life at time of purchase by the short-term portfolios of five years or less. These short-term portfolios are subject to specific investment policy statements, which among other things, do not allow for significant asset/liability interest rate duration mismatch, and are managed to a weighted average maturity that cannot exceed 99 days beyond the weighted average maturity of the lending book, which is overnight.

The following table sets forth our liabilities under asset-based or secured financing programs as of the dates indicated:

(1)The daily average outstanding balance for the three and nine months ended September 30, 2026 was $18,704 million and $17,989 million, respectively, for PFI excluding the Closed Block division, and $3,327 million and $3,290 million, respectively, for the Closed Block division.

(2)Includes utilization of external funding facilities for PGIM’s commercial mortgage origination business.

(3)Excludes securities that may be returned to the Company overnight.

As of September 30, 2026, our domestic insurance entities had assets eligible for the asset-based or secured financing programs of $93.8 billion, of which $18.7 billion were on loan. Taking into account market conditions and outstanding loan balances as of September 30, 2026, we believe approximately $30.0 billion of the remaining eligible assets are readily lendable, including approximately $26.5 billion relating to PFI excluding the Closed Block division, of which $9.1 billion relates to certain separate accounts and may only be used for financing activities related to those accounts, and the remaining $3.5 billion relating to the Closed Block division.

Financing Activities

As of September 30, 2026, total short-term and long-term debt of the Company on a consolidated basis was $20.7 billion, an increase of $0.4 billion from December 31, 2025. The following table sets forth total consolidated borrowings of the Company as of the dates indicated. We may, from time to time, seek to redeem or repurchase our outstanding debt securities through open market purchases, individually negotiated transactions or otherwise. Any such actions will depend on prevailing market conditions, our liquidity position, and other factors.

(1)Amounts are net of assets under set-off arrangements of $16,588 million and $15,744 million as of September 30, 2026 and December 31, 2025, respectively. Amounts include credit-linked note structures used to finance Guideline AXXX reserves for business reinsured to Somerset Reinsurance Ltd (“Somerset Re”) in March 2024.

(2)Limited and non-recourse borrowing primarily represents mortgage debt of our subsidiaries that has recourse only to real estate investment property of $233 million and $216 million as of September 30, 2026 and December 31, 2025, respectively, and a draw on a credit facility that has recourse only to collateral pledged by the Company of $170 million and $255 million as of September 30, 2026 and December 31, 2025, respectively.

As of September 30, 2026, and December 31, 2025, the Company was in compliance with all debt covenants related to the borrowings in the table above. For additional information regarding the Company’s short- and long-term debt obligations, see Note 15 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Prudential Financial’s consolidated borrowings increased $0.4 billion from December 31, 2025. In March 2026, the company paid, at maturity, $500 million in aggregate principal amount of 1.50% medium-term notes. In June 2026, the Company issued $750 million in aggregate principal amount of 6.25% junior subordinated notes due in June 2056. Through September 2026, the Company issued $267 million in aggregate principal of retail notes.

Term and Universal Life Reserve Financing

We use captive reinsurance subsidiaries to finance the portion of the statutory reserves required to be held by our domestic life insurance companies under Regulation XXX and Guideline AXXX that we consider to be non-economic. The financing arrangements involve the reinsurance of term and universal life business to our captive reinsurers and the issuance of surplus notes by those captives that are treated as capital for statutory purposes. These surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.

We have entered into agreements with external counterparties providing for the issuance of surplus notes by our captive reinsurers in return for the receipt of credit-linked notes, known as “credit-linked note structures.” As of September 30, 2026, we had credit-linked note structures with an aggregate issuance capacity of $8,000 million to support Regulation XXX reserves, of which $7,760 million was outstanding and matures in 2044, as compared to an aggregate issuance capacity of $8,000 million, of which $7,660 was outstanding, as of December 31, 2025. In addition, we use credit-linked note structures to finance Guideline AXXX reserves for business reinsured to Somerset Re in March 2024. Under the agreements, the captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate of the Company with an aggregate principal amount equal to the surplus notes outstanding. The captive holds the credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable. For additional information regarding our credit-linked note structures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

As of September 30, 2026, for purposes of financing Guideline AXXX non-economic reserves, one captive had $3,982 million of surplus notes outstanding that were issued to affiliates.

The Company introduced updated versions of its individual life products in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. These updated products are currently priced to support the principle-based statutory reserve level without the need for reserve financing.

Other Insurance Reserve Financing

In December 2025, the Company entered into a credit-linked note structure with an external counterparty that allows for the issuance by PICA of up to $750 million in principal amount of surplus notes in return for a corresponding amount of credit-linked notes issued by a special-purpose wholly-owned subsidiary of the Company. As of September 30, 2026, $292 million in principal amount of these surplus notes and credit-linked notes were outstanding. PICA holds these credit-linked notes as assets supporting statutory requirements and can redeem the principal amount of the outstanding credit-linked notes for cash upon the occurrence of specified liquidity stress events affecting PICA. Under the agreements, the external counterparty has agreed to fund any such payments under these credit-linked notes in return for the receipt of fees. To date, no such payments under these credit-linked notes have been required. The surplus notes and credit-linked notes eliminate upon consolidation and are not reflected in the Company’s financial statements.

In July 2026, a newly formed captive reinsurance subsidiary entered into a credit-linked note structure with an external counterparty that allows for the issuance by that captive reinsurance subsidiary of up to $2 billion in principal amount of surplus notes in return for a corresponding amount of credit-linked notes issued by a special-purpose affiliate of the Company. Currently, no surplus notes or credit-linked notes have been issued under this agreement. The captive expects to hold these credit-linked notes as assets supporting statutory requirements reinsured by the captive from PICA. Under the agreement, the captive can redeem the principal amount of the outstanding credit-linked notes for cash upon the occurrence of specified liquidity stress events affecting the reinsured business. The external counterparty has agreed to fund any such payments under these credit-linked notes in return for the receipt of fees. Under these transactions, because valid rights of set-off exist, interest and principal payments on the surplus notes and on the credit-linked notes will be settled on a net basis, and both the surplus notes and credit-linked notes will be reflected in the Company’s total consolidated borrowings on a net basis.

The surplus notes to be issued under each of these credit-linked note structures are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.

Off-Balance Sheet Arrangements

See additional information regarding off-balance sheet arrangements in Note 15 and other commitments in Note 21 to the Unaudited Interim Consolidated Financial Statements.

We do not have retained or contingent interests in assets transferred to unconsolidated entities, or variable interests in unconsolidated entities or other similar transactions, arrangements or relationships that serve as credit, liquidity or market risk support, that we believe are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or our access to or requirements for capital resources. In addition, we do not have relationships with any unconsolidated entities that are contractually limited to narrow activities that facilitate our transfer of or access to associated assets.