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Fidelity National Financial, Inc. - Quarter Report: 2024 March (Form 10-Q)

Item 6. Exhibits
91
Signatures
92
 
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PART I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except share data)
 March 31,
2024		December 31,
2023
(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at March 31, 2024 and December 31, 2023, at an amortized cost of $ and $, respectively, net of allowance for credit losses of $ and $, respectively, and includes pledged fixed maturity securities of $ and $, respectively, related to secured trust deposits
$ $ 
Preferred securities, at fair value  
Equity securities, at fair value  
Derivative investments  
Mortgage loans, net of allowance for credit losses of $ and $ at March 31, 2024 and December 31, 2023, respectively
  
Investments in unconsolidated affiliates  
Other long-term investments  
Short-term investments, at March 31, 2024 and December 31, 2023
  
Total investments  
Cash and cash equivalents, at March 31, 2024 and December 31, 2023 includes $ and $, respectively, of pledged cash related to secured trust deposits
  
Trade and notes receivables, net of allowance for credit losses of $ and $ at March 31, 2024 and December 31, 2023, respectively
  
Reinsurance recoverable, net of allowance for credit losses of $ and $ at March 31, 2024 and December 31, 2023, respectively
  
Goodwill  
Prepaid expenses and other assets  
Market risk benefits asset  
Lease assets  
Other intangible assets, net  
Title plants  
Property and equipment, net  
Total assets$ $ 
LIABILITIES AND EQUITY
Liabilities:  
Contractholder funds$ $ 
Future policy benefits  
Accounts payable and accrued liabilities  
Market risk benefits liability  
Notes payable  
Reserve for title claim losses  
Funds withheld for reinsurance liabilities  
Secured trust deposits  
Lease liabilities  
Income taxes payable  
Deferred tax liability  
Total liabilities  
Equity:  
FNF common stock, $ par value; authorized shares as of March 31, 2024 and December 31, 2023; outstanding of and as of March 31, 2024 and December 31, 2023, respectively, and issued of and as of March 31, 2024 and December 31, 2023, respectively
  
Preferred stock, $ par value; authorized shares; issued and outstanding,
  
Additional paid-in capital  
Retained earnings  
Accumulated other comprehensive loss()()
Less: Treasury stock, shares and shares as of March 31, 2024 and December 31, 2023, respectively, at cost
()()
Total Fidelity National Financial, Inc. shareholders’ equity  
Non-controlling interests  
Total equity  
Total liabilities and equity$ $ 
See Notes to Condensed Consolidated Financial Statements
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share data)

Three months ended March 31,
 20242023
(Unaudited)
Revenues:  
Direct title insurance premiums$ $ 
Agency title insurance premiums  
Escrow, title-related and other fees  
Interest and investment income  
Recognized gains and losses, net  
Total revenues  
Expenses:  
Personnel costs  
Agent commissions  
Other operating expenses  
Benefits and other changes in policy reserves  
Market risk benefit (gains) losses() 
Depreciation and amortization  
Provision for title claim losses  
Interest expense  
Total expenses  
Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates ()
Income tax expense  
Earnings (loss) before equity in earnings of unconsolidated affiliates ()
Equity in earnings of unconsolidated affiliates  
Net earnings (loss) ()
Less: Net earnings (loss) attributable to non-controlling interests ()
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders$ $()
Earnings (loss) per share
Basic
Net earnings (loss) per share attributable to common shareholders$ $()
Net earnings (loss) per share attributable to common shareholders, basic$ $()
Diluted
Net earnings (loss) per share attributable to common shareholders$ $()
Net earnings (loss) per share attributable to common shareholders, diluted$ $()
Weighted average common shares outstanding - basic   
Weighted average common shares outstanding - diluted   
See Notes to Condensed Consolidated Financial Statements
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In millions)
Three months ended March 31,
 20242023
 (Unaudited)
Net earnings (loss)$ $()
Other comprehensive earnings (loss): 
Unrealized (loss) gain on investments and other financial instruments (excluding investments in unconsolidated affiliates) (1)() 
Unrealized gain on investments in unconsolidated affiliates (2)  
Unrealized loss on foreign currency translation (3)() 
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)  
Changes in current discount rate - future policy benefits (5) ()
Changes in instrument-specific credit risk - market risk benefits (6)  
    Other comprehensive loss attributable to non-controlling interest (7) ()()
Other comprehensive earnings  
Comprehensive earnings  
Less: Comprehensive earnings (loss) attributable to non-controlling interests ()
Comprehensive earnings attributable to Fidelity National Financial, Inc. common shareholders$ $ 
 )   ) )  
  
 Other  
ComprehensiveTreasuryNon- 
RetainedEarningsStockcontrollingTotal
Earnings(Loss)Shares$InterestsEquity
 $ $() $()$ $ 
— — — ()— ()
— — — — ()()
—  — — —  
—  — — —  
—  — — —  
—  — — —  
—  — — —  
— ()— — — ()
— — — — —  
()— — — — ()
— ()— —  — 
— — — — ()()
()— — — ()()
 $ $() $()$ $ 
 $ $() $()$ $ 
— — — —   
— — — — ()()
— — — — —  
— ()— — — ()
—  — — —  
— ()— — — ()
—  — — —  
—  — — —  
—  — — —  
— ()— —  — 
— — — —   
— — — ()()()
()— — — — ()
— — — — ()()
 — — —   
 $ $() $()$ $ 

See Notes to Condensed Consolidated Financial Statements

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 For the three months ended March 31,
 
 20242023
 (Unaudited)
Cash flows from operating activities: 
Net earnings (loss)$ $()
Adjustments to reconcile net earnings to net cash provided by operating activities:
            Depreciation and amortization  
            Equity in earnings of unconsolidated affiliates() 
            (Gain) loss on sales of investments and other assets and asset impairments, net() 
            Interest credited/index credits to contractholder account balances  
            Change in market risk benefits, net() 
            Deferred policy acquisition costs and deferred sales inducements()()
            Charges assessed to contractholders for mortality and admin()()
            Non-cash lease costs  
            Operating lease payments()()
            Distributions from unconsolidated affiliates, return on investment  
            Stock-based compensation cost  
            Change in NAV of limited partnerships, net()()
            Change in valuation of derivatives, equity and preferred securities, net()()
Changes in assets and liabilities, net of effects from acquisitions:
Change in reinsurance recoverable()()
Change in future policy benefits  
Change in funds withheld from reinsurers  
Net decrease in trade receivables  
Net decrease in reserve for title claim losses()()
Net change in income taxes ()
Net change in other assets and other liabilities()()
Net cash provided by operating activities  
Cash flows from investing activities:  
Proceeds from sales, calls and maturities of investment securities  
Additions to property and equipment, capitalized software and title plants()()
Purchases of investment securities()()
Net proceeds from sales and maturities of short-term investment securities  
Additions to notes receivable()()
Collections of notes receivable  
Acquisitions and dispositions()()
Additional investments in unconsolidated affiliates()()
Distributions from unconsolidated affiliates, return of investment  
Net cash used in investing activities()()
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In millions)
For the three months ended March 31,
20242023
(Unaudited)
Cash flows from financing activities:  
Borrowings  
Debt costs/equity issuance additions()()
F&G Credit Agreement repayments, net ()
Dividends paid()()
Subsidiary dividends paid to non-controlling interest shareholders()()
Exercise of stock options  
Additional investment in consolidated subsidiary()()
Net change in secured trust deposits()()
Payment of contingent consideration for prior period acquisitions()()
Contractholder account deposits  
Contractholder account withdrawals()()
Purchases of treasury stock ()
Cash remitted for withholding taxes on share-based compensation() 
Net cash provided by financing activities  
Net increase in cash and cash equivalents  
Cash and cash equivalents at beginning of period  
Cash and cash equivalents at end of period$ $ 
See Notes to Condensed Consolidated Financial Statements
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A —
Description of the Business
We are a leading provider of (i) title insurance, escrow and other title-related services, including loan sub-servicing, valuations, default services and home warranty products, (ii) technology to the real estate and mortgage industries and (iii) annuity and life insurance products. FNF is one of the nation’s largest title insurance companies operating through its title insurance underwriters - Fidelity National Title Insurance Company ("FNTIC"), Chicago Title Insurance Company ("Chicago Title"), Commonwealth Land Title Insurance Company ("Commonwealth Title"), Alamo Title Insurance and National Title Insurance of New York Inc. - which collectively issue more title insurance policies than any other title company in the United States. Through our subsidiary, ServiceLink Holdings, LLC ("ServiceLink"), we provide mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. We are also a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through our majority-owned subsidiary, F&G Annuities & Life ("F&G").
For information about our reportable segments refer to Note H Segment Information.
Recent Developments
Successful Completion of Consent Solicitation
On April 23, 2024, we announced the successful completion of consent solicitations of the holders of each of our % Senior Notes due 2028 (the “2028 Notes”), % Senior Notes due 2030 (the “2030 Notes”), % Senior Notes due 2031 (the “2031 Notes”) and 3.200% Senior Notes due 2051 (the “2051 Notes” and, collectively with the 2028 Notes, 2030 Notes and the 2031 Notes, the “Notes” and each a “series of Notes”) to effect a certain amendment (the “Proposed Amendment”) to the indenture governing the Notes (the “Indenture”) with respect to each series of Notes, as described below.
As of 5:00 p.m., New York City time, on April 22, 2024 (the “Expiration Time”), we had received consents from a majority in principal amount of each series of Notes outstanding for the adoption of the proposed amendment to the Indenture. Each of the consent solicitations was made pursuant to the consent solicitation statement, dated April 16, 2024 (the “Consent Solicitation Statement”). A supplemental indenture giving effect to the Proposed Amendment with respect to each series of Notes was executed promptly. Upon its execution, the supplemental indenture is effective and constitutes a binding agreement between the Company and the trustee.
Immediately prior to the consummation of our redomestication, by conversion, from a corporation organized under the laws of the State of Delaware to a corporation organized under the laws of the State of Nevada (the “Redomestication”), we will pay holders of each series of Notes who validly delivered their consents at or prior to the Expiration Time (and did not validly revoke such consents) the Consent Fee described in the Consent Solicitation Statement. No Consent Fee will be paid with respect to a series of Notes if any of the consent solicitations are terminated prior to the proposed amendment becoming effective or if we abandon the Redomestication or if the Redomestication is not completed for any reason whatsoever. We are not required to consummate the Redomestication even if we have received the requisite consents for the Notes and the approval of our shareholders to the Redomestication. If the Redomestication is abandoned prior to consummation or otherwise not completed for any reason whatsoever (including, without limitation, because we determine to effect a redomestication by way of merger or otherwise), or the conditions to the consent solicitations are not satisfied or waived, then no Consent Fee shall be payable and the Proposed Amendment contained in the supplemental indenture described above will not become operative.
Amendment to our Revolving Credit Facility
On February 16, 2024, we entered into a Sixth Amended and Restated Credit Agreement for our $ million revolving credit facility (the "Amended Revolving Credit Facility") with Bank of America, N.A., as administrative agent and other agents party thereto (the "Sixth Restated Credit Agreement"). Among other changes, the Sixth Amended and Restated Credit Agreement amends the Revolving Credit Facility to extend the maturity date from October 29, 2025, to February 16, 2029. For further information related to the Amended Revolving Credit Facility and the Sixth Restated Credit Agreement refer to Note G Notes Payable in our Annual Report on Form 10-K for the year ended December 31, 2023.

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 million credit agreement, with the guarantors party thereto, the financial institutions party thereto as lenders, and Bank of America, N.A., as administrative agent, swing line lender and an issuing bank (the "Second Amended and Restated F&G Credit Agreement"). Among other changes, the Second Amended and Restated F&G Credit Agreement amends the Amended F&G Credit Agreement to extend the maturity date and increase the aggregate principal amount of commitments under the revolving credit facility to $ million. For more information related to the Second Amended and Restated F&G Credit Agreement refer to Note G Notes Payable in our Annual Report on Form 10-K for the year ended December 31, 2023.
Acquisition of Roar
On January 2, 2024, F&G acquired a % majority ownership stake in the equity of Roar Joint Venture, LLC ("Roar"). Roar wholesales life insurance and annuity products to banks and broker dealers through a network of agents. Total initial consideration is comprised of cash of $ million and $ million of contingent consideration. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to $ million over a period upon the achievement by Roar of certain earnings before interest, taxes, depreciation and amortization ("EBITDA") milestones. For further information related to the acquisition of Roar, refer to Note N Acquisitions.
Investment of $ million in F&G
On January 12, 2024, we completed a $ million preferred stock investment in F&G. F&G will use the net proceeds from the investment to support growth of its assets under management.
Under the terms of the agreement, we have agreed to invest $ million in exchange for  million shares of F&G's % Series A Mandatory Convertible Preferred Stock, par value $ per share (the "Mandatory Convertible Preferred Stock"). Each share of Mandatory Convertible Preferred Stock will have a liquidation preference of $ per share. Unless earlier converted at the option of the holder, each outstanding share of the Mandatory Convertible Preferred Stock will automatically convert into shares of common stock of F&G on January 15, 2027 (the "Mandatory Conversion Date"). Upon conversion on the Mandatory Conversion Date, the conversion rate for each share of the Mandatory Convertible Preferred Stock will be no more than shares of common stock and no less than shares of common stock per share of Mandatory Convertible Preferred Stock, depending on the value of F&G's common stock. The preferred stock investment in F&G eliminates upon consolidation.
Income Tax
Income tax expense was $ million and $ million in the three months ended March 31, 2024 and 2023, respectively. Income tax expense as a percentage of earnings (loss) before income taxes was % and ()% in the three months ended March 31, 2024 and 2023, respectively. The increase in income tax expense as a percentage of earnings (loss) before taxes in the three months ended March 31, 2024 as compared to the corresponding period in 2023 is primarily attributable to the 2023 period having income tax expense, due to a valuation allowance increase, despite there being a 2023 pre-tax loss.

 million antidilutive instruments outstanding during the three months ended March 31, 2024 and 2023.
Unconsolidated Owned Distribution Investments
For the three months ended March 31, 2024 and 2023, we paid approximately $ million and $ million, respectively, in commissions on sales through our unconsolidated funded owned distribution investments and their affiliates, with the acquisition expense deferred and amortized in Depreciation and amortization on the accompanying unaudited Condensed Consolidated Statements of Operations.
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Note B —
 $ Change in insurance recoverable  Claim loss provision related to: Current year  Total title claim loss provision  Claims paid, net of recoupments related to: Current year()()Prior years()()Total title claims paid, net of recoupments()()Ending balance of claim loss reserve for title insurance$ $ Provision for title insurance claim losses as a percentage of title insurance premiums % %
Several lawsuits were filed by various parties against Chicago Title Company and Chicago Title Insurance Company as its principal (collectively, the “Named Companies”) by plaintiffs claiming they were investors who were solicited by Gina Champion-Cain through her former company, ANI Development LLC (“ANI”), or other affiliates to provide funds placed in an escrow account that purportedly were to be used for high-interest, short-term loans to parties seeking to acquire California alcoholic beverage licenses. Plaintiffs further alleged that employees of Chicago Title Company assisted Ms. Champion-Cain and her entities in diverting the funds placed into an escrow account maintained by Chicago Title Company into which some of the plaintiffs’ funds were deposited.
In connection with the alcoholic beverage license scheme, the SEC filed a civil enforcement proceeding asserting claims for securities fraud against Champion-Cain and ANI in a lawsuit styled, Securities and Exchange Commission v. Gina Champion-Cain and ANI Development, LLC, pending in the United States District Court for the Southern District of California. The receiver, who was appointed by the court to preserve the assets of the defendant affiliated entities, then filed a lawsuit in San Diego County Superior Court against the Named Companies seeking damages in a lawsuit styled, Krista Freitag v. Chicago Title Co. and Chicago Title Ins. Co. The Named Companies reached a global settlement with the receiver and several other investor claimants and jointly sought court approval of the global settlement and entry of an order barring any claims against the Named Companies related to the alcoholic beverage license scheme. On November 23, 2022, the federal court overruled any objections by non-joining investors and entered an order approving the global settlement barring further claims against the Named Companies (“Settlement and Bar Order”). After her receipt of the settlement funds, the receiver dismissed the lawsuit against the Named Companies. Some of the non-joining investor claimants who objected to entry of the Settlement and Bar Order appealed the decision to the United States Court of Appeals for the Ninth Circuit by (Cases 22-56206, 22-56208, and 23-55083), and appellate oral argument is expected to be held later this year.
Chicago Title Company has also resolved a number of other pre-suit claims and previously-disclosed lawsuits from both individual and groups of alleged investors under confidential terms. Based on the facts and circumstances of the remaining claims, including the settlements already reached, we have recorded reserves included in our reserve for title claim losses, which we believe are adequate to cover losses related to this matter, and believe that our reserves for title claim losses are adequate.
We continually update loss reserve estimates as new information becomes known, new loss patterns emerge, or as other contributing factors are considered and incorporated into the analysis of reserve for claim losses. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims and other factors.
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Note C —
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 $ $ $— $ Fixed maturity securities, available-for-sale:Asset-backed securities   —  Commercial mortgage-backed securities   —  Corporates   —  Hybrids   —  Municipals   —  Residential mortgage-backed securities   —  U.S. Government   —  Foreign Governments   —  Short term investments   —  Preferred securities   —  Equity securities     Derivative investments   —  Investment in unconsolidated affiliates   —  Reinsurance related embedded derivative, included in other assets   —  Market risk benefits asset   —  Other long-term investments   —  Total financial assets at fair value$ $ $ $ $ LiabilitiesDerivatives:Indexed annuities/IUL embedded derivatives, included in contractholder funds   —  Interest rate swaps   —  Call options    —  Contingent consideration obligation   —  Market risk benefits liability   —  Total financial liabilities at fair value$ $ $ $— $ 

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 $ $ $— $ Fixed maturity securities, available-for-sale:Asset-backed securities   —  Commercial mortgage-backed securities   —  Corporates   —  Hybrids   —  Municipals   —  Residential mortgage-backed securities   —  U.S. Government   —  Foreign Governments   —  Short term investments   —  Preferred securities   —  Equity securities     Derivative investments   —  Investment in unconsolidated affiliates   —  Reinsurance related embedded derivative, included in other assets   —  Market risk benefits asset   —  Other long-term investments   —  Total financial assets at fair value$ $ $ $ $ LiabilitiesDerivatives:Indexed annuities/ IUL embedded derivatives, included in contractholder funds   —  Market risk benefits liability   —  Derivative instruments - futures contracts    Total financial liabilities at fair value$ $ $ $— $ 

Valuation Methodologies
Cash and Cash Equivalents
The carrying amounts reported in the unaudited Condensed Consolidated Balance Sheets for these instruments approximate fair value.
Fixed Maturity Preferred and Equity Securities
We measure the fair value of our securities based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the fixed maturity, preferred or equity security, and we will then consistently apply the valuation methodology to measure the security’s fair value. Our fair value measurement is based on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable securities. Sources of inputs to the market approach include third-party pricing services, independent broker quotations, or pricing matrices. We use observable and unobservable inputs in our valuation methodologies. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. In addition, market indicators and industry and economic events are monitored and further market data will be acquired when certain thresholds are met.
For certain security types, additional inputs may be used, or some of the inputs described above may not be applicable. The significant input used in the fair value measurement of equity securities for which the market approach valuation technique is employed is yield for comparable securities. Increases or decreases in the yields would result in lower or higher, respectively, fair value measurements. For broker-quoted only securities, quotes from market makers or broker-dealers are obtained from sources recognized to be market participants. We believe the broker quotes are prices at which trades could be executed based on historical trades executed at broker-quoted or slightly higher prices.
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since F&G will not be required to make any additional payments at maturity of the fund-linked note in order to receive the NAV of the fund on the maturity date. A Black-Scholes model determines the NAV of the fund as the fair value of the call option regardless of the values used for the other inputs to the option pricing model. The NAV of the fund is provided by the fund manager at the end of each calendar month and represents the value an investor would receive if it withdrew its investment on the balance sheet date. Therefore, the key unobservable input used in the Black-Scholes model is the value of the fund. As the value of the fund increases or decreases, the fair value of the embedded derivative will
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 Third-Party ValuationDiscount Rate
% - % (%)
Commercial mortgage-backed securities  Third-Party Valuation Discount Rate
% - %
(%)
Corporates  Discounted Cash FlowDiscount Rate
% - % (%)
Corporates  Third-Party Valuation Discount Rate
% - % (%)
Residential mortgage-backed securities  Third-Party Valuation Discount Rate
% - % (%)
Foreign Governments  Third-Party Valuation Discount Rate
% - % (%)
Investment in unconsolidated affiliates Market Comparable Company AnalysisEBITDA Multiple14.1x - 20.2x (16x)Adjusted Transaction ValueN/AN/APreferred securities Discounted Cash FlowDiscount rate
% - % (%)
Equity securities Discounted Cash Flow Discount rate
% - % (%)
Market Comparable Company Analysis EBITDA multiple
x - x (x)
Other long-term investments:Available-for-sale embedded derivative Black Scholes ModelMarket Value of AnchorPath Fund
%
Market risk benefits asset Discounted Cash FlowMortality
% - % (%)
Surrender Rates
% - %
(%)
Partial Withdrawal Rates
% - %
(%)
Non-Performance Spread
% - %
(%)
GMWB Utilization
% - %
(%)
Total financial assets at fair value (a)$ LiabilitiesDerivative investments:Indexed annuity/ IUL embedded derivatives, included in contractholder funds$ Discounted Cash FlowMarket Value of Option
% - % (%)
Mortality Multiplier
% - % (%)
Surrender Rates
% - % (%)
Partial Withdrawals
% - % (%)
Non-Performance Spread
% - % (%)
Option Cost
% - % (%)
Contingent consideration Discounted Cash FlowRisk-Adjusted Discount Rate
% - % (%)
EBITDA Volatility
% - %
(%)
Counterparty-Discount Rate
% - %
(%)
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 Discounted Cash FlowMortality
% - %
(%)
Surrender Rates
% - %
(%)
Partial Withdrawal Rates
% - %
(%)
Non-Performance Spread
% - %
(%)
GMWB Utilization
% - %
(%)
Total financial liabilities at fair value (a)$ 
(a) Assets of $ million and liabilities of $ million for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are excluded from the respective totals in the table above.

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 Third-Party ValuationDiscount Rate
% - %
(%)
Corporates Third-Party ValuationDiscount Rate
% - %
(%)
CorporatesDiscounted Cash FlowDiscount Rate
% - %
 (%)
MunicipalsThird-Party ValuationDiscount Rate
% - % (%)
Residential mortgage-backed securities Third-Party ValuationDiscount Rate
% - % (%)
Foreign Governments Third-Party ValuationDiscount Rate
% - % (%)
Investment in unconsolidated affiliates Market Comparable Company AnalysisEBITDA Multiple
x - x (x)
Preferred securities Discounted Cash FlowDiscount rate
%
Equity securities Discounted Cash FlowDiscount rate
% - % (%)
Other long-term investments:Available-for-sale embedded derivative Black Scholes ModelMarket Value of Fund
%
Market risk benefits asset Discounted Cash FlowMortality
% - %
(%)
Surrender Rates
% - %
(%)
Partial Withdrawal Rates
% - %
(%)
Non-Performance Spread
% - %
(%)
GMWB Utilization
% - %
(%)
Total financial assets at fair value (a)$ LiabilitiesDerivativesIndexed annuity/ IUL embedded derivatives, included in contractholder funds Discounted Cash FlowMarket Value of Option
% - %
(%)
Swap rates
% - %
(%)
Mortality Multiplier
% - %
(%)
Surrender Rates
% - %
(%)
Partial Withdrawals
% - %
(%)
Non-Performance Spread
% - %
(%)
Option cost
% - %
(%)
Market risk benefits liabilityDiscounted Cash FlowMortality
%- %
(%)
Surrender Rates
% - %
(%)
Partial Withdrawal Rates
% - %
(%)
Non-Performance Spread
% - %
(%)
GMWB Utilization
% - %
(%)
Total financial liabilities at fair value$ (a) Assets of $ million for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are excluded from the table above.

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)$ $ $()$()$()$ $      ()     ()()      ()                ()           )       )                       Other long-term investments:            ()   ()$ $ $()$()$()$ $   Liabilities    ()                    $ $ $ $()$ $ $   
(a) The net transfers out of Level 3 during the three months ended March 31, 2024 were exclusively to Level 2.
(b) Refer to Note O- Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liability.
(c) The initial contingent consideration recorded in the Roar transaction is included in purchases in the table above. Refer to Note N - Acquisitions for more information.
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 $()$ $ $()$()$()$ $ Commercial mortgage-backed securities      ()  Corporates ()()  ()  ()Municipals         Residential mortgage-backed securities     ()()  Foreign Governments         Investment in unconsolidated affiliates         Short term investments         Preferred securities         Equity securities         Other long-term investments:Available-for-sale embedded derivative         Credit linked note     ()   Secured borrowing receivable         Subtotal Level 3 assets at fair value$ $()$ $ $()$()$()$ $ Market risk benefits asset (b)  Total Level 3 assets at fair value$ $ LiabilitiesIndexed annuity/IUL embedded derivatives, included in contractholder funds     ()   Subtotal Level 3 liabilities at fair value$ $ $ $ $ $()$ $ $ Market risk benefits liability (b)  Total Level 3 liabilities at fair value$ $ 
(a)The net transfers out of Level 3 during the three months ended March 31, 2023 were to Level 2.
(b)Refer to Note O - Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liability.
.

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value
The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value. Considerable judgment is required to develop these assumptions used to measure fair value. Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.
Mortgage Loans
The fair value of mortgage loans is established using a discounted cash flow method based on internal credit rating, maturity and future income. This yield-based approach is sourced from our third-party vendor. The internal ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt service coverage, loan-to-value, quality of tenancy, borrower, and payment record. The inputs used to measure the fair value of our mortgage loans are classified as Level 3 within the fair value hierarchy.
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 million and $ million as of March 31, 2024 and December 31, 2023, respectively.
Policy Loans (included within Other long-term investments)
Fair values for policy loans are estimated from a discounted cash flow analysis, using interest rates currently being offered for loans with similar credit risk.  Loans with similar characteristics are aggregated for purposes of the calculations.
Company Owned Life Insurance
Company owned life insurance ("COLI") is a life insurance program used to finance certain employee benefit expenses. The fair value of COLI is based on net realizable value, which is generally cash surrender value. COLI is classified as Level 3 within the fair value hierarchy.
Other Invested Assets (included within Other long-term investments)
The fair value of bank loans is estimated using a discounted cash flow method with the discount rate based on weighted average cost of capital ("WACC"). This yield-based approach is sourced from a third-party vendor and the WACC establishes a market participant discount rate by determining the hypothetical capital structure for the asset should it be underwritten as of each period end. Bank loans are classified as Level 3 within the fair value hierarchy. For cost method investments, our carrying value approximates fair value. Cost method investments are classified as Level 1 within the fair value hierarchy.
Investment Contracts
Investment contracts include deferred annuities (indexed annuities and fixed rate annuities), IUL policies, funding agreements and pension risk transfers ("PRT") and immediate annuity contracts without life contingencies. The indexed annuities/IUL embedded derivatives, included in contractholder funds, are excluded as they are carried at fair value. The fair value of the deferred annuities (indexed annuities and fixed rate annuities) and IUL contracts is based on their cash surrender value (i.e., the cost the Company would incur to extinguish the liability) as these contracts are generally issued without an annuitization date. The fair value of funding agreements and PRT and immediate annuity contracts without life contingencies is derived by calculating a new fair value interest rate using the updated yield curve and treasury spreads as of the respective reporting date. The Company is not required to, and has not, estimated the fair value of the liabilities under contracts that involve significant mortality or morbidity risks, as these liabilities fall within the definition of insurance contracts that are exceptions from financial instruments that require disclosures of fair value.

Other
Federal Home Loan Bank of Atlanta (“FHLB”) common stock is carried at cost, which approximates fair value. The carrying amount of FHLB common stock represents the value it can be sold back to the FHLB and is classified as Level 2 within the hierarchy.
Debt
The fair value of debt, with the exception of the F&G Credit Agreement is based on quoted market prices. The carrying value of the F&G Credit Agreement approximates fair value as the rates are comparable to those at which we could currently borrow under similar terms. The inputs used to measure the fair value of our outstanding debt are classified as Level 2 within the fair value hierarchy.
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 $ $ $— $ $ Commercial mortgage loans   —   Residential mortgage loans   —   Investments in unconsolidated affiliates      Policy loans   —   Other invested assets      Company-owned life insurance   —   Trade and notes receivables, net of allowance    —   Total$ $ $ $ $ $ LiabilitiesInvestment contracts, included in contractholder funds$ $ $ $— $ $ Debt   —   Total$ $ $ $— $ $ 

December 31, 2023
Level 1Level 2Level 3NAVTotal Estimated Fair ValueCarrying Amount
Assets(In millions)
FHLB common stock$ $ $ $— $ $ 
Commercial mortgage loans   —   
Residential mortgage loans   —   
Investments in unconsolidated affiliates      
Policy loans   —   
Other invested assets      
Company-owned life insurance   —   
Trade and notes receivables, net of allowance   —   
Total$ $ $ $ $  
Liabilities
Investment contracts, included in contractholder funds$ $ $ $— $ $ 
Debt   —   
Total$ $ $ $— $ $ 
For investments for which NAV is used as a practical expedient for fair value, we do not have any significant restrictions in our ability to liquidate our positions in these investments, other than obtaining general partner approval, nor do we believe it is probable that a price less than NAV would be received in the event of a liquidation.

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Note D —
 $()$ $()$ Commercial mortgage-backed securities () () Corporates () () Hybrids   () Municipals   () Residential mortgage-backed securities () () U.S. Government   () Foreign Governments   () Total available-for-sale securities$ $()$ $()$ 
December 31, 2023
 Amortized CostAllowance for Expected Credit LossesGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale securities (In millions)
Asset-backed securities$ $()$ $()$ 
Commercial mortgage-backed/asset-backed securities () () 
Corporates () () 
Hybrids   () 
Municipals   () 
Residential mortgage-backed securities () () 
U.S. Government   () 
Foreign Governments   () 
Total available-for-sale securities$ $()$ $()$ 

Securities held on deposit with various state regulatory authorities had a fair value of $ million and $ million at March 31, 2024 and December 31, 2023, respectively.
As of March 31, 2024 and December 31, 2023, the Company held $ million and $ million, respectively, that were non-income producing for a period greater than twelve months.
As of March 31, 2024 and December 31, 2023, the Company's accrued interest receivable balance was $ million and $ million, respectively. Accrued interest receivable is classified within Prepaid expenses and other assets within the unaudited Condensed Consolidated Balance Sheets.
In accordance with our FHLB agreements, the investments supporting the funding agreement liabilities are pledged as collateral to secure the FHLB funding agreement liabilities and are not available to us for general purposes. The collateral investments had a fair value of $ million and $ million as of March 31, 2024 and December 31, 2023, respectively.
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 $ $ $ Due after one year through five years    Due after five years through ten years    Due after ten years    Subtotal    Other securities, which provide for periodic payments:Asset-backed securities    Commercial mortgage-backed securities    Residential mortgage-backed securities    Subtotal    Total fixed maturity available-for-sale securities$ $ $ $ 

Allowance for Expected Credit Loss
We regularly review AFS securities for declines in fair value that we determine to be credit related. For our fixed maturity securities, we generally consider the following in determining whether our unrealized losses are credit related, and if so, the magnitude of the credit loss:
•The extent to which the fair value is less than the amortized cost basis;
•The reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening);
•The financial condition of and near-term prospects of the issuer (including issuer's current credit rating and the probability of full recovery of principal based upon the issuer's financial strength);
•Current delinquencies and nonperforming assets of underlying collateral;
•Expected future default rates;
•Collateral value by vintage, geographic region, industry concentration or property type;
•Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and
•Contractual and regulatory cash obligations and the issuer's plans to meet such obligations.
We recognize an allowance for current expected credit losses on fixed maturity securities in an unrealized loss position when it is determined, using the factors discussed above, a component of the unrealized loss is related to credit. We measure the credit loss using a discounted cash flow model that utilizes the single best estimate cash flow and the recognized credit loss is limited to the total unrealized loss on the security (i.e. the fair value floor). Cash flows are discounted using the implicit yield of bonds at their time of purchase and the current book yield for asset and mortgage backed securities as well as variable rate securities. We recognize the expected credit losses in Recognized gains and losses, net in the unaudited Condensed Consolidated Statements of Operations, with an offset for the amount of non-credit impairments recognized in AOCI. We do not measure a credit loss allowance on accrued investment income because we write-off accrued interest through Interest and investment income when collectability concerns arise.
We consider the following in determining whether write-offs of a security’s amortized cost are necessary:
• We believe amounts related to securities have become uncollectible;
• We intend to sell a security; or
• It is more likely than not that we will be required to sell a security prior to recovery.
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 million and $ million, respectively.

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 $()$ $()$ $()Commercial mortgage-backed securities () () ()Corporates () () ()Hybrids () () ()Municipals () () ()Residential mortgage-backed securities () () ()U.S. Government () () ()Foreign Government () () ()Total available-for-sale securities$ $()$ $()$ $()Total number of available-for-sale securities in an unrealized loss position less than twelve months Total number of available-for-sale securities in an unrealized loss position twelve months or longerTotal number of available-for-sale securities in an unrealized loss position  
December 31, 2023
Less than 12 months12 months or longerTotal
Fair ValueGross Unrealized
Losses		Fair ValueGross Unrealized
Losses		Fair ValueGross Unrealized
Losses
Available-for-sale securities(In millions)
Asset-backed securities$ $()$ $()$ $()
Commercial mortgage-backed securities () () ()
Corporates () () ()
Hybrids () () ()
Municipals () () ()
Residential mortgage-backed securities () () ()
U.S. Government   () ()
Foreign Government () () ()
Total available-for-sale securities$ $()$ $()$ $()
Total number of available-for-sale securities in an unrealized loss position less than twelve months
Total number of available-for-sale securities in an unrealized loss position twelve months or longer
Total number of available-for-sale securities in an unrealized loss position  

The increase in unrealized losses as of March 31, 2024, compared to December 31, 2023, was caused by higher treasury rates compared to those at the time of the F&G acquisition or purchase of the security if later. For securities in an unrealized loss position as of March 31, 2024, our allowance for expected credit loss was $ million. We believe the unrealized loss position for which we have recorded an allowance for expected credit loss as of March 31, 2024 was primarily attributable to interest rate increases, near-term illiquidity, and other macroeconomic uncertainties as opposed to issuer specific credit concerns.
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% of our total investments as of March 31, 2024 and December 31, 2023. The mortgage loans in our investment portfolio are generally comprised of high quality commercial first lien and mezzanine real estate loans. Mortgage loans are primarily on income producing properties including industrial properties, retail buildings, multifamily properties and office buildings. We diversify our CML portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a consistent and acceptable level to secure the related debt.   %$  %Industrial  %  %Mixed Use  %  %Multifamily  %  %Office  %  %Retail  %  %Student Housing   %  %Other  %  %
Total commercial mortgage loans, gross of valuation allowance
$  %$  %Allowance for expected credit loss()()
Total commercial mortgage loans, net of valuation allowance
$ $ U.S. Region:East North Central$  %$  %East South Central  %  %Middle Atlantic  %  %Mountain  %  %New England  %  %Pacific  %  %South Atlantic  %  %West North Central  %  %West South Central  %  %
Total commercial mortgage loans, gross of valuation allowance
$  %$  %Allowance for expected credit loss()()
Total commercial mortgage loans, net of valuation allowance
$ $ 
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 $ $ $ $ $ $ 30-89 days past due       90 days or more past due       Total CMLs$ $ $ $ $ $ $ .........................................................................................................Charge offs.....................................................................................$ $ $ $ $ $ $ 
      
December 31, 2023
  %$  %
(a) Excludes loans under development with an amortized cost and estimated fair value of $ million.
March 31, 2024
Amortized Cost by Origination Year
20242023202220212020PriorTotal
Commercial mortgages(In millions)
LTV
Less than 50.00%$ $ $ $ $ $ $ 
50.00% to 59.99%       
60.00% to 74.99%       
75.00% to 84.99%       
Total CMLs$ $ $ $ $ $ $ 
Commercial mortgages
DSCR
Greater than 1.25x$ $ $ $ $ $ $ 
1.00x - 1.25x       
Less than 1.00x       
Total CMLs$ $ $ $ $ $ $ 
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 $ $ $ $ $ $ 50.00% to 59.99%       60.00% to 74.99%       75.00% to 84.99%       Total CMLs (a)$ $ $ $ $ $ $ Commercial mortgagesDSCRGreater than 1.25x$ $ $ $ $ $ $ 1.00x - 1.25x       Less than 1.00x       Total CMLs (a)$ $ $ $ $ $ $ 
 million.
We recognize a mortgage loan as delinquent when payments on the loan are greater than 30 days past due. At March 31, 2024 and December 31, 2023, we had CMLs that were delinquent in principal or interest payments as shown in the risk rating exposure table above.
Residential Mortgage Loans
Residential mortgage loans (“RMLs”) represented approximately % of our total investments as of March 31, 2024 and December 31, 2023. Our RMLs are closed end, amortizing loans and % of the properties are located in the United States. We diversify our RML portfolio by state to attempt to reduce concentration risk.
  %California  %All other states (a)  %      Total RMLs, gross of valuation allowance$  %            Allowance for expected credit loss()      Total RMLs, net of valuation allowance$ 
(a)     The individual concentration of each state is equal to or less than 5% as of March 31, 2024.

December 31, 2023
Amortized Cost% of Total
U.S. State:(In millions)
Florida$  %
New York  %
Texas  %
All other states (a)  %
      Total RMLs, gross of valuation allowance$  %
            Allowance for expected credit loss
()
      Total RMLs, net of valuation allowance$ 
(a)     The individual concentration of each state is equal to or less than 5% as of December 31, 2023.
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  %$  %Non-performing  %  %Total RMLs, gross of valuation allowance$  %$  %Allowance for expected loan loss() %() %Total RMLs, net of valuation allowance$  %$  %
There were charge offs recorded by RMLs during the three months ended March 31, 2024 or during the year ended December 31, 2023.
 $ $ $ $ $ $ 30-89 days past due       90 days or more past due       Total residential mortgages$ $ $ $ $ $ $ 
 $ $ $ $ $ $ 30-89 days past due       90 days or more past due       Total residential mortgages$ $ $ $ $ $ $ 
    
 $ Commercial mortgage:  Total non-accrual mortgages$ $ 
    
Immaterial interest income was recognized on non-accrual financing receivables for the three months ended March 31, 2024 and March 31, 2023.
It is our policy to cease to accrue interest on loans that are delinquent for 90 days or more. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes 90 days or more delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. As of March 31, 2024 and December 31, 2023, we had $ million and $ million, respectively, of mortgage loans that were over 90 days past due, of which $ million and $ million were in the process of foreclosure as of March 31, 2024 and December 31, 2023, respectively.
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reasonable and supportable forecast and then reverts over a period to market-wide historical loss experience. Changes in our allowance for expected credit losses on mortgage loans are recognized in Recognized gains and losses, net in the accompanying unaudited Condensed Consolidated Statements of Operations.

 $ $     $ $ 
 
Commercial MortgageTotal
 $ $ 
  
 $ $ 
An allowance for expected credit loss is not measured on accrued interest income for CMLs as we have a process to write-off interest on loans that enter into non-accrual status (90 days or more past due). Allowances for expected credit losses are measured on accrued interest income for RMLs and were immaterial for the three months ended March 31, 2024 and March 31, 2023.
Interest and Investment Income
 $ Equity securities  Preferred securities  Mortgage loans  Invested cash and short-term investments  Limited partnerships  Tax deferred property exchange income  Other investments  Gross investment income  Investment expense()()Interest and investment income$ $ 
Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements, which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $ million and $ million for the three months ended March 31, 2024 and March 31, 2023, respectively.
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)$()Net realized/unrealized gains on equity securities (1)  Net realized/unrealized gains (losses) on preferred securities (2) ()Net realized/unrealized gains (losses) on other invested assets ()Change in allowance for expected credit losses ()Derivatives and embedded derivatives:Realized gains (losses) on certain derivative instruments ()Unrealized gains on certain derivative instruments  Change in fair value of reinsurance related embedded derivatives (3)()()Change in fair value of other derivatives and embedded derivatives  Realized gains on derivatives and embedded derivatives  Recognized gains and losses, net$ $ 
(1) Includes net valuation gains of $ million and $ million for the three months ended March 31, 2024 and 2023, respectively.
(2) Includes net valuation gains of $ million and $ million for the three months ended March 31, 2024 and 2023, respectively.
(3) Change in fair value of reinsurance related embedded derivatives is due to activity related to the reinsurance treaties.
Recognized gains and losses, net is shown net of amounts attributable to certain funds withheld reinsurance agreements, which are passed along to the reinsurer in accordance with the terms of these agreements. Recognized losses attributable to these agreements, and thus excluded from the totals in the table above, was $ million and $ million for the three months ended March 31, 2024 and March 31, 2023, respectively.
 $ Gross gains  Gross losses()()
Unconsolidated Variable Interest Entities
We own investments in variable interest entities ("VIEs") that are not consolidated within our financial statements. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support, where investors lack certain characteristics of a controlling financial interest, or where the entity is structured with non-substantive voting rights. VIEs are consolidated by their ‘primary beneficiary’, a designation given to an entity that receives both the benefits from the VIE as well as the substantive power to make its key economic decisions. While we participate in the benefits from VIEs in which we invest, but do not consolidate, the substantive power to make the key economic decisions for each respective VIE resides with entities not under our common control. It is for this reason that we are not considered the primary beneficiary for the VIE investments that are not consolidated.
We invest in various limited partnerships and limited liability companies primarily as a passive investor. These investments are primarily in credit funds with a bias towards current income, real assets, or private equity. Limited partnership and limited liability company interests are accounted for under the equity method and are included in Investments in unconsolidated affiliates on our unaudited Condensed Consolidated Balance Sheets. In addition, we invest in structured investments, which may be VIEs, but for which we are not the primary beneficiary. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities included in fixed maturity securities available for sale on our unaudited Condensed Consolidated Balance Sheets.
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 $ $ $ Fixed maturity securities    Total unconsolidated VIE investments$ $ $ $ 
Concentrations
 (1) Represents a special purpose vehicle that holds investments in numerous limited partnership investments whose underlying investments are further diversified by holding interest in multiple individual investments and industries.

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Note E —
 $ Interest rate swaps  Foreign currency forward  Other long-term investments:Other embedded derivatives  Prepaid expenses and other assets: Reinsurance related embedded derivatives  Total$ $ 
Liabilities:
Contractholder funds:
Indexed annuities/IUL embedded derivatives$ $ 
Accounts payable and accrued liabilities:
Interest rate swaps  
Total$ $ 
 $ Interest rate swaps() Futures contracts  Foreign currency forwards ()Other derivatives and embedded derivatives  Reinsurance related embedded derivatives ()()Total net investment gains$ $ Benefits and other changes in policy reserves:Indexed annuities/IUL embedded derivatives increase$ $ 
Additional Disclosures

See descriptions of the fair value methodologies used for derivative financial instruments in Note C - Fair Value of Financial Instruments.

Indexed Annuities/IUL Embedded Derivative, Call Options and Futures
We have indexed annuities and IUL contracts that permit the holder to elect an interest rate return or an equity index linked component, where interest credited to the contracts is linked to the performance of various equity indices, primarily the S&P 500 Index. This feature represents an embedded derivative under GAAP. The indexed annuities/IUL embedded derivatives are valued at fair value and included in the liability for contractholder funds in the accompanying unaudited Condensed Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in the unaudited Condensed Consolidated Statements of Operations.

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 $ $ $ Morgan StanleyAA-/Aa3/A+    Barclay's BankA+/A1/A+    Canadian Imperial Bank of CommerceAA-/A2/A-    Wells FargoAA-/Aa2/A+    Goldman SachsA+/A1/A+    Credit SuisseA+/A3/A+    TruistA/A2/A    CitibankA+/Aa3/A+    JP MorganAA/Aa2/A+    Total$ $ $ $ 
December 31, 2023
(In millions)
CounterpartyCredit Rating
(Fitch/Moody's/S&P) (a)		Notional
Amount		Fair ValueCollateralNet Credit Risk
Merrill LynchAA/*/A+$ $ $ $ 
)) 








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Note I —
 $ Income taxes  Deferred sales inducements  Non-cash investing and financing activities:Change in proceeds of sales of investments available for sale receivable in period() Change in purchases of investments available for sale payable in period  Lease liabilities recognized in exchange for lease right-of-use assets  Remeasurement of lease liabilities  Liabilities assumed in connection with acquisitions Fair value of assets acquired   Less: Total Purchase price   Liabilities and noncontrolling interests assumed $ $ 

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Note J —
 $ Agency title insurance premiumsAgency title insurance premiumsTitle  Life insurance premiums, insurance and investment product fees, and otherEscrow, title-related and other feesF&G  Home warrantyEscrow, title-related and other feesTitle  Total revenue from insurance contracts  Revenue from contracts with customers:Escrow feesEscrow, title-related and other feesTitle  Other title-related fees and incomeEscrow, title-related and other feesTitle  ServiceLink, excluding title premiums, escrow fees, and subservicing feesEscrow, title-related and other feesTitle  Real estate technologyEscrow, title-related and other feesCorporate and other  Total revenue from contracts with customers  Other revenue:Loan subservicing revenueEscrow, title-related and other feesTitle  OtherEscrow, title-related and other feesCorporate and other  Interest and investment incomeInterest and investment incomeVarious  Recognized gains and losses, netRecognized gains and losses, netVarious  Total revenuesTotal revenues$ $ 

in length and revenue is recognized ratably over the term of the contract.
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Interest and investment income consists primarily of interest payments received on fixed maturity security holdings and dividends received on equity and preferred security holdings along with the investment income of limited partnerships.
Contract Balances
 $ Deferred revenue (contract liabilities)  

Deferred revenue is recorded primarily for our home warranty contracts. Revenues from home warranty products are recognized over the life of the policy, which is primarily . The unrecognized portion is recorded as deferred revenue in Accounts payable and other accrued liabilities in the unaudited Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024 and March 31 2023, we recognized $ million and $ million of revenue, respectively, which was included in deferred revenue at the beginning of the respective period.

Note K —
 $ VOBA  DAC  DSI  Value of distribution asset  Computer software  Trademarks, tradenames, and other    ) ) 

VOBA amortization expense of $ million and $ million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and March 31, 2023, respectively.

 $ $ $ Capitalization    Amortization()()()()
Balance at March 31, 2024
$ $ $ $ Indexed AnnuitiesFixed Rate AnnuitiesUniversal LifeTotal (a)(In millions)
Balance at January 1, 2023
$ $ $ $ Capitalization    Amortization()()()()Reinsurance related adjustments    
Balance at March 31, 2023
$ $ $ $ 
(a) Excludes insignificant amounts of DAC related to Funding Agreement Backed Note (“FABN”)
DAC amortization expense of $ million and $ million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and March 31, 2023, respectively, excluding insignificant amounts related to FABN.
 $ Fixed Rate Annuities  Universal Life  Funding Agreements  Total$ $ 
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 $ Capitalization  Amortization()()Balance at March 31,$ $ 
DSI amortization expense of $ million and $ million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and March 31, 2023, respectively.
The cash flow assumptions used to amortize VOBA and DAC were consistent with the assumptions used to estimate the future policy benefits (“FPB”) for life contingent immediate annuities, and will be reviewed and unlocked, if applicable, in the same period as those balances. For nonparticipating traditional life contracts, the VOBA amortization is straight-line, without the use of cash flow assumptions. For indexed annuity contracts, the cash flow assumptions used to amortize VOBA, DAC, and DSI were consistent with the assumptions used to estimate the value of the embedded derivative and MRBs, and will be reviewed and unlocked, if applicable, in the same period as those balances. For fixed rate annuities and IUL the cash flow assumptions used to amortize VOBA, DAC and DSI reflect the Company’s best estimates for policyholder behavior, consistent with the development of assumptions for indexed annuities and immediate annuities.
We review cash flow assumptions annually, generally in the third quarter. In 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuity (indexed annuity and fixed rate annuity) and IUL products, including surrender rates, partial withdrawal rates, mortality improvement, premium persistency, and option budgets. All updates to these assumptions brought us more in line with our company and overall industry experience since the prior assumption update.
 2025 2026 2027 2028 Thereafter Total$ 

Note L —
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 $ $ $ Ceded()()()()   Net$ $ $ $ 

Amounts payable or recoverable for reinsurance on paid and unpaid claims are not subject to periodic or maximum limits. No policies issued by the Company have been reinsured with any foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. The Company has not entered into any reinsurance agreements in which the reinsurer may unilaterally cancel any reinsurance for reasons other than non-payment of premiums or other similar credit issues. There have been no significant changes to reinsurance contracts for the three months ended March 31, 2024.

 $ Coinsurance Funds WithheldCertain MYGA (b)DepositSomerset Reinsurance Ltd  Coinsurance Funds WithheldCertain MYGA (b) and DADepositWilton Reassurance Company  CoinsuranceBlock of traditional, IUL and UL (c)ReinsuranceEverlake Life Insurance Company  Coinsurance (d)Certain MYGA (b) (d)DepositOther (e)  Reinsurance recoverable, gross of allowance for credit losses  Allowance for expected credit loss()()Reinsurance recoverable, net of allowance for credit losses$ $ (a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies.
(b) As of March 31, 2024 and December 31, 2023, the combined quota share flow reinsurance amongst all reinsurers was % .
(c) Also includes certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX.(d) Reinsurance recoverable is collateralized by assets placed in a statutory comfort trust by the reinsurer and maintained for our sole benefit.(e) Represents all other reinsurers, with no single reinsurer having a carrying value in excess of 5% of total reinsurance recoverable.
The Company incurred risk charge fees of $ million during the three months ended March 31, 2024, and 2023 in relation to reinsurance agreements.
Credit Losses

The Company estimates expected credit losses on reinsurance recoverables using a probability of default/loss given default model. Significant inputs to the model include the reinsurer's credit risk, expected timing of recovery, industry-wide historical default experience, senior unsecured bond recovery rates, and credit enhancement features.
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)$()Changes in the expected credit loss reserve  Balance at end of period$()$()
Concentration of Reinsurance Risk

As indicated above, F&G has a significant concentration of reinsurance risk with third party reinsurers, ASPIDA Life Re Ltd. (“Aspida Re”), Somerset Reinsurance Ltd. (“Somerset”), Wilton Reinsurance (“Wilton Re”) and Everlake Life Insurance Company (“Everlake”) that could have a material impact on our financial position in the event that any of these reinsurers fails to perform its obligations under the various reinsurance treaties. We monitor the financial condition and financial strength of individual reinsurers using public ratings (refer to table below) and ratings reports of individual reinsurers to attempt to reduce the risk of default by such reinsurers. In addition, the risk of non-performance is further mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit. We believe that all amounts due from Aspida Re, Somerset, Wilton Re and Everlake for periodic treaty settlements, net of any applicable credit loss reserves, are collectible as of March 31, 2024.


Note M —
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 $ $ $()For the three months ended March 31, 2023()   Statutory capital and surplus:March 31, 2024$ $ $ $ December 31, 2023    
(a) FGL NY Insurance, Raven Re and Corbeau Re are subsidiaries of FGL Insurance, and the columns should not be added together. Corbeau Re was incorporated on September 1, 2023.

Non-U.S. Companies

Net income and capital and surplus of our wholly owned Bermuda and Cayman Islands regulated insurance subsidiaries under U.S. GAAP were as follows (in millions):
Subsidiary (country of domicile)
F&G Cayman Re (Cayman Islands)F&G Life Re (Bermuda)
Statutory net income (loss):
For the three months ended March 31, 2024$()$ 
For the three months ended March 31, 2023  
Statutory capital and surplus:
March 31, 2024$ $ 
December 31, 2023
There have been no material changes to the prescribed and permitted practices for our U.S. insurance subsidiaries, which were detailed in our Annual Report on Form 10-K, and no significant changes in the regulatory status of our insurance subsidiaries as of March 31, 2024.

The prescribed and permitted statutory accounting practices have no impact on our unaudited Condensed Consolidated Financial Statements, which are prepared in accordance with GAAP.


Note N —

% majority ownership stake in the equity of Roar. Roar wholesales life insurance and annuity products to banks and broker dealers through a network of agents. Total initial consideration is comprised of $ million of cash and $ million of contingent consideration. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to $ million over a period upon the achievement of certain EBITDA milestones of Roar.

% majority interest of Roar shares$ Less: Cash acquired net of noncontrolling interests 
Net cash paid for % majority interest of Roar
 Initial fair value of contingent consideration Total net initial consideration$ 

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 Prepaid expenses and other assets Other intangible assets Total assets acquired  Accounts payable and accrued liabilities Total liabilities assumed Noncontrolling interests (fair value determined using income approach) Total liabilities assumed and non-controlling interests    Net assets acquired$ 

 Definite lived trademarks, tradenames, and other Total Other intangible assets$ 
Goodwill consists primarily of intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. The goodwill recorded is not expected to be deductible for tax purposes.

Roar’s revenues of $ million and net earnings of $ million are included in the unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2024.

Contingent Consideration
Under the terms of the purchase agreement for Roar, we have agreed to make cash payments of up to $ million over a period upon the achievement by Roar of certain EBITDA milestones. The contingent consideration is recorded at fair value in Accounts payable and accrued liabilities. Refer to Note A - Basis of Financial Statements for more information on the Roar purchase and refer to Note C - Fair Value of Financial Instruments for more information regarding the fair value of the contingent consideration.


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Note O —
 $ $ $ Balance, beginning of period, before effect of changes in the instrument-specific credit risk$ $ $ $ Issuances and benefit payments  () Attributed fees collected and interest accrual    Actual policyholder behavior different from expected     Changes in assumptions and other()   Effects of market related movements() () Balance, end of period, before effect of changes in the instrument-specific credit risk$ $ $ $ Effect of changes in the instrument-specific credit risk    Balance, end of period, net liability$ $ $ $ Weighted-average attained age of policyholders weighted by total AV (years)Net amount at risk$ $ $ $ 

The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRBs amounts in the accompanying unaudited Condensed Consolidated Balance Sheets:
March 31, 2024December 31, 2023
AssetLiabilityNetAssetLiabilityNet
(In millions)
Fixed rate annuities$ $ $ $ $ $ 
Indexed annuities      
Total$ $ $ $ $ $ 

The net MRB liability increased for the three months ended March 31, 2024, primarily as a result of collection of attributed fees and interest accrual as well as new MRB reserves for contracts issued within the period. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections.
For the three months ended March 31, 2024, notable changes made to the inputs to the fair value estimates of MRBs calculations included an increase in risk-free rates leading to a favorable change in the MRBs associated with indexed annuities and fixed rate annuities; increases in the equity market related projections resulted in a decrease in the net amount at risk associated with indexed annuities, leading to a favorable change in the value of the associated MRBs.
In addition, the cash flow assumptions used to calculate MRBs reflect the Company’s best estimates for policyholder behavior. We review cash flow assumptions annually, generally in the third quarter.
The net MRB liability increased for the year ended December 31, 2023, primarily as a result of collection of attributed fees and interest accrual as well actual policyholder behavior different than expected and changes in assumptions and other as discussed below. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections.
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Note P —
 $ $ $ $      Issuances          Premiums received          Policy charges (a)() ()       Surrenders and withdrawals()()()       Benefit payments()()()()()     Interest credited          Other     Balance, end of year$ $ $ $ $ Embedded derivative adjustment (c)     Gross Liability, end of period$ $ $ $ $ Less: Reinsurance()()()  Net Liability, after Reinsurance$ $ $ $ $ Weighted-average crediting rate % % %N/AN/ANet amount at risk (d)N/AN/A$ N/AN/ACash surrender value (e)$ $ $ N/AN/A
(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.
(b) FABN and FHLB are considered funding agreements that are investment contracts, which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.
(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.
(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
(e) These amounts are gross of reinsurance.
December 31, 2023
Indexed annuitiesFixed rate annuitiesUniversal LifeFABN (b)FHLB (b)
(Dollars in millions)
Balance, beginning of year$ $ $ $ $ 
     Issuances     
     Premiums received     
     Policy charges (a)() ()  
     Surrenders and withdrawals()()()  
     Benefit payments()()()()()
     Interest credited     
     Other   () 
Balance, end of year     
Embedded derivative adjustment (c)     
Gross Liability, end of period     
Less: Reinsurance()()()  
Net Liability, after Reinsurance$ $ $ $ $ 
Weighted-average crediting rate % % %N/AN/A
Net amount at risk (d)N/AN/A$ N/AN/A
Cash surrender value (e)$ $ $ N/AN/A
(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.
(b) FABN and FHLB are considered funding agreements that are investment contracts, which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.
(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.
(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
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 $ Fixed rate annuities  Immediate annuities  Universal life  Traditional life  Funding Agreement-FABN  FHLB  PRT  Total$ $ 

Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees. For the three months ended March 31, 2024, based on increases in interest rates and pricing changes, we updated certain indexed annuity assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder behavior. These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $ million for the three months ended March 31, 2024.

Basis Point- Basis Points Above
Basis Points- Basis Points Above
 Greater Than Basis Points Above
 TotalIndexed Annuities(In millions)0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ Fixed Rate Annuities0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ Universal Life0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ 
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Basis Point- Basis Points Above
Basis Points- Basis Points Above
 Greater Than Basis Points Above
 TotalIndexed Annuities(In millions)0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ Fixed Rate Annuities0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ Universal Life0.00%-1.50%$ $ $ $ $ 1.51%-2.50%     Greater than 2.50%     Total$ $ $ $ $ 



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Note Q —
 $ Beginning balance at original discount rate       Effect of actual variances from expected experience()()Balance adjusted for variances from expectation       Interest accrual       Net premiums collected()()Ending Balance at original discount rate       Effect of changes in discount rate assumptions()()Balance, end of year$ $ Expected FPBBalance, beginning of year$ $ Beginning balance at original discount rate       Effect of actual variances from expected experience()()Balance adjusted for variances from expectation       Interest accrual       Benefits payments()()Ending Balance at original discount rate       Effect of changes in discount rate assumptions()()Balance, end of year$ $ Net liability for future policy benefits$ $ Less: Reinsurance recoverable  Net liability for future policy benefits, after reinsurance recoverable$ $ Weighted-average duration of liability for future policyholder benefits (years)


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 $ Beginning balance at original discount rate       Effect of changes in cash flow assumptions       Effect of actual variances from expected experience()()Balance adjusted for variances from expectation       Issuances       Interest accrual       Benefits payments()()Ending Balance at original discount rate       Effect of changes in discount rate assumptions()()Balance, end of year$ $ Net liability for future policy benefits$ $ Less: Reinsurance recoverable  Net liability for future policy benefits, after reinsurance recoverable$ $ Weighted-average duration of liability for future policyholder benefits (years)

December 31, 2023
Immediate annuitiesPRT
(Dollars in millions)
Balance, beginning of year$ $ 
Beginning balance at original discount rate  
     Effect of changes in cash flow assumptions ()
     Effect of actual variances from expected experience()()
Balance adjusted for variances from expectation$ $ 
     Issuances  
     Interest accrual  
     Benefits payments()()
Ending Balance at original discount rate$ $ 
     Effect of changes in discount rate assumptions()()
Balance, end of year$ $ 
Net liability for future policy benefits$ $ 
Less: Reinsurance recoverable  
Net liability for future policy benefits, after reinsurance recoverable$ $ 
Weighted-average duration of liability for future policyholder benefits (years)


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 $ $ $ Effect of modeling changes    Effect of changes in cash flow assumptions ()  Effect of actual variances from expected experience    Balance adjusted for variances from expectation         Issuances         Interest accrual         Amortization() ()()Balance, end of year$ $ $ $  $ Immediate annuities   PRT  Immediate annuities DPL  PRT DPL  Total$ $ 2.3 $2.1 $1.8 $1.6 
As of April 18, 2024, the MBA expects residential purchase transactions, residential refinance transactions and overall mortgage originations to increase in 2024, 2025 and 2026.
Average interest rates for a 30-year fixed rate mortgage increased to 6.8% for the three months ended March 31, 2024, as compared to 6.4% for the corresponding period of 2023. On May 1, 2024, the Federal Reserve held the benchmark interest rate steady at 5.25% to 5.50% .
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A shortage in the supply of homes for sale, increasing home prices, rising mortgage interest rates, disrupted labor markets and geopolitical uncertainties associated with international conflicts created some volatility in the residential real estate market in 2023, which has continued into 2024. Existing-home sales decreased 4% in March 2024 as compared to the corresponding period in 2023 while median existing-home sales prices increased to $393,500, or approximately 5%, from the corresponding period in 2023.
Other economic indicators used to measure the health of the U.S. economy, including the unemployment rate, have remained strong. The unemployment rate was 3.8% and 3.5% in March 2024 and 2023, respectively.
We issue commercial title insurance policies in sectors including office, industrial, energy, hospitality, retail and multi-family, among others. The demand for commercial title insurance varies based on a variety of factors such as investor appetite, financing availability, and supply and demand in a particular area. Because commercial real estate transactions tend to be generally driven by supply and demand for commercial space in a particular area rather than by interest rate fluctuations, we believe that our commercial real estate title insurance business is less dependent on the industry cycles discussed above than our residential real estate title business. Factors including U.S. tax reform and a shift in U.S. monetary policy have had, or are expected to have, varying effects on availability of financing in the U.S. Lower corporate and individual tax rates and corporate tax-deductibility of capital expenditures have provided increased capacity and incentive for investments in commercial real estate. In recent years, we experienced fluctuating demand in commercial real estate markets. Commercial volumes and commercial fee-per-file were depressed in the three months ended March 31, 2024 and 2023 when compared to recent prior periods.
We continually monitor mortgage origination trends and believe that, based on our ability to produce industry leading operating margins through all economic cycles, we are well positioned to adjust our operations for adverse changes in real estate activity and to take advantage of increased volume when demand increases.
Seasonality. Historically, real estate transactions have produced seasonal revenue fluctuations in the real estate industry. The first calendar quarter is typically the weakest quarter in terms of revenue due to the generally low volume of home sales during January and February. The second and third calendar quarters are typically the strongest quarters in terms of revenue, primarily due to a higher volume of residential transactions in the spring and summer months. The fourth quarter is typically strong due to the desire of commercial entities to complete transactions by year-end. We have noted short-term fluctuations through recent years in resale and refinance transactions as a result of changes in interest rates. The rapid rise in mortgage rates and resulting decline in housing affordability has resulted in deviations in seasonality from historical patterns in 2023, which has continued into 2024.
F&G
The following factors represent some of the key trends and uncertainties that have influenced the development of our F&G segment and its historical financial performance, and we believe these key trends and uncertainties will continue to influence the business and financial performance of our F&G segment in the future.
Market Conditions
Market volatility has affected, and may continue to affect, our business and financial performance in varying ways. Volatility can pressure sales and reduce demand as consumers hesitate to make financial decisions. To enhance the attractiveness and profitability of our products and services, we continually monitor the behavior of our customers, as evidenced by annuitization rates and lapse rates in our F&G segment, which vary in response to changes in market conditions. See Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 for further discussion of risk factors that could affect market conditions.
Interest Rate Environment
Some of our F&G products include guaranteed minimum crediting rates, most notably our fixed rate annuities. As of March 31, 2024 and December 31, 2023, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $6.0 billion and 4%. We are required to pay the guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates for a longer period in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly. Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.
See Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023 for a more detailed discussion of interest rate risk.
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Aging of the U.S. Population
We believe that the aging of the U.S. population will increase the demand for our indexed annuity and indexed universal life ("IUL") products. As the “baby boomer” generation prepares for retirement, we believe that demand for retirement savings, growth, and income products will grow. Over 10,000 people will turn 65 each day in the United States over the next 15 years, and according to the U.S. Census Bureau, the proportion of the U.S. population over the age of 65 is expected to grow from 19% in 2024 to 21% in 2035. The impact of this growth may be offset to some extent by asset outflows as an increasing percentage of the population begins withdrawing assets to convert their savings into income.
Industry Factors and Trends Affecting Our Results of Operations
We operate in the sector of the insurance industry that focuses on the needs of middle-income Americans. The underserved middle-income market represents a major growth opportunity for us. As a tool for addressing the unmet need for retirement planning, we believe that many middle-income Americans have grown to appreciate the financial certainty that we believe annuities such as our indexed annuity products afford. For example, the fixed index annuity market grew from nearly $12 billion of sales in 2002 to $97 billion of sales in 2023 and the registered index-linked annuities ("RILA") market grew from $11 billion of sales in 2018 to $44 billion of sales in 2023. Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual premiums in 2002 to $3 billion of annual premiums in 2023.
See Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023 for a more detailed discussion of industry factors and trends affecting our Results of Operations.

Results of Operations
Consolidated Results of Operations
Net Earnings (loss). The following table presents certain financial data for the periods indicated:
 Three months ended March 31,
20242023
 (In millions)
Revenues:  
Direct title insurance premiums$440 $428 
Agency title insurance premiums593 550 
Escrow, title-related and other fees1,281 880 
Interest and investment income710 611 
Recognized gains and losses, net275 5 
Total revenues3,299 2,474 
Expenses:  
Benefits and other changes in policy reserves1,161 812 
Personnel costs727 677 
Agent commissions460 420 
Other operating expenses369 360 
Market risk benefit (gains) losses(11)59 
Depreciation and amortization167 134 
Provision for title claim losses46 44 
Interest expense49 42 
Total expenses2,968 2,548 
Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates331 (74)
Income tax expense 63 14 
Equity in earnings of unconsolidated affiliates1 — 
Net earnings (loss)$269 $(88)
 Revenues.
Total revenues increased by $825 million in the three months ended March 31, 2024 compared to the corresponding period in 2023.
Net earnings increased by $357 million in the three months ended March 31, 2024 compared to the corresponding period in 2023.
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The change in revenue and net earnings from our reportable segments is discussed in further detail at the segment level below.    

Expenses.
Our operating expenses consist primarily of Personnel costs; Other operating expenses, which in our title business are incurred as orders are received and processed; Agent commissions, which are incurred as title agency revenue is recognized; and Benefits and other changes in policy reserves, which in our F&G segment are charged to earnings in the period they are earned by the policyholder based on their selected strategy. For traditional life and immediate annuities, policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries. Title insurance premiums, escrow and title-related fees are generally recognized as income at the time the underlying transaction closes or other service is provided. Direct title operations revenue often lags approximately 45-60 days behind expenses and therefore gross margins may fluctuate. The changes in the market environment, mix of business between direct and agency operations and the contributions from our various business units have historically impacted margins and net earnings. We have implemented programs and have taken necessary actions to maintain expense levels consistent with revenue streams. However, a short-term lag exists in reducing controllable fixed costs and certain fixed costs are incurred regardless of revenue levels.
Personnel costs include base salaries, commissions, benefits, stock-based compensation and bonuses paid to employees, and are one of our most significant operating expenses. 
Agent commissions represent the portion of premiums retained by our third-party agents pursuant to the terms of their respective agency contracts.
Benefit expenses for deferred annuity, indexed annuity and IUL policies include index credits and interest credited to contractholder account balances and benefit claims in excess of contract account balances, net of reinsurance recoveries. Other changes in policy reserves include the change in the fair value of the indexed annuity embedded derivative and the change in the reserve for secondary guarantee benefit payments. Other changes in policy reserves also include the change in reserves for life insurance products.
Other operating expenses consist primarily of facilities expenses, title plant maintenance, premium taxes (which insurance underwriters are required to pay on title premiums in lieu of franchise and other state taxes), appraisal fees and other cost of sales on ServiceLink product offerings and other title-related products, postage and courier services, computer services, professional services, travel expenses, general insurance and bad debt expense on our trade and notes receivable. 
The provision for title claim losses includes an estimate of anticipated title and title-related claims, and escrow losses.
The change in expenses attributable to our reportable segments is discussed in further detail at the segment level below. 
Income tax expense was $63 million and $14 million in the three months ended March 31, 2024 and 2023, respectively. Income tax expense as a percentage of earnings before income taxes was 19% and (19)% in the three months ended March 31, 2024 and 2023. The increase in income tax expense as a percentage of earnings (loss) before taxes in the three months ended March 31, 2024 as compared to the corresponding period in 2023 is primarily attributable to the 2023 period having income tax expense, due to a valuation allowance increase, despite there being a 2023 pre-tax loss.
The Organization for Economic Cooperation and Development (OECD) has developed guidance known as the Global Anti-Base Erosion Pillar Two minimum tax rules, or Pillar Two, which generally provide for a minimum effective tax rate of 15% and are intended to apply to tax years beginning in 2024. The Company does not expect these rules to have a material impact on our income tax provision in 2024.

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Title
The following table presents the results from operations of our Title segment:
 Three months ended March 31,
 20242023
Revenues:(In millions)
Direct title insurance premiums$440 $428 
Agency title insurance premiums593 550 
Escrow, title-related and other fees484 471 
Interest and investment income83 81 
Recognized gains and losses, net63 22 
Total revenues1,663 1,552 
Expenses:  
Personnel costs618 598 
Agent commissions460 420 
Other operating expenses285 296 
Depreciation and amortization36 37 
Provision for title claim losses46 44 
Total expenses1,445 1,395 
Earnings before income taxes and equity in earnings of unconsolidated affiliates$218 $157 
Orders opened by direct title operations (in thousands)315 308 
Orders closed by direct title operations (in thousands)186 188 
Fee per file (in dollars)$3,555 $3,446 
Total revenues for the Title segment increased by $111 million, or 7%, in the three months ended March 31, 2024 from the corresponding period in 2023.
The following table presents the percentages of title insurance premiums generated by our direct and agency operations:
 Three months ended March 31,
  % of % of
 2024Total2023Total
 (Dollars in millions)
Title premiums from direct operations$440 43 %$428 44 %
Title premiums from agency operations593 57 550 56 
Total title premiums$1,033 100 %$978 100 %
Title premiums increased by $55 million, or 6% in the three months ended March 31, 2024 from the corresponding period in 2023. The increase was comprised of an increase in Title premiums from direct operations of $12 million, or 3%, and an increase in Title premiums from agency operations of $43 million, or 8%.
The following table presents the percentages of opened and closed title insurance orders generated by purchase and refinance transactions by our direct operations:
Three months ended March 31,
20242023
Opened title insurance orders from purchase transactions (1)79 %78 %
Opened title insurance orders from refinance transactions (1)21 22 
100 %100 %
Closed title insurance orders from purchase transactions (1)79 %78 %
Closed title insurance orders from refinance transactions (1)21 22 
100 %100 %
(1)    Percentages exclude consideration of an immaterial number of non-purchase and non-refinance orders.
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Title premiums from direct operations increased in the three months ended March 31, 2024 from the corresponding period in 2023. The increase was primarily attributable to an increase in the average fee per file, partially offset by decreased closed order volume.
We experienced a slight decrease in closed title insurance order volumes from both purchase and refinance transactions in the three months ended March 31, 2024 from the corresponding period in 2023. Total closed order volume was 186,000 in the three months ended March 31, 2024 compared to 188,000 in the three months ended March 31, 2023. This represented an overall decrease of 1% in the three months ended March 31, 2024 from the corresponding period in 2023. The decrease was primarily attributable to higher average mortgage interest rates in the three months ended March 31, 2024 when compared to the corresponding period in 2023.
Total opened title insurance order volume decreased in the three months ended March 31, 2024 from the corresponding period in 2023. The decrease was attributable to decreased opened title orders from both purchase and refinance transactions.
The average fee per file in our direct operations was $3,555 in the three months ended March 31, 2024 compared to $3,446 in the three months ended March 31, 2023. The increase in average fee per file in the three months ended March 31, 2024 reflects home price appreciation and an increased proportion of purchase transactions relative to total closed orders compared to the corresponding period in 2023. The fee per file tends to change as the mix of refinance and purchase transactions changes, because purchase transactions involve the issuance of both a lender’s policy and an owner’s policy, resulting in higher fees, whereas refinance transactions only require a lender’s policy, resulting in lower fees.
Title premiums from agency operations increased $43 million, or 8%, in the three months ended March 31, 2024 from the corresponding period in 2023.
Escrow, title-related and other fees increased by $13 million, or 3%, in the three months ended March 31, 2024 from the corresponding period in 2023. Escrow fees increased by $7 million, or 4%, in the three months ended March 31, 2024 from the corresponding period in 2023. The increase in the three month period ended March 31, 2024 as compared to the corresponding period in 2023 is relatively consistent with the increase in direct premiums. Other fees, excluding escrow fees, increased by $6 million, or 2%, in the three months ended March 31, 2024. The increase in Other fees was attributable to various immaterial items.
Interest and investment income levels are primarily a function of securities markets, interest rates and the amount of cash available for investment. Interest and investment income increased $2 million, or 2%, in the three months ended March 31, 2024 from the corresponding period in 2023. The increase was attributable to various immaterial items.
Net recognized gains were $63 million and $22 million in the three months ended March 31, 2024 and 2023, respectively. The increase in recognized gains and losses, net in the three months ended March 31, 2024 as compared to the corresponding period in 2023 is primarily attributable to fluctuations in non-cash valuation changes on our equity and preferred security holdings in addition to various other immaterial items.
Personnel costs include base salaries, commissions, benefits, stock-based compensation and bonuses paid to employees, and are one of our most significant operating expenses. Personnel costs increased $20 million, or 3%, in the three months ended March 31, 2024 compared to the corresponding period in 2023. The increase is due to inflationary salary increases, partially offset by lower average head count. Personnel costs as a percentage of total revenues from direct title premiums and escrow, title-related and other fees were 67% for the three months ended March 31, 2024 and 2023. Average employee count in the Title segment was 20,516 and 21,516 in the three months ended March 31, 2024 and 2023, respectively.
Other operating expenses decreased by $11 million, or 4%, in the three months ended March 31, 2024, from the corresponding period in 2023. Other operating expenses as a percentage of total revenue excluding agency premiums, interest and investment income, and recognized gains and losses were 31% and 33% in the three months ended March 31, 2024 and 2023, respectively.
Agent commissions represent the portion of premiums retained by agents pursuant to the terms of their respective agency contracts. Agent commissions and the resulting percentage of agent premiums that we retain vary according to regional differences in real estate closing practices and state regulations.
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The following table illustrates the relationship of agent premiums and agent commissions, which has remained relatively consistent since 2023:
 Three months ended March 31,
 2024%2023%
 (Dollars in millions)
Agent premiums$593 100 %$550 100 %
Agent commissions460 78 %420 76 %
Net retained agent premiums$133 22 %$130 24 %
The claim loss provision for title insurance was $46 million and $44 million for the three months ended March 31, 2024 and 2023, respectively. The provision reflects an average provision rate of 4.5% of title premiums in all periods. We continually monitor and evaluate our loss provision level, actual claims paid, and the loss reserve position each quarter. This loss provision rate is set to provide for losses on current year policies, but due to development of prior years and our long claim duration, it periodically includes amounts of estimated adverse or positive development on prior years' policies.
F&G
Segment Overview
Through our majority-owned F&G subsidiary, we have five distribution channels across retail and institutional markets. Our three retail channels include agent-based Independent Marketing Organizations ("IMOs"), banks and broker dealers. We have deep, long-tenured relationships with our network of leading IMOs and their agents to serve the needs of the middle-income market and develop competitive annuity and life products to align with their evolving needs. Upon FNF’s ownership and F&G’s subsequent rating upgrades in mid-2020, we launched into banks and broker dealers. Further, in 2021, we launched into two institutional markets to originate Funding Agreement Backed Notes ("FABN") and pension risk transfer ("PRT") transactions. The FABN Program offers funding agreements to institutional clients by means of capital markets transactions through investment banks. The funding agreements issued under the FABN Program are in addition to those issued to the Federal Home Loan Bank of Atlanta ("FHLB"). The PRT solutions business was launched by building an experienced team and then working with brokers and institutional consultants for distribution. These markets leverage our existing team's spread-based capabilities as well as our strategic partnership with Blackstone.
In setting the features and pricing of our flagship indexed annuity products relative to our targeted net margin, we take into account our expectations regarding (1) the difference between the net investment income we earn and the sum of the interest credited to policyholders and the cost of hedging our risk on the policies; (2) fees, including surrender charges and rider fees, partly offset by vesting bonuses that we pay our policyholders; and (3) a number of related expenses, including benefits and changes in reserves, acquisition costs, and general and administrative expenses.
Key Components of Our Historical Results of Operations
Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (indexed annuities and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions. A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued. IUL insurance is a complementary type of contract that accumulates value in a cash value account and provides a payment to designated beneficiaries upon the policyholder’s death. An immediate annuity is a type of contract that begins making specified payments within one annuity period (e.g., one month or one year) and typically makes payments of principal and interest earnings over a period of time. As defined by the Iowa Insurance Division, a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued. In essence, funding agreement providers issue fixed maturity contracts with fixed or floating interest rates in exchange for a single upfront premium. Our PRT products are comparable to income annuities, as we generally receive a single, upfront premium in exchange for paying a guaranteed stream of future income payments, which are typically fixed in nature but may vary in duration based on participant mortality experience.

Under GAAP, premium collections for deferred annuities (indexed annuities and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues. Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses. Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of unearned revenue liabilities ("URL")), and net realized gains (losses) on investments. Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization
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of value of business acquired ("VOBA"), deferred acquisition costs ("DAC") and deferred sales inducements ("DSI"), and other operating costs and expenses.

F&G hedges certain portions of its exposure to product related equity market risk by entering into derivative transactions. We purchase derivatives consisting predominantly of call options and, to a lesser degree, futures contracts (specifically for indexed annuity contracts) on the equity indices underlying the applicable policy. These derivatives are used to offset the reserve impact of the index credits due to policyholders under the indexed annuity and IUL contracts. The majority of all such call options are one-year options purchased to match the funding requirements underlying the indexed annuity/IUL contracts. We attempt to manage the cost of these purchases through the terms of our indexed annuity/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained. The call options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses). The change in fair value of the call options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions. In addition, to reduce market risks from interest rate changes on our earnings associated with our floating rate investments, during 2023 we began to execute pay-float and receive-fixed interest rate swaps.

Market Risk Benefits ("MRBs") are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk. MRBs are measured at fair value using a risk neutral valuation method, which is based on current net amounts at risk, market data, internal and industry experience, and other factors. The change in fair value of MRBs generally reflects impacts from actual policyholder behavior (including surrenders of the benefit), changes in interest rates, and changes in equity market returns. Generally higher interest rates and equity returns result in gains whereas lower interest rates and equity returns result in losses.

Earnings from products accounted for as deposit liabilities are primarily generated from the excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed annuity/IUL policies. With respect to indexed annuities/IULs, which includes the expenses incurred to fund the index credits. Proceeds received upon expiration or early termination of call options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives and are largely offset by an expense for index credits earned on annuity contractholder fund balances.
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F&G Results of Operations
The results of operations of our F&G segment for the three months ended March 31, 2024 and 2023 were as follows:

Three months ended
March 31, 2024March 31, 2023
Revenues(In millions)
Life insurance premiums and other fees$718 $365 
Interest and investment income616 519 
Owned distribution revenues23 — 
Recognized gains and (losses), net212 (15)
Total revenues1,569 869 
Benefits and expenses
Benefits and other changes in policy reserves1,161 812 
Market risk benefit (gains) losses(11)59 
Depreciation and amortization123 90 
Personnel costs66 53 
Other operating expenses58 36 
Interest expense30 22 
Total benefits and expenses1,427 1,072 
Earnings (loss) before income taxes$142 $(203)
Income tax expense (benefit)26 (8)
Net earnings (loss)116 (195)
Less: Noncontrolling interests1 — 
Net earnings (loss) attributable to F&G115 (195)
Revenues
Life insurance premiums and other fees
Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations). The following table summarizes the Life insurance premiums and other fees, on the unaudited Condensed Consolidated Statements of Operations (in millions), for the three months ended March 31, 2024 and March 31, 2023:
Three months ended
March 31, 2024March 31, 2023
(In millions)
Life-contingent pension risk transfer premiums$584 $263 
Traditional life insurance and life-contingent immediate annuity premiums12 12 
Surrender charges43 23 
Policyholder fees and other income79 67 
Life insurance premiums and other fees $718 $365 
•Life-contingent pension risk transfer premiums increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, reflecting the higher PRT sales.
•Surrender charges increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily reflecting increases in withdrawals from policyholders with surrender charges and market value adjustments (MVAs), primarily on our indexed annuities policies.
•Policyholder fees and other income increased for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to increased GMWB rider fees and cost of insurance charges, net of changes in URL on IUL policies from growth in business. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.
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Interest and investment income
Below is a summary of interest and investment income for the three months ended March 31, 2024 and March 31, 2023:
Three months ended
March 31, 2024March 31, 2023
(In millions)
Fixed maturity securities, available-for-sale$516 $432 
Equity securities6 5 
Preferred securities6 10 
Mortgage loans66 51 
Invested cash and short-term investments28 16 
Limited partnerships54 57 
Other investments10 9 
Gross investment income$686 $580 
Investment expense(70)(61)
Interest and investment income$616 $519 
Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $127 million and $58 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Recognized gains and losses, net
Below is a summary of the major components included in recognized gains and losses, net for the three months ended March 31, 2024 and March 31, 2023:
Three months ended
March 31, 2024March 31, 2023
(In millions)
Net realized and unrealized (losses) gains on fixed maturity available-for-sale securities, equity securities and other invested assets$48 $(48)
Change in allowance for expected credit losses— (8)
Net realized and unrealized (losses) gains on certain derivatives instruments179 58 
Change in fair value of reinsurance related embedded derivatives(18)(19)
Change in fair value of other derivatives and embedded derivatives3 2 
Recognized gains and losses, net$212 $(15)
Recognized gains and losses, net is shown net of amounts attributable to certain funds withheld reinsurance agreements, which is passed along to the reinsurer in accordance with the terms of these agreements. Recognized losses attributable to these agreements, and thus excluded from the totals in the table above, was $19 million and $22 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

•For the three months ended March 31, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option (“FVO”) gains on owned distribution investments and preferred securities, partially offset by realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities.
•For the three months ended March 31, 2023, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of mark-to-market losses on our equity securities and realized losses on fixed maturity available-for-sale securities.
•For all periods, net realized and unrealized gains (losses) on certain derivative instruments primarily relate to the net realized and unrealized gains (losses) on options and futures used to hedge indexed annuity and IUL products, including gains on option and futures expiration and changes in the fair value of interest rate swaps. See the table below for primary drivers of gains (losses) on certain derivatives.
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•The fair value of reinsurance related embedded derivative is based on the change in fair value of the underlying assets held in the funds withheld (“FWH”) portfolio.

We utilize a combination of static (call options) and dynamic (long futures contracts) instruments in our product hedging strategy. A substantial portion of the call options and futures contracts are based upon the S&P 500 Index with the remainder based upon other equity, bond and gold market indices.

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.
The components of the realized and unrealized gains (losses) on certain derivative instruments hedging our indexed annuity, universal life products and floating rate investments are summarized in the table below for the three months ended March 31, 2024 and March 31, 2023:
Three months ended
March 31, 2024March 31, 2023
(In millions)
Call options:
Realized gains (losses)$11 $(91)
Change in unrealized gains239 146 
Futures contracts:
Gains on futures contracts expiration7 3 
Change in unrealized (losses) gains(1)1 
Interest rate swap (losses) gains(80)— 
Foreign currency forward:
Gains (losses) on foreign currency forward3 (1)
Total net change in fair value$179 $58 
Annual Point-to-Point Change in S&P 500 Index during the periods 28 %(9)%
Secured Overnight Financing Rates5.34 %4.87 %
•Realized gains and (losses) on certain derivative instruments are directly correlated to the performance of the indices upon which the call options and futures contracts are based and the value of the derivatives at the time of expiration compared to the value at the time of purchase.
•The changes in unrealized gains (losses) due to the net changes in fair value of call options and futures contracts are primarily driven by the underlying performance of the S&P 500 Index during each respective period relative to the S&P 500 Index on the policyholder buy dates.
•The net change in fair value of the interest rate swaps was primarily driven by fluctuations in the interest rate index underlying the swap contracts.
The average index credits to policyholders are as follows:
Three months ended
March 31, 2024March 31, 2023
Average Crediting Rate3 %— %
S&P 500 Index:
Point-to-point strategy3 %— %
Monthly average strategy3 %— %
Monthly point-to-point strategy3 %— %
3 year high water mark5 %13 %
•Actual amounts credited to contractholder fund balances may differ from the index appreciation due to contractual features in the indexed annuity contracts and certain IUL contracts (caps, spreads and participation rates), which allow F&G to manage the cost of the options purchased to fund the annual index credits.
•The credits for the periods presented were based on comparing the S&P 500 Index on each issue date in the period to the same issue date in the respective prior year periods.
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Benefits and expenses
Benefits and other changes in policy reserves
Below is a summary of the major components included in Benefits and other changes in policy reserves:
Three months ended
March 31, 2024March 31, 2023
(In millions)
PRT agreements$598 $266 
Indexed annuities/IUL market related liability movements225 369 
Index credits, interest credited and bonuses327 134 
Other changes in policy reserves11 43 
Total benefits and other changes in policy reserves
$1,161 $812 
•PRT agreements increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, reflecting higher pension risk transfer group annuity obligations.
•The indexed annuities/IUL market related liability movements during the three months ended March 31, 2024 and March 31, 2023, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the periods. The change in risk free rates and non-performance spreads (decreased) increased the indexed annuities market related liability by $(84) million and $65 million during the three months ended March 31, 2024 and March 31, 2023, respectively. The remaining changes in market value of the market related liability movements for all periods was driven by equity market impacts. See “Revenues — Recognized gains and (losses), net” above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.
•Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees. During the three months ended March 31, 2024 and March 31, 2023, based on increases in interest rates and pricing changes, we updated certain indexed annuity assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in an increases in contractholder funds of $57 million and $102 million, respectively.
•Index credits, interest credited and bonuses for the three months ended March 31, 2024, were higher compared to the three months ended March 31, 2023, primarily reflecting higher index credits and interest credited on indexed annuities and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.
Market Risk Benefit (Gains) losses
Below is a summary of market risk benefit gains:

Three months ended
March 31, 2024March 31, 2023
(In millions)
Market risk benefits (gains) losses$(11)$59 
•Market risk benefits (gains) losses is primarily driven by attributed fees collected, effects of market related movements (including changes in equity markets and risk-free rates), actual policyholder behavior as compared with expected and changes in assumptions during the periods.

•Changes in market risk benefit (gains) losses for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily reflect favorable market related movements.
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Depreciation and Amortization
Below is a summary of the major components included in depreciation and amortization:

Three months ended
March 31, 2024March 31, 2023
(In millions)
Amortization of VOBA, DAC and DSI$107 $82 
Amortization of other intangible assets and fixed asset depreciation16 8 
Total depreciation and amortization$123 $90 
•DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Depreciation and amortization increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily reflecting increased DAC and DSI associated with the growth of the business, as well as a slightly increased amortization rate on some DAC and DSI balances due to updates to the surrender and mortality assumptions for the indexed annuity and fixed-rate annuity blocks that occurred in the third quarter of 2023.
•The three months ended March 31, 2024 also includes amortization of other intangible assets from F&G's majority owned interest in Roar.

Personnel Costs and Other Operating Expenses
Below is a summary of personnel costs and other operating expenses:
Three months ended
March 31, 2024March 31, 2023
(In millions)
Personnel costs$66 $53 
Other operating expenses58 36 
Total personnel costs and other operating expenses$124 $89 
•Personnel costs and other operating expenses for the three months ended March 31, 2024 were higher compared to the three months ended March 31, 2023, reflecting costs in line with the growth in sales and assets along with continued investments in our operating platform. In addition, the three months ended March 31, 2024 includes $11 million from our majority owned interest in Roar.
Other Items Affecting Net Earnings (Loss)
Income Tax Expense
Below is a summary of the major components included in income tax expense:
Three months ended
March 31, 2024March 31, 2023
(Dollars in millions)
Earnings (loss) before taxes$142 $(203)
Income tax expense (benefit) before valuation allowance25 (45)
Change in valuation allowance1 37 
Income tax expense (benefit)
$26 $(8)
Effective rate18 %4 %
•Income tax expense for the three months ended March 31, 2024 was $26 million, compared to income tax benefit of $(8) million for the three months ended March 31, 2023. The effective tax rate was 18% and 4% for the three months ended March 31, 2024 and March 31, 2023 respectively. The increase in income tax expense quarter over quarter is primarily related to the increase in pre-tax income, partially offset by the valuation allowance expense for the three months ended March 31, 2024.
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Investment Portfolio
The types of assets in which we may invest are influenced by various state laws, which prescribe qualified investment assets applicable to insurance companies. Within the parameters of these laws, we invest in assets giving consideration to four primary investment objectives: (i) maintain robust absolute returns; (ii) provide reliable yield and investment income; (iii) preserve capital and (iv) provide liquidity to meet policyholder and other corporate obligations.
Our investment portfolio is designed to contribute stable earnings, excluding short term mark to market effects, and balance risk across diverse asset classes and is primarily invested in high quality fixed income securities.
As of March 31, 2024 and December 31, 2023, the fair value of our investment portfolio was approximately $53 billion and $52 billion, respectively, and was divided among the following asset classes and sectors:
March 31, 2024December 31, 2023
Fair ValuePercentFair ValuePercent
Fixed maturity securities, available for sale:(Dollars in millions)
United States Government full faith and credit$276 — %$261 1 %
United States Government sponsored entities33 — %31 — %
United States municipalities, states and territories1,504 3 %1,567 3 %
Foreign Governments224 — %226 — %
Corporate securities:
 Finance, insurance and real estate7,571 14 %6,895 13 %
 Manufacturing, construction and mining1,119 2 %947 2 %
 Utilities, energy and related sectors2,456 5 %2,374 5 %
 Wholesale/retail trade2,512 5 %2,433 5 %
 Services, media and other4,011 8 %3,930 8 %
 Hybrid securities633 1 %618 1 %
 Non-agency residential mortgage-backed securities 2,426 5 %2,393 5 %
 Commercial mortgage-backed securities4,758 9 %4,410 9 %
 Asset-backed securities 9,491 18 %8,929 17 %
 Collateral loan obligations ("CLO")
5,617 10 %5,405 10 %
Total fixed maturity available for sale securities 42,631 80 %40,419 79 %
Equity securities (a)519 1 %606 1 %
Limited partnerships:
Private equity1,389 3 %1,277 2 %
Real assets473 1 %463 1 %
Credit1,156 2 %1,039 2 %
  Limited Partnerships$3,018 6 %$2,779 5 %
Commercial mortgage loans2,229 4 %2,253 4 %
Residential mortgage loans2,590 5 %2,545 5 %
Other (primarily derivatives, company owned life insurance and unconsolidated owned distribution investments)2,008 4 %1,697 3 %
Short term investments263 — %1,452 3 %
Total investments $53,258 100 %$51,751 100 %
(a) Includes investment grade non-redeemable preferred stocks ($333 million and $428 million as of March 31, 2024 and December 31, 2023, respectively).
Insurance statutes regulate the type of investments that our life insurance subsidiaries are permitted to make and limit the amount of funds that may be used for any one type of investment. In light of these statutes and regulations, and our business and investment strategy, we generally seek to invest in primarily high-grade fixed-income assets across a wide range of sectors, including Corporate securities, U.S. Government and government-sponsored agency securities, and Structured securities, among others.
The NAIC’s Securities Valuation Office ("SVO") is responsible for the day-to-day credit quality assessment and valuation of securities owned by state regulated insurance companies. Insurance companies report ownership of securities to the SVO when such securities are eligible for regulatory filings. The SVO conducts credit analysis on these securities for the purpose of
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assigning an NAIC designation or unit price. Typically, if a security has been rated by an NRSRO, the SVO utilizes that rating and assigns an NAIC designation based upon the NAIC published comparison of NRSRO ratings to NAIC designations.
The NAIC determines ratings for non-agency Residential Mortgage Backed Securities (“RMBS”) and CMBS using modeling that estimates security level expected losses under a variety of economic scenarios. For such assets issued prior to January 1, 2013, an insurer’s amortized cost basis in applicable assets can impact the assigned rating. In the tables below, we present the rating of structured securities based on ratings from the NAIC rating methodologies described above (which in some cases do not correspond to rating agency designations). All NAIC designations (e.g., NAIC 1-6) are based on the NAIC methodologies.
The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our fixed income portfolio at March 31, 2024 and December 31, 2023:

Fair ValueFair Value Percent
28,052 $26,170 65 %
12,302 30 %
1,554 4 %
215 1 %
72 — %
106 — %
43,601 $40,419 100 %

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Investment Concentrations
The tables below present the top ten structured security and industry categories of our fixed maturity and equity securities including the fair value and percent of total fixed maturity and equity securities fair value as of March 31, 2024 and December 31, 2023.
March 31, 2024
Top 10 ConcentrationsFair Value (In millions)Percent of Total Fair Value
ABS other$9,491 22 %
CLO securities5,617 13 %
Commercial mortgage backed securities4,758 11 %
Diversified financial services 3,657 8 %
Banking2,158 5 %
Whole loan collateralized mortgage obligation 2,078 5 %
Insurance1,616 4 %
Municipal1,504 3 %
Electric 1,146 3 %
Telecommunications 700 2 %
Total$32,725 76 %
December 31, 2023
Top 10 ConcentrationsFair Value (In millions)Percent of Total Fair Value
ABS other$8,929 22 %
CLO securities5,405 13 %
Commercial mortgage-backed securities4,410 11 %
Diversified financial services3,272 8 %
Banking2,048 5 %
Whole loan collateralized mortgage obligation2,043 5 %
Municipal1,600 4 %
Insurance1,567 4 %
Electric1,086 3 %
Telecommunications696 2 %
Total$31,056 77 %
The amortized cost and fair value of fixed maturity AFS securities by contractual maturities as of March 31, 2024 and December 31, 2023, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.
March 31, 2024December 31, 2023
Amortized CostFair ValueAmortized CostFair Value
Corporate, Non-structured Hybrids, Municipal and U.S. Government securities:(In millions)
Due in one year or less$404 $393 $383 $374 
Due after one year through five years3,700 3,614 3,207 3,129 
Due after five years through ten years3,492 3,333 2,822 2,680 
Due after ten years15,424 12,966 15,333 13,068 
Subtotal$23,020 $20,306 $21,745 $19,251 
Other securities, which provide for periodic payments:
Asset-backed securities$15,247 $15,108 $14,623 $14,334 
Commercial-mortgage-backed securities4,980 4,758 4,732 4,410 
Residential mortgage-backed securities2,545 2,459 2,501 2,424 
Subtotal$22,772 $22,325 $21,856 $21,168 
Total fixed maturity available-for-sale securities$45,792 $42,631 $43,601 $40,419 
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Non-Agency RMBS Exposure    
Our investment in non-agency RMBS securities is predicated on the conservative and adequate cushion between purchase price and NAIC 1 rating, general lack of sensitivity to interest rates, positive convexity to prepayment rates and correlation between the price of the securities and the unfolding recovery of the housing market.
The fair value of our investments in subprime securities and Alt-A RMBS securities were $33 million and $47 million as of March 31, 2024, respectively, and $33 million and $49 million as of December 31, 2023, respectively. As of both March 31, 2024 and December 31, 2023, approximately 95% of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

ABS and CLO Exposures
Our ABS exposures are largely diversified by underlying collateral and issuer type. Our CLO exposures are generally senior tranches of CLOs, which have leveraged loans as their underlying collateral.
As of March 31, 2024, the CLO and ABS positions were trading at a net unrealized gain of $113 million and a net unrealized loss of $242 million, respectively. As of December 31, 2023, the CLO and ABS positions were trading at a net unrealized gain position of $65 million and a net unrealized loss of $344 million, respectively.
The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our AFS ABS portfolio (dollars in millions) at March 31, 2024 and December 31, 2023.
March 31, 2024December 31, 2023
Fair ValuePercentFair ValuePercent
NRSRO RatingNAIC Designation
  AAA/AA/A1$7,444 78%$7,023 79%
  BBB21,49516%1,37515%
  BB34415%4185%
  B4611%591%
  CCC58—%13—%
  CC and lower642—%41—%
Total$9,491 100%$8,929 100%
The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our AFS CLO portfolio (dollars in millions) at March 31, 2024 and December 31, 2023.
March 31, 2024December 31, 2023
Fair ValuePercentFair ValuePercent
NRSRO RatingNAIC Designation
  AAA/AA/A1$3,433 61%$3,288 61%
  BBB21,64929%1,58229%
  BB34769%4809%
  B418—%17—%
  CCC5——%0—%
  CC and lower6411%381%
Total$5,617 100%$5,405 100%

Municipal Bond Exposure
Our municipal bond exposure is a combination of general obligation bonds (fair value of $227 million and $231 million and an amortized cost of $265 million and $268 million as of March 31, 2024 and December 31, 2023, respectively) and special revenue bonds (fair value of $1,275 million and $1,334 million and an amortized cost of $1,457 million and $1,506 million as of March 31, 2024 and December 31, 2023, respectively).
Across all municipal bonds, the largest issuer represented 5% of the category for both March 31, 2024 and December 31, 2023, and is rated NAIC 1. Our focus within municipal bonds is on NAIC 1 rated instruments, and 98% of our municipal bond exposure is rated NAIC 1 for both March 31, 2024 and December 31, 2023.
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Mortgage Loans
Commercial Mortgage Loans
We diversify our commercial mortgage loans ("CMLs") portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a level to secure the related debt. LTV and DSC ratios are utilized to assess the risk and quality of CMLs. For both March 31, 2024 and December 31, 2023, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times, and a weighted average LTV ratio of 55%.
We consider a CML delinquent when a loan payment is greater than 30 days past due. For mortgage loans that are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. As of March 31, 2024 and December 31, 2023, we had no CMLs that were delinquent in principal or interest payments and none in the process of foreclosure. See Note D - Investments to the Condensed Financial Statements included in this report for additional information on our CMLs, including our distribution by property type, geographic region, LTV and DSC ratios.
Residential Mortgage Loans
F&G's RMLs are closed end, amortizing loans, and 100% of the properties are in the United States. F&G diversifies its RML portfolio by state to attempt to reduce concentration risk. RMLs have a primary credit quality indicator of either a performing or nonperforming loan. F&G defines non-performing RMLs as those that are 90 or more days past due and/or in nonaccrual status.
Loans are placed on nonaccrual status when they are over 90 days delinquent. If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current can be put in place. See Note D Investments to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information on our RMLs.

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Unrealized Losses
The amortized cost and fair value of the fixed maturity securities and the equity securities that were in an unrealized loss position as of March 31, 2024 and December 31, 2023, were as follows:
March 31, 2024
Number of SecuritiesAmortized CostAllowance for Expected Credit LossesUnrealized LossesFair Value
Fixed maturity securities, available for sale:(In millions)
 United States Government full faith and credit23 $171 $— $(2)$169 
 United States Government sponsored agencies55 29 — (3)26 
 United States municipalities, states and territories173 1,464 — (231)1,233 
Foreign Governments46 212 — (43)169 
Corporate securities:
 Finance, insurance and real estate778 6,233 — (718)5,515 
 Manufacturing, construction and mining133 1,185 — (149)1,036 
 Utilities, energy and related sectors353 2,537 — (494)2,043 
 Wholesale/retail trade405 2,402 — (431)1,971 
 Services, media and other495 3,765 — (751)3,014 
Hybrid securities34 574 — (38)536 
Non-agency residential mortgage-backed securities297 1,301 (1)(113)1,187 
Commercial mortgage-backed securities404 2,809 (21)(239)2,549 
Asset-backed securities614 6,565 (11)(408)6,146 
Total fixed maturity available for sale securities3,810 29,247 (33)(3,620)25,594 
Equity securities35 441 — (89)352 
Total investments3,845 $29,688 $(33)$(3,709)$25,946 
December 31, 2023
Number of SecuritiesAmortized CostAllowance for Expected Credit LossesUnrealized LossesFair Value
Fixed maturity securities, available for sale:(In millions)
 United States Government full faith and credit8 $15 $— $(1)$14 
 United States Government sponsored agencies56 30 — (3)27 
 United States municipalities, states and territories180 1,498 — (222)1,276 
Foreign Governments50 209 — (39)170 
Corporate securities:
 Finance, insurance and real estate637 5,529 — (690)4,839 
 Manufacturing, construction and mining117 965 — (135)830 
 Utilities, energy and related sectors316 2,402 — (471)1,931 
 Wholesale/retail trade332 2,165 — (397)1,768 
 Services, media and other401 3,370 — (686)2,684 
Hybrid securities36 597 — (53)544 
Non-agency residential mortgage-backed securities244 1,118 (2)(101)1,015 
Commercial mortgage-backed securities435 3,198 (22)(323)2,853 
Asset-backed securities800 8,078 (9)(470)7,599 
Total fixed maturity available for sale securities3,612 29,174 (33)(3,591)25,550 
Equity securities41 567 — (100)467 
Total investments3,653 $29,741 $(33)$(3,691)$26,017 
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The gross unrealized loss position on the fixed maturity available-for-sale fixed and equity portfolio was $3,709 million and $3,691 million as of March 31, 2024 and December 31, 2023, respectively. Most components of the portfolio exhibited price depreciation caused primarily by higher treasury rates. The total amortized cost of all securities in an unrealized loss position was $29,688 million and $29,741 million as of March 31, 2024 and December 31, 2023, respectively. The average market value/book value of the investment category with the largest unrealized loss position was 80% for services, media and other as of March 31, 2024. In the aggregate, services, media and other represented 20% of the total unrealized loss position as of March 31, 2024. The average market value/book value of the investment category with the largest unrealized loss position was 88% for finance, insurance and real estate as of December 31, 2023. In aggregate, finance, insurance and real estate represented 19% of the total unrealized loss position as of December 31, 2023.
The amortized cost and fair value of fixed maturity available for sale securities under watch list analysis and the number of months in a loss position with investment grade securities (NRSRO rating of BBB/Baa or higher) as of March 31, 2024 and December 31, 2023, were as follows:
March 31, 2024
Number of SecuritiesAmortized CostFair ValueAllowance for Credit LossGross Unrealized Losses
Investment grade:(Dollars in millions)
Less than six months— $— $— $— $— 
Six months or more and less than twelve months1 15 14 — (1)
Twelve months or greater83 1,112 768 — (344)
Total investment grade84 1,127 782 — (345)
Below investment grade:
Less than six months— — — — — 
Six months or more and less than twelve months— — — — — 
Twelve months or greater3 41 30 — (11)
Total below investment grade3 41 30 — (11)
Total87 $1,168 $812 $— $(356)
December 31, 2023
Number of SecuritiesAmortized CostFair ValueAllowance for Credit LossGross Unrealized Losses
Investment grade:(Dollars in Millions)
Less than six months1 $15 $14 $— $(1)
Six months or more and less than twelve months1 54 44 — (10)
Twelve months or greater47 634 444 — (190)
Total investment grade49 703 502 — (201)
Below investment grade:
Less than six months— — — — — 
Six months or more and less than twelve months— — — — — 
Twelve months or greater3 19 15 — (4)
Total below investment grade3 19 15 — (4)
Total52 $722 $517 $— $(205)







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Expected Credit Losses and Watch List
F&G prepares a watch list to identify securities to evaluate for expected credit losses. Factors used in preparing the watch list include fair values relative to amortized cost, ratings and negative ratings actions and other factors. Detailed analysis is performed for each security on the watch list to further assess the presence of credit impairment loss indicators and, where present, calculate an allowance for expected credit loss or direct write-down of a security’s amortized cost.
At March 31, 2024, our watch list included 87 securities in an unrealized loss position with an amortized cost of $1,168 million, no allowance for expected credit losses, unrealized losses of $356 million and a fair value of $812 million.
At December 31, 2023, our watch list included 52 securities in an unrealized loss position with an amortized cost of $722 million, no allowance for expected credit losses, unrealized losses of $205 million and a fair value of $517 million.
The watch list excludes structured securities as we have separate processes to evaluate the credit quality on the structured securities.
There were 49 and 101 structured securities with a fair value of $146 million and $316 million to which we had potential credit exposure as of March 31, 2024 and December 31, 2023, respectively. Our analysis of these structured securities, which included cash flow testing, resulted in allowances for expected credit losses of $33 million and $35 million as of March 31, 2024 and December 31, 2023, respectively.
Exposure to Sovereign Debt and Certain Other Exposures
Our investment portfolio had an immaterial amount of direct exposure to European sovereign debt as of March 31, 2024 and December 31, 2023, respectively. We have no exposure to investments in Russia or Ukraine and de minimis investments in peripheral countries in the region.

Interest and Investment Income
For discussion regarding our interest and investment income and recognized gains and (losses), net refer to Note D - Investments to the unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
AFS Securities
For additional information regarding our AFS securities, including the amortized cost, gross unrealized gains (losses), and fair value as well as the amortized cost and fair value of fixed maturity AFS securities by contractual maturities, as of March 31, 2024 and December 31, 2023, refer to Note D Investments to the unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Concentrations of Financial Instruments
For certain information regarding our concentrations of financial instruments, refer to Note D Investments to the unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
There have been no other material changes in the concentrations of financial instruments described in our Annual Report on Form 10-K for the year ended December 31, 2023.
Derivatives
We are exposed to credit loss in the event of nonperformance by our counterparties on derivative instruments. We attempt to reduce this credit risk by purchasing such derivative instruments from large, well-established financial institutions.
We also hold cash and cash equivalents received from counterparties for derivative instrument collateral, as well as U.S. Government securities pledged as derivative instrument collateral, if our counterparty’s net exposures exceed pre-determined thresholds.
We are required to pay counterparties the effective federal funds rate each day for cash collateral posted to F&G for daily mark to market margin changes. We reduce the negative interest cost associated with cash collateral posted from counterparties under various ISDA agreements by reinvesting derivative cash collateral. This program permits collateral cash received to be invested in short term Treasury securities, bank deposits and commercial paper rated A1/P1, which are included in Cash and cash equivalents in the accompanying unaudited Condensed Consolidated Balance Sheets.
See Note E Derivative Financial Instruments to the unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information regarding our derivatives and our exposure to credit loss on call options.
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Corporate and Other
The Corporate and Other segment consists of the operations of the parent holding company and our real estate technology subsidiaries. This segment also includes certain other unallocated corporate overhead expenses and eliminations of revenues and expenses between it and our Title segment.
The following table presents the results of operations of our Corporate and Other segment:
 Three months ended March 31,
 20242023
Revenues:(In millions)
Escrow, title-related and other fees$56 $44 
Interest and investment income38 11 
Recognized gains and losses, net— (2)
Total revenues94 53 
Expenses:  
Personnel costs43 26 
Other operating expenses26 28 
Depreciation and amortization8 7 
Interest expense19 20 
Total expenses96 81 
Loss from continuing operations, before income taxes and equity in earnings of unconsolidated affiliates$(2)$(28)
** Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date:May 10, 2024
FIDELITY NATIONAL FINANCIAL, INC.
(registrant)
 
 
 By:  /s/ Anthony J. Park   
  Anthony J. Park  
  Chief Financial Officer
(Principal Financial and Accounting Officer) 		 
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