F&G Annuities & Life, Inc.

Previous wording

Some of our products include guaranteed minimum crediting rates, most notably our fixed rate annuities. As of March 31, 2025 and December 31, 2024, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were both $6 billion and 5%. 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.

Current wording

As of June 30, 2025 and December 31, 2024, our reserves, net of reinsurance, and weighted average crediting rate on our fixed rate annuities were $6.7 billion and 4.57% and $6.4 billion and 4.42%, 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.

Previous wording

The accounting estimates described in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024 are those we consider critical in preparing our unaudited Condensed Consolidated Financial Statements. 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.

Current wording

The accounting estimates described in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024 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 six months ended June 30, 2025. 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.

Previous wording

The results of operations for the three months ended March 31, 2025 and March 31, 2024 were as follows (in millions):

Current wording

The results of operations for the three and six months ended June 30, 2025 and June 30, 2024 were as follows (in millions):

Previous wording

•Funding agreements, reflecting new FABN and FHLB agreements, were higher for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, and are subject to fluctuation period to period based on economic conditions and the timing of entering the new agreements.

Current wording

•Funding agreements, reflecting new FABN and FHLB agreements, were lower for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, and are subject to fluctuation period to period based on economic conditions and the timing of entering the new agreements.

Previous wording

•PRT sales decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, reflecting the timing of PRT transactions that are also subject to fluctuation period to period. During the three months ended March 31, 2025, we closed two pension risk transfer transactions.

Current wording

•PRT sales increased for the three months ended June 30, 2025 and decreased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, reflecting the timing of PRT transactions that are also subject to fluctuation period to period. During the three and six months ended June 30, 2025, we closed four and six pension risk transfer transactions, respectively.

Previous wording

•Sales attributable to flow reinsurance to third parties were lower during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily reflecting the lower level of MYGA sales partially offset by the addition of new reinsurance that was effective July 1, 2024.

Current wording

•Sales attributable to flow reinsurance to third parties were higher during the three months ended June 30, 2025, and lower during the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, primarily reflecting the levels of MYGA sales during the respective periods.

Previous wording

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations). The following table summarizes the Life insurance premiums and other fees, on the unaudited Condensed Consolidated Statements of Operations, for the three months ended March 31, 2025 and March 31, 2024 (in millions):

Current wording

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations). The following table summarizes the Life insurance premiums and other fees, on the unaudited Condensed Consolidated Statements of Operations, for the three and six months ended June 30, 2025 and June 30, 2024 (in millions):

Previous wording

•Life-contingent pension risk transfer premiums decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, reflecting the timing of PRT transactions. As noted above, PRT premiums are subject to fluctuation period to period.

Current wording

•Life-contingent pension risk transfer premiums increased for the three months ended June 30, 2025 and decreased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, reflecting the timing of PRT transactions. As noted above, PRT premiums are subject to fluctuation period to period.

Previous wording

•Surrender charges increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily reflecting increases in withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies. The increase in termination activity is primarily due to the higher interest rate environment.

Current wording

•Surrender charges were relatively unchanged for the three months ended June 30, 2025 and increased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively. The increase for the six months ended June 30, 2025 primarily reflects increases in withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies. The increase in termination activity is primarily due to the higher interest rate environment.

Previous wording

•Policyholder fees and other income increased for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily reflecting a reinsurance true-up adjustment, 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. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.

Current wording

•Policyholder fees and other income increased for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, primarily reflecting 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. The increase for the six months ended June 30, 2025 also includes a reinsurance true-up adjustment. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.

Previous wording

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 $184 million and $127 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

Current wording

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 $189 million and $373 million for the three and six months ended June 30, 2025, respectively, and $155 million and $282 million for the three and six months ended June 30, 2024, respectively.

Previous wording

•AAUM was higher for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, reflecting net new business asset flows, stable inforce retention and net capital transaction proceeds.

Current wording

•AAUM was higher for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, reflecting net new business asset flows, stable inforce retention and, for the six months ended June 30, 2025, net capital transaction proceeds.

Previous wording

•Interest and investment income was higher for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to $56 million from invested asset growth and $1 million of all other rate and mix impacts, partially offset by $7 million of lower returns on alternative investments.

Current wording

•Interest and investment income was lower for the three months ended June 30, 2025, compared to the three and months ended June 30, 2024, primarily due to $56 million from invested asset growth and $10 million of all other rate and mix impacts, partially offset by $68 million of lower returns on alternative investments.

Previous wording

•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 lower for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily reflecting lower commission revenues.

Current wording

•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 three months ended June 30, 2025, compared to the three months ended June 30, 2024, and slightly lower for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily reflecting higher and slightly lower commission revenues for the respective periods.

Previous wording

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 $(42) million for the three month period ended March 31, 2025, and $(19) million for the three month period ended March 31, 2024, respectively.

Current wording

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 $(57) million and $(99) million for the three and six month periods ended June 30, 2025, and $10 million and $(9) million for the three and six month periods ended June 30, 2024, respectively.

Previous wording

•For the three months ended March 31, 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.

Current wording

•For the three and six months ended June 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.

Previous wording

•For the three months ended March 31, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option (“FVO”) gains on owned distribution investments and preferred securities, partially offset by realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities.

Current wording

•For the three and six months ended June 30, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option (“FVO”) gains on owned distribution investments and preferred securities, partially offset by realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities.

Previous wording

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

Current wording

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.

Previous wording

•The net change in fair value of the interest rate swaps was primarily driven by fluctuations in the interest rate index underlying the swap contracts.

Current wording

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

Previous wording

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

Current wording

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, increased for the three months ended June 30, 2025 and decreased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

Previous wording

•The indexed annuities/IUL market related liability movements during the three months ended March 31, 2025 and March 31, 2024, 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 (decreased) the direct indexed annuities market related liability by $47 million and $(84) million during the three months ended March 31, 2025 and March 31, 2024, 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.

Current wording

•The indexed annuities/IUL market related liability movements during the three and six months ended June 30, 2025 and June 30, 2024, 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 (decreased) the direct indexed annuities market related liability by $36 million and $(85) million during the three months ended June 30, 2025 and June 30, 2024, respectively. The change in risk free rates and non-performance spreads increased (decreased) the direct indexed annuities market related liability by $83 million and $(168) million during the six months ended June 30, 2025 and June 30, 2024, 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.

Previous wording

◦During the three months ended March 31, 2025, based on experience, we reflected updates to the option budget assumption used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in decreases in total benefits and other changes in policy reserves of approximately $21 million for the three months ended March 31, 2025.

Current wording

◦During the three and six months ended June 30, 2025, based on experience, we reflected updates to the option budget assumption used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in decreases in total benefits and other changes in policy reserves of approximately $5 million and $26 million for the three and six months ended June 30, 2025, respectively.

Previous wording

◦During the three months ended March 31, 2024, based on increases in interest rates and pricing changes, we updated certain indexed annuity assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in an increase in total benefits and other changes in policy reserves of $57 million for the three months ended March 31, 2024.

Current wording

◦There were no assumptions updated for the three months ended June 30, 2024. During the six months ended June 30, 2024, based on increases in interest rates and pricing changes, we updated certain indexed annuity assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in an increase in total benefits and other changes in policy reserves of $57 million for the six months ended June 30, 2024.

Previous wording

•Index credits, interest credited and bonuses for the three months ended March 31, 2025, were higher compared to the three months ended March 31, 2024, 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.

Current wording

•Index credits, interest credited and bonuses for the three and six months ended June 30, 2025, were higher compared to the three and six months ended June 30, 2024, 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.

Previous wording

•Market risk benefit (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 (gains) losses are reported net of reinsurance, reflecting an amended reinsurance agreement effective July 1, 2024.

Current wording

•Market risk benefit (gains) losses are 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 (gains) losses are reported net of reinsurance, reflecting an amended reinsurance agreement effective July 1, 2024.

Previous wording

•Changes in market risk benefit (gains) losses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily reflect unfavorable market related movements and unfavorable actual policyholder behavior as compared to expected.

Current wording

•Changes in market risk benefit (gains) losses for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily reflect favorable market related movements and lower issuances. Changes in market risk benefit (gains) losses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily reflect unfavorable market related movements and unfavorable actual policyholder behavior as compared to expected.

Previous wording

•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, VOBA and DSI increased for the three months ended March 31, 2025, compared to the three months ended March 31, 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 during the three months ended September 30, 2024, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

Current wording

•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, VOBA and DSI increased for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 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 during the three months ended September 30, 2024, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

Previous wording

•Personnel costs and other operating expenses for the three months ended March 31, 2025 were lower compared to the three months ended March 31, 2024, primarily reflecting disciplined expense management, costs in line with sales volumes and growth in assets, along with continued investments in our operating platform.

Current wording

•Personnel costs and other operating expenses were higher for the three months ended June 30, 2025 and lower for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, 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, along with continued investments in our operating platform.

Previous wording

•Interest expense increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily reflecting interest on the debt issuances in 2024 and January 2025, partially offset by the payoff of the 5.50% Senior Notes due May 1, 2025 (the “5.50% F&G Senior Notes”) in February 2025, and the payoff of the revolving credit facility in 2024.

Current wording

•Interest expense increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily reflecting interest on the debt issuances in 2024 and January 2025, partially offset by the payoff of the 5.50% Senior Notes due May 1, 2025 (the “5.50% F&G Senior Notes”) in February 2025, and the payoff of the revolving credit facility in 2024.

Previous wording

•Income tax benefit for the three months ended March 31, 2025 was $5 million, compared to income tax expense of $26 million for the three months ended March 31, 2024. The effective tax rate was 19% and 18% for the three months ended March 31, 2025 and March 31, 2024, respectively. The decrease in income tax expense period over period is primarily related to the decrease in pre-tax income.

Current wording

•Income tax expense for the three months ended June 30, 2025 was $15 million, compared to income tax expense of $50 million for the three months ended June 30, 2024. The effective tax rate was 26% and 20% for the three months ended June 30, 2025 and June 30, 2024, respectively. The decrease in income tax expense period over period is primarily related to the decrease in pre-tax income.

Previous wording

•Adjusted net earnings of $91 million for the three months ended March 31, 2025 included income from a $16 million reinsurance true-up adjustment. Investment income from alternative investments was $63 million below management’s long-term expected return of approximately 10%.

Current wording

•Adjusted net earnings of $194 million for the six months ended June 30, 2025 included income from a $16 million reinsurance true-up adjustment. Investment income from alternative investments was $146 million below management’s long-term expected return of approximately 10%.

Previous wording

•Adjusted net earnings of $108 million for the three months ended March 31, 2024 included $2 million of other income items. Investment income from alternative investments was $52 million below management’s long-term expected return of approximately 10%.

Current wording

•Adjusted net earnings of $247 million for the six months ended June 30, 2024 included expense from $16 million of actuarial model updates and refinements; partially offset by $2 million of other income items. Investment income from alternative investments was $72 million below management’s long-term expected return of approximately 10%.

Previous wording

As of March 31, 2025 and December 31, 2024, the fair value of our investment portfolio was approximately $60 billion and was divided among the following asset classes and sectors (dollars in millions):

Current wording

As of June 30, 2025 and December 31, 2024, the fair value of our investment portfolio was approximately $64 billion and $60 billion, respectively, and was divided among the following asset classes and sectors (dollars in millions):

Previous wording

(b)Includes investment grade non-redeemable preferred stocks ($203 million and $222 million at March 31, 2025 and December 31, 2024, respectively).

Current wording

(b)Includes investment grade non-redeemable preferred stocks ($202 million and $222 million at June 30, 2025 and December 31, 2024, respectively).

Previous wording

The amortized cost and fair value of fixed maturity available-for-sale (“AFS”) securities by contractual maturities as of March 31, 2025 and December 31, 2024 (dollars in millions), are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Current wording

The amortized cost and fair value of fixed maturity available-for-sale (“AFS”) securities by contractual maturities as of June 30, 2025 (dollars in millions), are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Previous wording

The fair value of our investments in subprime securities and Alt-A RMBS securities were $5 million and $44 million as of March 31, 2025, respectively, and $29 million and $44 million as of December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, approximately 92% and 93%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

Current wording

The fair value of our investments in subprime securities and Alt-A RMBS securities were $5 million and $43 million as of June 30, 2025, respectively, and $29 million and $44 million as of December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, approximately 94% and 93%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

Previous wording

As of March 31, 2025, the CLO and ABS positions were trading at a net unrealized gain of $55 million and a net unrealized loss of $207 million, respectively. As of December 31, 2024, the CLO and ABS positions were trading at a net unrealized gain of $92 million and a net unrealized loss of $207 million, respectively.

Current wording

As of June 30, 2025, the CLO and ABS positions were trading at a net unrealized gain of $91 million and a net unrealized loss of $193 million, respectively. As of December 31, 2024, the CLO and ABS positions were trading at a net unrealized gain of $92 million and a net unrealized loss of $207 million, respectively.

Previous wording

Across all municipal bonds, the largest issuer represented 5% of the category and less than 1% of the total portfolio for both March 31, 2025 and December 31, 2024, and is rated NAIC 1 as of March 31, 2025. Our focus within municipal bonds is on NAIC 1 rated instruments, with 98% and 97% of our municipal bond exposure rated NAIC 1 as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Across all municipal bonds, the largest issuer represented 5% of the category and less than 1% of the total portfolio for both June 30, 2025 and December 31, 2024, and is rated NAIC 1 as of June 30, 2025. Our focus within municipal bonds is on NAIC 1 rated instruments, with 97% of our municipal bond exposure rated NAIC 1 as of June 30, 2025 and December 31, 2024.

Previous wording

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 March 31, 2025 and December 31, 2024, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times, and a weighted average LTV ratio of 56% and 57%, respectively.

Current wording

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 June 30, 2025 and December 31, 2024, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.2 times and 2.3 times, respectively, and a weighted average LTV ratio of 56% and 57%, respectively.

Previous wording

Our residential mortgage loans (“RMLs”) are closed end, amortizing loans, and 100% of the properties are in the United States. We diversify our RML portfolio by state to attempt to reduce concentration risk. RMLs have a primary credit quality indicator of either a performing or non-performing loan. We define non-performing RMLs as those that are 90 or more days past due and/or in non-accrual status.

Current wording

Our residential mortgage loans (“RMLs”) are primarily closed end, amortizing loans, and 100% of the properties are in the United States. We diversify our RML portfolio by state to attempt to reduce concentration risk. RMLs have a primary credit quality indicator of either a performing or non-performing loan. We define non-performing RMLs as those that are 90 or more days past due and/or in non-accrual status.