10q10k10q10k.net

What changed in Brighthouse Financial, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Brighthouse Financial, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+451 added−421 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-28)

Top changes in Brighthouse Financial, Inc.'s 2025 10-K

451 paragraphs added · 421 removed · 369 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

109 edited+26 added−20 removed260 unchanged
Biggest changeDeposits for our Shield Annuities and variable annuities were as follows: Years Ended December 31, 2024 2023 2022 (In millions) Shield Annuities $ 7,671 $ 6,857 $ 5,848 GMWB 355 402 852 GMDB only 252 220 286 GMIB 22 24 49 Total $ 8,300 $ 7,503 $ 7,035 Guaranteed Minimum Death Benefits Since 2001, we have offered a variety of GMDBs to our contract holders, which include the following: • Account Value Death Benefit .
Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies.” Going forward, we intend to focus on selling our new suite of Shield Annuity products, along with variable annuities with GMWBs and GMDBs only. 9 Tab le of Contents Deposits for our Shield Annuities and variable annuities were as follows: Years Ended December 31, 2025 2024 2023 (In millions) Shield Annuities $ 8,008 $ 7,671 $ 6,857 GMWB 445 355 402 GMDB only 249 252 220 GMIB 13 22 24 Total $ 8,715 $ 8,300 $ 7,503 Guaranteed Minimum Death Benefits Since 2001, we have offered a variety of GMDBs to our contract holders, which include the following: • Account Value Death Benefit .
Under the Fiduciary Advice Rule, individuals or entities providing investment advice would be considered fiduciaries under ERISA or the Tax Code, as applicable, and would therefore be required to act solely in the interest of ERISA Plan participants or IRA beneficiaries, or risk exposure to fiduciary liability with respect to their advice.
Individuals or entities providing investment advice would be considered fiduciaries under ERISA or the Tax Code, as applicable, and would therefore be required to act solely in the interest of ERISA Plan participants or IRA beneficiaries, or risk exposure to fiduciary liability with respect to their advice.
We could be subject to higher costs of entering into derivatives transactions (including customized derivatives) and the reduced availability of customized derivatives that might result from the implementation of Dodd-Frank and comparable international derivatives regulations.
We could be subject to higher costs of entering into derivative transactions (including customized derivatives) and the reduced availability of customized derivatives that might result from the implementation of Dodd-Frank and comparable international derivatives regulations.
We reinsure, through 100% quota share reinsurance agreements, certain run-off long-term care and workers’ compensation business that we originally wrote. For products in our Run-off segment other than ULSG, we have periodically engaged in reinsurance activities on an opportunistic basis. Our ordinary course net reinsurance recoverables from unaffiliated third-party reinsurers at December 31, 2024 were as follows: Reinsurance Recoverables A.M.
We reinsure, through 100% quota share reinsurance agreements, certain run-off long-term care and workers’ compensation business that we originally wrote. For products in our Run-off segment other than ULSG, we have periodically engaged in reinsurance activities on an opportunistic basis. Our ordinary course net reinsurance recoverables from unaffiliated third-party reinsurers at December 31, 2025 were as follows: Reinsurance Recoverables A.M.
Additionally, Citigroup agreed to indemnify us for losses and certain other payment obligations we might incur with respect to this block of reinsured long-term care insurance business. The financial strength rating as of December 31, 2024 for each of the Genworth reinsurers was C++ from A.M. Best, and Citigroup’s credit ratings were A3 from Moody’s and BBB+ from S&P.
Additionally, Citigroup agreed to indemnify us for losses and certain other payment obligations we might incur with respect to this block of reinsured long-term care insurance business. The financial strength rating as of December 31, 2025 for each of the Genworth reinsurers was C++ from A.M. Best, and Citigroup’s credit ratings were A3 from Moody’s and BBB+ from S&P.
(2) Relates to a block of workers’ compensation insurance policies reinsured in connection with a former affiliate’s acquisition of The Travelers Indemnity Company (“Travelers”) from Citigroup, Inc. (“Citigroup”).
(2) Relates to a block of workers’ compensation insurance policies reinsured in connection with a former affiliate’s acquisition of The Travelers Indemnity Company (“Travelers”) from Citigroup, Inc.
State laws in the U.S. grant insurance regulatory authorities broad administrative powers with respect to, among other things: • licensing companies and agents to transact business; • calculating the value of assets to determine compliance with statutory requirements; • mandating certain insurance benefits; • regulating certain premium rates; • reviewing and approving certain policy forms and rates; • regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements, and identifying and paying to the states benefits and other property that are not claimed by the owners; • regulating underwriting, advertising and marketing of insurance products, including the use of external data and information, as well as the use of certain emerging technologies; • protecting privacy and cybersecurity; • establishing statutory accounting and reserve requirements and solvency standards (including RBC); • specifying the conditions under which a ceding company can take credit for reinsurance in its statutory financial statements (i.e., reduce its reserves by the amount of reserves ceded to a reinsurer); • fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; • adopting and enforcing replacement, best interest, or suitability standards with respect to the sale of annuities and other insurance products; • approving changes in control of insurance companies; • restricting the payment of dividends to affiliates, as well as certain other transactions between affiliates; and 20 Table of Contents • regulating the types, amounts and valuation of investments.
State laws in the U.S. grant insurance regulatory authorities broad administrative powers with respect to, among other things: • licensing companies and agents to transact business; • calculating the value of assets to determine compliance with statutory requirements; • mandating certain insurance benefits; • regulating certain premium rates; • reviewing and approving certain policy forms and rates; • regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements, and identifying and paying to the states benefits and other property that are not claimed by the owners; • regulating underwriting, advertising and marketing of insurance products, including the use of external data and information, as well as the use of certain emerging technologies; • protecting privacy and establishing cybersecurity requirements; • establishing statutory accounting and reserve requirements and solvency standards (including RBC); • specifying the conditions under which a ceding company can take credit for reinsurance in its statutory financial statements (i.e., reduce its reserves by the amount of reserves ceded to a reinsurer); • fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; • adopting and enforcing replacement, best interest, or suitability standards with respect to the sale of life insurance policies and annuity contracts; • approving changes in control of insurance companies; • restricting the payment of dividends to affiliates, as well as certain other transactions between affiliates; and 21 Tab le of Contents • regulating the types, amounts and valuation of investments.
Retail Distribution and Marketing (April 2016 – August 2017) Allie Lin 47 Brighthouse Financial: Executive Vice President and General Counsel (December 2022 – present); Head of Litigation and Employment Law (February 2021 – December 2022); Lead Litigation and Employment Attorney (September 2019 – February 2021); Corporate Counsel, Litigation Attorney (March 2018 – September 2019) AXA Equitable Life Insurance Company: Senior Director and Counsel (October 2013 – March 2018) John L.
Retail Distribution and Marketing (April 2016 – August 2017) Allie Lin 48 Brighthouse Financial: Executive Vice President and General Counsel (December 2022 – present); Head of Litigation and Employment Law (February 2021 – December 2022); Lead Litigation and Employment Attorney (September 2019 – February 2021); Corporate Counsel, Litigation Attorney (March 2018 – September 2019) AXA Equitable Life Insurance Company: Senior Director and Counsel (October 2013 – March 2018) John L.
Centralized clearing of certain derivatives also exposes us to the risk of a default by a clearing member or clearinghouse with respect to our cleared derivatives transactions.
Centralized clearing of certain derivatives also exposes us to the risk of a default by a clearing member or clearinghouse with respect to our cleared derivative transactions.
The increased margin requirements, combined with increased capital charges for our counterparties and central clearinghouses with respect to non-cash collateral, may result in increased holdings of cash and highly liquid securities with lower yields causing a reduction in income and less favorable pricing for cleared and OTC-bilateral derivatives transactions.
The increased margin requirements, combined with increased capital charges for our counterparties and central clearinghouses with respect to non-cash collateral, may result in increased holdings of cash and highly liquid securities with lower yields causing a reduction in income and less favorable pricing for cleared and OTC-bilateral derivative transactions.
Failure to comply with the CCPA risks regulatory fines, and the CCPA grants a private right of action and statutory damages for an unauthorized access and exfiltration, theft, or disclosure of certain types of personal information resulting from the Company’s violation of a duty to maintain reasonable security procedures and practices.
Failure to comply with the CCPA risks regulatory fines, and the CCPA grants a private right of action and statutory damages for any unauthorized access and exfiltration, theft, or disclosure of certain types of personal information resulting from the Company’s violation of a duty to maintain reasonable security procedures and practices.
In addition to the discussion that follows, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Segment Results for the Years Ended December 31, 2024 and 2023 - Adjusted Earnings (Loss)” and Note 2 of the Notes to the Consolidated Financial Statements for additional information regarding each of our segments.
In addition to the discussion that follows, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Segment Results for the Years Ended December 31, 2025 and 2024 - Adjusted Earnings (Loss)” and Note 2 of the Notes to the Consolidated Financial Statements for additional information regarding each of our segments.
For example, Dodd-Frank imposes requirements for (i) the mandatory clearing of certain OTC derivatives transactions that must be cleared and settled through central clearing counterparties (“OTC-cleared”), and (ii) the mandatory exchange of margin for OTC in-scope derivatives transactions that are bilateral contracts between two counterparties (“OTC-bilateral” or “uncleared”).
For example, Dodd-Frank imposes requirements for (i) the mandatory clearing of certain OTC derivative transactions that must be cleared and settled through central clearing counterparties (“OTC-cleared”), and (ii) the mandatory exchange of margin for OTC in-scope derivative transactions that are bilateral contracts between two counterparties (“OTC-bilateral” or “uncleared”).
Our ability to successfully execute our business strategy and deliver on our mission to help people achieve financial security starts with our culture and values, which are brought to life every day by our employees. At December 31, 2024, we had approximately 1,400 employees.
Our ability to successfully execute our business strategy and deliver on our mission to help people achieve financial security starts with our culture and values, which are brought to life every day by our employees. At December 31, 2025, we had approximately 1,400 employees.
(August 2016 – August 2017); Executive Vice President, U.S. Retail (September 2012 – August 2017) Edward A. Spehar 59 Brighthouse Financial: Executive Vice President and Chief Financial Officer (August 2019 – present) MetLife: Executive Vice President and Treasurer (August 2018 – July 2019); Chief Financial Officer of Europe, Middle East and Africa Region (July 2016 – February 2019) Vonda R.
(August 2016 – August 2017); Executive Vice President, U.S. Retail (September 2012 – August 2017) Edward A. Spehar 60 Brighthouse Financial: Executive Vice President and Chief Financial Officer (August 2019 – present) MetLife: Executive Vice President and Treasurer (August 2018 – July 2019); Chief Financial Officer of Europe, Middle East and Africa Region (July 2016 – February 2019) Vonda R.
See “— Insurance Regulation — Insurance Regulatory Examinations and Other Activities.” 26 Table of Contents Federal and state securities laws and regulations are primarily intended to ensure the integrity of the financial markets, to protect investors in the securities markets, and to protect investment advisory or brokerage clients, and generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to limit or restrict the conduct of business for failure to comply with such laws and regulations.
See “— Insurance Regulation — Insurance Regulatory Examinations and Other Activities.” Federal and state securities laws and regulations are primarily intended to ensure the integrity of the financial markets, to protect investors in the securities markets, and to protect investment advisory or brokerage clients, and generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to limit or restrict the conduct of business for failure to comply with such laws and regulations.
We believe that these risk mitigation actions at the fund level reduce the amount of hedging or reinsurance we require to manage our risks arising from guarantees we provide on the underlying variable annuity separate accounts. 10 Table of Contents GMWBs . GMWBs have a Benefit Base that contract holders may roll up for up to ten years.
We believe that these risk mitigation actions at the fund level reduce the amount of hedging or reinsurance we require to manage our risks arising from guarantees we provide on the underlying variable annuity separate accounts. GMWBs . GMWBs have a Benefit Base that contract holders may roll up for up to ten years.
The CCPA, as amended by the California Privacy Rights Act (the “CPRA”), effective as of January 1, 2023, and its implementing regulations require additional investment in compliance programs and potential modifications to business processes.
The CCPA, as amended by the California Privacy Rights Act (the “CPRA”), effective as of January 1, 2023, and its implementing regulations required additional investment in compliance programs and potential modifications to business processes.
See “Risk Factors — Risks Related to Our Business — Differences between actual experience and actuarial assumptions may adversely affect our financial results, capitalization and financial condition” and “Risk Factors — Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” 12 Table of Contents Life Our Life segment consists of insurance products, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis.
See “Risk Factors — Risks Related to Our Business — Differences between actual experience and actuarial assumptions may adversely affect our financial results, capitalization and financial condition” and “Risk Factors — Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” 13 Tab le of Contents Life Our Life segment consists of insurance products, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis.
The initial margin requirements for OTC-bilateral derivatives transactions, which requires the collecting and posting of collateral to reduce future exposure to a given counterparty, became applicable to us in September 2021.
The initial margin requirements for OTC-bilateral derivative transactions, which requires the collecting and posting of collateral to reduce future exposure to a given counterparty, became applicable to us in September 2021.
Huss 58 Brighthouse Financial: Executive Vice President and Chief Human Resources Officer (November 2017 – present) Wells Fargo, a financial services company: Executive Vice President, Co-Head of Human Resources (September 2015 – November 2017) Myles J.
Huss 59 Brighthouse Financial: Executive Vice President and Chief Human Resources Officer (November 2017 – present) Wells Fargo, a financial services company: Executive Vice President, Co-Head of Human Resources (September 2015 – November 2017) Myles J.
The Enhanced Death Benefit pays the greater of (i) the highest anniversary “step-up” value or (ii) a roll-up benefit which allows for dollar-for-dollar withdrawals up to the permitted amount for that contract year and proportional adjustments for withdrawals in excess of the permitted amount. 9 Table of Contents • Interval Reset Death Benefit .
The Enhanced Death Benefit pays the greater of (i) the highest anniversary “step-up” value or (ii) a roll-up benefit which allows for dollar-for-dollar withdrawals up to the permitted amount for that contract year and proportional adjustments for withdrawals in excess of the permitted amount. • Interval Reset Death Benefit .
Our offering and selling of Securities Products, including with respect to Brighthouse Securities and Brighthouse Advisers, may be impacted by SEC regulatory initiatives impacting the industry. Department of Labor and ERISA Considerations We manufacture individual retirement annuities that are subject to the Internal Revenue Code of 1986, as amended (the “Tax Code”), for third parties to sell to individuals.
Our offering and selling of Securities Products, including with respect to Brighthouse Securities and Brighthouse Advisers, may be impacted by SEC regulatory initiatives impacting the industry. 27 Tab le of Contents Department of Labor and ERISA Considerations We manufacture individual retirement annuities that are subject to the Internal Revenue Code of 1986, as amended (the “Tax Code”), for third parties to sell to individuals.
See “Risk Factors — Risks Related to Our Business — If the counterparties to our reinsurance or indemnification arrangements or to the derivatives we use to hedge our business risks default or fail to perform, we may be exposed to risks we had sought to mitigate, which could materially adversely affect our financial condition and results of operations.” 15 Table of Contents We have historically reinsured the mortality risk on our life insurance policies primarily on an excess of retention basis or on a quota share basis.
See “Risk Factors — Risks Related to Our Business — If the counterparties to our reinsurance or indemnification arrangements or to the derivatives we use to hedge our business risks default or fail to perform, we may be exposed to risks we had sought to mitigate, which could materially adversely affect our financial condition and results of operations.” 16 Tab le of Contents We have historically reinsured the mortality risk on our life insurance policies primarily on an excess of retention basis or on a quota share basis.
As amended by the new Fiduciary Advice Rule, PTE 84-24 would be available exclusively to independent producer fiduciaries receiving reasonable compensation for products that are not considered securities in connection with providing investment advice, including advice with respect to roll overs, that would otherwise be prohibited as a result of a fiduciary relationship to an ERISA plan or IRA.
As amended, PTE 84-24 would be available exclusively to independent producer fiduciaries receiving reasonable compensation for products that are not considered securities in connection with providing investment advice, including advice with respect to roll overs, that would otherwise be prohibited as a result of a fiduciary relationship to an ERISA plan or IRA.
See “Risk Factors — Risks Related to Our Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” 17 Table of Contents Sales Distribution We distribute our annuity and life insurance products through multiple independent distribution channels and marketing arrangements with a geographically diverse network of over 400 distribution partners.
See “Risk Factors — Risks Related to Our Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” 18 Tab le of Contents Sales Distribution We distribute our annuity and life insurance products through multiple independent distribution channels and marketing arrangements with a geographically diverse network of over 400 distribution partners.
These disclosures are included on our website in the “Investor Relations” or “Newsroom” sections. Accordingly, investors should monitor these portions of our website, in addition to following Brighthouse Financial’s news releases, SEC filings, public conference calls and webcasts.
These disclosures are included on our website in the “Investor Relations” or “Newsroom” sections. Accordingly, investors should monitor these portions of our website, in addition to following Brighthouse Financial’s news releases, SEC filings and webcasts.
See “Risk Factors — Risks Related to Our Business — Factors affecting our competitiveness may adversely affect our market share and profitability” and “Risk Factors — Risks Related to Our Business — We may experience difficulty in marketing and distributing products through our distribution channels.” 24 Table of Contents NYDFS Insurance Regulation 210 In March 2018, NYDFS Insurance Regulation 210: Life Insurance and Annuity Non-Guaranteed Elements took effect.
See “Risk Factors — Risks Related to Our Business — Factors affecting our competitiveness may adversely affect our market share and profitability” and “Risk Factors — Risks Related to Our Business — We may experience difficulty in marketing and distributing products through our distribution channels.” NYDFS Insurance Regulation 210 In March 2018, NYDFS Insurance Regulation 210: Life Insurance and Annuity Non-Guaranteed Elements took effect.
(2) Total account value includes investments in the general account totaling $3.8 billion and $4.3 billion at December 31, 2024 and 2023, respectively.
(2) Total account value includes investments in the general account totaling $3.4 billion and $3.8 billion at December 31, 2025 and 2024, respectively.
In addition, through regular communications, we help to ensure that employees are well-informed of the Company’s reporting and escalation process, including options for anonymous whistleblower reporting. 31 Table of Contents Attracting, Engaging, Developing and Retaining Talent We believe that our success depends, in large part, on our ability to attract and retain highly skilled employees.
In addition, through regular communications, we help to ensure that employees 32 Tab le of Contents are well-informed of the Company’s reporting and escalation process, including options for anonymous whistleblower reporting. Attracting, Engaging, Developing and Retaining Talent We believe that our success depends, in large part, on our ability to attract and retain highly skilled employees.
Additionally, we introduced limitations on fund selections inside certain variable annuity contracts and introduced managed volatility funds to our fund offerings in conjunction with the introduction of our last generation GMIB product “Max.” Approximately 28% and 29% of GMIB total account value at December 31, 2024 and 2023, respectively, was invested in managed volatility funds.
Additionally, we introduced limitations on fund selections inside certain variable annuity contracts and introduced managed volatility funds to our fund offerings in conjunction with the introduction of our last generation GMIB product “Max.” Approximately 28% of GMIB total account value at both December 31, 2025 and 2024 was invested in managed volatility funds.
SPIAs are single premium annuity products that provide a guaranteed level of income, beginning within 12 months from the contract issuance date, to the contract holder for a specified number of years or the duration of the life of the annuitant(s).
SPIAs are single premium annuity products that 7 Tab le of Contents provide a guaranteed level of income, beginning within 12 months from the contract issuance date, to the contract holder for a specified number of years or the duration of the life of the annuitant(s).
Information contained on or connected to any website referenced in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any website references are intended to be inactive textual references only, unless expressly noted. 34 Table of Contents
Information contained on or connected to any website referenced in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any website references are intended to be inactive textual references only, unless expressly noted. 35 Tab le of Contents
A portion of the investment management fees charged on proprietary funds managed by subadvisors unaffiliated with us are paid by us to such subadvisors. Investment management fees reduce the net returns on the variable annuity investments. 12b-1 Fees and Other Revenue.
A portion 8 Tab le of Contents of the investment management fees charged on proprietary funds managed by subadvisors unaffiliated with us are paid by us to such subadvisors. Investment management fees reduce the net returns on the variable annuity investments. 12b-1 Fees and Other Revenue.
Over the past several years, there have been no material adverse findings in connection with any examinations of us conducted by state insurance departments, although there can be no assurance that there will not be any material adverse findings in the future. 23 Table of Contents State regulatory authorities, the Financial Industry Regulatory Authority, Inc.
Over the past several years, there have been no material adverse findings in connection with any examinations of us conducted by state insurance departments, although there can be no assurance that there will not be any material adverse findings in the future. 24 Tab le of Contents State regulatory authorities, the Financial Industry Regulatory Authority, Inc.
We have established a portfolio of trademarks in the U.S. that we consider important in the marketing of our products and services, including for our name, “Brighthouse Financial,” our logo design and taglines. 33 Table of Contents Available Information and the Brighthouse Financial Website Our website is located at www.brighthousefinancial.com.
We have established a portfolio of trademarks in the U.S. that we consider important in the marketing of our products and services, including for our name, “Brighthouse Financial,” our logo design and taglines. 34 Tab le of Contents Available Information and the Brighthouse Financial Website Our website is located at www.brighthousefinancial.com.
The office is also subject to periodic external audits by reinsurers with whom we do business. 14 Table of Contents We believe we have established oversight of the underwriting process that facilitates quality sales and serves the needs of our customers, while supporting our financial strength and business objectives.
The office is also subject to periodic external audits by reinsurers with whom we do business. 15 Tab le of Contents We believe we have established oversight of the underwriting process that facilitates quality sales and serves the needs of our customers, while supporting our financial strength and business objectives.
Rosenthal 64 Brighthouse Financial: Executive Vice President and Chief Investment Officer (August 2017 – present) MetLife: Executive Vice President and Chief Investment Officer, Brighthouse Financial, Inc.
Rosenthal 65 Brighthouse Financial: Executive Vice President and Chief Investment Officer (August 2017 – present) MetLife: Executive Vice President and Chief Investment Officer, Brighthouse Financial, Inc.
Since 2014, our new sales have primarily consisted of Shield ® Level Annuities (“Shield” and “Shield Annuities”), fixed annuities and variable annuities with simplified living benefits.
Since 2014, our new sales have primarily consisted of Shield ® Level Annuities (“Shield,” “Shield Annuity” and “Shield Annuities”), fixed annuities and variable annuities with simplified living benefits.
With our in-force policies, the policyholder can withdraw or borrow against the policy (sometimes on a tax favored basis). 13 Table of Contents Universal Life We have a significant in-force book of universal life policies and currently offer two universal life products with index-linked benefits.
With our in-force policies, the policyholder can withdraw or borrow against the policy (sometimes on a tax favored basis). 14 Tab le of Contents Universal Life We have a significant in-force book of universal life policies and currently offer two universal life products with index-linked benefits.
In addition, we currently also offer an optional death benefit for an additional fee with our FlexChoice SM riders, available at issue through age 65, which has a similar level of death benefit protection as the Benefit Base for the living benefit rider. However, the Benefit Base for this death benefit is adjusted for all withdrawals.
In addition, we currently also offer an optional death benefit for an additional fee with our FlexChoice SM riders, available at issue through age 65, which has a similar level of death benefit protection as the Benefit Base for the living benefit rider.
Information About Our Executive Officers The following table presents certain information regarding our executive officers as of February 28, 2025. Name Age Position with Brighthouse Financial and Certain Other Business Experience Eric T. Steigerwalt 63 Brighthouse Financial: President and Chief Executive Officer (August 2017 – present) MetLife: President and Chief Executive Officer, Brighthouse Financial, Inc.
Information About Our Executive Officers The following table presents certain information regarding our executive officers as of February 24, 2026. Name Age Position with Brighthouse Financial and Certain Other Business Experience Eric T. Steigerwalt 64 Brighthouse Financial: President and Chief Executive Officer (August 2017 – present) MetLife: President and Chief Executive Officer, Brighthouse Financial, Inc.
This guidance reversed an earlier DOL interpretation suggesting that roll over advice does not constitute investment advice giving rise to a fiduciary relationship. The Fiduciary Advice Rule expands the definition of fiduciary “investment advice” to include, in many circumstances, providing one-time advice (including rollover advice) to ERISA Plans and IRAs, among other conduct.
This guidance reversed an earlier DOL interpretation suggesting that roll over advice does not constitute investment advice giving rise to a fiduciary relationship. 28 Tab le of Contents PTE 2020-02 expands the definition of fiduciary “investment advice” to include, in many circumstances, providing one-time advice (including rollover advice) to ERISA Plans and IRAs, among other conduct.
Principal Distribution Channels and Related Data The relative percentage of our annuity sales by our principal distribution channels were as follows: Year Ended December 31, 2024 Distribution Channel Variable Fixed Shield Annuities Fixed Index Annuity Total Independent financial planners 5 % 2 % 49 % 2 % 58 % Banks/financial institutions — % 5 % 20 % 2 % 27 % Regional broker-dealers 1 % 3 % 5 % 1 % 10 % National broker-dealers — % 2 % 3 % — % 5 % Our top five distributors of annuity products produced 13%, 11%, 11%, 9% and 6% of our deposits of annuity products for the year ended December 31, 2024.
Principal Distribution Channels and Related Data The relative percentage of our annuity sales by our principal distribution channels were as follows: Year Ended December 31, 2025 Distribution Channel Variable Fixed Shield Annuities Fixed Index Annuity Total Independent financial planners 6 % 1 % 49 % 1 % 57 % Banks/financial institutions — % 7 % 20 % 2 % 29 % Regional broker-dealers — % 2 % 6 % 1 % 9 % National broker-dealers — % 2 % 3 % — % 5 % Our top five distributors of annuity products produced 15%, 13%, 12%, 11% and 7% of our deposits of annuity products for the year ended December 31, 2025.
Further, the CCPA, as amended, creates the California Privacy Protection Agency to enforce the statute as well as its regulations, and imposes new requirements relating to additional consumer rights, data minimization, and other obligations.
Further, the CCPA, as amended, created the California Privacy Protection Agency (the “CPPA”) to enforce the statute as well as its regulations, and imposed new requirements relating to additional consumer rights, data minimization, and other obligations.
We introduced Shield Annuities in 2013 and sales have continued to increase due to growing consumer demand. Shield Annuities have historically provided us with a risk offset to the GMxBs offered in our traditional variable annuity products, and we historically managed our variable annuities and Shield Annuities on a combined basis.
We introduced our first generation Shield Annuities in 2013 and sales have continued to increase due to growing consumer demand. Shield Annuities have historically provided us with a risk offset to the GMxBs offered in our traditional variable annuity products.
Our variable annuity MRBs by type of GMxB were as follows at: December 31, 2024 2023 (In millions) GMIB $ 7,560 $ 9,485 GMWB 7 41 GMDB 740 788 Total $ 8,307 $ 10,314 The estimated fair value of these guarantees can change significantly due to changes in interest rates, equity indices, market volatility and variations in actuarial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as well as changes in nonperformance risk.
Our variable annuity MRBs by type of GMxB were as follows at: December 31, 2025 2024 (In millions) GMIB $ 7,298 $ 7,560 GMWB 5 7 GMDB 745 740 Total $ 8,048 $ 8,307 The estimated fair value of these guarantees can change significantly due to changes in interest rates, equity indices, market volatility and variations in actuarial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as well as changes in nonperformance risk.
Lambert 50 Brighthouse Financial: Executive Vice President and Chief Marketing and Distribution Officer (August 2017 – present) MetLife: Executive Vice President and Chief Marketing and Distribution Officer, Brighthouse Financial, Inc. (August 2016 – August 2017); Senior Vice President, U.S.
Lambert 51 Brighthouse Financial: Executive Vice President and Chief Operating Officer (August 2025 – Present); Executive Vice President and Chief Marketing and Distribution Officer (August 2017 – August 2025) MetLife: Executive Vice President and Chief Marketing and Distribution Officer, Brighthouse Financial, Inc. (August 2016 – August 2017); Senior Vice President, U.S.
We may also need to take certain additional actions to comply with, or assist our distributors in their compliance with, the regulation.
We may also need to take certain additional actions to comply with, or assist our distributors in their compliance with, forthcoming regulations.
The relative percentage of our life insurance sales by our principal distribution channels were as follows: Distribution Channel Year Ended December 31, 2024 Financial intermediaries 87 % Brokerage general agencies 13 % Our top five distributors of life insurance policies produced 24%, 22%, 21%, 11% and 6% of our life insurance sales for the year ended December 31, 2024. 18 Table of Contents Regulation Index to Regulation Page Overview 20 Insurance Regulation 20 Privacy and Cybersecurity Regulation 25 Regulation of the Use of Artificial Intelligence 26 Securities, Broker-Dealer and Investment Advisor Regulation 26 Department of Labor and ERISA Considerations 27 Standard of Conduct Regulation 27 Federal Tax Reform 29 Regulation of Over-the-Counter Derivatives 30 Environmental Considerations 30 Unclaimed Property 30 19 Table of Contents Overview Our insurance subsidiaries and BRCD are primarily regulated at the state level, with some products and services also subject to federal regulation.
The relative percentage of our life insurance sales by our principal distribution channels were as follows: Distribution Channel Year Ended December 31, 2025 Financial intermediaries 88 % Brokerage general agencies 12 % Our top five distributors of life insurance policies produced 28%, 25%, 20%, 10% and 4% of our life insurance sales for the year ended December 31, 2025. 19 Tab le of Contents Regulation Index to Regulation Page Overview 21 Insurance Regulation 21 Privacy and Cybersecurity Regulation 26 Regulation of the Use of Artificial Intelligence 27 Securities, Broker-Dealer and Investment Advisor Regulation 27 Department of Labor and ERISA Considerations 28 Standard of Conduct Regulation 28 Federal Tax Reform 30 Regulation of Over-the-Counter Derivatives 31 Environmental Considerations 31 Unclaimed Property 32 20 Tab le of Contents Overview Our insurance subsidiaries and BRCD are primarily regulated at the state level, with some products and services also subject to federal regulation.
Unclaimed Property We are subject to the laws and regulations of states and other jurisdictions concerning identification, reporting and escheatment of unclaimed or abandoned funds, and are subject to audit and examination for compliance with these requirements, which may result in fines or penalties.
The Company continues to monitor the litigation. 31 Tab le of Contents Unclaimed Property We are subject to the laws and regulations of states and other jurisdictions concerning identification, reporting and escheatment of unclaimed or abandoned funds, and are subject to audit and examination for compliance with these requirements, which may result in fines or penalties.
In 2022, we launched our Company’s employee network groups, which are open to all employees and provide a forum for employees to discuss relevant professional and personal topics, learn from one another, find support and allyship, expand their networks and deepen their level of compassion and understanding. 32 Table of Contents Supporting our Communities The Company seeks to support the communities in which we live and work through its own charitable organizations and through strategic partnerships with community organizations, educational institutions and industry peers.
These include the Company’s employee network groups, which are open to all employees and provide a forum for employees to discuss relevant professional and personal topics, learn from one another, find support and allyship, and expand their networks. 33 Tab le of Contents Supporting our Communities The Company seeks to support the communities in which we live and work through its own charitable organizations and through strategic partnerships with community organizations, educational institutions and industry peers.
As a result, we and the third parties who distribute our products are subject to U.S. federal and state privacy laws and regulations, including the Health Insurance Portability and Accountability Act as well as additional regulations, including those described below.
We also collect and handle the personal information of our associates and certain third parties who distribute our products. As a result, we and the third parties who distribute our products are subject to U.S. federal and state privacy laws and regulations, including the Health Insurance Portability and Accountability Act as well as additional regulations and those described below.
The Inflation Reduction Act establishes a 15% corporate alternative minimum tax (the “CAMT”) for corporations whose average annual adjusted financial statement income for any consecutive three–tax year period ending after December 31, 2021 and preceding the tax year exceeds $1.0 billion. Based on guidance issued by the U.S. Department of Treasury (the “U.S.
The Inflation Reduction Act establishes a 15% corporate alternative minimum tax (the “CAMT”) for corporations whose average annual adjusted financial statement income for any consecutive three–tax year period ending after December 31, 2021 and preceding the tax year exceeds $1.0 billion. On September 12, 2024, the Internal Revenue Service (“IRS”) and the U.S. Department of Treasury (the “U.S.
GMWBs primarily come in two versions depending on if they are period certain or if they are lifetime payments. GMABs . GMABs guarantee a minimum amount of account value to the contract holder after a set period of time, which can also include locking in capital markets gains. This can protect the value of the annuity from market fluctuations.
GMWBs primarily come in two versions depending on if they are period certain or if they are lifetime payments. 11 Tab le of Contents GMABs . GMABs guarantee a minimum amount of account value to the contract holder after a set period of time, which can also include locking in capital markets gains.
Business Index to Business Page Our Company 5 Segment Information 5 Reinsurance Activity 15 Sales Distribution 18 Regulation 19 Competition 31 Human Capital Resources 31 Information About Our Executive Officers 33 Intellectual Property 33 Available Information and the Brighthouse Financial Website 34 4 Table of Contents Our Company We are one of the largest providers of annuity and life insurance products in the U.S. with over 2.2 million annuity contracts and insurance policies in force at December 31, 2024.
Business Index to Business Page Our Company 6 Segment Information 6 Reinsurance Activity 16 Sales Distribution 19 Regulation 20 Competition 32 Human Capital Resources 32 Information About Our Executive Officers 34 Intellectual Property 34 Available Information and the Brighthouse Financial Website 35 5 Tab le of Contents Our Company We are one of the largest providers of annuity and life insurance products in the U.S. with over 2.0 million annuity contracts and insurance policies in force at December 31, 2025.
NR = Not rated 16 Table of Contents In addition, a block of long-term care insurance business with reserves of $5.4 billion at December 31, 2024 is reinsured to Genworth Life Insurance Company and Genworth Life Insurance Company of New York (collectively, the “Genworth reinsurers”) who further retroceded this business to Union Fidelity Life Insurance Company (“UFLIC”), an indirect subsidiary of General Electric Company (“GE”).
(“Citigroup”). 17 Tab le of Contents In addition, a block of long-term care insurance business with reserves of $5.5 billion at December 31, 2025 is reinsured to Genworth Life Insurance Company and Genworth Life Insurance Company of New York (collectively, the “Genworth reinsurers”) who further retroceded this business to Union Fidelity Life Insurance Company (“UFLIC”), an indirect subsidiary of General Electric Company (“GE”).
The regulation has opened the New York market to new competitors and has impacted some components of our current product designs. We continue to assess the impacts of these new factors on our sales in New York.
The regulation has opened the New York market to new competitors, and we continue to assess the impacts of these new factors on our sales in New York.
Insurance liabilities of our annuity contracts and life insurance policies reported in our Run-off segment were as follows at: December 31, 2024 December 31, 2023 General Account Separate Account Total General Account Separate Account Total (In millions) ULSG $ 17,110 $ — $ 17,110 $ 17,487 $ — $ 17,487 Structured settlements 4,523 — 4,523 4,997 — 4,997 Pension risk transfer 2,217 — 2,217 2,423 — 2,423 Company-owned life insurance 1,173 1,808 2,981 663 2,162 2,825 Other 26 23 49 528 19 547 Total $ 25,049 $ 1,831 $ 26,880 $ 26,098 $ 2,181 $ 28,279 Corporate & Other Our Corporate & Other segment consists of activities related to funding agreements associated with our institutional spread margin business, excess capital not allocated to the other segments, interest expense related to our outstanding debt, and preferred stock dividends, as well as expenses associated with certain legal proceedings and income tax audit issues.
Insurance liabilities of our annuity contracts and life insurance policies reported in our Run-off segment were as follows at: December 31, 2025 December 31, 2024 General Account Separate Account Total General Account Separate Account Total (In millions) ULSG $ 17,137 $ — $ 17,137 $ 17,110 $ — $ 17,110 Structured settlements 4,477 — 4,477 4,523 — 4,523 Pension risk transfer 2,110 — 2,110 2,217 — 2,217 Company-owned life insurance 652 2,457 3,109 1,173 1,808 2,981 Other 26 26 52 26 23 49 Total $ 24,402 $ 2,483 $ 26,885 $ 25,049 $ 1,831 $ 26,880 Corporate & Other Our Corporate & Other segment consists of activities related to funding agreements associated with our institutional spread margin business, excess capital not allocated to the other segments, interest expense related to our outstanding debt, and preferred stock dividends, as well as expenses associated with certain legal proceedings and income tax audit issues.
The current draft of the amended Model Law #672 focuses on four key privacy principles: (i) third-party arrangements; (ii) the right to access, correct, and delete data; (iii) the sale of personal information; and (iv) the processing and handling of personal information.
The current draft of the amended Model Law #672 focuses on four key privacy principles: (i) third-party arrangements; (ii) the right to access, correct, and delete data; (iii) the sale of personal information; and (iv) the processing and handling of personal information. Model Law #672 is still being exposed for comment to stakeholders and could undergo additional changes.
Contract holders must wait for a defined period, usually ten years, before they can elect to receive income through guaranteed annuity payments. Contract holder behavior around choosing a particular option cannot be predicted with certainty at the time of contract issuance or thereafter.
GMIBs. GMIBs are our largest block of living benefit guarantees based on in-force account value. Contract holders must wait for a defined period, usually ten years, before they can elect to receive income through guaranteed annuity payments. Contract holder behavior around choosing a particular option cannot be predicted with certainty at the time of contract issuance or thereafter.
In 2020, we launched a new term product with 10-, 20- or 30-year level premium term options, which we plan to cease offering during the first half of 2025. We also offer a one-year term option. Our term life products do not include any cash value, accumulation or investment components.
These term life product offerings include 10-, 20- or 30-year level premium term options, which we ceased offering during the first half of 2025. We currently offer a one-year term option. Our term life products do not include any cash value, accumulation or investment components.
Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring surplus and, in some instances, would require divestiture of such non-qualifying investments. The NAIC periodically reviews the statutory accounting and RBC requirements for investments and makes changes from time to time.
Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring surplus and, in some instances, would require divestiture of such non-qualifying investments.
The guidance provided by the DOL broadened the circumstances under which financial institutions, including insurance companies, could be considered fiduciaries under ERISA or the Tax Code.
PTE 2020-02 broadened the circumstances under which financial institutions, including insurance companies, could be considered fiduciaries under ERISA or the Tax Code.
Regulation of Over-the-Counter Derivatives The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) includes a framework of regulation of the over-the-counter (“OTC”) derivatives markets which requires clearing of certain types of derivatives and imposes additional costs, including new reporting and margin requirements.
The Company does not expect the OBBBA to have a material impact on the Company. 30 Tab le of Contents Regulation of Over-the-Counter Derivatives The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) includes a framework of regulation of the over-the-counter (“OTC”) derivatives markets which requires clearing of certain types of derivatives and imposes additional costs, including new reporting and margin requirements.
All U.S. states, the District of Columbia, and U.S. territories also require entities to provide notification to affected residents and, in certain instances, state regulators, such as state attorneys general or state insurance commissioners, in the event of certain security breaches affecting personal information.
See “Cybersecurity” for a discussion of our cybersecurity risk management and governance framework. 26 Tab le of Contents All U.S. states, the District of Columbia, and U.S. territories also require entities to provide notification to affected residents and, in certain instances, state regulators, such as state attorneys general or state insurance commissioners, in the event of certain security breaches affecting personal information.
In connection with the Fiduciary Advice Rule, the DOL also issued an exemption, Prohibited Transaction Exemption (“PTE”) 2020-02, that allows fiduciaries to receive compensation in connection with providing investment advice, including advice with respect to roll overs, that would otherwise be prohibited as a result of their fiduciary relationship to the ERISA Plan or IRA.
They would further be prohibited from receiving compensation for this advice, unless an exemption applied. PTE 2020-02 allows fiduciaries to receive compensation in connection with providing investment advice, including advice with respect to roll overs, that would otherwise be prohibited as a result of their fiduciary relationship to the ERISA Plan or IRA.
Similarly, the SEC periodically conducts routine or special examinations of Brighthouse Advisers, the registered funds advised by Brighthouse Advisers, and the registered separate accounts through which Brighthouse issues variable contracts. These examinations focus on the regulation of these entities under the federal securities laws.
Similarly, the SEC periodically conducts routine or special examinations of Brighthouse Funds Trusts I & II (the “Trusts”), the registered funds available in certain variable products, Brighthouse Advisers, the registered adviser to the Trusts, and the registered separate accounts through which Brighthouse Financial issues variable contracts. These examinations focus on the regulation of these entities under the federal securities laws.
Our variable annuity account value and Benefit Base by type of GMLB were as follows at: December 31, 2024 (1) December 31, 2023 (1) Account Value (2) Benefit Base Account Value (2) Benefit Base (In millions) GMIB $ 41,202 $ 64,007 $ 44,028 $ 67,086 GMWB 19,263 19,414 19,961 21,241 GMAB 359 266 431 343 Total $ 60,824 $ 83,687 $ 64,420 $ 88,670 _______________ (1) Many of our annuity contracts offer more than one type of guarantee and therefore certain living benefit guarantee amounts included in this table may also be included in the GMDBs table above.
Our variable annuity account value and Benefit Base by type of GMLB were as follows at: December 31, 2025 (1) December 31, 2024 (1) Account Value (2) Benefit Base Account Value (2) Benefit Base (In millions) GMIB $ 39,787 $ 60,558 $ 41,202 $ 64,007 GMWB 19,094 18,083 19,263 19,414 GMAB 162 125 359 266 Total $ 59,043 $ 78,766 $ 60,824 $ 83,687 _______________ (1) Many of our annuity contracts offer more than one type of guarantee and therefore certain living benefit guarantee amounts included in this table may also be included in the GMDBs table above.
See Note 12 of the Notes to the Consolidated Financial Statements for a discussion of dividend restrictions under the insurance laws of Delaware, New York and Massachusetts, as well as the dividend restrictions under BRCD’s plan of operations. 22 Table of Contents See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the ability of its subsidiaries to pay dividends.” Group Capital Contribution The NAIC adopted a group capital calculation tool, implemented by Brighthouse Financial in 2022, that uses an RBC aggregation methodology for all entities within an insurance holding company system.
See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the ability of its subsidiaries to pay dividends.” Group Capital Contribution The NAIC adopted a group capital calculation tool, implemented by Brighthouse Financial in 2022, that uses an RBC aggregation methodology for all entities within an insurance holding company system.
Insurance liabilities of our life insurance products were as follows at: December 31, 2024 December 31, 2023 General Account Separate Account Total General Account Separate Account Total (In millions) Term $ 2,468 $ — $ 2,468 $ 2,473 $ — $ 2,473 Whole 3,417 — 3,417 3,312 — 3,312 Universal 1,998 — 1,998 1,969 — 1,969 Variable 1,153 6,419 7,572 1,143 5,921 7,064 Total $ 9,036 $ 6,419 $ 15,455 $ 8,897 $ 5,921 $ 14,818 The in-force face amount and direct premiums received for our life insurance products were as follows: In-Force Face Amount Premiums December 31, Years Ended December 31, 2024 2023 2024 2023 2022 (In millions) Term $ 337,199 $ 351,824 $ 498 $ 531 $ 535 Whole $ 16,904 $ 17,561 $ 360 $ 388 $ 408 Universal $ 9,679 $ 10,171 $ 99 $ 105 $ 113 Variable $ 32,720 $ 33,916 $ 150 $ 161 $ 175 Products Term Life Term life products are designed to provide a fixed death benefit in exchange for a guaranteed level premium to be paid over a specified period of time.
Insurance liabilities of our life insurance products were as follows at: December 31, 2025 December 31, 2024 General Account Separate Account Total General Account Separate Account Total (In millions) Term $ 2,472 $ — $ 2,472 $ 2,468 $ — $ 2,468 Whole 3,493 — 3,493 3,417 — 3,417 Universal 2,078 — 2,078 1,998 — 1,998 Variable 1,140 6,860 8,000 1,153 6,419 7,572 Total $ 9,183 $ 6,860 $ 16,043 $ 9,036 $ 6,419 $ 15,455 The in-force face amount and direct premiums received for our life insurance products were as follows: In-Force Face Amount Premiums December 31, Years Ended December 31, 2025 2024 2025 2024 2023 (In millions) Term $ 312,477 $ 337,199 $ 457 $ 498 $ 531 Whole $ 16,098 $ 16,904 $ 316 $ 360 $ 388 Universal $ 9,339 $ 9,679 $ 96 $ 99 $ 105 Variable $ 31,714 $ 32,720 $ 134 $ 150 $ 161 Products Term Life Term life products are designed to provide a fixed death benefit in exchange for a guaranteed level premium to be paid over a specified period of time.
It represents the amount of the claim we would incur if death claims were made on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. 11 Table of Contents Our variable annuity account value and NAR by type of GMxB were as follows at: December 31, 2024 December 31, 2023 Account Value Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the-Money (2) Account Value Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the-Money (2) (Dollars in millions) GMIB $ 30,280 $ 3,660 $ 4,085 33.5 % $ 32,079 $ 4,089 $ 3,600 30.3 % GMIB Max with EDB 6,981 6,501 875 48.8 % 7,605 6,092 470 31.9 % GMIB Max without EDB 3,941 111 247 33.6 % 4,344 133 107 17.8 % GMWB 19,263 237 276 10.1 % 19,961 541 249 10.2 % GMAB 359 1 1 2.9 % 431 4 4 17.9 % GMDB only (other than EDB) 17,076 964 — N/A 16,768 1,056 — N/A EDB only 3,084 1,343 — N/A 3,109 1,325 — N/A Total $ 80,984 $ 12,817 $ 5,484 $ 84,297 $ 13,240 $ 4,430 _______________ (1) The “Death Benefit NAR” and “Living Benefit NAR” are not additive at the contract level.
It represents the amount of the claim we would incur if death claims were made on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. 12 Tab le of Contents Our variable annuity account value and NAR by type of GMxB were as follows at: December 31, 2025 December 31, 2024 Account Value Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the-Money (2) Account Value Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the-Money (2) (Dollars in millions) GMIB $ 29,217 $ 3,170 $ 4,086 32.1 % $ 30,280 $ 3,660 $ 4,085 33.5 % GMIB Max with EDB 6,758 6,410 1,103 51.6 % 6,981 6,501 875 48.8 % GMIB Max without EDB 3,812 49 330 37.3 % 3,941 111 247 33.6 % GMWB 19,094 140 266 9.0 % 19,263 237 276 10.1 % GMAB 162 — — 0.3 % 359 1 1 2.9 % GMDB only (other than EDB) 17,112 930 — N/A 17,076 964 — N/A EDB only 3,166 1,216 — N/A 3,084 1,343 — N/A Total $ 79,321 $ 11,915 $ 5,785 $ 80,984 $ 12,817 $ 5,484 _______________ (1) The “Death Benefit NAR” and “Living Benefit NAR” are not additive at the contract level.
On April 23, 2024, the Department of Labor (“DOL”) issued a final regulation updating the definition of “investment advice.” See “— Standard of Conduct Regulation — Department of Labor Fiduciary Advice Rule” for additional details regarding the status of the DOL Fiduciary Advice Rule (as defined below).
In recent years, the Department of Labor (“DOL”) issued a final regulation updating the definition of “investment advice,” which was subsequently stayed by judicial action. See “— Standard of Conduct Regulation — Department of Labor Fiduciary Advice Rule” for additional details regarding the status of the DOL Fiduciary Advice Rule (as defined below).
Additionally, the administrative fees are charged either based on the daily average of the net asset values in the subaccounts or when contracts fall below minimum values based on a flat annual fee per contract. 7 Table of Contents Surrender Charges.
These fees are used to offset the insurance and operational expenses relating to our variable annuity contracts. Additionally, the administrative fees are charged either based on the daily average of the net asset values in the subaccounts or when contracts fall below minimum values based on a flat annual fee per contract. Surrender Charges.
We have launched new products and refined existing products as we continue to strive to innovate in response to customer and distributor needs and market conditions. 5 Table of Contents Insurance liabilities of our annuity products were as follows at: December 31, 2024 December 31, 2023 General Account (1) Separate Account Total General Account (1) Separate Account Total (In millions) Variable $ 3,833 $ 77,151 $ 80,984 $ 4,307 $ 79,990 $ 84,297 Shield Annuities 32,152 — 32,152 28,850 — 28,850 Fixed deferred 20,556 — 20,556 19,794 — 19,794 Income 4,283 235 4,518 4,279 179 4,458 Total $ 60,824 $ 77,386 $ 138,210 $ 57,230 $ 80,169 $ 137,399 _______________ (1) Excludes market risk benefit (“MRB”) liabilities for guaranteed minimum benefits (“GMxB”) and Shield embedded derivatives.
We have launched new products and refined existing products as we continue to strive to innovate in response to customer and distributor needs and market conditions. 6 Tab le of Contents Insurance liabilities of our annuity products were as follows at: December 31, 2025 December 31, 2024 General Account (1) Separate Account Total General Account (1) Separate Account Total (In millions) Variable $ 3,403 $ 75,918 $ 79,321 $ 3,833 $ 77,151 $ 80,984 Shield Annuities 35,621 — 35,621 32,152 — 32,152 Fixed deferred 19,007 — 19,007 20,556 — 20,556 Income 4,521 267 4,788 4,283 235 4,518 Total $ 62,552 $ 76,185 $ 138,737 $ 60,824 $ 77,386 $ 138,210 _______________ (1) Excludes market risk benefit (“MRB”) liabilities for guaranteed minimum benefits (“GMxB”) and Shield embedded derivatives.
Best Financial Strength Rating (1) (In millions) MetLife, Inc. $ 3,447 A+ Munich American Reassurance Company 545 A+ RGA Reinsurance Company 481 A+ The Travelers Indemnity Company (2) 443 A++ Swiss Re Life & Health America Inc. 414 A+ SCOR 332 A+ Aegon NV 133 NR General Re Life Corporation 101 A++ Other 314 Allowance for credit losses (3) Total $ 6,207 _______________ (1) These financial strength ratings were the most currently available for our reinsurance counterparties as of December 31, 2024, and reflect the ratings of the ultimate parent companies of such counterparties, as there may be numerous subsidiary counterparties to each listed parent.
Best Financial Strength Rating (1) (In millions) MetLife, Inc. $ 3,399 A+ Munich American Reassurance Company 632 A+ Reinsurance Group of America, Inc. 559 A+ Swiss Re AG 491 A++ The Travelers Indemnity Company (2) 419 A+ SCOR SE 352 A+ Aegon Ltd 154 A General Re Life Corporation 109 A++ Other 358 Allowance for credit losses (3) Total $ 6,470 _______________ (1) These financial strength ratings were the most currently available for our reinsurance counterparties as of December 31, 2025, and reflect the ratings of the ultimate parent companies of such counterparties, as there may be numerous subsidiary counterparties to each listed parent.
M&E Fees are calculated based on the portion of the contract holder’s account value allocated to the separate accounts and are expressed as an annual percentage deducted daily. These fees are used to offset the insurance and operational expenses relating to our variable annuity contracts.
Mortality & Expense Fees and Administrative Fees. We earn mortality and expense fees (“M&E Fees”), as well as administrative fees on our variable annuity contracts. M&E Fees are calculated based on the portion of the contract holder’s account value allocated to the separate accounts and are expressed as an annual percentage deducted daily.
The regulation applies to all individual life insurance policies, individual annuity contracts and certain group life insurance and group annuity certificates that contain NGEs. NGEs include premiums, expense charges, cost of insurance rates and interest credits.
The regulation applies to all individual life insurance policies, individual annuity contracts and certain group life insurance and group annuity certificates that contain NGEs.
District Court for the Northern District of Texas issued decisions, which, together, stayed the effective date for implementation of the Fiduciary Advice Rule and the PTE Amendments. In September 2024, the DOL appealed these rulings.
District Court for the Northern District of Texas issued decisions, which, together, stayed the effective date for implementation of the Fiduciary Advice Rule and the PTE Amendments. In September 2024, the DOL appealed these rulings but subsequently withdrew its appeal of the stays, and the U.S. Court of Appeals for the Fifth Circuit issued an order dismissing the appeal.
While we cannot predict whether the Fiduciary Advice Rule will take effect in its current form, if implemented, it could have adverse effects on sales of our products and may also lead to further changes to our product offerings and compensation practices, as well as increase our litigation risk, any of which could adversely affect our financial condition and results of operations.
While we cannot predict the outcome of that rulemaking, future regulations could have adverse effects on sales of our products and may also lead to further changes to our product offerings and compensation practices, as well as increase our litigation risk, any of which could adversely affect our financial condition and results of operations.

… 75 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

76 edited+24 added−13 removed289 unchanged
Biggest changeRisks Related to Our Separation from, and Continuing Relationship with, MetLife If the Separation were to fail to qualify for non-recognition treatment for federal income tax purposes, then we could be subject to significant tax liabilities In connection with the Separation, MetLife received a private letter ruling from the IRS regarding certain significant issues under the Tax Code, as well as an opinion from its tax advisor that, subject to certain limited exceptions, the Separation qualifies for non-recognition of gain or loss to MetLife and MetLife’s shareholders pursuant to Sections 355 and 361 of the Tax Code.
Biggest changeAny inquiry in connection with our analytics business practices, as well as any misuse or alleged misuse of those analytics insights, including for alleged violation of third-party privacy and intellectual property rights, or other rights, or alleged breach of contractual obligations, such as limitations on the use of personal information, could cause reputational harm or result in regulatory enforcement actions or litigation, and any related limitations imposed on us could have a material impact on our business, financial condition and results of operations. 59 Tab le of Contents Risks Related to Our Separation from, and Continuing Relationship with, MetLife If the Separation were to fail to qualify for non-recognition treatment for federal income tax purposes, then we could be subject to significant tax liabilities In connection with the Separation, MetLife received a private letter ruling from the IRS regarding certain significant issues under the Tax Code, as well as an opinion from its tax advisor that, subject to certain limited exceptions, the Separation qualifies for non-recognition of gain or loss to MetLife and MetLife’s shareholders pursuant to Sections 355 and 361 of the Tax Code.
This could in turn impact our RBC ratios and our financial strength ratings, which are necessary to support our product sales, and, in certain circumstances, ultimately impact our solvency.
This could in turn impact our RBC ratios and our financial strength ratings, which are necessary to support our product sales, and, in certain circumstances, ultimately impact our solvency.
It is possible that an employee or third-party service provider (or their suppliers, vendors or subcontractors) could, intentionally or unintentionally, disclose or misappropriate confidential personal information, and there can be no assurance that our information security policies and systems in place can prevent unauthorized use or disclosure of confidential information, including nonpublic personal information.
It is possible that an employee or third-party service provider (or their suppliers, vendors or subcontractors) could, intentionally or unintentionally, disclose or misappropriate personal information, and there can be no assurance that our information security policies and systems in place can prevent unauthorized use or disclosure of confidential information, including personal information.
In addition, certain of our distributors currently offer their own competing products or may offer competing products in the future. If our distributors concentrate their efforts in selling their firm’s own products or our other competitors’ products instead of ours, our sales could be adversely impacted.
In addition, certain of our distributors currently offer their own competing products or may offer competing products in the future. If our distributors concentrate their efforts on selling their firm’s own products or our other competitors’ products instead of ours, our sales could be adversely impacted.
See “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” 48 Table of Contents Risks Related to Our Investment Portfolio Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations Credit Risk Fixed income securities and mortgage loans represent a significant portion of our investment portfolio.
See “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” Risks Related to Our Investment Portfolio Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations Credit Risk Fixed income securities and mortgage loans represent a significant portion of our investment portfolio.
In connection with our insurance operations, plaintiffs’ lawyers may bring or are bringing class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, claims payments and procedures, escheatment, product design, disclosure, administration, investments, denial or delay of benefits, lapse or termination of policies, cost of insurance and breaches of fiduciary or other duties to customers.
In connection with our insurance operations, plaintiffs’ lawyers may bring or are bringing class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, claims payments and procedures, escheatment, product design, disclosure, administration, investments, denial or delay of benefits, lapse or termination of policies, COI and breaches of fiduciary or other duties to customers.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers, employees, or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personally identifiable information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation and public statements against us by consumer advocacy groups or others, and could cause our customers, employees, or other third parties to lose trust in us, all of which could be costly and have a material adverse effect on our business, financial condition and results of operations.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers, employees, or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personal information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation and public statements against us by consumer advocacy groups or others, and could cause our customers, employees, or other third parties to lose trust in us, all of which could be costly and have a material adverse effect on our business, financial condition and results of operations.
Any payment of dividends by Brighthouse Life Insurance Company in 2024 would be considered an extraordinary dividend subject to regulatory approval. See Note 13 of the Notes to the Consolidated Financial Statements for a discussion of the applicable dividend restrictions and certain of our subsidiaries’ ordinary dividend capacity, as well as the circumstances under which regulatory approval would be required.
Any payment of dividends by Brighthouse Life Insurance Company in 2026 would be considered an extraordinary dividend subject to regulatory approval. See Note 13 of the Notes to the Consolidated Financial Statements for a discussion of the applicable dividend restrictions and certain of our subsidiaries’ ordinary dividend capacity, as well as the circumstances under which regulatory approval would be required.
See also “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk” and “— Risks Related to Our 46 Table of Contents Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs and our access to capital The capital and credit markets may be subject to periods of extreme volatility.
See also “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk” and “— Risks Related to Our Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs and our access to capital The capital and credit markets may be subject to periods of extreme volatility.
See “— Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” Our financial condition, results of operations, cash flows and statutory capital position could be materially adversely affected by disruptions in the financial markets, as such disruptions may limit our ability to replace, in a timely manner, maturing liabilities, satisfy regulatory capital requirements, and access the capital that may be necessary to grow our business.
See “— Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” 49 Tab le of Contents Our financial condition, results of operations, cash flows and statutory capital position could be materially adversely affected by disruptions in the financial markets, as such disruptions may limit our ability to replace, in a timely manner, maturing liabilities, satisfy regulatory capital requirements, and access the capital that may be necessary to grow our business.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.” 36 Table of Contents Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk Certain of the variable annuity and Shield Annuity products we offer include guaranteed benefits designed to protect contract holders against significant changes in equity markets and interest rates, including GMDBs and GMWBs.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.” Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk Certain of the variable annuity and Shield Annuity products we offer include guaranteed benefits designed to protect contract holders against significant changes in equity markets and interest rates, including GMDBs and GMWBs.
See “— Regulatory and Legal Risks — A decrease in the RBC ratio of our insurance subsidiaries (as a result of a reduction in statutory capital and surplus or an increase in the required RBC capital charges), or a change in the rating agency proprietary capital models for our insurance subsidiaries, could result in increased scrutiny by insurance regulators and rating agencies or BHF contributing capital to its subsidiaries and could have a material adverse effect on our financial condition and results of operations.” See also “Business — Regulation — Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Parent Company — Liquidity and Capital — Statutory Capital and Dividends.” Risks associated with climate change could adversely affect our business, financial condition and results of operations.
See “— Regulatory and Legal Risks — A decrease in the RBC ratio of our insurance subsidiaries (as a result of a reduction in statutory capital and surplus or an increase in the required RBC capital charges), or a change in the rating agency proprietary capital models for our insurance subsidiaries, could result in increased scrutiny by insurance regulators and rating agencies or BHF contributing capital to its subsidiaries and could have a material adverse effect on our financial condition and results of operations.” See also “Business — Regulation — Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Parent Company — Liquidity and Capital — Statutory Capital and Dividends.” 46 Tab le of Contents Risks associated with climate change could adversely affect our business, financial condition and results of operations.
Moreover, we may be unable to timely dissolve all contractual relationships with the divested business in the course of the proposed transaction, which may materially adversely affect our ability to realize value from the disposition. Such disposition could also adversely affect our internal controls and 45 Table of Contents procedures and impair our relationships with key customers, distributors and suppliers.
Moreover, we may be unable to timely dissolve all contractual relationships with the divested business in the course of the proposed transaction, which may materially adversely affect our ability to realize value from the disposition. Such disposition could also adversely affect our internal controls and procedures and impair our relationships with key customers, distributors and suppliers.
In addition, from time to time, certain third parties have brought to our attention practices, procedures and reserves with respect to certain products they administer on our behalf that require further review.
In addition, from time to time, certain third parties have brought to our attention practices and procedures used to estimate our reserves with respect to certain products they administer on our behalf that require further review.
See also “— Any failure to protect the confidentiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” Our employees and those of our third-party service providers may take excessive risks which could negatively affect our financial condition and business As an insurance enterprise, we are in the business of accepting certain risks.
See also “— Any failure to protect the confidentiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” 58 Tab le of Contents Our employees and those of our third-party service providers may take excessive risks which could negatively affect our financial condition and business As an insurance enterprise, we are in the business of accepting certain risks.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.” Regulatory and Legal Risks Our insurance business is highly regulated, and changes in regulation and in supervisory and enforcement policies or interpretations thereof may materially impact our capitalization or cash flows, reduce our profitability and limit our growth Our operations are subject to a wide variety of insurance and other laws and regulations.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.” 54 Tab le of Contents Regulatory and Legal Risks Our insurance business is highly regulated, and changes in regulation and in supervisory and enforcement policies or interpretations thereof may materially impact our capitalization or cash flows, reduce our profitability and limit our growth Our operations are subject to a wide variety of insurance and other laws and regulations.
A decline in RBC ratio, whether or not it results in a failure to meet applicable RBC requirements, could limit the ability of an insurance subsidiary to make dividends or distributions to us, could result in a loss of customers or new business, or could influence ratings agencies to downgrade our financial strength ratings, each of which could cause a material adverse effect on our business, financial condition and results of operations.
A decline in RBC ratio, whether or not it results in a failure to meet applicable RBC requirements, could limit the ability of an insurance subsidiary to make dividends or distributions to us, could result in a loss of customers or new 55 Tab le of Contents business, or could influence ratings agencies to downgrade our financial strength ratings, each of which could cause a material adverse effect on our business, financial condition and results of operations.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties — Financial and Economic Environment” for a discussion of the current impacts of inflation. 49 Table of Contents Market Valuation Risk Market valuation risk relates to the variability in the estimated fair value of investments associated with changes in market factors.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties — Financial and Economic Environment” for a discussion of the current impacts of inflation. Market Valuation Risk Market valuation risk relates to the variability in the estimated fair value of investments associated with changes in market factors.
Decreases in the estimated fair value of securities we hold could have a material adverse effect on our financial condition and results of operations. • Risks Related to the Determination of Allowances and Impairments – The determination of the amount of allowances and impairments is subjective and varies by investment type, which is based on our periodic evaluation and assessment of known and inherent risks associated with the respective asset class.
Decreases in the estimated fair value of securities we hold could have a material adverse effect on our financial condition and results of operations. 52 Tab le of Contents • Risks Related to the Determination of Allowances and Impairments – The determination of the amount of allowances and impairments is subjective and varies by investment type, which is based on our periodic evaluation and assessment of known and inherent risks associated with the respective asset class.
Furthermore, the valuation of our derivatives could change based on changes to our valuation methodology or the discovery of errors. 51 Table of Contents Substantially all of our derivative transactions require us to pledge or receive collateral or make payments related to any decline in the net estimated fair value of such derivative transactions.
Furthermore, the valuation of our derivatives could change based on changes to our valuation methodology or the discovery of errors. Substantially all of our derivative transactions require us to pledge or receive collateral or make payments related to any decline in the net estimated fair value of such derivative transactions.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which the shares currently trade, and the market price of our common stock may fluctuate widely depending on many factors, some of which may be beyond our control.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which the shares currently trade, and the market price of our common stock may fluctuate widely depending on many factors, some of which may be beyond our control, including the pendency of the Merger.
Furthermore, even for obligations and liabilities that we do discover during the due diligence process, neither the valuation adjustment nor the contractual protections we negotiate may be sufficient to fully protect us from losses. We may from time to time dispose of business or blocks of in-force business through outright sales, reinsurance transactions or by alternate means.
Furthermore, even for obligations and liabilities that we do discover during the due diligence process, neither the valuation adjustment nor the contractual protections we negotiate may be sufficient to fully protect us from losses. 47 Tab le of Contents We may from time to time dispose of business or blocks of in-force business through outright sales, reinsurance transactions or by alternate means.
High inflation could also cause a change in consumer sentiment and behavior adversely affecting the sales of certain of our products. Equity Risk We sell certain spread-based annuity products that expose us to the risk that changes in equity markets will reduce our investment margin, as higher equity markets would require us to credit more under the contracts.
High inflation could also cause a change in consumer sentiment and behavior adversely affecting the sales of certain of our products. 50 Tab le of Contents Equity Risk We sell certain spread-based annuity products that expose us to the risk that changes in equity markets will reduce our investment margin, as higher equity markets would require us to credit more under the contracts.
In any particular year, TAC amounts, and thus RBC ratios, may fluctuate depending on a variety of factors, including the amount of statutory income or losses generated by the insurance subsidiary, the amount of additional capital such insurer must hold to support business growth, equity and credit market conditions, the value and credit ratings of certain fixed income and equity securities in its investment portfolio, the value of certain derivative instruments that do not receive hedge accounting, as well as changes to the RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies.
In any particular year, TAC amounts, and thus RBC ratios, may fluctuate depending on a variety of factors, including the amount of statutory income or losses generated by the insurance subsidiary, the amount of additional capital such insurer must hold to support business growth, equity and credit market conditions, the value and credit ratings of certain fixed income and equity securities in its investment portfolio, the value of certain derivative instruments, as well as changes to the RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies.
Consolidation of distributors or other industry changes may also increase the likelihood that distributors will try to renegotiate the terms of any existing selling agreements to terms less favorable to us. 42 Table of Contents Because our products are distributed through unaffiliated firms, we may not be able to monitor or control the manner of their distribution despite our training and compliance programs.
Consolidation of distributors or other industry changes may also increase the likelihood that distributors will try to renegotiate the terms of any existing selling agreements to terms less favorable to us. 44 Tab le of Contents Because our products are distributed through unaffiliated firms, we may not be able to monitor or control the manner of their distribution despite our training and compliance programs.
Furthermore, if implemented, any such refinements could cause us to increase the reserves we hold for our insurance policy and annuity contract liabilities. If models are misused 54 Table of Contents or fail to serve their intended purposes, they could produce incorrect or inappropriate results.
Furthermore, if implemented, any such refinements could cause us to increase the reserves we hold for our insurance policy and annuity contract liabilities. If models are misused or fail to serve their intended purposes, they could produce incorrect or inappropriate results.
Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC 50 Table of Contents levels.
Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC levels.
The above risks could adversely affect our business, financial condition and results of operations. 44 Table of Contents Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general Public health crises, extreme mortality events or other similar occurrences could have a major impact on the global economy and the financial markets or the economies of particular countries or regions, including market volatility and disruptions to commerce, the health system, and the food supply, as well as reduced economic activity and labor shortages.
Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general Public health crises, extreme mortality events or other similar occurrences could have a major impact on the global economy and the financial markets or the economies of particular countries or regions, including market volatility and disruptions to commerce, the health system, and the food supply, as well as reduced economic activity and labor shortages.
There can be no assurance that MetLife will be able to satisfy 57 Table of Contents its indemnification obligation to us or that such indemnification will be sufficient to us in the event of a dispute or nonperformance by MetLife.
There can be no assurance that MetLife will be able to satisfy its indemnification obligation to us or that such indemnification will be sufficient to us in the event of a dispute or nonperformance by MetLife.
This risk mitigation strategy may negatively impact our GAAP stockholders’ equity and net income when interest rates rise and our ULSG Target likely declines as a result, since our interest rate derivatives are measured at fair value, while our ULSG liabilities under GAAP are largely insensitive to actual fluctuations in interest rates.
This risk mitigation strategy may negatively impact our GAAP stockholders’ equity and net income when interest rates rise and our ULSG Target likely declines as a result, since our 40 Tab le of Contents interest rate derivatives are measured at fair value, while our ULSG liabilities under GAAP are largely insensitive to actual fluctuations in interest rates.
In addition, our continuous technological evaluations and enhancements, including changes designed to update our protective measures, may increase our risk of a breach or gap in our security, and there can be no assurance that any such efforts will be effective in preventing or limiting the impact of future cyberattacks.
In addition, our continuous technological evaluations and enhancements, including changes designed and 57 Tab le of Contents intended to update our protective measures, may increase our risk of a breach or gap in our security, and there can be no assurance that any such efforts will be effective in preventing or limiting the impact of future cyberattacks.
Moreover, borrowers may prepay or redeem the fixed income securities and commercial, agricultural or residential mortgage loans in our investment portfolio with greater frequency in order to borrow at lower market rates, thereby exacerbating this risk. Increases in interest rates could negatively affect our profitability.
Moreover, borrowers may prepay or redeem the fixed income securities and commercial, agricultural or residential mortgage loans in our investment portfolio with greater frequency in order to borrow at lower market rates, thereby exacerbating this risk. 51 Tab le of Contents Increases in interest rates could negatively affect our profitability.
The financing facility matures in 2039, and we may therefore need to refinance this facility in the future. 41 Table of Contents The NAIC adopted AG 48, which regulates the terms of captive insurer arrangements that are entered into or amended in certain ways after December 31, 2014.
The financing facility matures in 2039, and we may therefore need to refinance this facility in the future. 43 Tab le of Contents The NAIC adopted AG 48, which regulates the terms of captive insurer arrangements that are entered into or amended in certain ways after December 31, 2014.
In addition, our ability to withstand competitive pressures and to react 40 Table of Contents to changes in the insurance industry could be impaired. Further, if we are unable to repay, refinance or restructure our secured indebtedness, the holders of such indebtedness could proceed against any collateral securing that indebtedness.
In addition, our ability to withstand competitive pressures and to react 42 Tab le of Contents to changes in the insurance industry could be impaired. Further, if we are unable to repay, refinance or restructure our secured indebtedness, the holders of such indebtedness could proceed against any collateral securing that indebtedness.
Continued scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding environmental, social and governance matters may adversely affect our reputation or otherwise adversely impact our business and results of operations There is continued scrutiny and evolving expectations, as well as conflicting expectations, from investors, customers, regulators and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion, racial justice and workplace conduct.
Continued scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding environmental, social and governance matters may adversely affect our reputation or otherwise adversely impact our business and results of operations There is continued scrutiny and evolving expectations, as well as conflicting expectations, from investors, customers, regulators and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, workplace conduct and other social and political mandates.
Our net investment spread is a key component of our profitability measures. 47 Table of Contents Although reducing interest crediting rates can help offset decreases in net investment spreads on some products, our ability to reduce these rates is limited to the portion of our in-force product portfolio that has adjustable interest crediting rates and could also be limited by the actions of our competitors or contractually guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields.
Although reducing interest crediting rates can help offset decreases in net investment spreads on some products, our ability to reduce these rates is limited to the portion of our in-force product portfolio that has adjustable interest crediting rates and could also be limited by the actions of our competitors or contractually guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields.
Potential attacks may include, but are not limited to, cyberattacks, phishing attacks, account takeover attempts, the introduction of computer viruses or malicious code (commonly referred to as “malware”), ransomware or other extortion tactics, denial of service attacks, credential stuffing, and other computer-related penetrations.
Potential attacks may include, but are not limited to, cyberattacks, phishing attacks, account takeover attempts, the introduction of computer viruses or malicious code (commonly referred to as “malware”), ransomware or other extortion tactics, denial of service attacks, credential stuffing, and other computer-related penetrations, each of which may be facilitated by the use of AI.
Such adverse changes in the economy could negatively affect our earnings and capitalization and have a material adverse effect on our financial condition, results of operations and our ability to receive dividends from our insurance subsidiaries and BRCD. In addition, adverse economic conditions could have a material impact on our investment portfolio.
Such adverse changes in the economy could negatively affect our earnings and capitalization and have a material adverse effect on our financial condition, results of operations and our ability to receive dividends from our insurance subsidiaries and BRCD.
Changes in regulatory approval processes, rules and other dynamics in the regulatory process could adversely impact our ability to react to such changing conditions. 52 Table of Contents We cannot predict the impact that “best interest” or fiduciary standards adopted or proposed by various regulators may have on our business, financial condition or results of operations.
Changes in regulatory approval processes, rules and other dynamics in the regulatory process could adversely impact our ability to react to such changing conditions. We cannot predict the impact that “best interest” or fiduciary standards may have on our business, financial condition or results of operations.
We need liquidity at our holding company to pay our operating expenses, pay interest on our indebtedness, pay dividends on our preferred stock, carry out any share or debt repurchases that we may undertake, pay any potential dividends on our common stock, provide our subsidiaries with cash or collateral, maintain our securities lending activities and replace certain maturing liabilities.
We need liquidity at our holding company to pay our operating expenses, pay interest on our indebtedness, pay dividends on our preferred stock, carry out any share or debt repurchases that we may undertake, pay any potential dividends on our common stock and provide our subsidiaries with cash or collateral.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” for additional information regarding our financial strength ratings and credit ratings, including current ratings and outlooks. 39 Table of Contents Our indebtedness and the degree to which we are leveraged could cause a material adverse effect on our financial condition and results of operations We had $3.2 billion of total long-term consolidated indebtedness outstanding at December 31, 2024, consisting of debt securities issued to investors.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” for a discussion of the actions taken by rating agencies following the announcement of the Merger and for additional information regarding our financial strength ratings and credit ratings, including current ratings and outlooks. 41 Tab le of Contents Our indebtedness and the degree to which we are leveraged could cause a material adverse effect on our financial condition and results of operations We had $3.2 billion of total long-term consolidated indebtedness outstanding at December 31, 2025, consisting of debt securities issued to investors.
See “Note Regarding Forward-Looking Statements and Summary of Risk Factors.” Risks Related to Our Business Differences between actual experience and actuarial assumptions may adversely affect our financial results, capitalization and financial condition Our earnings significantly depend upon the extent to which our actual claims experience and benefit payments on our products are consistent with the assumptions we use in setting prices for our products and establishing liabilities for future policy benefits and claims.
Risks Related to Our Business Differences between actual experience and actuarial assumptions may adversely affect our financial results, capitalization and financial condition Our earnings significantly depend upon the extent to which our actual claims experience and benefit payments on our products are consistent with the assumptions we use in setting prices for our products and establishing liabilities for future policy benefits and claims.
Changes in tax laws or interpretations of such laws could reduce our earnings and materially impact our operations by increasing our corporate taxes and making some of our products less attractive to consumers Changes in tax laws or interpretations of such laws, including in relation to the extension of expiring provisions of the 2017 Tax Cuts and Jobs Act, could have a material adverse effect on our profitability and financial condition and could result in our incurring materially higher statutory taxes.
Changes in tax laws or interpretations of such laws could reduce our earnings and materially impact our operations by increasing our corporate taxes and making some of our products less attractive to consumers Changes in tax laws or interpretations of such laws could have a material adverse effect on our profitability and financial condition and could result in our incurring materially higher statutory taxes.
See “— Any failure in our cybersecurity risk management program, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively.” In addition, compliance with complex variations in privacy and data security laws may require modifications to current business practices, including significant technology efforts that require long implementation timelines, increased costs and dedicated resources. 56 Table of Contents Furthermore, there has been increased scrutiny as well as enacted and proposed additional laws and regulations, including from state regulators, regarding the use of customer data.
See “— Any failure in our cybersecurity risk management program, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively.” In addition, compliance with complex variations in privacy and data security laws may require modifications to current business practices, including significant technological efforts that require long implementation timelines, increased costs and dedicated resources.
Climate change could also impact our counterparties and other third parties, including, among others, reinsurers and derivative counterparties. Increasing scrutiny and evolving expectations from investors, customers, regulators, and other stakeholders regarding climate change matters may adversely affect our reputation.
Climate change could also impact our counterparties and other third parties, including, among others, reinsurers and derivative counterparties. Increasing scrutiny and evolving expectations from investors, customers, regulators, and other stakeholders regarding climate change matters may adversely affect our reputation. The above risks could adversely affect our business, financial condition and results of operations.
If our associates fail to adhere to regulatory requirements or our policies and procedures, we may be subject to penalties, restrictions or other sanctions by applicable regulators, and we may suffer reputational harm.
Such actions may negatively affect our business and results of operations. If our associates fail to adhere to regulatory requirements or our policies and procedures, we may be subject to penalties, restrictions or other sanctions by applicable regulators, and we may suffer reputational harm.
Risk Factors Index to Risk Factors Page Overview 36 Risks Related to Our Business 36 Economic Environment and Capital Markets-Related Risks 46 Risks Related to Our Investment Portfolio 49 Regulatory and Legal Risks 52 Operational Risks 54 Risks Related to Our Separation from, and Continuing Relationship with, MetLife 57 Risks Related to Our Securities 58 35 Table of Contents Overview You should carefully consider the factors described below, in addition to the other information set forth in this Annual Report on Form 10-K.
Risk Factors Index to Risk Factors Page Overview 37 Risks Related to the Merger 37 Risks Related to Our Business 38 Economic Environment and Capital Markets-Related Risks 48 Risks Related to Our Investment Portfolio 51 Regulatory and Legal Risks 55 Operational Risks 57 Risks Related to Our Separation from, and Continuing Relationship with, MetLife 60 Risks Related to Our Securities 61 36 Tab le of Contents Overview You should carefully consider the factors described below, in addition to the other information set forth in this Annual Report on Form 10-K.
Real Estate Risk A portion of our investment portfolio consists of mortgage loans on commercial, agricultural and residential real estate. Our exposure to this risk stems from various factors, including the supply and demand of leasable commercial space, creditworthiness of tenants and partners, capital markets volatility, interest rate fluctuations, agricultural prices and farm incomes.
Our exposure to this risk stems from various factors, including the supply and demand of leasable commercial space, creditworthiness of tenants and partners, capital markets volatility, interest rate fluctuations, agricultural prices and farm incomes.
We manage our exposures to equity risk by selling products that provide a risk offset to each other, through hedging, and to a lesser extent reinsurance. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies,” for details regarding our risk management and hedging programs.
We manage our exposures to equity risk through product design strategies such as selling products or introducing product features that provide a risk offset to each other, hedging using derivative instruments, as well as reinsurance. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies,” for details regarding our risk management and hedging programs.
An increase in our reserves for any of the above reasons, individually or in the aggregate, could have a material adverse effect on our financial condition and results of operations and our profitability measures, as well as materially impact our capitalization, our statutory free cash flow, our ability to receive dividends from our insurance subsidiaries and BRCD, as well as our liquidity.
If the liabilities originally established for future benefit payments and claims prove inadequate, we will be required to increase them. 38 Tab le of Contents An increase in our reserves for any of the above reasons, individually or in the aggregate, could have a material adverse effect on our financial condition and results of operations and our profitability measures, as well as materially impact our capitalization, our statutory free cash flow, our ability to receive dividends from our insurance subsidiaries and BRCD, as well as our liquidity.
Even if we ultimately prevail in the litigation, regulatory action or investigation, our ability to attract new customers and distributors, retain our current customers and distributors, and recruit and retain personnel could be materially and adversely impacted. Regulatory inquiries and legal disputes may also cause volatility in the price of BHF securities and the securities of companies in our industry.
Even if we ultimately prevail in the litigation, regulatory action or investigation, our ability to attract new customers and distributors, retain our current customers and distributors, and recruit and retain personnel could be materially and adversely impacted.
In addition, the Master Separation Agreement allocates responsibility among MetLife and Brighthouse Financial with respect to certain claims (including litigation or regulatory actions or investigations where Brighthouse Financial is not a party). As a result, we may face indemnification obligations or be required to share in certain of MetLife’s liabilities with respect to such claims.
In addition, the Master Separation Agreement allocates responsibility among MetLife and Brighthouse Financial with respect to certain claims (including litigation or regulatory actions or investigations where Brighthouse Financial is not a party).
Current claims, litigation, unasserted claims probable of assertion, investigations and other proceedings against us, as well as any other disputes or other matters involving third parties, could have a material adverse effect on our business, financial condition and results of operations.
Regulatory inquiries and legal disputes may also cause volatility in the price of BHF securities and the securities of companies in our industry. 56 Tab le of Contents Current claims, litigation, unasserted claims probable of assertion, investigations and other proceedings against us, as well as any other disputes or other matters involving third parties, could have a material adverse effect on our business, financial condition and results of operations.
Our risk management strategy relies on selling products that provide a risk offset to each other, hedging using derivative instruments and, to a lesser extent, reinsurance. We utilize a combination of short-term and longer-term derivative instruments to have a laddered maturity of protection and reduce roll-over risk during periods of market disruption or higher volatility.
Our risk management strategy includes product design strategies, hedging using derivative instruments, as well as reinsurance. We utilize a combination of short-term and longer-term derivative instruments to have a laddered maturity of protection and reduce roll-over risk during periods of market disruption or higher volatility.
In addition, this risk mitigation strategy may fail to adequately cover a scenario under which our obligations are higher than projected and we may be required to sell investments to cover these increased obligations.
Our interest rate derivative instruments may not effectively offset the costs of our ULSG policyholder obligations or may otherwise be insufficient. In addition, this risk mitigation strategy may fail to adequately cover a scenario under which our obligations are higher than projected and we may be required to sell investments to cover these increased obligations.
The ULSG liabilities under GAAP reflect changes in interest rates only when we revise our long-term assumptions due to sustained changes in the market interest rates, such as when we increased our mean reversion rate from 3.75% to 4.00% in the third quarter of 2024 following our AAR. 38 Table of Contents Our interest rate derivative instruments may not effectively offset the costs of our ULSG policyholder obligations or may otherwise be insufficient.
The ULSG liabilities under GAAP reflect changes in interest rates only when we revise our long-term assumptions due to sustained changes in the market interest rates, such as when we increased our mean reversion rate from 4.00% to 4.50% in the third quarter of 2025 following our GAAP AAR.
Without sufficient liquidity, we could be forced to curtail our operations and limit the investments necessary to grow our business. For our insurance subsidiaries, the principal sources of liquidity are insurance premiums and fees paid in connection with annuity products, and cash flow from our investment portfolio to the extent consisting of cash and readily marketable securities.
For our insurance subsidiaries, the principal sources of liquidity are insurance premiums and fees paid in connection with annuity products, as well as cash flows from our investment portfolio to the extent consisting of cash and readily marketable securities.
We evaluate our liabilities periodically based on accounting requirements (which change from time to time), the assumptions and models used to establish the liabilities, as well as our actual experience. If the liabilities originally established for future benefit payments and claims prove inadequate, we will be required to increase them.
We evaluate our liabilities periodically based on accounting requirements (which change from time to time), the assumptions and models used to establish the liabilities, as well as our actual experience.
In addition, the terms of the agreements governing preferred stock and certain of our outstanding indebtedness, as well as debt and other financial instruments that we may issue in the future, may limit or prohibit the payment of dividends on our common stock or preferred stock, or the payment of interest on our junior subordinated debentures.
See “Risks Related to the Merger – Failure to complete the Merger could adversely affect our business, results of operations or financial condition, including in the event the Company is required to pay the termination fee.” In addition, the terms of the agreements governing preferred stock and certain of our outstanding indebtedness, as well as debt and other financial instruments that we may issue in the future, may limit or prohibit the payment of dividends on our common stock or preferred stock, or the payment of interest on our junior subordinated debentures.
Furthermore, changes in laws and regulations that affect our customers and distribution partners or their operations also may affect our business relationships with them and their ability to purchase or distribute our products. Such actions may negatively affect our business and results of operations.
The failure to comply with these laws or changes to these laws could have a material adverse effect on our operations and our profitability. Furthermore, changes in laws and regulations that affect our customers and distribution partners or their operations also may affect our business relationships with them and their ability to purchase or distribute our products.
Furthermore, we are subject to the risk that changes in policyholder behavior or mortality, combined with adverse market events, could produce economic losses outside the scope of our risk management strategy. 37 Table of Contents The cost of our hedging strategy may also be greater than anticipated if adverse market conditions were to limit the availability, and increase the costs of, the derivatives we intend to employ, and such costs may not be recovered in the pricing of the underlying products we offer.
The cost of our hedging strategy may also be greater than anticipated if adverse market conditions were to limit the availability, and increase the costs of, the derivatives we intend to employ, and such costs may not be recovered in the pricing of the underlying products we offer.
In addition, current U.S. federal income tax law permits tax-deferred accumulation of income earned under life insurance and annuity products and permits exclusion from taxation of death benefits paid under life insurance contracts.
In addition, current U.S. federal income tax law permits tax-deferred accumulation of income earned under life insurance and annuity products and permits exclusion from taxation of death benefits paid under life insurance contracts. Changes in tax laws that restrict these tax benefits, or declines in individual income tax rates more generally, could make our products less attractive to consumers.
If the separate account assets are insufficient to support the increased liabilities, we may be required to fund such separate accounts with additional assets from our general account. To the extent policyholder persistency is different from what we anticipate in a sustained period of equity index growth, it could have a negative impact on our liquidity.
If the separate account assets are insufficient to support the increased liabilities, we may be required to fund such separate accounts with additional assets from our general account. We use derivatives to hedge against equity index movements, and margin calls on such options could have a negative impact on our liquidity.
Under our hedging strategy, period-to-period changes in the valuation of our hedges relative to the guarantee liabilities may result in significant volatility in certain of our profitability measures, which in certain circumstances could be more significant than has been the case historically.
Under our hedging strategy, period-to-period changes in the valuation of our hedges relative to the guarantee liabilities may result in significant volatility in certain of our profitability measures, which in certain circumstances could be more significant than has been the case historically. 39 Tab le of Contents In addition, hedging instruments we enter into may not effectively offset the costs of the guarantees within certain of our annuity products or may otherwise be insufficient in relation to our obligations.
Best revised the outlook on the long-term issuer credit rating for BHF and certain of its subsidiaries to negative from stable. The credit rating agencies also evaluate the insurance industry as a whole and may change our credit rating based on their overall view of our industry.
The credit rating agencies also evaluate the insurance industry as a whole and may change our credit rating based on their overall view of our industry.
If we or our vendors fail to prevent, detect, address and mitigate such incidents, this may impede or interrupt our business operations and information systems, result in data loss, destruction, modification, disclosure or misuse, or loss of assets which could adversely affect our business, financial condition and results of operations. 55 Table of Contents A disaster such as a natural catastrophe, epidemic, pandemic, industrial accident, blackout, terrorist attack, cyberattack or war, unanticipated problems with our or our vendors’ disaster recovery systems (and the disaster recovery systems of such vendors’ suppliers, vendors or subcontractors), could cause our computer systems to be inaccessible to our employees, distributors, vendors or customers or may destroy valuable data.
A disaster such as a natural catastrophe, epidemic, pandemic, industrial accident, blackout, terrorist attack, cyberattack or war, unanticipated problems with our or our vendors’ disaster recovery systems (and the disaster recovery systems of such vendors’ suppliers, vendors or subcontractors), could cause our computer systems to be inaccessible to our employees, distributors, vendors or customers or may destroy valuable data.
In addition, if a third-party provider raises the rates that it charges us for its services, we may not be able to pass the increased costs onto our customers and our profitability may be negatively impacted as a result. 43 Table of Contents Changes in our deferred income tax assets or liabilities, including changes in our ability to realize our deferred income tax assets, could adversely affect our financial condition or results of operations Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities.
In addition, if a 45 Tab le of Contents third-party provider raises the rates that it charges us for its services, we may not be able to pass the increased costs onto our customers and our profitability may be negatively impacted as a result.
In addition, we are subject to federal, state and other securities and state insurance laws and regulations which, among other things, require that we distribute certain of our products through a registered broker-dealer. The failure to comply with these laws or changes to these laws could have a material adverse effect on our operations and our profitability.
See “Business — Regulation — Standard of Conduct Regulation — State Law Standard of Conduct Rules and Regulations.” In addition, we are subject to federal, state and other securities and state insurance laws and regulations which, among other things, require that we distribute certain of our products through a registered broker-dealer.
Significant market volatility in reaction to geopolitical risks, changing monetary policy, trade disputes and uncertain fiscal policy may exacerbate some of the risks we face. Increased market volatility may affect the performance of the various asset classes in which we invest, as well as separate account values.
Increased market volatility may affect the performance of the various asset classes in which we invest, as well as separate account values.
Credit rating agencies may continue to review and adjust their ratings for the companies that they rate, including us. For example, in November 2024, Fitch revised the outlooks on the financial strength rating and the long-term issuer credit rating for BHF and certain of its subsidiaries to negative from stable. In addition, in January 2025, A.M.
Credit rating agencies may continue to review and adjust their ratings for the companies that they rate, including us. For example, in July 2025, S&P revised the long-term issuer credit ratings for BHF and BH Holdings to BBB from BBB+.
In addition, under stressful capital markets and economic conditions, liquidity broadly deteriorates, which could further restrict our ability to sell securities. Furthermore, if we decrease the amount of our securities lending activities over time, the amount of net investment income generated by these activities will also likely decline.
In addition, under stressful capital markets and economic conditions, liquidity broadly deteriorates, which could further restrict our ability to sell securities.
Therefore, you are not likely to receive any dividends on your common stock in the near-term, and the success of an investment in shares of our common stock will depend upon any future appreciation in their value.
Therefore, you are not likely to receive any dividends on your common stock in the foreseeable future.
Changes in tax laws that restrict these tax benefits, or declines in individual income tax rates more generally, could make our 53 Table of Contents products less attractive to consumers. See “Business — Regulation — Federal Tax Reform” for a discussion of the potential impacts of the Inflation Reduction Act and the related corporate alternative minimum tax.
See “Business — Regulation — Federal Tax Reform” for a discussion of the potential impacts of the Inflation Reduction Act and the related corporate alternative minimum tax.
These laws and regulations are increasing in complexity and number, change frequently, and may be subject to interpretation by different regulators and courts. We may analyze customer data or input such data into third-party analytics in order to better manage our business.
We may analyze personal information or input such information into third-party analytics in order to better manage our business.
In addition, hedging instruments we enter into may not effectively offset the costs of the guarantees within certain of our annuity products or may otherwise be insufficient in relation to our obligations. For example, in the event that derivative counterparties or central clearinghouses are unable or unwilling to honor their obligations, we would remain liable for the guaranteed benefits.
For example, in the event that derivative counterparties or central clearinghouses are unable or unwilling to honor their obligations, we would remain liable for the guaranteed benefits. Furthermore, we are subject to the risk that changes in policyholder behavior or mortality, combined with adverse market events, could produce economic losses outside the scope of our risk management strategy.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — ‘Dividend Stopper’ Provisions in BHF’s Preferred Stock and Junior Subordinated Debentures.” State insurance laws and Delaware corporate law, as well as certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock State laws may delay, deter, prevent or render more difficult a takeover attempt that our stockholders might consider in their best interests.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — ‘Dividend Stopper’ Provisions in BHF’s Preferred Stock and Junior Subordinated Debentures.” Item 1B. Unresolved Staff Comments None.
Removed
Any inquiry in connection with our analytics business practices, as well as any misuse or alleged misuse of those analytics insights, including for alleged violation of third-party privacy and intellectual property rights, or other rights, or alleged breach of contractual obligations, such as limitations on the use of data, could cause reputational harm or result in regulatory enforcement actions or litigation, and any related limitations imposed on us could have a material impact on our business, financial condition and results of operations.
Added
See “Note Regarding Forward-Looking Statements and Summary of Risk Factors.” Risks Related to the Merger The completion of the Merger is subject to a number of conditions, many of which are largely outside the parties’ control, and, if these conditions are not satisfied or waived, the Merger may not be completed within the expected timeframe or at all On November 6, 2025, BHF entered into the Merger Agreement, pursuant to which, at the closing of the transactions contemplated by the Merger Agreement, Merger Sub will merge with and into BHF, and the separate corporate existence of Merger Sub will cease, with BHF continuing as the surviving corporation and as a wholly-owned subsidiary of Aquarian Parent.
Removed
Risks Related to Our Securities We currently have no plans to declare and pay dividends on our common stock, and legal restrictions could limit our ability to pay dividends on our capital stock and our ability to repurchase our common stock at the level we wish We currently have no plans to declare and pay cash dividends on our common stock.
Added
The Merger Agreement was adopted by stockholders at the special meeting held on February 12, 2026, and the applicable waiting period under the Hart-Scott Rodino Antitrust Improvement Act of 1976, as amended, has expired.

… 33 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed21 unchanged
Biggest changeFor more information regarding our risks from cybersecurity threats, see “Risk Factors — Operational Risks — Any failure in our cybersecurity risk management program, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively” and “Risk Factors —Operational Risks — Any failure to protect the confidentiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” Governance Board of Directors - Oversight and Management Reporting The Audit Committee of the Board of Directors (the “Audit Committee”) is primarily responsible for overseeing cybersecurity risks, and the Board of Directors is actively engaged with respect to these risks.
Biggest changeFor more information regarding our risks from cybersecurity threats, see “Risk Factors — Operational Risks — Any failure in our cybersecurity risk management program, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively” and “Risk Factors — Operational Risks — Any failure to protect the confidentiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” 62 Tab le of Contents Governance Board of Directors - Oversight and Management Reporting The Audit Committee of the Board of Directors (the “Audit Committee”) is primarily responsible for overseeing cybersecurity risks, and the Board of Directors is actively engaged with respect to these risks.
This Brighthouse Response Team provides reports regarding cybersecurity incidents to the enterprise-level risk committee referenced above. 59 Table of Contents Further, employees outside of our information technology organization have a role in our cybersecurity defenses, and we encourage a corporate culture supportive of security, which we believe improves the effectiveness of our cybersecurity risk management program.
This Brighthouse Response Team provides reports regarding cybersecurity incidents to the enterprise-level risk committee referenced above. Further, employees outside of our information technology organization have a role in our cybersecurity defenses, and we encourage a corporate culture supportive of security, which we believe improves the effectiveness of our cybersecurity risk management program.
Our Chief Compliance Officer also regularly reports to the Audit Committee regarding the Company’s compliance with applicable regulations relating to cybersecurity. Item 2. Properties Not material. Item 3. Legal Proceedings See Note 17 of the Notes to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. 60 Table of Contents PART II
Our Chief Compliance Officer also regularly reports to the Audit Committee regarding the Company’s compliance with applicable regulations relating to cybersecurity. Item 2. Properties Not material. Item 3. Legal Proceedings See Note 17 of the Notes to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. PART II
We monitor issues that are internally discovered or externally reported that may affect our business, and we employ a range of tools and third-party services to effectuate our cybersecurity risk identification and assessments, including regular network and endpoint monitoring, threat and vulnerability assessments, and external penetration testing.
We monitor issues that are internally discovered or externally reported that may affect our business, and we employ a range of tools and third-party services to effectuate our cybersecurity risk identification and assessments, including regular 61 Tab le of Contents network and endpoint monitoring, threat and vulnerability assessments, and external penetration testing.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+4 added−2 removed1 unchanged
Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — Common Stock Repurchases” and Note 12 of the Notes to the Consolidated Financial Statements for more information on common stock repurchases. Item 6. [Reserved] 62 Table of Contents
Biggest changeSee “Risk Factors — Risks Related to Our Securities — We are not currently permitted to declare and pay dividends on our common stock, and legal restrictions could limit our ability to pay dividends on our capital stock and our ability to repurchase our common stock at the level we wish in the future,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — Common Stock Repurchases” and Note 12 of the Notes to the Consolidated Financial Statements for more information on common stock repurchases.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Issuer Common Equity BHF’s common stock, par value $0.01 per share, trades on the Nasdaq under the symbol “BHF.” As of February 21, 2025, there were approximately 1.0 million registered holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Issuer Common Equity BHF’s common stock, par value $0.01 per share, trades on the Nasdaq under the symbol “BHF.” As of February 20, 2026, there were approximately 1.0 million registered holders of record of our common stock.
See “Risk Factors — Risks Related to Our Securities — We currently have no plans to declare and pay dividends on our common stock, and legal restrictions could limit our ability to pay dividends on our capital stock and our ability to repurchase our common stock at the level we wish” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital.” Stock Performance Graph The graph and table below present BHF’s cumulative total shareholder return relative to the performance of (1) the S&P 500 Index, (2) the S&P 500 Financials Index and (3) the S&P 500 Life & Health Insurance Index, respectively, for the five-year period ended December 31, 2024.
See “Risk Factors — Risks Related to Our Securities — We are not currently permitted to declare and pay dividends on our common stock, and legal restrictions could limit our ability to pay dividends on our capital stock and our ability to repurchase our common stock at the level we wish in the future” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital.” Stock Performance Graph The graph and table below present BHF’s cumulative total shareholder return relative to the performance of (1) the S&P 500 Index, (2) the S&P 500 Financials Index and (3) the S&P 500 Life & Health Insurance Index, respectively, for the five-year period ended December 31, 2025.
The actual number of holders of our common stock is substantially greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in “street name” by banks, brokers, and other financial institutions. We currently have no plans to declare and pay dividends on our common stock.
The actual number of holders of our common stock is substantially greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in “street name” by banks, brokers, and other financial institutions. Pursuant to the Merger Agreement, we are not currently permitted to declare and pay dividends on our common stock.
The points on the graph and the values in the table represent month-end values based on the last trading day of each month. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock.
The points on the graph and the values in the table represent month-end values based on the last trading day of each month.
Removed
Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 BHF common stock $ 100.00 $ 92.29 $ 132.04 $ 130.69 $ 134.90 $ 122.46 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P 500 Financials $ 100.00 $ 98.31 $ 132.75 $ 118.77 $ 133.20 $ 173.90 S&P 500 Life & Health Insurance $ 100.00 $ 90.52 $ 123.73 $ 136.53 $ 142.87 $ 171.87 61 Table of Contents Issuer Purchases of Equity Securities Purchases of BHF common stock made by or on behalf of BHF or its affiliates during the three months ended December 31, 2024 are set forth below: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (In millions) October 1 — October 31, 2024 483,900 $ 46.69 483,900 $ 581 November 1 — November 30, 2024 392,451 $ 50.63 392,451 $ 561 December 1 — December 31, 2024 355,802 $ 49.44 355,802 $ 543 Total 1,232,153 1,232,153 _______________ (1) Where applicable, total number of shares purchased includes shares of common stock withheld with respect to option exercise costs and tax withholding obligations associated with the exercise or vesting of share-based compensation awards under our publicly announced benefit plans or programs.
Added
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 63 Tab le of Contents Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 BHF common stock $ 100.00 $ 143.07 $ 141.61 $ 146.17 $ 132.69 $ 178.95 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P 500 Financials $ 100.00 $ 135.04 $ 120.81 $ 135.49 $ 176.89 $ 203.47 S&P 500 Life & Health Insurance $ 100.00 $ 136.68 $ 150.82 $ 157.83 $ 189.86 $ 201.00 Issuer Purchases of Equity Securities On November 16, 2023, BHF’s Board of Directors authorized the repurchase of up to $750 million of BHF’s common stock, which does not have an expiration date.
Removed
(2) On November 16, 2023, we authorized the repurchase of up to $750 million of our common stock, which is in addition to the $1.2 billion total repurchases authorized in 2021.
Added
Repurchases made under such authorization may be made through open market purchases, including pursuant to Rule 10b5-1 plans or pursuant to accelerated stock repurchase plans, or through privately negotiated transactions, from time to time at management’s discretion in accordance with applicable legal requirements. The Company did not repurchase any shares of its common stock during the fourth quarter of 2025.
Added
In addition, pursuant to the Merger Agreement, we have agreed that during the period beginning the date of the Merger Agreement through the earlier of the closing of the Merger and the termination of the Merger Agreement, we will not, subject to certain exceptions, purchase directly or indirectly any of BHF’s or its subsidiaries’ capital stock or other equity or voting interests of BHF or any of its subsidiaries.
Added
At December 31, 2025, BHF had $441 million remaining under its common stock repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

160 edited+28 added−16 removed187 unchanged
Biggest changeKey net favorable impacts were: • lower net costs associated with insurance-related activities due to: ◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR in our Run-off and Annuities segments and other refinements; partially offset by ◦ an increase in liability balances in our Run-off segment resulting from a reinsurance premium rate increase associated with the conclusion of a reinsurance arbitration; and ◦ a decrease in income annuity underwriting margins; • higher net investment spread due to: ◦ higher average invested assets resulting from positive net flows in the general account; ◦ higher returns on other limited partnerships; and ◦ higher investment yields on our fixed income portfolio, as proceeds from maturing investments and the growth in the investment portfolio were invested at higher yields than the portfolio average; partially offset by ◦ higher interest credited to policyholders due to higher account balances and current and prior period actuarial modeling improvements, net of changes made in the current period in connection with the AAR in our Annuities segment; and • lower other expenses due to: ◦ lower operational expenses; ◦ lower legal reserves; and ◦ lower transition services agreement expenses; partially offset by ◦ higher asset-based variable annuity expenses resulting from higher average separate account balances, a portion of which is offset in fee income; and ◦ higher variable compensation expenses. 78 Table of Contents Key net unfavorable impact was: • lower net fee income due to: ◦ higher ceded cost of insurance fees in our Life and Run-off segments related to the conclusion of the aforementioned reinsurance arbitration, as well as the aging in-force business in our Run-off segment; partially offset by ◦ higher reinsurance fees on our fixed annuity business resulting from higher account balances; and ◦ higher asset-based fees resulting from higher average separate account balances, a portion of which is offset in other expenses.
Biggest changeKey net unfavorable impacts were: • lower net investment spread due to: ◦ higher interest credited to policyholders due to higher account balances and prior period changes made in connection with the AAR, net of year-over-year actuarial modeling improvements in our Annuities segment; ◦ lower yields and average invested long-term assets on our institutional spread margin business; ◦ lower returns on other limited partnerships; and ◦ lower returns on short-term investments; partially offset by 80 Tab le of Contents ◦ higher investment yields on our fixed income portfolio, as proceeds from maturing investments and the growth in the investment portfolio were invested at higher yields than the portfolio average; ◦ higher returns on real estate limited partnerships and limited liability companies (“LLC”); and ◦ higher average invested long-term assets; • higher other expenses due to: ◦ higher operational expenses; partially offset by ◦ lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income; ◦ lower reinsurance expenses in our Life and Run-off segments associated with the conclusion of the aforementioned reinsurance arbitration in the prior period; and ◦ lower transition services agreement expenses; and • higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior in our Annuities segment net of the aging in-force business in our Life segment.
For our variable annuity business, we updated our annuitization, mortality, lapses and withdrawals, as well as separate account assumptions, including fund fees and allocations. For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.
For our variable annuity business, we updated assumptions regarding annuitization, mortality, lapses and withdrawals, as well as separate account assumptions, including fund fees and allocations. For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.
Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. A sustained low interest rate environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of these policyholder account balances.
Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. A sustained low interest rate environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of these policyholder account balances.
Best’s financial strength ratings for insurance companies range from “A++ (Superior)” to “S (Suspended).” A.M.
A.M. Best’s financial strength ratings for insurance companies range from “A++ (Superior)” to “S (Suspended).” A.M.
Events involving limited liquidity, defaults, nonperformance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about events of these kinds or other similar risks, could adversely affect market-wide liquidity, which could increase the risk of a recession or an equity market downturn and negatively impact various portions of our business, including our investment portfolio.
Events involving limited liquidity, defaults, nonperformance, fraud or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about events of these kinds or other similar risks, could adversely affect market-wide liquidity, which could increase the risk of a recession or an equity market downturn and negatively impact various portions of our business, including our investment portfolio.
As part of the 2024 AAR, for our ULSG business, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate, from 3.75% to 4.00%. Also, with respect to our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses and withdrawals.
As part of the 2024 GAAP AAR, for our ULSG business, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate, from 3.75% to 4.00%. Also, with respect to our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses and withdrawals.
We launched updated versions of our Shield Annuity products in 2024, which we manage and hedge on a standalone basis separately from our variable annuity and first generation Shield Annuity products. We believe the level of our capital protection provides us financial flexibility and supports deploying capital for growing long-term, sustainable shareholder value.
We launched updated versions of our Shield Annuity products in 2024, which we also manage and hedge on a standalone basis separately from our variable annuity and first generation Shield Annuity products. We believe the level of our capital protection provides us financial flexibility and supports deploying capital for growing long-term, sustainable shareholder value.
See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the ability of its subsidiaries to pay dividends,” “Risk Factors — Economic Environment and Capital Markets-Related Risks — Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs and our access to capital” and “Risk Factors — Regulatory and Legal Risks — Our insurance business is highly regulated, and changes in regulation and in supervisory and enforcement policies or interpretations thereof may materially impact our capitalization or cash flows, reduce our profitability and limit our growth,” as well as Note 12 of the Notes to the Consolidated Financial Statements.
See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the ability of its subsidiaries to pay dividends,” “Risk Factors — Economic Environment and Capital Markets-Related Risks — Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs and our access to capital” and “Risk Factors — Regulatory and Legal Risks — Our insurance business is highly regulated, and changes in regulation and in supervisory and enforcement policies or interpretations thereof may materially impact our capitalization or cash flows, reduce our profitability and limit our growth,” as well as Notes 12 and 15 of the Notes to the Consolidated Financial Statements.
See Note 9 of the Notes to the Consolidated Financial Statements for: • a comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks; • information about the gross notional amount, estimated fair value, and primary underlying risk exposure of our derivatives by type of hedge designation, excluding embedded derivatives held at December 31, 2024 and 2023; and • the effects of derivatives in cash flow, fair value, or non-qualifying hedge relationships on the statements of operations for the years ended December 31, 2024, 2023 and 2022.
See Note 9 of the Notes to the Consolidated Financial Statements for: • a comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks; • information about the gross notional amount, estimated fair value and primary underlying risk exposure of our derivatives by type of hedge designation, excluding embedded derivatives held at December 31, 2025 and 2024; and • the effects of derivatives in cash flow, fair value or non-qualifying hedge relationships on the statements of operations for the years ended December 31, 2025, 2024 and 2023.
Based on our analysis and comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable BHF to make payments on debt, pay preferred stock dividends, contribute capital to its subsidiaries, repurchase its common stock, pay all general operating expenses and meet its cash needs.
Based on our analysis and comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable BHF to make payments on debt, pay preferred stock dividends, contribute capital to its subsidiaries, pay all general operating expenses and meet its cash needs.
Primary Uses of Liquidity and Capital In addition to the summarized description of liquidity and capital uses discussed in “— Sources and Uses of Liquidity and Capital,” the following additional information is provided regarding our primary uses of liquidity and capital: Common Stock Repurchases See Note 12 of the Notes to the Consolidated Financial Statements for information relating to authorizations to repurchase BHF common stock, amounts of common stock repurchased pursuant to such authorizations and the amount remaining under such authorizations at December 31, 2024.
Primary Uses of Liquidity and Capital In addition to the summarized description of liquidity and capital uses discussed in “— Sources and Uses of Liquidity and Capital,” the following additional information is provided regarding our primary uses of liquidity and capital: Common Stock Repurchases See Note 12 of the Notes to the Consolidated Financial Statements for information relating to authorizations to repurchase BHF common stock, amounts of common stock repurchased pursuant to such authorizations and the amount remaining under such authorizations at December 31, 2025.
We receive non-cash collateral for securities lending from counterparties, which cannot be sold or re-pledged, and which is not recorded on our consolidated balance sheets. There was no non-cash collateral at both December 31, 2024 and 2023. See Note 8 of the Notes to the Consolidated Financial Statements for further discussion of our securities lending program.
We receive non-cash collateral for securities lending from counterparties, which cannot be sold or re-pledged, and which is not recorded on our consolidated balance sheets. There was no non-cash collateral at both December 31, 2025 and 2024. See Note 8 of the Notes to the Consolidated Financial Statements for further discussion of our securities lending program.
The institutional spread margin business is comprised of funding agreements issued in connection with the programs described in more detail below. Activity related to these programs are reported in Corporate & Other. See “Obligations Under Funding Agreements” in Note 3 of the Notes to the Consolidated Financial Statements for additional information on funding agreements.
The institutional spread margin business is comprised of funding agreements issued in connection with the programs described in more detail below. Activity related to these programs is reported in the Corporate & Other segment. See “Obligations Under Funding Agreements” in Note 3 of the Notes to the Consolidated Financial Statements for additional information on funding agreements.
Certain of these activities may require regulatory approval. Furthermore, the payment of dividends and other distributions by our insurance subsidiaries is governed by the insurance laws and regulations of the states where they are domiciled. Any payment of dividends by Brighthouse Life Insurance Company in 2024 would be subject to Delaware DOI approval.
Certain of these activities may require regulatory approval. Furthermore, the payment of dividends and other distributions by our insurance subsidiaries is governed by the insurance laws and regulations of the states where they are domiciled. Any payment of dividends by Brighthouse Life Insurance Company in 2026 would be subject to Delaware DOI approval.
We use the fees directly earned from the guarantee riders to fund the reserves, future claims and costs associated with the hedges of market risks inherent in these liabilities. The future fees are included in the estimated fair value of MRB liabilities, with changes recorded in MRBs. Variable Annuity Hedges and Reinsurance.
We use the fees directly earned from the guarantee riders to fund the reserves, future claims and costs associated with the hedges of market risks inherent in these liabilities. The future fees are included in the estimated fair value of MRB liabilities, with changes recorded in MRBs. Variable Annuity and Shield Hedges, including Reinsurance.
In 2024, the Company updated assumptions regarding policyholder behavior, mortality and separate account fund allocations. See Note 4 of the Notes to the Consolidated Financial Statements for additional information on the effects of changes in inputs and assumptions on the measurement of our liabilities for variable annuity guarantees.
In 2025, the Company updated assumptions regarding policyholder behavior, mortality and separate account fund allocations. See Note 4 of the Notes to the Consolidated Financial Statements for additional information on the effects of changes in inputs and assumptions on the measurement of our liabilities for variable annuity guarantees.
Our capital position is supported by our ability to generate cash flows within our insurance subsidiaries, our ability to effectively manage the risks of our businesses and our expected ability to borrow funds and raise additional capital to meet operating and growth needs under a variety of market and economic conditions.
In addition, our capital position is supported by our ability to generate cash flows within our insurance subsidiaries, our ability to effectively manage the risks of our businesses and our expected ability to borrow funds and raise additional capital to meet operating and growth needs under a variety of market and economic conditions.
See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations,” and “Risk Factors — Risks Related to Our Investment Portfolio — Ongoing military actions, the continued threat of terrorism, climate change as well as other catastrophic events may adversely affect the value of our investment portfolio and the level of claim losses we incur.” 84 Table of Contents There has been a continued market focus on commercial real estate, including office properties, as a result of hybrid work arrangements and the resulting impact on the demand for office space.
See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations,” and “Risk Factors — Risks Related to Our Investment Portfolio — Ongoing military actions, the continued threat of terrorism, climate change as well as other catastrophic events may adversely affect the value of our investment portfolio and the level of claim losses we incur.” 86 Tab le of Contents There has been a continued market focus on commercial real estate, including office properties, as a result of hybrid work arrangements and the resulting impact on the demand for office space.
Credit and Committed Facilities See Notes 11 and 12 of the Notes to the Consolidated Financial Statements for information regarding our credit and committed facilities. We have no reason to believe that our lending counterparties would be unable to fulfill their respective contractual obligations under these facilities.
Credit and Committed Facilities See Note 11 of the Notes to the Consolidated Financial Statements for information regarding our credit and committed facilities. We have no reason to believe that our lending counterparties would be unable to fulfill their respective contractual obligations under these facilities.
See Note 8 of the Notes to the Consolidated Financial Statements for information about how the allowance for credit losses is established and monitored, as well as activity in and balances of the allowance for credit losses for the years ended December 31, 2024 and 2023.
See Note 8 of the Notes to the Consolidated Financial Statements for information about how the allowance for credit losses is established and monitored, as well as activity in and balances of the allowance for credit losses for the years ended December 31, 2025 and 2024.
The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. 71 Table of Contents We present adjusted earnings in a manner consistent with management’s view of the primary business activities that drive the profitability of our core businesses.
The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. We present adjusted earnings in a manner consistent with management’s view of the primary business activities that drive the profitability of our core businesses.
See “Risk Factors — Economic Environment and Capital Markets-Related Risks — If difficult conditions in the capital markets and the U.S. economy generally persist or are perceived to persist, they may materially adversely affect our business and results of operations” and “Risk Factors — Risks Related to our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” 67 Table of Contents The above factors affect our expectations regarding future margins.
See “Risk Factors — Economic Environment and Capital Markets-Related Risks — If difficult conditions in the capital markets and the U.S. economy generally persist or are perceived to persist, they may materially adversely affect our business and results of operations” and 69 Tab le of Contents “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” The above factors affect our expectations regarding future margins.
We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not recorded on our consolidated balance sheets. The amount of this non-cash collateral at estimated fair value was $2.3 billion and $2.4 billion at December 31, 2024 and 2023, respectively.
We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not recorded on our consolidated balance sheets. The amount of this non-cash collateral at estimated fair value was $3.2 billion and $2.3 billion at December 31, 2025 and 2024, respectively.
We review our long-term assumptions about capital markets returns and interest rates, along with other assumptions such as contract holder behavior, as part of our annual actuarial review. As additional company specific or industry information on contract holder behavior becomes available, related assumptions may change and may potentially have a material impact on liability valuations and net income.
We review our long-term assumptions about capital markets returns and interest rates, along with other assumptions such as contract holder behavior, as part of our AAR. As additional company specific or industry information on contract holder behavior becomes available, related assumptions may change and may potentially have a material impact on liability valuations and net income.
See Note 10 of the Notes to the Consolidated Financial Statements for more information on the determination of estimated fair value of crediting rate embedded derivatives. 70 Table of Contents Income Taxes We provide for federal and state income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities.
See Note 10 of the Notes to the Consolidated Financial Statements for more information on the determination of estimated fair value of crediting rate embedded derivatives. Income Taxes We provide for federal and state income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities.
We continually review our risk management strategies in the context of our overall capitalization targets as well as monitor the capital markets for opportunities to adjust our derivative positions to manage our market risk exposure, as appropriate.
We continually review our risk management strategies in the context of our overall capitalization targets and monitor the capital markets for opportunities to adjust our derivative positions to manage our market risk exposure, as appropriate.
Our portfolio does not have any exposure to any single issuer in excess of 1% of total investments and the top ten holdings in aggregate comprise 1% of total investments at both December 31, 2024 and 2023.
Our portfolio does not have any exposure to any single issuer in excess of 1% of total investments and the top ten holdings in aggregate comprise 1% of total investments at both December 31, 2025 and 2024.
The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 18% in the current period compared to 17% in the prior period. Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction, tax credits and current period non-recurring items.
The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 18% in both the current period and the prior period. Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction, tax credits and current period non-recurring items.
As a result of acquisitions, we establish additional liabilities known as excess interest reserves for policies with credited rates in excess of market rates as of the applicable acquisition dates. 94 Table of Contents Life Life policyholder account balance liabilities are held for retained asset accounts, universal life policies and the fixed account of universal variable life insurance policies.
As a result of acquisitions, we establish additional liabilities known as excess interest reserves for policies with credited rates in excess of market rates as of the applicable acquisition dates. Life Life policyholder account balance liabilities are held for retained asset accounts, universal life policies and the fixed account of universal variable life insurance policies.
The changes in our variable annuities separate account balances are presented in Note 5 of the Notes to the Consolidated Financial Statements. Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Adjusted earnings were $1.3 billion in the current period, an increase of $82 million.
The changes in our variable annuities separate account balances are presented in Note 5 of the Notes to the Consolidated Financial Statements. Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 Adjusted earnings were $1.3 billion in the current period, an increase of $3 million.
For more information on the determination of estimated fair value of MRBs, see Note 10 of the Notes to the Consolidated Financial Statements. 69 Table of Contents The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk.
For more information on the determination of estimated fair value of MRBs, see Note 10 of the Notes to the Consolidated Financial Statements. The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk.
The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 7% in the current period compared to 25% in the prior period.
The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 8% in the current period compared to 7% in the prior period.
In September, November and December 2024, the Federal Reserve Board (the “Federal Reserve”) decreased the target range for the federal funds rate, and any additional future decrease may negatively impact our business in certain respects, including our investment portfolio, by lowering the level of long-term interest rates and changing the shape of the yield curve.
The Federal Reserve Board (the “Federal Reserve”) decreased the target range for the federal funds rate in September, October and December 2025, as well as in September, November and December 2024, and any additional future decrease may negatively impact our business in certain respects, including our investment portfolio, by lowering the level of long-term interest rates and changing the shape of the yield curve.
See Note 8 of the Notes to the Consolidated Financial Statements for information on mortgage loans by credit quality indicator, past due status, nonaccrual status and modified mortgage loans. 90 Table of Contents Our commercial mortgage loans are reviewed on an ongoing basis.
See Note 8 of the Notes to the Consolidated Financial Statements for information on mortgage loans by credit quality indicator, past due status, nonaccrual status and modified mortgage loans. Our commercial mortgage loans are reviewed on an ongoing basis.
We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the loaned securities are returned to us. Generally, our securities lending contracts expire within twelve months of issuance. We were liable for cash collateral under our control of $3.2 billion and $3.3 billion at December 31, 2024 and 2023, respectively.
We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the loaned securities are returned to us. Generally, our securities lending contracts expire within twelve months of issuance. We were liable for cash collateral under our control of $3.2 billion at both December 31, 2025 and 2024.
As a result of increases in interest rates, the unrealized losses on our fixed maturity securities exceeded the unrealized gains as of December 31, 2024.
As a result of increases in interest rates, the unrealized losses on our fixed maturity securities exceeded the unrealized gains as of December 31, 2025.
As a result of acquisitions, we establish additional liabilities known as excess interest reserves for policies with credited rates in excess of market rates as of the applicable acquisition dates. Run-off Policyholder account balance liabilities in Run-off are comprised of ULSG, certain company-owned life insurance policies and certain funding agreements.
As a result of acquisitions, we establish additional liabilities known as excess interest reserves for policies with credited rates in excess of market rates as of the applicable acquisition dates. 96 Tab le of Contents Run-off Policyholder account balance liabilities in Run-off are comprised of ULSG, certain company-owned life insurance policies and certain funding agreements.
As described in this section, adjusted earnings is presented by key business activities which are derived, but different, from the line items presented in the GAAP statements of operations. • “Results of Operations” begins with a discussion of our AAR, including a summary of the changes made to the key assumptions in 2024 and 2023, as well as the resulting impact on net income (loss) available to shareholders in each period. 64 Table of Contents Our Results of Operations discussion and analysis presents a review for the years ended December 31, 2024 and 2023 and year-over-year comparisons between these years.
As described in this section, adjusted earnings is presented by key business activities which are derived, but different, from the line items presented in the GAAP statements of operations. • “Results of Operations” begins with a discussion of our AAR, including a summary of the changes made to the key assumptions in 2025 and 2024, as well as the resulting impact on net income (loss) available to shareholders in each period. 66 Tab le of Contents Our Results of Operations discussion and analysis presents a review for the years ended December 31, 2025 and 2024 and year-over-year comparisons between these years.
The primary liquidity concerns with respect to these cash flows are market disruption and the risk of early policyholder withdrawal. 98 Table of Contents Primary Sources of Liquidity and Capital In addition to the summary description of liquidity and capital sources discussed in “— Sources and Uses of Liquidity and Capital,” the following additional information is provided regarding our primary sources of liquidity and capital: Funding Sources Liquidity is provided by a variety of funding sources, including secured and unsecured funding agreements, unsecured credit facilities and secured committed facilities.
The primary liquidity concerns with respect to these cash flows are market disruption and the risk of early policyholder withdrawal. 100 Tab le of Contents Primary Sources of Liquidity and Capital In addition to the summary description of liquidity and capital sources discussed in “— Sources and Uses of Liquidity and Capital,” the following additional information is provided regarding our primary sources of liquidity and capital: Funding Sources Liquidity is provided by a variety of funding sources, including secured and unsecured funding agreements, unsecured credit facilities and secured committed facilities.
For our agricultural mortgage loans, our average loan-to-value ratio was 48% and 47% at December 31, 2024 and 2023, respectively. The values utilized in calculating the agricultural mortgage loan loan-to-value ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated. Mortgage Loan Allowance for Credit Losses.
For our agricultural mortgage loans, our average loan-to-value ratio was 46% and 48% at December 31, 2025 and 2024, respectively. The values utilized in calculating the agricultural mortgage loan loan-to-value ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated. Mortgage Loan Allowance for Credit Losses.
See Note 9 of the Notes to the Consolidated Financial Statements for additional information regarding pledged collateral. 101 Table of Contents Securities Lending We have a securities lending program that aims to enhance the total return on our investment portfolio, whereby securities are loaned to third parties, primarily brokerage firms and commercial banks.
See Note 9 of the Notes to the Consolidated Financial Statements for additional information regarding pledged collateral. 103 Tab le of Contents Securities Lending We have a securities lending program that aims to enhance the total return on our investment portfolio, whereby securities are loaned to third parties, primarily brokerage firms and commercial banks.
Our Results of Operations discussion and analysis for the year ended December 31, 2023, including a review of the 2023 AAR and year-over-year comparisons between the years ended December 31, 2023 and 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “2023 Annual Report”), which was filed with the SEC on February 22, 2024, and such discussions are incorporated herein by reference.
Our Results of Operations discussion and analysis for the year ended December 31, 2024, including a review of the 2024 AAR and year-over-year comparisons between the years ended December 31, 2024 and 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “2024 Annual Report”), which was filed with the SEC on February 28, 2025, and such discussions are incorporated herein by reference.
We maintain a substantial short-term liquidity position, which was $5.2 billion and $3.8 billion at December 31, 2024 and 2023, respectively. Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed.
We maintain a substantial short-term liquidity position, which was $4.3 billion and $5.2 billion at December 31, 2025 and 2024, respectively. Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed.
Pledged Collateral We enter into derivatives to manage various risks relating to our ongoing business operations. We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At December 31, 2024, we did not pledge any cash collateral to counterparties. At December 31, 2023, we pledged $16 million of cash collateral to counterparties.
Pledged Collateral We enter into derivatives to manage various risks relating to our ongoing business operations. We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At December 31, 2025, we pledged $34 million of cash collateral to counterparties. At December 31, 2024, we did not pledge any cash collateral to counterparties.
To the extent the rider fees are insufficient, the Company may also include fees related to mortality and expense charges in the attributed fee ratio, provided the total fees included in the calculation do not exceed total contract fees and assessments collected from the contract holder. The attributed fee ratio is not updated in subsequent periods.
To the extent the rider fees are insufficient, the Company may also include fees related to mortality and expense charges in the attributed fee ratio, provided the total fees included in the calculation do not exceed total contract fees and assessments collected from the contract holder.
(ii) Net investment spread (ii) Net investment income plus Investment Hedge Adjustments reduced by Interest credited to policyholder account balances (excluding Market Value Adjustments) and interest on future policy benefits. (iii) Insurance-related activities (iii) Premiums less Policyholder benefits and claims , excluding interest on future policy benefits.
(ii) Net investment spread (ii) Net investment income (excluding investment gains (losses) on trading securities) plus Investment Hedge Adjustments reduced by Interest credited to policyholder account balances (excluding Market Value Adjustments) and interest on future policy benefits. (iii) Insurance-related activities (iii) Premiums less Policyholder benefits and claims , excluding interest on future policy benefits.
At December 31, 2024, the carrying value as a percentage of total commercial and agricultural mortgage loans for the top three states in the U.S. was 17% for California, 11% for Texas and 8% for New York.
At December 31, 2025, the carrying value as a percentage of total commercial and agricultural mortgage loans for the top three states in the U.S. was 17% for California, 11% for Texas and 7% for New York.
Normalized statutory earnings (loss) is calculated as statutory pre-tax net gain (loss) from operations adjusted for the favorable or unfavorable impacts of (i) net realized capital gains (losses), (ii) the change in total asset requirement at CTE98, net of the change in our variable annuity reserves, which are calculated at CTE70, and (iii) unrealized gains (losses) associated with our variable annuities and Shield hedges, net of reinsurance, and other equity risk management strategies.
Normalized statutory earnings (loss) is calculated as statutory pre-tax net gain (loss) from operations adjusted for the favorable or unfavorable impacts of (i) net realized capital gains (losses) before capital gains tax (excluding gains (losses) and taxes transferred to the interest maintenance reserve), (ii) the change in total asset requirement at CTE98, net of the change in our variable annuity reserves, which are calculated at CTE70, and (iii) pre-tax unrealized gains (losses) associated with our variable annuities and Shield hedges, net of reinsurance, and other equity risk management strategies.
The monitoring process for agricultural mortgage loans is generally similar, with a focus on higher risk loans, such as loans with higher loan-to-value ratios, including reviews on a geographic and sector basis. Our residential mortgage loans are reviewed on an ongoing basis.
The monitoring process for agricultural mortgage loans is generally similar, with a focus on higher risk loans, such as loans with higher loan-to-value ratios, 92 Tab le of Contents including reviews on a geographic and sector basis. Our residential mortgage loans are reviewed on an ongoing basis.
See “— Non-GAAP Financial Disclosures.” See “— Results of Operations” for a detailed discussion of our results. 65 Table of Contents Risk Management Strategies We employ risk management strategies to mitigate the effects of severe market disruptions and other economic events on our business.
See “— Non-GAAP Financial Disclosures.” See “— Results of Operations” for a detailed discussion of our results. 67 Tab le of Contents Risk Management Strategies We employ risk management strategies to mitigate the effects of severe market disruptions and other economic events on our business.
Short-term Liquidity and Liquid Assets At December 31, 2024 and 2023, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $912 million and $1.2 billion, respectively. Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include assets held in trust.
Short-term Liquidity and Liquid Assets At December 31, 2025 and 2024, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $763 million and $912 million, respectively. Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include assets held in trust.
At December 31, 2024, our insurance subsidiaries had a combined statutory TAC of approximately $5.4 billion, resulting in a Combined RBC Ratio of approximately 400%. The amount of dividends that our insurance subsidiaries can ultimately pay to BHF through their various parent entities provides an additional margin for risk protection and investment in our businesses.
At December 31, 2025, our insurance subsidiaries had a preliminary combined statutory TAC of approximately $5.3 billion, resulting in a preliminary Combined RBC Ratio of 456%. The amount of dividends that our insurance subsidiaries can ultimately pay to BHF through their various parent entities provides an additional margin for risk protection and investment in our businesses.
At December 31, 2024 and 2023, we were obligated to return cash collateral pledged to us by counterparties of $812 million and $393 million, respectively. The timing of the return of the derivatives collateral is uncertain. We also pledge collateral from time to time in connection with certain funding agreements.
At December 31, 2025 and 2024, we were obligated to return cash collateral pledged to us by counterparties of $1.5 billion and $812 million, respectively. The timing of the return of the derivatives collateral is uncertain. We also pledge collateral from time to time in connection with certain funding agreements.
See “Business — Segment Information — Annuities” and “— Risk Management Strategies” for more information about our use of derivatives by major hedging programs, as well as “— Results of Operations — Annual Actuarial Review” and “Risk Factors — Risks Related to our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” Fair Value Hierarchy See Note 10 of the Notes to the Consolidated Financial Statements for derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy, as well as a rollforward of the fair value measurements for derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs as discussed below.
In addition, see “— Results of Operations — Annual Actuarial Review” and “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S. and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” Fair Value Hierarchy See Note 10 of the Notes to the Consolidated Financial Statements for derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy, as well as a rollforward of the fair value measurements for derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs as discussed below.
Year Ended December 31, 2024 Annuity guaranteed benefits and Shield annuity liabilities performance was unfavorable for the year ended December 31, 2024, primarily driven by: • favorable decreases in annuity guaranteed benefits liabilities due to increasing long-term interest rates and equity markets, as well as changes made in connection with the AAR; • favorable changes in variable annuity hedges due to increasing equity markets, partially offset by increasing long-term interest rates; and • unfavorable changes in Shield embedded derivatives due to increasing equity markets, partially offset by increasing long-term interest rates and changes made in connection with the AAR. 83 Table of Contents Year Ended December 31, 2023 Annuity guaranteed benefits and Shield annuity liabilities performance was unfavorable for the year ended December 31, 2023, primarily driven by: • favorable decreases in annuity guaranteed benefits liabilities due to increasing equity markets and long-term interest rates, partially offset by changes made in connection with the AAR; • favorable changes in variable annuity hedges due to increasing equity markets, partially offset by increasing long-term interest rates; and • unfavorable changes in Shield embedded derivatives due to increasing equity markets.
Year Ended December 31, 2025 Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the year ended December 31, 2025, primarily driven by: • favorable decreases in annuity guaranteed benefits liabilities due to increasing equity markets, partially offset by changes made in connection with the AAR and decreasing interest rates; • favorable changes in variable annuity and Shield hedges due to increasing equity markets; and • unfavorable changes in Shield embedded derivatives due to increasing equity markets and changes made in connection with the AAR. 85 Tab le of Contents Year Ended December 31, 2024 Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the year ended December 31, 2024, primarily driven by: • favorable decreases in annuity guaranteed benefits liabilities due to increasing long-term interest rates and equity markets, as well as changes made in connection with the AAR; • favorable changes in variable annuity and Shield hedges due to increasing equity markets, partially offset by increasing long-term interest rates; and • unfavorable changes in Shield embedded derivatives due to increasing equity markets, partially offset by increasing long-term interest rates and changes made in connection with the AAR.
Generally, the lower the debt-service coverage ratio, the higher the risk of experiencing a credit loss. For our commercial mortgage loans, our average loan-to-value ratio was 69% and 65% at December 31, 2024 and 2023, respectively, and our average debt-service coverage ratio was 2.3x at both December 31, 2024 and 2023.
Generally, the lower the debt-service coverage ratio, the higher the risk of experiencing a credit loss. For our commercial mortgage loans, our average loan-to-value ratio was 67% and 69% at December 31, 2025 and 2024, respectively, and our average debt-service coverage ratio was 2.2x and 2.3x at December 31, 2025 and 2024, respectively.
At December 31, 2024, we were in compliance with these financial covenants.
At December 31, 2025, we were in compliance with these financial covenants.
At December 31, 2024 and 2023, BHF and certain of its non-insurance subsidiaries had liquid assets of $1.1 billion and $1.3 billion, respectively, of which $1.1 billion and $1.2 billion, respectively, was held by BHF. Liquid assets are comprised of cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed.
At December 31, 2025 and 2024, BHF and certain of its non-insurance subsidiaries had liquid assets of $911 million and $1.1 billion, respectively, of which $868 million and $1.1 billion, respectively, was held by BHF. Liquid assets are comprised of cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed.
The net statutory reserves for the ULSG business in our insurance subsidiaries and BRCD (which is in part supported by reinsurance financings) were $24.6 billion and $24.1 billion for the years ended December 31, 2024 and 2023, respectively. 66 Table of Contents Our ULSG Target is sensitive to the actual and future expected level of long-term U.S. interest rates.
The net statutory reserves for the ULSG business in our insurance subsidiaries and BRCD (which is in part supported by reinsurance financings) were $24.4 billion and $24.6 billion for the years ended December 31, 2025 and 2024, respectively. 68 Tab le of Contents Our ULSG Target is sensitive to the actual and future expected level of long-term U.S. interest rates.
The percentage of our commercial and agricultural mortgage loan portfolios collateralized by properties located in the U.S. was 98% at both December 31, 2024 and 2023. The remainder was collateralized by properties located outside of the U.S.
The percentage of our commercial and agricultural mortgage loan portfolios collateralized by properties located in the U.S. was 99% and 98% at December 31, 2025 and 2024, respectively. The remainder was collateralized by properties located outside of the U.S.
All residential mortgage loans were collateralized by properties located in the U.S. at both December 31, 2024 and 2023. At December 31, 2024, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S. was 39% for California, 10% for Florida and 6% for New York.
All residential mortgage loans were collateralized by properties located in the U.S. at both December 31, 2025 and 2024. At December 31, 2025, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S. was 37% for California, 10% for Florida and 6% for Texas.
Assets pledged or otherwise committed include amounts received in connection with securities lending, derivatives and assets held on deposit or in trust. 95 Table of Contents An integral part of our liquidity management includes managing our level of liquid assets, which was $48.1 billion and $45.2 billion at December 31, 2024 and 2023, respectively.
Assets pledged or otherwise committed include amounts received in connection with securities lending, derivatives and assets held on deposit or in trust. An integral part of our liquidity management includes managing our level of liquid assets, which was $50.1 billion and $48.1 billion at December 31, 2025 and 2024, respectively.
As part of our 2024 AAR, we increased our projected long-term general account earned rate, as well as our mean reversion rate over a period of ten years, from 3.75% to 4.00%, which resulted in a decrease in our ULSG liabilities of $260 million.
As part of our 2025 AAR, we increased our projected long-term general account earned rate, as well as our mean reversion rate over a period of ten years, from 4.00% to 4.50%, which resulted in a decrease in our ULSG liabilities of $359 million.
Years Ended December 31, 2024 2023 2022 (In millions) Net investment income $ 5,222 $ 4,664 $ 4,138 Less: Investment hedge adjustments (31) (105) (71) Adjusted net investment income — in the above yield table $ 5,253 $ 4,769 $ 4,209 See “— Results of Operations — Consolidated Results for the Years Ended December 31, 2024 and 2023” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Consolidated Results for the Years Ended December 31, 2023 and 2022” in our 2023 Annual Report for an analysis of the year-over-year changes in net investment income. 85 Table of Contents Fixed Maturity Securities Available-For-Sale Fixed maturity securities held by type (public or private) were as follows at: December 31, 2024 December 31, 2023 Estimated Fair Value % of Total Estimated Fair Value % of Total (Dollars in millions) Publicly-traded $ 66,402 82.9 % $ 67,056 82.8 % Privately-placed 13,653 17.1 13,935 17.2 Total fixed maturity securities $ 80,055 100.0 % $ 80,991 100.0 % Percentage of cash and invested assets 65.4 % 67.9 % See Note 10 of the Notes to the Consolidated Financial Statements for further information on our valuation controls and procedures including our formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value.
Years Ended December 31, 2025 2024 2023 (In millions) Net investment income $ 5,244 $ 5,222 $ 4,664 Add: Investment hedge adjustments — 31 105 Less: Investment gains (losses) on trading securities — — — Adjusted net investment income — in the above yield table $ 5,244 $ 5,253 $ 4,769 See “— Results of Operations — Consolidated Results for the Years Ended December 31, 2025 and 2024” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Consolidated Results for the Years Ended December 31, 2024 and 2023” in our 2024 Annual Report for an analysis of the year-over-year changes in net investment income. 87 Tab le of Contents Fixed Maturity Securities Available-For-Sale Fixed maturity securities held by type (public or private) were as follows at: December 31, 2025 December 31, 2024 Estimated Fair Value % of Total Estimated Fair Value % of Total (Dollars in millions) Publicly-traded $ 67,348 82.1 % $ 66,402 82.9 % Privately-placed 14,666 17.9 13,653 17.1 Total fixed maturity securities $ 82,014 100.0 % $ 80,055 100.0 % Percentage of cash and invested assets 65.1 % 65.4 % See Note 10 of the Notes to the Consolidated Financial Statements for further information on our valuation controls and procedures including our formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value.
Normalized statutory earnings (loss) may be further adjusted for certain unanticipated items that impact our results in order to help management and investors better understand, evaluate and forecast those results.
See “Glossary” for the definition of CTE. Normalized statutory earnings (loss) may be further adjusted for certain unanticipated items that impact our results in order to help management and investors better understand, evaluate and forecast those results.
Adjusted Net Investment Income Adjusted net investment income is used by management to measure our performance, and we believe it enhances the understanding of our investment portfolio results. Adjusted net investment income represents GAAP net investment income plus Investment Hedge Adjustments.
Adjusted Net Investment Income Adjusted net investment income is used by management to measure our performance, and we believe it enhances the understanding of our investment portfolio results. Adjusted net investment income represents GAAP net investment income plus Investment Hedge Adjustments less investment gains (losses) on trading securities.
See “Risk Factors — Risks Related to Our Business — A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and materially adversely affect our financial condition and results of operations” for a description of the impact of a potential ratings downgrade. 97 Table of Contents Sources and Uses of Liquidity and Capital Our primary sources and uses of liquidity and capital were as follows at: Years Ended December 31, 2024 2023 2022 (In millions) Sources: Changes in policyholder account balances, net $ 4,032 $ 4,242 $ 11,650 Changes in payables for collateral under securities loaned and other transactions, net 221 — — Financing element on certain derivative instruments and other derivative related transactions, net — 90 — Total sources 4,253 4,332 11,650 Uses: Operating activities, net 290 137 1,228 Investing activities, net 2,194 3,196 8,276 Changes in payables for collateral under securities loaned and other transactions, net — 890 1,709 Long-term debt repaid 2 2 3 Dividends on preferred stock 102 102 104 Treasury stock acquired in connection with share repurchases 250 250 488 Financing element on certain derivative instruments and other derivative related transactions, net 204 — 185 Other, net 17 19 16 Total uses 3,059 4,596 12,009 Net increase (decrease) in cash and cash equivalents $ 1,194 $ (264) $ (359) Cash Flows from Operating Activities The principal cash inflows from our insurance activities come from insurance premiums, annuity considerations and net investment income.
See “Risk Factors — Risks Related to Our Business — A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and materially adversely affect our financial condition and results of operations” for a description of the potential impact of a ratings downgrade. 99 Tab le of Contents Sources and Uses of Liquidity and Capital Our primary sources and uses of liquidity and capital were as follows at: Years Ended December 31, 2025 2024 2023 (In millions) Sources: Operating activities, net $ 259 $ — $ — Investing activities, net 751 — — Changes in policyholder account balances, net — 4,032 4,242 Changes in payables for collateral under securities loaned and other transactions, net 814 221 — Financing element on certain derivative instruments and other derivative related transactions, net — — 90 Total sources 1,824 4,253 4,332 Uses: Operating activities, net — 290 137 Investing activities, net — 2,194 3,196 Changes in policyholder account balances, net 816 — — Changes in payables for collateral under securities loaned and other transactions, net — — 890 Long-term debt repaid 2 2 2 Dividends on preferred stock 102 102 102 Treasury stock acquired in connection with share repurchases 102 250 250 Financing element on certain derivative instruments and other derivative related transactions, net 443 204 — Other, net 17 17 19 Total uses 1,482 3,059 4,596 Net increase (decrease) in cash and cash equivalents $ 342 $ 1,194 $ (264) Cash Flows from Operating Activities The principal cash inflows from our insurance activities come from insurance premiums, annuity considerations and net investment income.
We believe the effective tax rate for Corporate & Other is not generally meaningful, neither on a standalone basis nor for comparison to prior periods, since taxes for Corporate & Other are derived from the difference between the overall consolidated effective tax rate and total taxes for the other operating segments. 82 Table of Contents Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2024 and 2023 The overall impact on income (loss) available to shareholders before provision for income tax from the performance of annuity guaranteed benefits and Shield annuity liabilities, which includes (i) changes in the fair value of liabilities and related reinsurance, (ii) fees net of claims and (iii) the mark-to-market of hedges, was as follows: Years Ended December 31, 2024 2023 (In millions) Market risk benefits mark-to-market $ 2,103 $ 903 Annuity guaranteed benefit rider fees, net of claims 603 635 Ceded reinsurance (33) (31) Total changes attributable to annuity guaranteed benefits 2,673 1,507 Variable annuity hedges 660 369 Shield embedded derivatives (3,776) (4,129) Total $ (443) $ (2,253) Market Risk Benefits Mark-to-Market.
We believe the effective tax rate for the Corporate & Other segment is not generally meaningful, neither on a standalone basis nor for comparison to prior periods, since taxes for the Corporate & Other segment are derived from the difference between the overall consolidated effective tax rate and total taxes for the other operating segments. 84 Tab le of Contents Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2025 and 2024 The overall impact on income (loss) available to shareholders before provision for income tax from the performance of annuity guaranteed benefits and Shield Annuity liabilities, which includes (i) changes in the fair value of liabilities and related reinsurance, (ii) fees net of claims and (iii) the mark-to-market of hedges, was as follows: Years Ended December 31, 2025 2024 (In millions) Market risk benefits mark-to-market $ (198) $ 2,103 Annuity guaranteed benefit rider fees, net of claims 479 603 Ceded reinsurance (13) (33) Total changes attributable to annuity guaranteed benefits 268 2,673 Variable annuity and Shield hedges 1,494 660 Shield embedded derivatives (2,980) (3,776) Total $ (1,218) $ (443) Market Risk Benefits Mark-to-Market.
For our variable annuity business, we updated our annuitization, mortality, lapses and withdrawals, as well as separate account assumptions, including fund fees, allocations and volatility. For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.
For our variable annuity business, we updated assumptions regarding annuitization, mortality, guaranteed principal option utilization, lapses and withdrawals, as well as separate account assumptions, including fund fees and allocations. For the payout annuity business, we updated assumptions regarding mortality. For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.
Segment Results for the Years Ended December 31, 2024 and 2023 — Adjusted Earnings (Loss) Annuities The components of adjusted earnings for our Annuities segment were as follows: Years Ended December 31, 2024 2023 (In millions) Fee income $ 2,134 $ 1,999 Net investment spread 1,508 1,514 Insurance-related activities (190) (169) Amortization of DAC and VOBA (505) (516) Other expenses (1,399) (1,391) Pre-tax adjusted earnings 1,548 1,437 Provision for income tax expense (benefit) 297 268 Adjusted earnings $ 1,251 $ 1,169 A significant portion of our adjusted earnings is driven by separate account balances related to our variable annuity business, as these balances determine asset-based fee income and commissions.
Segment Results for the Years Ended December 31, 2025 and 2024 — Adjusted Earnings (Loss) Annuities The components of adjusted earnings for our Annuities segment were as follows: Years Ended December 31, 2025 2024 (In millions) Fee income $ 2,024 $ 2,134 Net investment spread 1,635 1,508 Insurance-related activities (191) (190) Amortization of DAC and VOBA (522) (505) Other expenses (1,397) (1,399) Pre-tax adjusted earnings 1,549 1,548 Provision for income tax expense (benefit) 295 297 Adjusted earnings $ 1,254 $ 1,251 A significant portion of our adjusted earnings is driven by separate account balances related to our variable annuity business, as these balances determine asset-based fee income and commissions.
Years Ended December 31, 2024 2023 2022 Yield % Amount Yield % Amount Yield % Amount (Dollars in millions) Investment income (1) 4.49 % $ 5,403 4.23 % $ 4,917 3.96 % $ 4,363 Investment fees and expenses (2) (0.13) (150) (0.14) (148) (0.14) (154) Adjusted net investment income (3) 4.36 % $ 5,253 4.09 % $ 4,769 3.82 % $ 4,209 _______________ (1) Investment income yields are calculated as investment income as a percentage of average quarterly asset carrying values.
Years Ended December 31, 2025 2024 2023 Yield % Amount Yield % Amount Yield % Amount (Dollars in millions) Investment income (1) 4.48 % $ 5,405 4.49 % $ 5,403 4.23 % $ 4,917 Investment fees and expenses (2) (0.14) (161) (0.13) (150) (0.14) (148) Adjusted net investment income (3) 4.34 % $ 5,244 4.36 % $ 5,253 4.09 % $ 4,769 _______________ (1) Investment income yields are calculated as investment income as a percentage of average quarterly asset carrying values.
All future estimated cash payments are presented gross of any reinsurance recoverable. At December 31, 2024, obligations under our institutional spread margin business totaled $11.0 billion and the related future estimated cash payments, including interest, totaled $11.6 billion, of which $5.5 billion is due in the next twelve months.
All future estimated cash payments are presented gross of any reinsurance recoverable. At December 31, 2025, obligations under our institutional spread margin business totaled $9.5 billion and the related future estimated cash payments, including interest, totaled $10.1 billion, of which $4.7 billion is due in the next twelve months.
Limited Partnerships and Limited Liability Companies The carrying values of our limited partnerships and LLCs were as follows at: December 31, 2024 December 31, 2023 (In millions) Other limited partnerships $ 4,100 $ 4,140 Real estate limited partnerships and LLCs (1) 727 806 Total $ 4,827 $ 4,946 _______________ (1) The estimated fair value of real estate limited partnerships and LLCs was $836 million and $927 million at December 31, 2024 and 2023, respectively.
Limited Partnerships and Limited Liability Companies The carrying values of our limited partnerships and LLCs were as follows at: December 31, 2025 December 31, 2024 (In millions) Other limited partnerships $ 4,099 $ 4,100 Real estate limited partnerships and LLCs (1) 597 727 Total $ 4,696 $ 4,827 _______________ (1) The estimated fair value of real estate limited partnerships and LLCs was $599 million and $836 million at December 31, 2025 and 2024, respectively.
At December 31, 2024, our insurance liabilities, excluding obligations under our institutional spread margin business, totaled $112.4 billion and the related future estimated cash payments totaled $202.1 billion, of which $13.1 billion is due in the next twelve months.
At December 31, 2025, our insurance liabilities, excluding obligations under our institutional spread margin business, totaled $114.4 billion and the related future estimated cash payments totaled $204.9 billion, of which $13.7 billion is due in the next twelve months.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Introduction 64 Executive Summary 65 Risk Management Strategies 66 Industry Trends and Uncertainties 67 Summary of Critical Accounting Estimates 68 Non-GAAP Financial Disclosures 71 Results of Operations 73 Investments 84 Derivatives 92 Policyholder Liabilities 93 Liquidity and Capital Resources 95 63 Table of Contents The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Introduction 66 Executive Summary 67 Risk Management Strategies 68 Industry Trends and Uncertainties 69 Summary of Critical Accounting Estimates 70 Non-GAAP Financial Disclosures 73 Results of Operations 75 Investments 86 Derivatives 94 Policyholder Liabilities 95 Liquidity and Capital Resources 97 65 Tab le of Contents The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs.
For a reconciliation of adjusted net investment income yield to net investment income, the most directly comparable GAAP measure, see the summary yield table located in “— Investments — Current Environment — Investment Portfolio Results.” 72 Table of Contents Results of Operations Index to Results of Operations Page Annual Actuarial Review 74 Consolidated Results for the Years Ended December 31, 2024 and 2023 75 Reconciliation of Net Income (Loss) Available to Shareholders to Adjusted Earnings (Loss) 77 Consolidated Results for the Years Ended December 31, 2024 and 2023 - Adjusted Earnings (Loss) 78 Segment Results for the Years Ended December 31, 2024 and 2023 - Adjusted Earnings (Loss) 79 Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2024 and 2023 83 73 Table of Contents Annual Actuarial Review We typically conduct our AAR in the third quarter of each year.
For a reconciliation of adjusted net investment income yield to net investment income, the most directly comparable GAAP measure, see the summary yield table located in “— Investments — Current Environment — Investment Portfolio Results.” 74 Tab le of Contents Results of Operations Index to Results of Operations Page Annual Actuarial Review 76 Consolidated Results for the Years Ended December 31, 2025 and 2024 77 Reconciliation of Net Income (Loss) Available to Shareholders to Adjusted Earnings (Loss) 79 Consolidated Results for the Years Ended December 31, 2025 and 2024 - Adjusted Earnings (Loss) 80 Segment Results for the Years Ended December 31, 2025 and 2024 - Adjusted Earnings (Loss) 81 Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2025 and 2024 85 75 Tab le of Contents Annual Actuarial Review We conducted our GAAP AAR in the third quarter of 2025.
Farmer Mac Funding Agreements Brighthouse Life Insurance Company has a secured funding agreement program with the Federal Agricultural Mortgage Corporation and its affiliate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”) with a term ending on December 1, 2026, pursuant to which the parties may enter into funding agreements in an aggregate amount of up to $750 million. 99 Table of Contents Information regarding funding agreements issued for spread lending purposes is as follows: Aggregate Principal Amount Outstanding Issuances Repayments December 31, Years Ended December 31, 2024 2023 2024 2023 2022 2024 2023 2022 (In millions) FABR Program $ 500 $ — $ 500 $ — $ — $ — $ — $ — FABCP Program 2,962 3,442 15,801 8,046 12,682 16,281 6,701 12,433 FABN Program 2,550 2,100 1,150 — 550 700 1,350 — FHLB Funding Agreements 4,300 4,350 2,150 2,350 6,275 2,200 1,900 3,275 Farmer Mac Funding Agreements 650 700 50 — 600 100 — 25 Total $ 10,962 $ 10,592 $ 19,651 $ 10,396 $ 20,107 $ 19,281 $ 9,951 $ 15,733 Debt Issuances See Note 11 of the Notes to the Consolidated Financial Statements for information on debt issuances.
Farmer Mac Funding Agreements Brighthouse Life Insurance Company has a secured funding agreement program with the Federal Agricultural Mortgage Corporation and its affiliate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”) with a term ending on December 1, 2026, pursuant to which the parties may enter into funding agreements in an aggregate amount of up to $750 million. 101 Tab le of Contents Information regarding funding agreements issued for spread lending purposes is as follows: Aggregate Principal Amount Outstanding Issuances Repayments December 31, Years Ended December 31, 2025 2024 2025 2024 2023 2025 2024 2023 (In millions) FABR Program $ 500 $ 500 $ — $ 500 $ — $ — $ — $ — FABCP Program 2,254 2,962 7,510 15,801 8,046 8,218 16,281 6,701 FABN Program 2,000 2,550 — 1,150 — 550 700 1,350 FHLB Funding Agreements 4,200 4,300 1,575 2,150 2,350 1,675 2,200 1,900 Farmer Mac Funding Agreements 500 650 250 50 — 400 100 — Total $ 9,454 $ 10,962 $ 9,335 $ 19,651 $ 10,396 $ 10,843 $ 19,281 $ 9,951 Debt Issuances See Note 11 of the Notes to the Consolidated Financial Statements for information on debt issuances.
For the year ended December 31, 2024, we had net income available to shareholders of $286 million and adjusted earnings of $1.3 billion compared to net loss available to shareholders of $1.2 billion and adjusted earnings of $969 million for the year ended December 31, 2023.
For the year ended December 31, 2025, we had net income available to shareholders of $331 million and adjusted earnings of $1.6 billion compared to net income available to shareholders of $286 million and adjusted earnings of $1.3 billion for the year ended December 31, 2024.
Equity Risk Management We are exposed to equity market risk from policyholder liabilities with long-term guarantees based on equity performance, with our most significant exposures found in crediting rates on Shield Annuities and variable annuity guarantees. We manage equity risk primarily through the use of product-specific hedging strategies and have a macro hedging program for managing residual equity risk.
Equity Risk Management We are exposed to equity market risk from policyholder liabilities with long-term guarantees based on equity performance, with our most significant exposures found in crediting rates on Shield Annuities and variable annuity guarantees. While we manage equity risk primarily through the use of product-specific hedging strategies, we also manage equity risk in aggregate across the Company.
The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.4 billion, or 68.5% of total CMBS, and designated NAIC 1 was $6.0 billion, or 94.2% of total CMBS, at December 31, 2023. 88 Table of Contents ABS Our ABS holdings are diversified by both collateral type and issuer.
The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.3 billion, or 67.7% of total CMBS, and designated NAIC 1 was $6.0 billion, or 94.2% of total CMBS, at December 31, 2024. 90 Tab le of Contents ABS Our ABS holdings are diversified by both collateral type and issuer.

… 124 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

15 edited+0 added−1 removed20 unchanged
Biggest changeFor purposes of this discussion, “market risk” is defined as changes in estimated fair value resulting from changes in interest rates, equity market prices, credit spreads and foreign currency exchange rates. We may have additional financial impacts other than changes in estimated fair value, which are beyond the scope of this discussion.
Biggest changeMarket Risk - Fair Value Exposures We have exposure to market risk through our insurance operations and general account investment activities. For purposes of this discussion, “market risk” is defined as changes in estimated fair value resulting from changes in interest rates, equity market prices, credit spreads and foreign currency exchange rates. We regularly analyze our market risk exposure.
We modeled the impact of changes in market rates and prices on the estimated fair values of our market sensitive assets and liabilities as follows: • the estimated fair value of our interest rate sensitive exposures resulting from a 100 basis point change (increase or decrease) in interest rates; • the estimated fair value of our equity positions due to a 10% change (increase or decrease) in equity market prices; and • the U.S. dollar equivalent of estimated fair values of our foreign currency exposures due to a 10% change (increase in the value of the U.S. dollar compared to the foreign currencies or decrease in the value of the U.S. dollar compared to the foreign currencies) in foreign currency exchange rates.
We modeled the impact of changes in market rates and prices on the estimated fair values of our market sensitive assets and liabilities as follows: • the estimated fair value of our interest rate sensitive exposures resulting from a 100 basis point change (increase or decrease) in interest rates; • the estimated fair value of our equity positions due to a 10% change (increase or decrease) in equity market prices; and • the U.S. dollar equivalent of estimated fair values of our foreign currency exposures due to a 10% change (increase or decrease) in foreign currency exchange rates.
If interest rates continue to decline, we may need to increase our reserves for future benefits under our annuity contracts, which would adversely affect our financial condition and results of operations. 104 Table of Contents We also employ product design and pricing strategies to mitigate the potential effects of interest rate movements.
If interest rates continue to decline, we may need to increase our reserves for future benefits under our annuity contracts, which would adversely affect our financial condition and results of operations. We also employ product design and pricing strategies to mitigate the potential effects of interest rate movements.
As discussed above, we economically hedge substantially all of our foreign currency exposure such that sensitivity to changes in foreign currencies is minimal. 107 Table of Contents
As discussed above, we economically hedge substantially all of our foreign currency exposure such that sensitivity to changes in foreign currencies is minimal. 109 Table of Contents
These strategies include the use of surrender charges, market value adjustment features or restrictions on withdrawals, and for certain products, the ability to reset crediting rates. We analyze interest rate risk using various models, including multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivatives.
These strategies include the use of surrender charges, market value adjustment features or restrictions on withdrawals, and for certain products, the ability to reset crediting rates. 106 Tab le of Contents We analyze interest rate risk using various models, including multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivatives.
Our Finance Department and our Investment Department, together with Risk Management, are responsible for coordinating our ALM strategies throughout the enterprise. The membership of the BSC is comprised of the following members of senior management: Chief Executive Officer, Chief Risk Officer, Chief Financial Officer, Chief Investment Officer and Head of Product Strategy and Pricing.
Our Finance Department and our Investment Department, together with Risk Management, are responsible for coordinating our ALM strategies throughout the enterprise. The voting membership of the BSC is comprised of the following members of senior management: Chief Executive Officer, Chief Risk Officer, Chief Financial Officer, Chief Investment Officer and Head of Product Strategy and Underwriting.
In addition, we have exposure to equity markets through equity derivatives that we enter into to mitigate potential equity market exposure from our policyholder liabilities. 105 Table of Contents Foreign Currency Exchange Rates Our fair value exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results from our holdings in non-U.S. dollar denominated fixed maturity securities, mortgage loans and certain liabilities.
In addition, we have exposure to equity markets through equity derivatives that we enter into to mitigate potential equity market exposure from our policyholder liabilities. Foreign Currency Exchange Rates Our fair value exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results from our holdings in non-U.S. dollar denominated fixed maturity securities, mortgage loans and certain liabilities.
(2) Excludes $35.4 billion of liabilities at carrying value pursuant to insurance contracts reported within future policy benefits and other policy-related balances on the consolidated balance sheet at December 31, 2024.
(2) Excludes $35.9 billion of liabilities at carrying value pursuant to insurance contracts reported within future policy benefits and other policy-related balances on the consolidated balance sheet at December 31, 2025.
In performing the analysis summarized below, we used market rates as of December 31, 2024.
In performing the analysis summarized below, we used market rates as of December 31, 2025.
Risk Measurement: Sensitivity Analysis In the following discussion and analysis, we measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, equity market prices and foreign currency exchange rates using a sensitivity analysis.
We economically hedge substantially all of our foreign currency exposure. 107 Tab le of Contents Risk Measurement: Sensitivity Analysis In the following discussion and analysis, we measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, equity market prices and foreign currency exchange rates using a sensitivity analysis.
The principal currencies that create foreign currency exchange rate risk in our investment portfolios and liabilities are the Euro and the British pound. We economically hedge substantially all of our foreign currency exposure.
The principal currencies that create foreign currency exchange rate risk in our investment portfolios and liabilities are the Euro and the British pound.
As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are significantly exposed to changes in interest rates, and to a lesser extent, to changes in equity market prices and foreign currency exchange rates. We have exposure to market risk through our insurance operations and investment activities.
As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are significantly exposed to changes in interest rates, and to a lesser extent, to changes in equity market prices and foreign currency exchange rates. We may have additional financial impacts other than changes in estimated fair value.
Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management. 106 Table of Contents The potential loss in the estimated fair value of our interest rate sensitive financial instruments due to a 100 basis point increase in the yield curve by type of asset and liability was as follows at: December 31, 2024 Notional Amount Estimated Fair Value (1) 100 Basis Point Increase in the Yield Curve (In millions) Financial assets with interest rate risk Fixed maturity securities $ 80,055 $ (4,641) Mortgage loans $ 21,373 (861) Policy loans $ 2,104 (99) Premiums, reinsurance and other receivables $ 9,277 (107) Reinsurance of market risk benefits $ 17 (26) Increase (decrease) in estimated fair value of assets (5,734) Financial liabilities with interest rate risk (2) Policyholder account balances $ 31,563 175 Long-term debt $ 2,787 208 Other liabilities $ 1,338 (6) Embedded derivatives on index-linked annuities (3) $ 11,540 1 (Increase) decrease in estimated fair value of liabilities 378 Market risk benefits associated with variable annuities $ 7,233 (2,188) Derivative instruments with interest rate risk Interest rate contracts $ 125,236 $ (2,448) (1,372) Foreign currency contracts $ 4,894 $ 539 (32) Equity contracts $ 146,514 $ 777 133 Increase (decrease) in estimated fair value of derivative instruments (1,271) Net change $ (4,439) _______________ (1) Separate account assets and liabilities, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contract holder.
Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management. 108 Tab le of Contents The potential loss in the estimated fair value of our interest rate sensitive financial instruments due to a 100 basis point increase in the yield curve by type of asset and liability was as follows at: December 31, 2025 Notional Amount Estimated Fair Value (1) 100 Basis Point Increase in the Yield Curve (In millions) Financial assets with interest rate risk Fixed maturity securities $ 82,014 $ (4,619) Mortgage loans $ 21,732 (825) Policy loans $ 1,551 (132) Premiums, reinsurance and other receivables $ 8,197 (91) Reinsurance of index-linked annuities and market risk benefits $ 87 (20) Increase (decrease) in estimated fair value of assets (5,687) Financial liabilities with interest rate risk (2) Policyholder account balances $ 28,728 173 Long-term debt $ 2,633 174 Other liabilities $ 1,291 (6) Embedded derivatives on index-linked annuities (3) $ 12,406 108 (Increase) decrease in estimated fair value of liabilities 449 Market risk benefits associated with variable annuities $ 7,001 (1,803) Derivative instruments with interest rate risk Interest rate contracts $ 83,364 $ (1,785) (2,260) Foreign currency contracts $ 4,783 $ 262 (20) Equity contracts $ 216,118 $ 3,057 802 Increase (decrease) in estimated fair value of derivative instruments (1,478) Net change $ (4,913) _______________ (1) Separate account assets and liabilities, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contract holder.
Sensitivity Summary Sensitivity to a 100 basis point rise in interest rates decreased by $390 million, or 8% to $4.4 billion at December 31, 2024 from $4.8 billion at December 31, 2023, primarily as a result of a decrease in the estimated fair value of our fixed maturity securities due to higher interest rates, in line with management expectation.
Sensitivity Summary Sensitivity to a 100 basis point rise in interest rates increased by $474 million, or 11% to $4.9 billion at December 31, 2025 from $4.4 billion at December 31, 2024, primarily as a result of an increase in derivatives used to mitigate interest rate exposures from our policyholder liabilities.
Sensitivity to a 10% decrease in equity prices increased by $233 million, or 262% to $322 million at December 31, 2024 from $89 million at December 31, 2023, primarily as a result of increase sales of index-linked annuities.
Sensitivity to a 10% decrease in equity prices increased by $403 million, or 125% to $725 million at December 31, 2025 from $322 million at December 31, 2024, primarily due to differences between the fair value methodologies of our equity-sensitive liabilities compared to the methodologies used to value the related derivative instruments.
Removed
Market Risk - Fair Value Exposures We regularly analyze our market risk exposure to interest rate, equity market price, credit spreads and foreign currency exchange rate risks.

Other BHFAO 10-K year-over-year comparisons