F&G Annuities & Life, Inc.

Previous wording

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

Current wording

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

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

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by indexed annuities. Opportunistic sales of MYGA and funding agreements are subject to fluctuation period to period based on economics and market opportunity; we continue to prioritize pricing discipline and capital allocation to the highest return opportunities.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•Life-contingent pension risk transfer premiums increased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, reflecting the timing of PRT transactions. PRT premiums are subject to fluctuation period to period.

Current wording

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

Previous wording

•Surrender charges were relatively unchanged for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. These charges primarily reflect withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities and IUL policies, and are subject to changes in the interest rate environment.

Current wording

•Surrender charges were lower for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, respectively. These charges primarily reflect withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities and IUL policies, and are subject to changes in the interest rate environment.

Previous wording

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

Current wording

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

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 $228 million and $184 million for the three months ended March 31, 2026 and March 31, 2025, 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 $263 million and $491 million for the three and six months ended June 30, 2026, respectively, and $189 million and $373 million for the three and six months ended June 30, 2025, respectively.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•Interest and investment income was higher for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to $10 million from invested asset growth, $4 million of higher returns on alternative investments and $22 million of all other rate and mix impacts.

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 modestly higher for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily reflecting higher 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 lower for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily reflecting lower commission revenues.

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 $260 million for the three month periods ended March 31, 2026, and $(42) million for the three month periods ended March 31, 2025, 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 $(82) million and $132 million for the three and six month periods ended June 30, 2026, and $(57) million and $(99) million for the three and six month periods ended June 30, 2025, respectively.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•For the three months ended March 31, 2025, net realized and unrealized gains (losses) on fixed maturity 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

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.

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 and foreign currency forwards 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 foreign currency and interest rate swaps were primarily driven by fluctuations in the foreign currency exchange rates and interest rate indexes underlying the swap contracts.

Current wording

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

Previous wording

(a) Reported net of ceded benefits and other changes in policy reserves of $50 million and $53 million for the three months ended March 31, 2026 and 2025 respectively.

Current wording

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

Previous wording

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, increased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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, decreased for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, 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, 2026 and 2025, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the respective periods. The change in risk free rates and non-performance spreads (decreased) increased the direct indexed annuities market related liability by $(145) million and $47 million during the three months ended March 31, 2026 and 2025, respectively. The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts. See “Revenues—Recognized gains and (losses), net”above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

Current wording

•The indexed annuities/IUL market related liability movements during the three and six months ended June 30, 2026 and 2025, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the respective periods. The change in risk free rates and non-performance spreads increased the direct indexed annuities market related liability by $10 million and $36 million during the three months ended June 30, 2026 and 2025, respectively. The change in risk free rates and non-performance spreads (decreased) increased the direct indexed annuities market related liability by $(135) million and $83 million during the six months ended June 30, 2026 and 2025, respectively.

Previous wording

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

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

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

Current wording

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

Previous wording

•Other changes in policy reserves decreased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily reflecting higher ceded deposit asset accretion associated with the reinsurance of annuity products.

Current wording

•Other changes in policy reserves increased for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily reflecting an actuarial model update that lowered the ceded deposit asset accretion associated with the reinsurance of annuity products, partially offset by higher FIA bonus recapture upon surrender. Other changes in policy reserves decreased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily reflecting higher FIA bonus recapture upon surrender, partially offset by lower ceded deposit asset accretion associated with the reinsurance of annuity products which includes the actuarial model update noted above.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•Changes in market risk benefit losses (gains) for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily reflect unfavorable market related movements, partially offset by favorable actual policyholder behavior as compared to expected. Changes in market risk benefit losses (gains) for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily reflect favorable market related movements, offset by higher issuances 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. Depreciation and amortization increased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

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. Depreciation and amortization increased for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

Previous wording

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

Current wording

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

Previous wording

•Interest expense was relatively unchanged for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Current wording

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

Previous wording

•Income tax expense for the three months ended March 31, 2026 was $74 million, compared to income tax benefit of $5 million for the three months ended March 31, 2025. The effective tax rate was 23% and 19% for the three months ended March 31, 2026 and 2025, respectively. The increase in income tax expense period over period is primarily related to the increase in pre-tax income.

Current wording

•Income tax benefit for the three months ended June 30, 2026 was $19 million, compared to income tax expense of $15 million for the three months ended June 30, 2025. The effective tax rate was 20% and 26% for the three months ended June 30, 2026 and 2025, 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 $110 million for the three months ended March 31, 2026 included expense from $5 million of investment and other income true-up adjustments. Investment income from alternative investments was $44 million below the midpoint of management's long-term expected return of approximately 12% to 14%.

Current wording

•Adjusted net earnings of $195 million for the six months ended June 30, 2026 included expense from $5 million of investment and other income true-up adjustments. Investment income from alternative investments was $93 million below management's long-term expected return.

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 $45 million below the midpoint of management's long-term expected return of approximately 12% to 14%.

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 $112 million below management's long-term expected return.

Previous wording

As of March 31, 2026 and December 31, 2025, the fair value of our investment portfolio was approximately $69 billion for both periods, and was divided among the following asset classes and sectors (dollars in millions):

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Previous wording

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

Current wording

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

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, 2026 and December 31, 2025, 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 57% for both periods.

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, 2026 and December 31, 2025, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.1 times and 2.3 times, respectively, and a weighted average LTV ratio of 56% and 57%, respectively.