10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number 001-32195

GENWORTH FINANCIAL, INC.

(Exact name of registrant as specified in its charter)


Delaware		80-0873306
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

11011 West Broad Street Glen Allen, Virginia		23060
(Address of principal executive offices)		(Zip Code)

(804) 281-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.001 per share	GNW	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July

, 2024, 432,029,640 shares of Common Stock, par value $0.001 per share, were outstanding.

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements

GENWORTH FINANCIAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except par value and share amounts)


	June 30, 2024			December 31, 2023
	(Unaudited)
Assets
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost of $48,998 and $49,365, respectively, and allowance for credit losses of $— and $7, respectively, as of June 30, 2024 and December 31, 2023)	$	45,233		$	46,781
Equity securities, at fair value		435			396
Commercial mortgage loans (net of unamortized balance of loan origination fees and costs of $4 as of June 30, 2024 and December 31, 2023)		6,692			6,829
Less: Allowance for credit losses		(30	)		(27	)

Commercial mortgage loans, net		6,662			6,802
Policy loans		2,359			2,220
Limited partnerships		2,968			2,821
Other invested assets		702			731

Total investments		58,359			59,751
Cash, cash equivalents and restricted cash		1,932			2,215
Accrued investment income		549			647
Deferred acquisition costs		1,884			1,988
Intangible assets		197			198
Reinsurance recoverable		17,739			19,054
Less: Allowance for credit losses		(26	)		(29	)

Reinsurance recoverable, net		17,713			19,025
Other assets		518			489
Deferred tax asset		1,784			1,952
Market risk benefit assets		54			43
Separate account assets		4,553			4,509

Total assets	$	87,543		$	90,817

Liabilities and equity
Liabilities:
Future policy benefits	$	53,774		$	57,655
Policyholder account balances		15,047			15,540
Market risk benefit liabilities		500			625
Liability for policy and contract claims		649			652
Unearned premiums		130			149
Other liabilities		1,973			1,768
Long-term borrowings		1,564			1,584
Separate account liabilities		4,553			4,509

Total liabilities		78,190			82,482

Commitments and contingencies (Note 17)
Equity:
Common stock, $0.001 par value; 1,500,000,000 shares authorized; 606,303,648 and 603,151,611 shares issued as of June 30, 2024 and December 31, 2023, respectively; 434,010,505 and 446,823,204 shares outstanding as of June 30, 2024 and December 31, 2023, respectively		1			1
Additional paid-in capital		11,880			11,884
Accumulated other comprehensive income (loss)		(1,687	)		(2,555	)
Retained earnings		1,428			1,213
Treasury stock, at cost (172,293,143 and 156,328,407 shares as of June 30, 2024 and December 31, 2023, respectively)		(3,163	)		(3,063	)

Total Genworth Financial, Inc.’s stockholders’ equity		8,459			7,480
Noncontrolling interests		894			855

Total equity		9,353			8,335

Total liabilities and equity	$	87,543		$	90,817

See Notes to Condensed Consolidated Financial Statements

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GENWORTH FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in millions, except per share amounts)

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023
Revenues:
Premiums	$	855		$	902		$	1,730		$	1,817
Net investment income		808			785			1,590			1,572
Net investment gains (losses)		(61	)		39			(12	)		28
Policy fees and other income		167			166			325			329

Total revenues		1,769			1,892			3,633			3,746

Benefits and expenses:
Benefits and other changes in policy reserves		1,151			1,175			2,354			2,351
Liability remeasurement (gains) losses		39			70			31			55
Changes in fair value of market risk benefits and associated hedges		(8	)		(19	)		(31	)		(2	)
Interest credited		125			126			250			252
Acquisition and operating expenses, net of deferrals		229			226			465			466
Amortization of deferred acquisition costs and intangibles		60			64			125			136
Interest expense		30			29			60			58

Total benefits and expenses		1,626			1,671			3,254			3,316

Income from continuing operations before income taxes		143			221			379			430
Provision for income taxes		32			55			98			110

Income from continuing operations		111			166			281			320
Income (loss) from discontinued operations, net of taxes		(1	)		2			(2	)		2

Net income		110			168			279			322
Less: net income attributable to noncontrolling interests		34			31			64			63

Net income available to Genworth Financial, Inc.’s common stockholders	$	76		$	137		$	215		$	259

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share:
Basic	$	0.18		$	0.28		$	0.49		$	0.53

Diluted	$	0.17		$	0.28		$	0.49		$	0.53

Net income available to Genworth Financial, Inc.’s common stockholders per share:
Basic	$	0.17		$	0.29		$	0.49		$	0.54

Diluted	$	0.17		$	0.29		$	0.48		$	0.53

Weighted-average common shares outstanding:
Basic		436.4			473.2			439.7			482.7

Diluted		440.7			478.1			445.5			489.1

See Notes to Condensed Consolidated Financial Statements

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GENWORTH FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in millions)

(Unaudited)


	Three months ended June 30, 2024
	Common stock		Additional paid-in capital		Accumulated other comprehensive income (loss)			Retained earnings		Treasury stock, at cost			Total Genworth Financial, Inc.’s stockholders’ equity			Noncontrolling interests			Total equity
Balances as of March 31, 2024	$	1	$	11,873	$	(2,094	)	$	1,352	$	(3,126	)	$	8,006		$	873		$	8,879
Repurchase of subsidiary shares		—		—		—			—		—			—			(9	)		(9	)
Comprehensive income:
Net income		—		—		—			76		—			76			34			110
Other comprehensive income, net of taxes		—		—		407			—		—			407			—			407

Total comprehensive income														483			34			517
Treasury stock acquired in connection with share repurchases		—		—		—			—		(37	)		(37	)		—			(37	)
Dividends to noncontrolling interests		—		—		—			—		—			—			(5	)		(5	)
Stock-based compensation expense and exercises and other		—		7		—			—		—			7			1			8

Balances as of June 30, 2024	$	1	$	11,880	$	(1,687	)	$	1,428	$	(3,163	)	$	8,459		$	894		$	9,353


	Three months ended June 30, 2023
	Common stock		Additional paid-in capital		Accumulated other comprehensive income (loss)			Retained earnings		Treasury stock, at cost			Total Genworth Financial, Inc.’s stockholders’ equity			Noncontrolling interests			Total equity
Balances as of March 31, 2023	$	1	$	11,863	$	(2,853	)	$	1,261	$	(2,833	)	$	7,439		$	793		$	8,232
Repurchase of subsidiary shares		—		—		—			—		—			—			(8	)		(8	)
Comprehensive income (loss):
Net income		—		—		—			137		—			137			31			168
Other comprehensive loss, net of taxes		—		—		(8	)		—		—			(8	)		(5	)		(13	)

Total comprehensive income														129			26			155
Treasury stock acquired in connection with share repurchases		—		—		—			—		(114	)		(114	)		—			(114	)
Dividends to noncontrolling interests		—		—		—			—		—			—			(5	)		(5	)
Stock-based compensation expense and exercises and other		—		6		—			—		—			6			1			7

Balances as of June 30, 2023	$	1	$	11,869	$	(2,861	)	$	1,398	$	(2,947	)	$	7,460		$	807		$	8,267

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GENWORTH FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY, CONTINUED

(Amounts in millions)

(Unaudited)


	Six months ended June 30, 2024
	Common stock		Additional paid-in capital			Accumulated other comprehensive income (loss)			Retained earnings		Treasury stock, at cost			Total Genworth Financial, Inc.’s stockholders’ equity			Noncontrolling interests			Total equity
Balances as of December 31, 2023	$	1	$	11,884		$	(2,555	)	$	1,213	$	(3,063	)	$	7,480		$	855		$	8,335
Repurchase of subsidiary shares		—		—			—			—		—			—			(18	)		(18	)
Comprehensive income (loss):
Net income		—		—			—			215		—			215			64			279
Other comprehensive income (loss), net of taxes		—		—			868			—		—			868			(1	)		867

Total comprehensive income															1,083			63			1,146
Treasury stock acquired in connection with share repurchases		—		—			—			—		(100	)		(100	)		—			(100	)
Dividends to noncontrolling interests		—		—			—			—		—			—			(10	)		(10	)
Stock-based compensation expense and exercises and other		—		(4	)		—			—		—			(4	)		4			—

Balances as of June 30, 2024	$	1	$	11,880		$	(1,687	)	$	1,428	$	(3,163	)	$	8,459		$	894		$	9,353


	Six months ended June 30, 2023
	Common stock		Additional paid-in capital			Accumulated other comprehensive income (loss)			Retained earnings		Treasury stock, at cost			Total Genworth Financial, Inc.’s stockholders’ equity			Noncontrolling interests			Total equity
Balances as of December 31, 2022	$	1	$	11,869		$	(2,614	)	$	1,139	$	(2,764	)	$	7,631		$	755		$	8,386
Repurchase of subsidiary shares		—		—			—			—		—			—			(12	)		(12	)
Comprehensive income (loss):
Net income		—		—			—			259		—			259			63			322
Other comprehensive income (loss), net of taxes		—		—			(247	)		—		—			(247	)		7			(240	)

Total comprehensive income															12			70			82
Treasury stock acquired in connection with share repurchases		—		—			—			—		(183	)		(183	)		—			(183	)
Dividends to noncontrolling interests		—		—			—			—		—			—			(9	)		(9	)
Stock-based compensation expense and exercises and other		—		—			—			—		—			—			3			3

Balances as of June 30, 2023	$	1	$	11,869		$	(2,861	)	$	1,398	$	(2,947	)	$	7,460		$	807		$	8,267

See Notes to Condensed Consolidated Financial Statements

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GENWORTH FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)

(Unaudited)


	Six months ended June 30,
	2024			2023
Cash flows from (used by) operating activities:
Net income	$	279		$	322
Less (income) loss from discontinued operations, net of taxes		2			(2	)
Adjustments to reconcile net income to net cash from (used by) operating activities:
Amortization of fixed maturity securities discounts and premiums		(64	)		(58	)
Net investment (gains) losses		12			(28	)
Changes in fair value of market risk benefits and associated hedges		(31	)		(2	)
Charges assessed to policyholders		(285	)		(291	)
Amortization of deferred acquisition costs and intangibles		125			136
Deferred income taxes		(50	)		107
Derivative instruments, limited partnerships and other		(263	)		(222	)
Long-term incentive compensation expense		25			25
Change in certain assets and liabilities:
Accrued investment income and other assets		(98	)		(66	)
Insurance reserves		273			525
Current tax liabilities		97			—
Other liabilities, policy and contract claims and other policy-related balances		(122	)		(169	)
Cash used by operating activities—discontinued operations		—			(2	)

Net cash from (used by) operating activities		(100	)		275

Cash flows from (used by) investing activities:
Proceeds from maturities and repayments of investments:
Fixed maturity securities		1,320			1,144
Commercial mortgage loans		267			269
Limited partnerships and other invested assets		108			67
Proceeds from sales of investments:
Fixed maturity and equity securities		1,718			1,289
Purchases and originations of investments:
Fixed maturity and equity securities		(2,627	)		(1,443	)
Commercial mortgage loans		(129	)		(113	)
Limited partnerships and other invested assets		(283	)		(301	)
Short-term investments, net		15			(7	)
Policy loans, net		47			32
Other		(35	)		(20	)

Net cash from investing activities		401			917

Cash flows from (used by) financing activities:
Deposits to universal life and investment contracts		272			303
Withdrawals from universal life and investment contracts		(677	)		(893	)
Proceeds from issuance of long-term debt		750			—
Debt issuance costs		(7	)		—
Repayment and repurchase of long-term debt		(776	)		(11	)
Repurchase of subsidiary shares		(18	)		(12	)
Treasury stock acquired in connection with share repurchases		(99	)		(181	)
Dividends paid to noncontrolling interests		(10	)		(9	)
Other, net		(19	)		(15	)

Net cash used by financing activities		(584	)		(818	)

Net change in cash, cash equivalents and restricted cash		(283	)		374
Cash, cash equivalents and restricted cash at beginning of period		2,215			1,799

Cash, cash equivalents and restricted cash at end of period	$	1,932		$	2,173

See Notes to Condensed Consolidated Financial Statements

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Business and Basis of Presentation

Genworth Holdings, Inc. (“Genworth Holdings”) (formerly known as Genworth Financial, Inc.) was incorporated in Delaware in 2003 in preparation for an initial public offering of its common stock, which was completed on May 28, 2004. On April 1, 2013, Genworth Holdings completed a holding company reorganization pursuant to which Genworth Holdings became a direct, 100% owned subsidiary of a new public holding company that it had formed. The new public holding company was incorporated in Delaware on December 5, 2012, in connection with the reorganization, and was renamed Genworth Financial, Inc. (“Genworth Financial”) upon the completion of the reorganization.

The accompanying unaudited condensed financial statements include on a consolidated basis the accounts of Genworth Financial and its affiliate companies in which it holds a majority voting interest or power to direct activities of certain variable interest entities, which on a consolidated basis is referred to as “Genworth,” the “Company,” “we,” “us” or “our” unless the context otherwise requires. All intercompany accounts and transactions have been eliminated in consolidation. References to “Genworth Financial” refer solely to Genworth Financial, Inc., and not to any of its consolidated subsidiaries.

We manage our business through the following three reportable segments:

•

Enact

. Enact Holdings, Inc. (“Enact Holdings”) comprises our Enact segment. Through Enact Holdings’ mortgage insurance subsidiaries, we offer private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans at specified coverage percentages (“primary mortgage insurance”). Enact Holdings also selectively enters into insurance transactions with lenders and investors, under which it insures a portfolio of loans at or after origination (“pool mortgage insurance”).

•

Long-Term Care Insurance.

Through our principal U.S. life insurance subsidiaries, we offer long-term care insurance products in the United States. Long-term care insurance products are intended to protect against the significant and escalating costs of long-term care services provided in the insured’s home or assisted living or nursing facilities.

•

Life and Annuities.

We service a variety of protection and retirement income products through our principal U.S. life insurance subsidiaries that are not actively marketed or sold. These products include traditional and

non-traditional

life insurance (term, universal and term universal life insurance as well as corporate-owned life insurance and funding agreements), fixed annuities and variable annuities.

In addition to our three reportable segments, we also have Corporate and Other, which includes debt financing expenses that are incurred at the Genworth Holdings level, unallocated corporate income and expenses, and eliminations of inter-segment transactions. Corporate and Other also includes the results of other businesses that are not individually reportable, such as certain international businesses and

start-up

results of our CareScout business related to our senior care growth initiatives.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission. Preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements include all adjustments (including normal recurring adjustments) considered necessary by management to present a fair statement of the financial position, results of operations and cash flows for the periods presented. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

indicative of results that may be expected for the entire year. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes contained in our 2023 Annual Report on Form 10-K. Certain prior year amounts have been reclassified to conform to the current year presentation.

On July 31, 2023, Genworth Financial’s Board of Directors authorized an additional $350 million of share repurchases under the existing share repurchase program that began in May 2022. Pursuant to the program, during the six months ended June 30, 2024, Genworth Financial repurchased 15,964,736 shares of its common stock at an average price of $6.21 per share for a total cost of $100 million, including excise taxes and other costs paid in connection with acquiring the shares. The repurchased shares were recorded at cost and presented as treasury stock in a separate caption in equity in our condensed consolidated balance sheets. Genworth Financial also authorized repurchases under the share repurchase program through a Rule

10b5-1

trading plan under which 1,991,396 shares of its common stock were repurchased in July 2024 at an average price of $6.03 per share for a total of $12 million, leaving approximately $230 million available for repurchase under the program as of July 31, 2024. Under the program, share repurchases may be made at Genworth’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, including through Rule

10b5-1

trading plans. The timing and number of future shares repurchased under the share repurchase program will depend on a variety of factors, including Genworth Financial’s stock price and trading volume, and general business and market conditions, among other factors. The authorization has no expiration date and may be modified, suspended or terminated at any time.

(2) Accounting Changes

Accounting Pronouncements Recently Adopted

On January 1, 2024, we adopted new accounting guidance issued by the Financial Accounting Standards Board (the “FASB”) related to the fair value measurement of equity securities subject to contractual sale restrictions. The guidance clarifies existing fair value guidance on measuring the fair value of an equity security subject to contractual sale restrictions and adds new disclosures related to these securities. We adopted this guidance using the prospective method, which did not have any impact on our condensed consolidated financial statements and disclosures.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued new accounting guidance to improve income tax disclosures. The guidance requires annual disclosure of specific categories in the income tax rate reconciliation, separate disclosure of additional information related to reconciling items that meet a quantitative threshold and additional disclosures about income taxes paid, among other qualitative and quantitative disclosure improvements. This guidance is effective for us for annual reporting periods beginning on January 1, 2025 using the prospective method, with early adoption permitted, which we do not intend to elect. The guidance will have no impact on our consolidated financial statements but will require expanded annual disclosures. We are currently evaluating the impact the guidance may have on our processes, controls and

disclosures.

In November 2023, the FASB issued new accounting guidance to improve reportable segment disclosures. The guidance requires annual and interim disclosure of significant segment expenses regularly provided to the Chief Operating Decision Maker (“CODM”) and other segment items. The guidance also requires disclosures about a segment’s profit or loss and assets, currently only required annually, to be disclosed on an interim basis. Under the new accounting guidance, public entities may disclose multiple measures of a segment’s profit or loss, as long as all disclosed measures are used by the CODM for purposes of assessing performance and allocating resources and at least one of the reported measures is that which management believes to be most consistent with U.S. GAAP

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

measurement principles. This guidance is effective for us for annual reporting periods beginning on January 1, 2024 and interim reporting periods beginning on January 1, 2025 using the retrospective method, with early adoption permitted, which we do not intend to elect. The guidance will have no impact on our consolidated financial statements but will require expanded disclosures for the annual period ended December 31, 2024 and interim periods thereafter, which we are in the process of developing. We continue to evaluate the full impact the guidance will have on our processes, controls and disclosures.

(3) Earnings Per Share

Basic and diluted earnings per share are calculated by dividing each income (loss) category presented below by the weighted-average basic and diluted common shares outstanding for the periods indicated:


	Three months ended June 30,					Six months ended June 30,
(Amounts in millions, except per share amounts)	2024			2023		2024			2023
Weighted-average common shares used in basic earnings per share calculations		436.4			473.2		439.7			482.7
Potentially dilutive securities:
Performance stock units, restricted stock units and other equity-based awards		4.3			4.9		5.8			6.4

Weighted-average common shares used in diluted earnings per share calculations		440.7			478.1		445.5			489.1

Income from continuing operations:
Income from continuing operations	$	111		$	166	$	281		$	320
Less: net income from continuing operations attributable to noncontrolling interests		34			31		64			63

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders	$	77		$	135	$	217		$	257

Basic per share	$	0.18		$	0.28	$	0.49		$	0.53

Diluted per share	$	0.17		$	0.28	$	0.49		$	0.53

Income (loss) from discontinued operations:
Income (loss) from discontinued operations, net of taxes	$	(1	)	$	2	$	(2	)	$	2

Basic per share	$	—		$	0.01	$	—		$	0.01

Diluted per share	$	—		$	0.01	$	—		$	0.01

Net income:
Income from continuing operations	$	111		$	166	$	281		$	320
Income (loss) from discontinued operations, net of taxes		(1	)		2		(2	)		2

Net income		110			168		279			322
Less: net income attributable to noncontrolling interests		34			31		64			63

Net income available to Genworth Financial, Inc.’s common stockholders	$	76		$	137	$	215		$	259

Basic per share (1)	$	0.17		$	0.29	$	0.49		$	0.54

Diluted per share (1)	$	0.17		$	0.29	$	0.48		$	0.53

(1)	May not total due to whole number calculation.

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4) Investments

(a) Net Investment Income

Sources of net investment income were as follows for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
(Amounts in millions)	2024			2023			2024			2023
Fixed maturity securities—taxable	$	571		$	567		$	1,125		$	1,128
Fixed maturity securities—non-taxable		—			1			1			2
Equity securities		3			3			5			5
Commercial mortgage loans		75			75			150			151
Policy loans		56			54			114			109
Limited partnerships		36			17			56			45
Other invested assets		67			70			135			138
Cash, cash equivalents, restricted cash and short-term investments		25			22			52			40

Gross investment income before expenses and fees		833			809			1,638			1,618
Expenses and fees		(25	)		(24	)		(48	)		(46	)

Net investment income	$	808		$	785		$	1,590		$	1,572

(b) Net Investment Gains (Losses)

The following table sets forth net investment gains (losses) for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
(Amounts in millions)	2024			2023			2024			2023

Realized investment gains (losses):
Available-for-sale fixed maturity securities:
Realized gains	$	21		$	18		$	28		$	21
Realized losses		(40	)		(48	)		(69	)		(67	)

Net realized gains (losses) on available-for-sale fixed maturity securities		(19	)		(30	)		(41	)		(46	)
Net realized gains (losses) on equity securities sold		—			(1	)		—			(1	)

Total net realized investment gains (losses)		(19	)		(31	)		(41	)		(47	)

Net change in allowance for credit losses on available-for-sale fixed maturity securities		7			11			7			(4	)
Write-down of available-for-sale fixed maturity securities (1)		—			(1	)		—			(1	)
Net unrealized gains (losses) on equity securities still held		12			21			44			32
Net unrealized gains (losses) on limited partnerships		(52	)		40			(9	)		40
Commercial mortgage loans		(1	)		—			(3	)		(2	)
Derivative instruments (2)		(8	)		(1	)		(7	)		11
Other		—			—			(3	)		(1	)

Net investment gains (losses)	$	(61	)	$	39		$	(12	)	$	28

(1)	Represents write-down of securities deemed uncollectible or that we intend to sell or will be required to sell prior to recovery of the amortized cost basis.

(2)	See note 5 for additional information on the impact of derivative instruments included in net investment gains (losses).

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

See Note 2—Summary of Significant Accounting Policies included in the Notes to Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for a discussion of our policy for evaluating and measuring the allowance for credit losses related to our available-for-sale fixed maturity securities.

The following table represents the allowance for credit losses aggregated by security type for available-for-sale fixed maturity securities as of and for the three and six months ended June 30, 2024:


(Amounts in millions)	Beginning balance		Increase from securities without allowance in previous periods		Increase (decrease) from securities with allowance in previous periods		Securities sold			Decrease due to change in intent or requirement to sell		Write-offs		Recoveries		Ending balance

Fixed maturity securities:
Commercial mortgage-backed	$	7	$	—	$	—	$	(7	)	$	—	$	—	$	—	$	—

Total available-for-sale fixed maturity securities	$	7	$	—	$	—	$	(7	)	$	—	$	—	$	—	$	—

The following

table

represents the allowance for

credit lo

sses aggregated by security type for

available-for-sale

fixed maturity securities as of and for the three months ended June 30, 2023:


(Amounts in millions)	Beginning balance		Increase from securities without allowance in previous periods		Increase (decrease) from securities with allowance in previous periods		Securities sold			Decrease due to change in intent or requirement to sell		Write-offs			Recoveries		Ending balance
Fixed maturity securities:
U.S. corporate	$	9	$	—	$	—	$	(7	)	$	—	$	(2	)	$	—	$	—
Commercial mortgage-backed		6		—		—		(2	)		—		—			—		4

Total available-for-sale fixed maturity securities	$	15	$	—	$	—	$	(9	)	$	—	$	(2	)	$	—	$	4

The following table represents the allowance for credit losses aggregated by security type for

available-for-sale

fixed maturity securities as of and for the six months ended June 30, 2023:


(Amounts in millions)	Beginning balance		Increase from securities without allowance in previous periods		Increase (decrease) from securities with allowance in previous periods		Securities sold			Decrease due to change in intent or requirement to sell		Write-offs			Recoveries		Ending balance
Fixed maturity securities:
U.S. corporate	$	—	$	9	$	—	$	(7	)	$	—	$	(2	)	$	—	$	—
Commercial mortgage-backed		—		6		—		(2	)		—		—			—		4

Total available-for-sale fixed maturity securities	$	—	$	15	$	—	$	(9	)	$	—	$	(2	)	$	—	$	4

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Net unrealized gains and losses on available-for-sale investment securities reflected as a separate component of accumulated other comprehensive income (loss) were as follows as of the dates indicated:


(Amounts in millions)	June 30, 2024			December 31, 2023
Net unrealized gains (losses) on fixed maturity securities without an allowance for credit losses	$	(3,765	)	$	(2,577	)
Net unrealized gains (losses) on fixed maturity securities with an allowance for credit losses		—			—
Adjustments to policyholder contract balances		79			52
Income taxes, net		600			352

Net unrealized investment gains (losses)		(3,086	)		(2,173	)
Less: net unrealized investment gains (losses) attributable to noncontrolling interests		(44	)		(43	)

Net unrealized investment gains (losses) attributable to Genworth Financial, Inc.	$	(3,042	)	$	(2,130	)

The change in net unrealized gains (losses) on available-for-sale investment securities reported in accumulated other comprehensive income (loss) was as follows as of and for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
(Amounts in millions)	2024			2023			2024			2023
Beginning balance	$	(2,615	)	$	(2,500	)	$	(2,130	)	$	(3,407	)
Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on fixed maturity securities		(575	)		(755	)		(1,229	)		415
Adjustments to policyholder contract balances (1)		13			13			27			(6	)
Provision for income taxes		120			158			257			(87	)

Change in unrealized gains (losses) on investment securities		(442	)		(584	)		(945	)		322
Reclassification adjustments to net investment (gains) losses, net of taxes of $(4), $(7), $(9) and $(10)		15			23			32			36

Change in net unrealized investment gains (losses)		(427	)		(561	)		(913	)		358
Less: change in net unrealized investment gains (losses) attributable to noncontrolling interests		—			(5	)		(1	)		7

Ending balance	$	(3,042	)	$	(3,056	)	$	(3,042	)	$	(3,056	)

(1)	See note 10 for additional information.

Amounts reclassified out of accumulated other comprehensive income (loss) to net investment gains (losses) include realized gains (losses) on sales of securities, which are determined on a specific identification basis.

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(d) Fixed Maturity Securities

As of June 30, 2024, the amortized cost or cost, gross unrealized gains (losses), allowance for credit losses and fair value of our fixed maturity securities classified as available-for-sale were as follows:


(Amounts in millions)	Amortized cost or cost		Gross unrealized gains		Gross unrealized losses			Allowance for credit losses		Fair value

Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	3,777	$	38	$	(303	)	$	—	$	3,512
State and political subdivisions		2,453		10		(295	)		—		2,168
Non-U.S. government		804		8		(103	)		—		709
U.S. corporate:
Utilities		4,639		47		(454	)		—		4,232
Energy		2,448		43		(169	)		—		2,322
Finance and insurance		7,703		55		(730	)		—		7,028
Consumer—non-cyclical		4,671		62		(380	)		—		4,353
Technology and communications		3,011		47		(308	)		—		2,750
Industrial		1,186		14		(106	)		—		1,094
Capital goods		2,268		36		(159	)		—		2,145
Consumer—cyclical		1,660		14		(121	)		—		1,553
Transportation		1,121		32		(91	)		—		1,062
Other		288		2		(16	)		—		274

Total U.S. corporate		28,995		352		(2,534	)		—		26,813

Non-U.S. corporate:
Utilities		778		—		(68	)		—		710
Energy		1,078		23		(54	)		—		1,047
Finance and insurance		1,961		33		(142	)		—		1,852
Consumer—non-cyclical		672		3		(77	)		—		598
Technology and communications		881		6		(81	)		—		806
Industrial		846		9		(52	)		—		803
Capital goods		639		4		(48	)		—		595
Consumer—cyclical		249		1		(19	)		—		231
Transportation		441		11		(30	)		—		422
Other		609		8		(45	)		—		572

Total non-U.S. corporate		8,154		98		(616	)		—		7,636

Residential mortgage-backed		906		4		(59	)		—		851
Commercial mortgage-backed		1,605		1		(294	)		—		1,312
Other asset-backed		2,304		6		(78	)		—		2,232

Total available-for-sale fixed maturity securities	$	48,998	$	517	$	(4,282	)	$	—	$	45,233

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of December 31, 2023, the amortized cost or cost, gross unrealized gains (losses), allowance for credit losses and fair value of our fixed maturity securities classified as available-for-sale were as follows:


(Amounts in millions)	Amortized cost or cost		Gross unrealized gains		Gross unrealized losses			Allowance for credit losses			Fair value
Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	3,588	$	121	$	(215	)	$	—		$	3,494
State and political subdivisions		2,537		24		(259	)		—			2,302
Non-U.S. government		703		15		(92	)		—			626
U.S. corporate:
Utilities		4,521		104		(352	)		—			4,273
Energy		2,449		66		(143	)		—			2,372
Finance and insurance		7,813		99		(634	)		—			7,278
Consumer—non-cyclical		4,648		129		(272	)		—			4,505
Technology and communications		3,187		75		(239	)		—			3,023
Industrial		1,294		27		(88	)		—			1,233
Capital goods		2,230		69		(118	)		—			2,181
Consumer—cyclical		1,715		30		(96	)		—			1,649
Transportation		1,187		44		(69	)		—			1,162
Other		316		6		(13	)		—			309

Total U.S. corporate		29,360		649		(2,024	)		—			27,985

Non-U.S. corporate:
Utilities		739		1		(55	)		—			685
Energy		1,038		34		(45	)		—			1,027
Finance and insurance		2,041		47		(140	)		—			1,948
Consumer—non-cyclical		669		8		(61	)		—			616
Technology and communications		944		12		(65	)		—			891
Industrial		829		17		(49	)		—			797
Capital goods		591		8		(38	)		—			561
Consumer—cyclical		236		2		(17	)		—			221
Transportation		369		15		(20	)		—			364
Other		726		18		(43	)		—			701

Total non-U.S. corporate		8,182		162		(533	)		—			7,811

Residential mortgage-backed		953		8		(54	)		—			907
Commercial mortgage-backed		1,714		1		(290	)		(7	)		1,418
Other asset-backed		2,328		6		(96	)		—			2,238

Total available-for-sale fixed maturity securities	$	49,365	$	986	$	(3,563	)	$	(7	)	$	46,781

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the gross unrealized losses and fair values of our fixed maturity securities for which an allowance for credit losses had not been recorded, aggregated by investment type and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of June 30, 2024:


	Less than 12 months							12 months or more							Total
(Dollar amounts in millions)	Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities

Description of Securities
Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	688	$	(13	)		60	$	1,299	$	(290	)		49	$	1,987	$	(303	)		109
State and political subdivisions		253		(6	)		38		1,571		(289	)		262		1,824		(295	)		300
Non-U.S. government		164		(3	)		32		420		(100	)		61		584		(103	)		93
U.S. corporate		3,397		(108	)		500		16,313		(2,426	)		2,095		19,710		(2,534	)		2,595
Non-U.S. corporate		814		(16	)		115		4,856		(600	)		636		5,670		(616	)		751
Residential mortgage-backed		96		(1	)		55		495		(58	)		168		591		(59	)		223
Commercial mortgage-backed		—		—			—		1,286		(294	)		216		1,286		(294	)		216
Other asset-backed		108		(1	)		37		1,226		(77	)		266		1,334		(78	)		303

Total for fixed maturity securities in an unrealized loss position	$	5,520	$	(148	)		837	$	27,466	$	(4,134	)		3,753	$	32,986	$	(4,282	)		4,590

% Below cost:
<20% Below cost	$	5,445	$	(125	)		829	$	23,296	$	(2,635	)		3,175	$	28,741	$	(2,760	)		4,004
20%-50% Below cost		75		(23	)		8		4,170		(1,499	)		578		4,245		(1,522	)		586

Total for fixed maturity securities in an unrealized loss position	$	5,520	$	(148	)		837	$	27,466	$	(4,134	)		3,753	$	32,986	$	(4,282	)		4,590

Investment grade	$	5,413	$	(146	)		814	$	26,434	$	(4,006	)		3,604	$	31,847	$	(4,152	)		4,418
Below investment grade		107		(2	)		23		1,032		(128	)		149		1,139		(130	)		172

Total for fixed maturity securities in an unrealized loss position	$	5,520	$	(148	)		837	$	27,466	$	(4,134	)		3,753	$	32,986	$	(4,282	)		4,590

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the gross unrealized losses and fair values of our corporate securities for which an allowance for credit losses had not been recorded, aggregated by investment type and length of time that individual investment securities had been in a continuous unrealized loss position, based on industry, as of June 30, 2024:


	Less than 12 months							12 months or more							Total
(Dollar amounts in millions)	Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities
Description of Securities
U.S. corporate:
Utilities	$	855	$	(18	)		114	$	2,096	$	(436	)		309	$	2,951	$	(454	)		423
Energy		256		(19	)		49		1,254		(150	)		162		1,510		(169	)		211
Finance and insurance		648		(13	)		88		4,996		(717	)		625		5,644		(730	)		713
Consumer—non-cyclical		573		(17	)		82		2,483		(363	)		273		3,056		(380	)		355
Technology and communications		323		(13	)		53		1,936		(295	)		256		2,259		(308	)		309
Industrial		150		(5	)		17		670		(101	)		92		820		(106	)		109
Capital goods		242		(14	)		41		1,106		(145	)		142		1,348		(159	)		183
Consumer—cyclical		179		(4	)		34		1,047		(117	)		142		1,226		(121	)		176
Transportation		127		(4	)		17		582		(87	)		75		709		(91	)		92
Other		44		(1	)		5		143		(15	)		19		187		(16	)		24

Subtotal, U.S. corporate securities		3,397		(108	)		500		16,313		(2,426	)		2,095		19,710		(2,534	)		2,595

Non-U.S. corporate:
Utilities		104		(2	)		11		575		(66	)		65		679		(68	)		76
Energy		122		(2	)		15		450		(52	)		53		572		(54	)		68
Finance and insurance		144		(2	)		29		1,328		(140	)		186		1,472		(142	)		215
Consumer—non-cyclical		97		(5	)		14		416		(72	)		50		513		(77	)		64
Technology and communications		63		(1	)		9		597		(80	)		74		660		(81	)		83
Industrial		94		(1	)		16		418		(51	)		60		512		(52	)		76
Capital goods		105		(2	)		12		356		(46	)		47		461		(48	)		59
Consumer—cyclical		—		—			—		170		(19	)		25		170		(19	)		25
Transportation		—		—			—		266		(30	)		35		266		(30	)		35
Other		85		(1	)		9		280		(44	)		41		365		(45	)		50

Subtotal, non-U.S. corporate securities		814		(16	)		115		4,856		(600	)		636		5,670		(616	)		751

Total for corporate securities in an unrealized loss position	$	4,211	$	(124	)		615	$	21,169	$	(3,026	)		2,731	$	25,380	$	(3,150	)		3,346

We did not recognize an allowance for credit losses on securities in an unrealized loss position included in the tables above. Based on a qualitative and quantitative review of the issuers of the securities, we believe the decline in fair value was largely due to increased interest rates and was not indicative of credit losses. The issuers continue to make timely principal and interest payments. For all securities in an unrealized loss position without an allowance for credit losses, we expect to recover the amortized cost based on our estimate of the amount and timing of cash flows to be collected. We do not intend to sell nor do we expect that we will be required to sell these securities prior to recovering our amortized cost.

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


	Less than 12 months							12 months or more							Total
(Dollar amounts in millions)	Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities
Description of Securities
Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	28	$	(1	)		6	$	1,353	$	(214	)		50	$	1,381	$	(215	)		56
State and political subdivisions		121		(2	)		18		1,581		(257	)		268		1,702		(259	)		286
Non-U.S. government		—		—			—		448		(92	)		67		448		(92	)		67
U.S. corporate		1,054		(30	)		142		17,019		(1,994	)		2,164		18,073		(2,024	)		2,306
Non-U.S. corporate		157		(5	)		19		5,180		(528	)		684		5,337		(533	)		703
Residential mortgage-backed		62		(1	)		31		477		(53	)		156		539		(54	)		187
Commercial mortgage-backed		37		(1	)		7		1,349		(289	)		224		1,386		(290	)		231
Other asset-backed		—		—			—		1,624		(96	)		327		1,624		(96	)		327

Total for fixed maturity securities in an unrealized loss position	$	1,459	$	(40	)		223	$	29,031	$	(3,523	)		3,940	$	30,490	$	(3,563	)		4,163

% Below cost:
<20% Below cost	$	1,450	$	(37	)		221	$	26,032	$	(2,509	)		3,542	$	27,482	$	(2,546	)		3,763
20%-50% Below cost		9		(3	)		2		2,999		(1,014	)		398		3,008		(1,017	)		400

Total for fixed maturity securities in an unrealized loss position	$	1,459	$	(40	)		223	$	29,031	$	(3,523	)		3,940	$	30,490	$	(3,563	)		4,163

Investment grade	$	1,441	$	(40	)		221	$	27,804	$	(3,394	)		3,762	$	29,245	$	(3,434	)		3,983
Below investment grade		18		—			2		1,227		(129	)		178		1,245		(129	)		180

Total for fixed maturity securities in an unrealized loss position	$	1,459	$	(40	)		223	$	29,031	$	(3,523	)		3,940	$	30,490	$	(3,563	)		4,163

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


	Less than 12 months							12 months or more							Total
(Dollar amounts in millions)	Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities		Fair value		Gross unrealized losses			Number of securities
Description of Securities
U.S. corporate:
Utilities	$	177	$	(2	)		21	$	2,129	$	(350	)		308	$	2,306	$	(352	)		329
Energy		122		(2	)		20		1,343		(141	)		168		1,465		(143	)		188
Finance and insurance		274		(8	)		42		5,192		(626	)		645		5,466		(634	)		687
Consumer—non-cyclical		173		(6	)		18		2,529		(266	)		280		2,702		(272	)		298
Technology and communications		105		(6	)		19		2,100		(233	)		269		2,205		(239	)		288
Industrial		50		(1	)		6		702		(87	)		96		752		(88	)		102
Capital goods		—		—			—		1,193		(118	)		150		1,193		(118	)		150
Consumer—cyclical		88		(1	)		11		1,073		(95	)		148		1,161		(96	)		159
Transportation		65		(4	)		5		621		(65	)		82		686		(69	)		87
Other		—		—			—		137		(13	)		18		137		(13	)		18

Subtotal, U.S. corporate securities		1,054		(30	)		142		17,019		(1,994	)		2,164		18,073		(2,024	)		2,306

Non-U.S. corporate:
Utilities		—		—			—		609		(55	)		68		609		(55	)		68
Energy		39		(1	)		4		487		(44	)		59		526		(45	)		63
Finance and insurance		100		(2	)		10		1,358		(138	)		203		1,458		(140	)		213
Consumer—non-cyclical		—		—			—		471		(61	)		55		471		(61	)		55
Technology and communications		—		—			—		659		(65	)		83		659		(65	)		83
Industrial		18		(2	)		5		436		(47	)		61		454		(49	)		66
Capital goods		—		—			—		384		(38	)		49		384		(38	)		49
Consumer—cyclical		—		—			—		188		(17	)		26		188		(17	)		26
Transportation		—		—			—		216		(20	)		30		216		(20	)		30
Other		—		—			—		372		(43	)		50		372		(43	)		50

Subtotal, non-U.S. corporate securities		157		(5	)		19		5,180		(528	)		684		5,337		(533	)		703

Total for corporate securities in an unrealized loss position	$	1,211	$	(35	)		161	$	22,199	$	(2,522	)		2,848	$	23,410	$	(2,557	)		3,009

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The scheduled maturity distribution of fixed maturity securities as of June 30, 2024 is set forth below. Actual maturities may differ from contractual maturities because issuers of securities may have the right to call or prepay obligations with or without call or prepayment penalties.


(Amounts in millions)	Amortized cost or cost		Fair value

Due one year or less	$	1,267	$	1,254
Due after one year through five years		8,281		8,022
Due after five years through ten years		12,210		11,427
Due after ten years		22,425		20,135

Subtotal		44,183		40,838
Residential mortgage-backed		906		851
Commercial mortgage-backed		1,605		1,312
Other asset-backed		2,304		2,232

Total	$	48,998	$	45,233

As of June 30, 2024, securities issued by finance and insurance,

consumer—non-cyclical,

utilities and technology and communications industry groups represented approximately 27%, 14%, 14% and 10%, respectively, of our domestic and foreign corporate fixed maturity securities portfolio. No other industry group comprised more than 10% of our investment portfolio.

As of June 30, 2024, we did not hold any fixed maturity securities in any single issuer, other than securities issued or guaranteed by the U.S. government, which exceeded 10% of stockholders’ equity.

(e) Commercial Mortgage Loans

Our mortgage loans are collateralized by commercial properties, including multi-family residential buildings. The carrying value of commercial mortgage loans is stated at original cost net of principal payments, amortization and allowance for credit losses.

We diversify our commercial mortgage loans by both property type and geographic region. The following tables set forth the distribution across property type and geographic region for commercial mortgage loans as of the dates indicated:


	June 30, 2024						December 31, 2023
(Amounts in millions)	Carrying value			% of total			Carrying value			% of total
Property type:
Retail	$	2,794			42	%	$	2,858			42	%
Office		1,457			22			1,481			22
Industrial		1,400			21			1,440			21
Apartments		513			8			522			8
Mixed use		372			5			371			5
Other		156			2			157			2

Subtotal		6,692			100	%		6,829			100	%

Allowance for credit losses		(30	)					(27	)

Total	$	6,662					$	6,802

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(Unaudited)


	June 30, 2024						December 31, 2023
(Amounts in millions)	Carrying value			% of total			Carrying value			% of total
Geographic region:
South Atlantic	$	1,808			27	%	$	1,803			26	%
Pacific		1,228			18			1,281			19
Mountain		1,002			15			1,029			15
Middle Atlantic		889			13			925			14
West South Central		545			8			553			8
East North Central		442			7			445			6
West North Central		396			6			404			6
East South Central		202			3			206			3
New England		180			3			183			3

Subtotal		6,692			100	%		6,829			100	%

Allowance for credit losses		(30	)					(27	)

Total	$	6,662					$	6,802

As of June 30, 2024, we had one commercial mortgage loan with an amortized cost of $11 million that was

61-90

days past due in the industrial property type. The carrying value of this commercial mortgage loan was lower than the fair value of its collateral as of June 30, 2024. We had no other commercial mortgage loans past due or any commercial mortgage loans on

non-accrual

status as of June 30, 2024. As of December 31, 2023, we had no commercial mortgage loans past due or on

non-accrual

status. For a discussion of our policy related to placing commercial mortgage loans on

non-accrual

status, see Note 2—Summary of Significant Accounting Policies included in the Notes to Consolidated Financial Statements in our 2023 Annual Report on Form

10-K.

During the six months ended June 30, 2024 and the year ended December 31, 2023, we did not have any loan modifications or extensions associated with borrowers experiencing financial difficulty that resulted in the consideration of whether to establish a new loan or to continue accounting for the modification or extension under the existing loan.

The following table sets forth the allowance for credit losses related to commercial mortgage loans as of and for the periods indicated:


	Three months ended June 30,				Six months ended June 30,
(Amounts in millions)	2024		2023		2024		2023
Allowance for credit losses:
Beginning balance	$	29	$	24	$	27	$	22
Provision		1		—		3		2
Write-offs		—		—		—		—
Recoveries		—		—		—		—

Ending balance	$	30	$	24	$	30	$	24

In evaluating the credit quality of commercial mortgage loans, we assess the performance of the underlying loans using both quantitative and qualitative criteria. Certain risks associated with commercial mortgage loans can be evaluated by reviewing both the debt-to-value and debt service coverage ratio to understand both the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

probability of the borrower not being able to make the necessary loan payments as well as the ability to sell the underlying property for an amount that would enable us to recover our unpaid principal balance in the event of default by the borrower. The average debt-to-value ratio is based on our most recent estimate of the fair value for the underlying property which is evaluated at least annually and updated more frequently if necessary to better indicate risk associated with the loan. A lower debt-to-value indicates that our loan value is more likely to be recovered in the event of default by the borrower if the property were sold. The debt service coverage ratio is based on “normalized” annual income of the property compared to the payments required under the terms of the loan. Normalization allows for the removal of annual one-time events such as capital expenditures, prepaid or late real estate tax payments or non-recurring third-party fees (such as legal, consulting or contract fees). This ratio is evaluated at least annually and updated more frequently if necessary to better indicate risk associated with the loan. A higher debt service coverage ratio indicates the borrower is less likely to default on the loan. The debt service coverage ratio is not used without considering other factors associated with the borrower, such as the borrower’s liquidity or access to other resources that may result in our expectation that the borrower will continue to make the future scheduled payments.

The following tables set forth commercial mortgage loans by year of origination and credit quality indicator as of June 30, 2024:


(Amounts in millions)	2024		2023		2022		2021		2020		2019 and prior		Total


Debt-to-value:
0% - 50%	$	29	$	20	$	74	$	85	$	114	$	1,958	$	2,280
51% - 60%		6		28		107		239		105		967		1,452
61% - 75%		94		221		738		570		247		1,040		2,910
76% - 100%		—		—		—		—		4		46		50
Greater than 100%		—		—		—		—		—		—		—

Total amortized cost	$	129	$	269	$	919	$	894	$	470	$	4,011	$	6,692

Debt service coverage ratio:
Less than 1.00	$	—	$	—	$	17	$	4	$	17	$	215	$	253
1.00 - 1.25		3		14		37		9		16		176		255
1.26 - 1.50		59		171		220		102		66		605		1,223
1.51 - 2.00		42		65		391		416		201		1,454		2,569
Greater than 2.00		25		19		254		363		170		1,561		2,392

Total amortized cost	$	129	$	269	$	919	$	894	$	470	$	4,011	$	6,692

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following tables set forth the debt-to-value of commercial mortgage loans by property type as of the dates indicated:


	June 30, 2024
(Amounts in millions)	0% - 50%			51% - 60%			61% - 75%			76% - 100%			Greater than 100%			Total
Property type:
Retail	$	922		$	729		$	1,143		$	—		$	—		$	2,794
Office		346			341			735			35			—			1,457
Industrial		610			251			539			—			—			1,400
Apartments		199			62			244			8			—			513
Mixed use		115			59			191			7			—			372
Other		88			10			58			—			—			156

Total amortized cost	$	2,280		$	1,452		$	2,910		$	50		$	—		$	6,692

% of total		34	%		22	%		43	%		1	%		—	%		100	%

Weighted-average debt service coverage ratio		2.40			1.85			1.67			0.87			—			1.95


	December 31, 2023
(Amounts in millions)	0% - 50%			51% - 60%			61% - 75%			76% - 100%			Greater than 100%			Total
Property type:
Retail	$	945		$	686		$	1,227		$	—		$	—		$	2,858
Office		350			325			771			35			—			1,481
Industrial		670			250			520			—			—			1,440
Apartments		194			61			259			8			—			522
Mixed use		120			61			183			7			—			371
Other		89			10			58			—			—			157

Total amortized cost	$	2,368		$	1,393		$	3,018		$	50		$	—		$	6,829

% of total		35	%		20	%		44	%		1	%		—	%		100	%

Weighted-average debt service coverage ratio		2.42			1.87			1.66			0.87			—			1.96

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following tables set forth the debt service coverage ratio for fixed rate commercial mortgage loans

property type as of the dates indicated:


	June 30, 2024
(Amounts in millions)	Less than 1.00			1.00 - 1.25			1.26 - 1.50			1.51 - 2.00			Greater than 2.00			Total

Property type:
Retail	$	49		$	106		$	578		$	1,120		$	941		$	2,794
Office		99			45			244			601			468			1,457
Industrial		42			30			209			472			647			1,400
Apartments		12			50			79			184			188			513
Mixed use		27			10			91			161			83			372
Other		24			14			22			31			65			156

Total amortized cost	$	253		$	255		$	1,223		$	2,569		$	2,392		$	6,692

% of total		4	%		4	%		18	%		38	%		36	%		100	%

Weighted-average debt-to-value		63	%		62	%		64	%		57	%		46	%		55	%


	December 31, 2023
(Amounts in millions)	Less than 1.00			1.00 - 1.25			1.26 - 1.50			1.51 - 2.00			Greater than 2.00			Total

Property type:
Retail	$	54		$	105		$	583		$	1,142		$	974		$	2,858
Office		105			48			244			615			469			1,481
Industrial		43			30			181			471			715			1,440
Apartments		12			51			86			187			186			522
Mixed use		27			14			80			164			86			371
Other		24			15			22			32			64			157

Total amortized cost	$	265		$	263		$	1,196		$	2,611		$	2,494		$	6,829

% of total		4	%		4	%		17	%		38	%		37	%		100	%

Weighted-average debt-to-value		64	%		63	%		65	%		58	%		46	%		55	%

(5) Derivative Instruments

Our business activities routinely deal with fluctuations in interest rates, equity prices, currency exchange rates and other asset and liability prices. We use derivative instruments to mitigate or reduce some of these risks. We have established policies for managing each of these risks, including prohibitions on derivatives market-making and other speculative derivatives activities. These policies require the use of derivative instruments in concert with other techniques to reduce or mitigate these risks. While we use derivatives to mitigate or reduce risks, certain derivatives do not meet the accounting requirements to be designated as hedging instruments and are denoted as “derivatives not designated as hedges” in the following disclosures. For derivatives that meet the accounting requirements to be designated as hedges, the following disclosures for these derivatives are denoted as “derivatives designated as hedges,” which include cash flow hedges.

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(

Unaudited

)

The following table sets forth our positions in derivative instruments as of the dates indicated:


	Derivative assets					Derivative liabilities
		Fair value					Fair value
(Amounts in millions)	Balance sheet classification	June 30, 2024		December 31, 2023		Balance sheet classification	June 30, 2024		December 31, 2023
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps	Other invested assets	$	26	$	55	Other liabilities	$	636	$	490
Foreign currency swaps	Other invested assets		12		10	Other liabilities		1		2
Forward bond purchase commitments	Other invested assets		21		51	Other liabilities		13		—

Total cash flow hedges			59		116			650		492

Total derivatives designated as hedges			59		116			650		492

Derivatives not designated as hedges
Equity index options	Other invested assets		21		15	Other liabilities		—		—
Financial futures (1)	Other invested assets		—		—	Other liabilities		—		—
Forward bond purchase commitments	Other invested assets		—		—	Other liabilities		20		9
Fixed indexed annuity embedded derivatives	Other assets		—		—	Policyholder account balances (2)		160		165
Indexed universal life embedded derivatives	Reinsurance recoverable		—		—	Policyholder account balances (3)		16		15

Total derivatives not designated as hedges			21		15			196		189

Total derivatives		$	80	$	131		$	846	$	681

(1)	The period end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis.

(2)	Represents the embedded derivatives associated with our fixed indexed annuity liabilities.

(3)	Represents the embedded derivatives associated with our indexed universal life liabilities.

The fair value of derivative positions presented above was not offset by the respective collateral amounts received or provided under these agreements.

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The activity associated with derivative instruments can generally be measured by the change in notional value over the periods presented. However, for fixed indexed annuity embedded derivatives and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies. The following tables represent activity associated with derivative instruments as of the dates indicated:


		December 31,				Maturities/			June 30,
(Notional in millions)	Measurement	2023		Additions		terminations			2024
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps	Notional	$	8,975	$	231	$	(399	)	$	8,807
Foreign currency swaps	Notional		131		13		—			144
Forward bond purchase commitments	Notional		1,075		1,528		—			2,603

Total cash flow hedges			10,181		1,772		(399	)		11,554

Total derivatives designated as hedges			10,181		1,772		(399	)		11,554

Derivatives not designated as hedges
Equity index options	Notional		702		308		(357	)		653
Financial futures	Notional		1,251		2,363		(2,455	)		1,159
Forward bond purchase commitments	Notional		500		—		—			500

Total derivatives not designated as hedges			2,453		2,671		(2,812	)		2,312

Total derivatives		$	12,634	$	4,443	$	(3,211	)	$	13,866


		December 31,				Maturities/			June 30,
(Number of policies)	Measurement	2023		Additions		terminations			2024
Derivatives not designated as hedges
Fixed indexed annuity embedded derivatives	Policies		5,826		—		(530	)		5,296
Indexed universal life embedded derivatives	Policies		749		—		(17	)		732

Cash Flow Hedges

Certain derivative instruments are designated as cash flow hedges. The changes in fair value of these instruments are recorded as a component of other comprehensive income (loss) (“OCI”). We designate and account for the following as cash flow hedges when they have met the effectiveness requirements: (i) various types of interest rate swaps to convert floating rate investments to fixed rate investments; (ii) various types of interest rate swaps to convert floating rate liabilities into fixed rate liabilities; (iii) receive U.S. dollar fixed on foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments; (iv) forward starting interest rate swaps to hedge against changes in interest rates associated with future fixed rate bond purchases and/or interest income; (v) forward bond purchase commitments to hedge against the variability in the anticipated cash flows required to purchase future fixed rate bonds; and (vi) other instruments to hedge the cash flows of various forecasted transactions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides information about the pre-tax income effects of cash flow hedges for the three months ended June 30, 2024:


(Amounts in millions)	Gain (loss) recognized in OCI			Gain (loss) reclassified into net income from OCI			Classification of gain (loss) reclassified into net income	Gain (loss) recognized in net income		Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets	$	(77	)	$	52		Net investment income	$	—	Net investment gains (losses)
Interest rate swaps hedging assets		—			1		Net investment gains (losses)		—	Net investment gains (losses)
Interest rate swaps hedging liabilities		—			(1	)	Interest expense		—	Net investment gains (losses)
Foreign currency swaps		2			—		Net investment income		—	Net investment gains (losses)
Forward bond purchase commitments		(33	)		—		Net investment gains (losses)		—	Net investment gains (losses)

Total	$	(108	)	$	52			$	—

The following table provides information about the pre-tax income effects of cash flow hedges for the three months ended June 30, 2023:


(Amounts in millions)	Gain (loss) recognized in OCI			Gain (loss) reclassified into net income from OCI		Classification of gain (loss) reclassified into net income	Gain (loss) recognized in net income		Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets	$	(104	)	$	55	Net investment income	$	—	Net investment gains (losses)
Interest rate swaps hedging assets		—			3	Net investment gains (losses)		—	Net investment gains (losses)
Foreign currency swaps		(2	)		—	Net investment income		—	Net investment gains (losses)

Total	$	(106	)	$	58		$	—

The following table provides information about the pre-tax income effects of cash flow hedges for the six months ended June 30, 2024:


(Amounts in millions)	Gain (loss) recognized in OCI			Gain (loss) reclassified into net income from OCI			Classification of gain (loss) reclassified into net income	Gain (loss) recognized in net income		Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets	$	(225	)	$	105		Net investment income	$	—	Net investment gains (losses)
Interest rate swaps hedging assets		—			5		Net investment gains (losses)		—	Net investment gains (losses)
Interest rate swaps hedging liabilities		—			(2	)	Interest expense		—	Net investment gains (losses)
Foreign currency swaps		3			—		Net investment income		—	Net investment gains (losses)
Forward bond purchase commitments		(44	)		—		Net investment gains (losses)		—	Net investment gains (losses)

Total	$	(266	)	$	108			$	—

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GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides information about the pre-tax income effects of cash flow hedges for the six months ended June 30, 2023:


(Amounts in millions)	Gain (loss) recognized in OCI			Gain (loss) reclassified into net income from OCI			Classification of gain (loss) reclassified into net income	Gain (loss) recognized in net income		Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets	$	42		$	109		Net investment income	$	—	Net investment gains (losses)
Interest rate swaps hedging assets		—			8		Net investment gains (losses)		—	Net investment gains (losses)
Interest rate swaps hedging liabilities		—			(1	)	Interest expense		—	Net investment gains (losses)
Interest rate swaps hedging liabilities		—			1		Net investment gains (losses)		—	Net investment gains (losses)
Foreign currency swaps		(3	)		—		Net investment income		—	Net investment gains (losses)
Foreign currency swaps		—			2		Net investment gains (losses)		—	Net investment gains (losses)

Total	$	39		$	119			$	—

The following table provides a reconciliation of current period changes, net of applicable income taxes, for these designated derivatives presented in the separate component of stockholders’ equity labeled “derivatives qualifying as hedges,” as of and for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
(Amounts in millions)	2024			2023			2024			2023

Beginning balance	$	849		$	1,274		$	1,010		$	1,200
Current period increases (decreases) in fair value, net of deferred taxes of $23, $23, $56 and $(8)		(85	)		(83	)		(210	)		31
Reclassification to net (income), net of deferred taxes of $18, $21, $38 and $42		(34	)		(37	)		(70	)		(77	)

Ending balance	$	730		$	1,154		$	730		$	1,154

The total of derivatives designated as cash flow hedges of $

730

million, net of taxes, recorded in stockholders’ equity as of June 30, 2024 is expected to be reclassified to net income (loss) in the future, concurrently with and primarily offsetting changes in interest expense and interest income on floating rate instruments and interest income on future fixed rate bond purchases. Of this amount, $

129

million, net of taxes, is expected to be reclassified to net income (loss) in the next 12 months. Actual amounts may vary from this amount as a result of market conditions. All forecasted transactions associated with qualifying cash flow hedges are expected to occur by

2057

. During the six months ended June 30, 2024 and 2023, we reclassified $

million and $

million, respectively, to net income in connection with forecasted transactions that were no longer considered reasonably possible of occurring.

Derivatives Not Designated As Hedges

We enter into certain non-qualifying derivative instruments such as equity index options and financial futures to mitigate the risks associated with liabilities that have guaranteed minimum benefits, fixed indexed

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

annuities and indexed universal life. Our fixed indexed annuity and indexed universal life insurance products with certain features are required to be bifurcated as embedded derivatives. Additionally, we have forward bond purchase commitments to hedge against the variability in the anticipated cash flows required to purchase future fixed rate bonds.

The following table provides the pre-tax gain (loss) recognized in net income for the effects of derivatives not designated as hedges for the periods indicated:


	Three months ended June 30,						Six months ended June 30,						Classification of gain (loss) recognized in net income
(Amounts in millions)	2024			2023			2024			2023			Classification of gain (loss) recognized in net income

Equity index options	$	1		$	5		$	6		$	6		Net investment gains (losses)
Financial futures		(15	)		(65	)		(79	)		(67	)	Changes in fair value of market risk benefits and associated hedges
Forward bond purchase commitments		(7	)		(3	)		(11	)		(3	)	Net investment gains (losses)
Fixed indexed annuity embedded derivatives		(5	)		(8	)		(13	)		(10	)	Net investment gains (losses)
Indexed universal life embedded derivatives		2			2			6			7		Net investment gains (losses)

Total derivatives not designated as hedges	$	(24	)	$	(69	)	$	(91	)	$	(67	)

Derivative Counterparty Credit Risk

Most of our derivative arrangements with counterparties require the posting of collateral upon meeting certain net exposure thresholds. The following table presents additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated:


	June 30, 2024									December 31, 2023
(Amounts in millions)	Derivative assets (1)			Derivative liabilities (1)			Net derivatives			Derivative assets (1)			Derivative liabilities (1)			Net derivatives


Amounts presented in the balance sheet:
Gross amounts recognized	$	80		$	670		$	(590	)	$	131		$	501		$	(370	)
Gross amounts offset in the balance sheet		—			—			—			—			—			—

Net amounts presented in the balance sheet		80			670			(590	)		131			501			(370	)
Gross amounts not offset in the balance sheet:
Financial instruments (2)		(38	)		(38	)		—			(59	)		(59	)		—
Collateral received		(17	)		—			(17	)		(19	)		—			(19	)
Collateral pledged		—			(1,288	)		1,288			—			(1,100	)		1,100
Over collateralization		2			656			(654	)		—			658			(658	)

Net amount	$	27		$	—		$	27		$	53		$	—		$	53

(1)	Does not include amounts related to embedded derivatives as of June 30, 2024 and December 31, 2023.

(2)	Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty.

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(6) Fair Value of Financial Instruments

Recurring Fair Value Measurements

We have fixed maturity securities, equity securities, limited partnerships, derivatives, short-term investments, embedded derivatives, separate account assets, market risk benefits (“MRBs”) and certain other financial instruments, which are carried at fair value. Below is a description of the valuation techniques and inputs used to determine fair value by class of instrument.

Fixed maturity securities, equity securities and short-term investments

The fair value of fixed maturity securities, equity securities and short-term investments is estimated primarily based on information derived from third-party pricing services (“pricing services”), internal models and/or broker quotes, which may use a market approach, income approach or a combination of the market and income approach depending on the type of instrument and availability of information. In general, a market approach is utilized if there is readily available and relevant market activity for an individual security. In certain cases where market information is not available for a specific security but is available for similar securities, that security is valued using market information for similar securities, which is also a market approach. When market information is not available for a specific security (or similar securities) or is available but such information is less relevant or reliable, an income approach or a combination of a market and income approach is utilized. For securities with optionality, such as call or prepayment features (including mortgage-backed or asset-backed securities), an income approach may be used. These valuation techniques may change from period to period, based on the relevance and availability of market data.

Further, while we consider the valuations provided by pricing services and broker quotes to be of high quality, management determines the fair value of our investment securities after considering all relevant and available information.

In general, we first obtain valuations from pricing services. If prices are unavailable for public securities, we obtain broker quotes. For all securities, excluding certain private fixed maturity securities, if neither a pricing service nor broker quotes valuation is available, we determine fair value using internal models. For certain private fixed maturity securities where we do not obtain valuations from pricing services, we utilize an internal model to determine fair value since transactions for similar securities are not readily observable and these securities are not typically valued by pricing services.

Given our understanding of the pricing methodologies and procedures of pricing services, the securities valued by pricing services are typically classified as Level 2 unless we determine the valuation process for a security or group of securities utilizes significant unobservable inputs, which would result in the valuation being classified as Level 3. Broker quotes may be utilized when pricing services data is not available and are typically classified as Level 3 due to the use of significant unobservable inputs.

For private fixed maturity securities, we utilize an income approach where we obtain public bond spreads and utilize those in an internal model to determine fair value. Other inputs to the model include rating and weighted-average life, as well as sector which is used to assign the spread. We then add an additional premium, which represents an unobservable input, to the public bond spread to adjust for the liquidity and other features of our private placements. We utilize the estimated market yield to discount the expected cash flows of the security to determine fair value. We utilize price caps for securities where the estimated market yield results in a valuation that may exceed the amount that would be received in a market transaction. When a security does not

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have an external rating, we assign the security an internal rating to determine the appropriate public bond spread that should be utilized in the valuation. While we generally consider the public bond spreads by sector and maturity to be observable inputs, we evaluate the similarities of our private placements with the public bonds, price caps, liquidity premiums applied, and whether external ratings are available for our private placements to determine whether the spreads utilized would be considered observable inputs. We classify private securities without an external rating or public bond spread as Level 3. In general, a significant increase (decrease) in credit spreads would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of June 30, 2024.

For remaining securities priced using internal models, we determine fair value using an income approach. We maximize the use of observable inputs but typically utilize significant unobservable inputs to determine fair value. Accordingly, the valuations are typically classified as Level 3.

Our assessment of whether or not there were significant unobservable inputs related to fixed maturity securities was based on our observations obtained through the course of managing our investment portfolio, including interaction with other market participants, observations related to the availability and consistency of pricing and/or rating, and understanding of general market activity such as new issuance and the level of secondary market trading for a class of securities. Additionally, we considered data obtained from pricing services to determine whether our estimated values incorporate significant unobservable inputs that would result in the valuation being classified as Level 3.

A summary of the inputs used for our financial instruments carried at fair value based on the level in which instruments are classified is included below. We have combined certain classes of instruments together as the nature of the inputs is similar.

Level 1 measurements

Equity securities.

The primary inputs to the valuation of exchange-traded equity securities include quoted prices for the identical instrument.

Separate account assets.

The fair value of separate account assets is based on the quoted prices of the underlying fund investments and, therefore, represents Level 1 pricing.

Level 2 measurements

Fixed maturity

securities

•

Third-party pricing services:

In estimating the fair value of fixed maturity securities, 88%

of our portfolio was priced using third-party pricing services as of June 30, 2024. These pricing services utilize industry-standard valuation techniques that include market-based approaches, income-based approaches, a combination of market-based and income-based approaches or other proprietary, internally generated models as part of the valuation processes. These third-party pricing vendors maximize the use of publicly available data inputs to generate valuations for each asset class. Priority and type of inputs used may change frequently as certain inputs may be more direct drivers of valuation at the time of pricing. Examples of significant inputs incorporated by pricing services may include sector and issuer spreads, seasoning, capital structure, security optionality, collateral data, prepayment assumptions, default assumptions, delinquencies, debt covenants, benchmark yields, trade data, dealer

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quotes, credit ratings, maturity and weighted-average life. We conduct regular meetings with our pricing services for the purpose of understanding the methodologies, techniques and inputs used by the third-party pricing providers.

The following table presents a summary of the significant inputs used by our pricing services for certain fair value measurements of

fixed maturit

securities that are classified as Level 2 as of June 30, 2024:


(Amounts in millions)	Fair value		Primary methodologies	Significant inputs
U.S. government, agencies and government-sponsored enterprises	$	3,512	Price quotes from trading desk, broker feeds	Bid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread

State and political subdivisions	$	2,103	Multi-dimensional attribute-based modeling systems, third-party pricing vendors	Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes

Non-U.S. government	$	709	Matrix pricing, spread priced to benchmark curves, price quotes from market makers	Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

U.S. corporate	$	23,287	Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, OAS-based models	Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports

Non-U.S. corporate	$	5,976	Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers	Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

Residential mortgage-backed	$	849	OAS-based models, single factor binomial models, internally priced	Prepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports

Commercial mortgage-backed	$	1,301	Multi-dimensional attribute-based modeling systems, pricing matrix, spread matrix priced to swap curves, Trepp commercial mortgage-backed securities analytics model	Credit risk, interest rate risk, prepayment speeds, new issue data, collateral performance, origination year, tranche type, original credit ratings, weighted-average life, cash flows, spreads derived from broker quotes, bid side prices, spreads to daily updated swaps curves, TRACE reports

Other asset-backed	$	2,119	Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makers	Spreads to daily updated swap curves, spreads derived from trade prices and broker quotes, bid side prices, new issue data, collateral performance, analysis of prepayment speeds, cash flows, collateral loss analytics, historical issue analysis, trade data from market makers, TRACE reports

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•

Internal models:

A portion of our U.S. corporate and

non-U.S.

corporate securities are valued using internal models. The fair value of these fixed maturity securities was $1,542 million and $849 million, respectively, as of June 30, 2024. Internally modeled securities are primarily private fixed maturity securities where we use market observable inputs such as an interest rate yield curve, published credit spreads for similar securities based on the external ratings of the instrument and related industry sector of the issuer. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps and liquidity premiums are established using inputs from market participants.

Equity securities.

The primary inputs to the valuation include quoted prices for identical asset

, or similar assets in markets that are not active.

Short-term investments.

The fair value of short-term investments classified as Level 2 is determined after considering prices obtained by pricing services.

Level 3 measurements

Fixed maturity securities

•

Broker quotes:

A portion of our state and political subdivisions, U.S. corporate,

non-U.S.

corporate, residential mortgage-backed, commercial mortgage-backed and other asset-backed securities are valued using broker quotes. Broker quotes are obtained from third-party providers that have current market knowledge to provide a reasonable price for securities not routinely priced by pricing services. Brokers utilized for valuation of assets are reviewed annually. The fair value of our Level 3 fixed maturity securities priced by broker quotes was $

205

million as of June 30, 2024.

•

Internal models:

A portion of our state and political subdivisions, U.S. corporate,

non-U.S.

corporate, residential mortgage-backed and other asset-backed securities are valued using internal models. The primary inputs to the valuation of the bond population include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, duration, call provisions, issuer rating, benchmark yields and credit spreads. Certain private fixed maturity securities are valued using an internal model using market observable inputs such as the interest rate yield curve, as well as published credit spreads for similar securities, which includes significant unobservable inputs. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps are established using inputs from market participants. For structured securities, the primary inputs to the valuation include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, weighted-average coupon, weighted-average maturity, issuer rating, structure of the security, expected prepayment speeds and volumes, collateral type, current and forecasted loss severity, average delinquency rates, vintage of the loans, geographic region, debt service coverage ratios, payment priority with the tranche, benchmark yields and credit spreads. The fair value of our Level 3 fixed maturity securities priced using internal models was $2,781 million as of June 30, 2024.

Equity securities.

The primary inputs to the valuation include broker quotes where the underlying inputs are unobservable and for internal models, structure of the security and issuer rating.

Limited partnerships.

The fair value of limited partnerships classified as Level 3 is determined based on third-party valuation sources that utilize unobservable inputs, such as a reference to public market or private transactions, valuations for comparable companies or assets, discounted cash flows and/or recent transactions.

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Short-term investments.

The primary inputs to the valuation include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, duration, call provisions, issuer rating, benchmark yields and credit spreads. Certain securities are valued using an internal model using market observable inputs such as the interest rate yield curve, as well as published credit spreads for similar securities, which include significant unobservable inputs.

Net asset value

Limited partnerships.

Limited partnerships are valued based on comparable market transactions, discounted future cash flows, quoted market prices and/or estimates using the most recent data available for the underlying instrument. We utilize the net asset value (“NAV”) from the underlying fund statements as a practical expedient for fair value.

Derivatives

We consider counterparty collateral arrangements and rights of

set-off

when evaluating our net credit risk exposure to our derivative counterparties. Accordingly, we are permitted to include consideration of these arrangements when determining whether any incremental adjustment should be made for both the counterparty’s and our

non-performance

risk in measuring fair value for our derivative instruments. As a result of these counterparty arrangements, we determined that any adjustment for credit risk would not be material and we have not recorded any incremental adjustment for our

non-performance

risk or the

non-performance

risk of the derivative counterparty for our derivative assets or liabilities.

Foreign currency swaps.

The valuation of foreign currency swaps is determined using an income approach. The primary inputs into the valuation represent the forward interest rate swap curve and foreign currency exchange rates, both of which are considered observable inputs, and results in the derivative being classified as Level 2.

Equity index options.

We have equity index options associated with various equity indices. The valuation of equity index options is determined using an income approach. The primary inputs into the valuation represent forward interest rates, equity index volatility, equity index and time value component associated with the optionality in the derivative. The equity index volatility surface is determined based on market information that is not readily observable and is developed based upon inputs received from several third-party sources. Accordingly, these options are classified as Level 3. As of June 30, 2024, a significant increase (decrease) in the equity index volatility discussed above would have resulted in a significantly higher (lower) fair value measurement.

Financial futures.

The fair value of financial futures is based on the closing exchange prices. Accordingly, these financial futures are classified as Level 1. The period end valuation is zero as a result of settling the margins on these contracts on a

daily basis.

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Forward bond purchase commitments.

The valuation of forward bond purchase commitments is determined using an income approach. The primary inputs into the valuation represent current bond prices and interest rates, as well as an estimate of the cost of counterparty financing to acquire and carry the bond during the forward period. The estimated cost of counterparty financing is not readily observable and is developed based upon an assumed spread; accordingly, these derivatives are classified as Level 3.

Fixed indexed annuity and indexed universal life embedded derivatives.

We have fixed indexed annuity and indexed universal life insurance products where interest is credited to the policyholder’s account balance based on equity index changes. This feature is required to be bifurcated as an embedded derivative and recorded at fair value. Fair value is determined using an income approach where the present value of the excess cash flows above the guaranteed cash flows is used to determine the value attributed to the equity index feature. The inputs used in determining the fair value include policyholder behavior (lapses and withdrawals), near-term equity index volatility, expected future interest credited, forward interest rates and an adjustment to the discount rate to incorporate

non-performance

risk and risk margins. As a result of our assumptions for expected future interest credited being considered significant unobservable inputs, we classify these instruments as Level 3. As expected future interest credited decreases, the value of our embedded derivative liability will decrease. As of June 30, 2024, a significant change in the unobservable inputs discussed above would have resulted in a significantly lower or higher fair value measurement.

Market risk benefits

MRBs are contracts or contract features that provide protection to the contractholder from and expose us to other-than-nominal capital market risk. MRBs include certain contract features on fixed and variable annuity products that provide minimum guarantees, in addition to the policyholder account balance, such as guaranteed minimum death benefits (“GMDBs”), guaranteed minimum withdrawal benefits (“GMWBs”) and guaranteed payout annuity floor benefits (“GPAFs”). MRBs are measured at fair value using an income-based valuation model based on current net amounts at risk, market data, experience and other factors.

MRB assets and liabilities for minimum guarantees are valued and presented separately from the related separate account and policyholder account balances.

Fixed indexed annuities

The valuation of fixed indexed annuities MRBs, which includes GMWB features, is based on an income approach that incorporates inputs such as policyholder behavior (GMWB utilization, lapses and mortality), equity index volatility, expected future interest credited, forward interest rates and an adjustment to the discount rate to incorporate non-performance risk and risk margins. Our discount rate used to determine fair value of our fixed indexed annuities MRBs includes market credit spreads above U.S. Treasury rates to reflect an adjustment for the non-performance risk of the fixed indexed annuities MRBs. We determine fair value using an internal model based on the various inputs noted above. As a result of our assumptions for GMWB utilization, expected future interest credited and non-performance risk being considered significant unobservable inputs, we classify these instruments as Level 3. As expected future interest credited decreases or GMWB utilization increases, the value of our fixed indexed annuities MRB liability will increase. Any increase in non-performance risk would increase the discount rate and would decrease the fair value of the liability. As of June 30, 2024, a significant change in the unobservable inputs discussed above would have resulted in a significantly lower or higher fair value measurement. Refer to note 11 for additional details related to the changes in the fair value measurement of fixed indexed annuities MRBs as of June 30, 2024 and December 31, 2023.

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Variable annuities

The valuation of our variable annuities MRBs, which includes GMWB, GMDB and GPAF features, is based on an income approach that incorporates inputs such as policyholder behavior (GMWB utilization, lapses and mortality), equity index volatility, interest rates, equity index and fund correlation and an adjustment to the discount rate to incorporate

non-performance

risk and risk margins. Our discount rate used to determine fair value of our variable annuities MRBs includes market credit spreads above U.S. Treasury rates to reflect an adjustment for the

non-performance

risk of the variable annuities MRBs. We determine fair value using an internal model based on the various inputs noted above. We classify the variable annuities MRBs valuation as Level 3 based on having significant unobservable inputs, with policyholder behavior (GMWB utilization and lapses), equity index volatility and

non-performance

risk being considered the more significant unobservable inputs. As equity index volatility increases, the fair value of the variable annuities MRBs will increase. An increase in our lapse assumption would decrease the fair value of the variable annuities MRBs, whereas an increase in our GMWB utilization rate would increase the fair value. Any increase in

non-performance

risk would increase the discount rate and would decrease the fair value of the liability. As of June 30, 2024, a significant change in the unobservable inputs discussed above would have resulted in a significantly lower or higher fair value measurement. Refer to note 11 for additional details related to the changes in the fair value measurement of variable annuities MRBs as of June 30, 2024 and December 31, 2023.

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The following tables set forth our assets by class of instrument that are measured at fair value on a recurring basis as of the dates indicated:


	June 30, 2024
(Amounts in millions)	Total		Level 1		Level 2		Level 3		NAV (1)

Assets
Investments:
Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	3,512	$	—	$	3,512	$	—	$	—
State and political subdivisions		2,168		—		2,103		65		—
Non-U.S. government		709		—		709		—		—
U.S. corporate:
Utilities		4,232		—		3,389		843		—
Energy		2,322		—		2,277		45		—
Finance and insurance		7,028		—		6,348		680		—
Consumer—non-cyclical		4,353		—		4,290		63		—
Technology and communications		2,750		—		2,738		12		—
Industrial		1,094		—		1,079		15		—
Capital goods		2,145		—		2,091		54		—
Consumer—cyclical		1,553		—		1,436		117		—
Transportation		1,062		—		1,042		20		—
Other		274		—		139		135		—

Total U.S. corporate		26,813		—		24,829		1,984		—

Non-U.S. corporate:
Utilities		710		—		430		280		—
Energy		1,047		—		928		119		—
Finance and insurance		1,852		—		1,719		133		—
Consumer—non-cyclical		598		—		521		77		—
Technology and communications		806		—		789		17		—
Industrial		803		—		743		60		—
Capital goods		595		—		550		45		—
Consumer—cyclical		231		—		224		7		—
Transportation		422		—		400		22		—
Other		572		—		521		51		—

Total non-U.S. corporate		7,636		—		6,825		811		—

Residential mortgage-backed		851		—		849		2		—
Commercial mortgage-backed		1,312		—		1,301		11		—
Other asset-backed		2,232		—		2,119		113		—

Total fixed maturity securities		45,233		—		42,247		2,986		—

Equity securities		435		364		29		42		—
Limited partnerships		2,314		—		—		16		2,298
Other invested assets:
Derivative assets:
Interest rate swaps		26		—		26		—		—
Foreign currency swaps		12		—		12		—		—
Equity index options		21		—		—		21		—
Forward bond purchase commitments		21		—		—		21		—

Total derivative assets		80		—		38		42		—

Short-term investments		12		—		12		—		—

Total other invested assets		92		—		50		42		—

Separate account assets		4,553		4,553		—		—		—

Total assets	$	52,627	$	4,917	$	42,326	$	3,086	$	2,298

(1)	Limited partnerships that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.

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	December 31, 2023
(Amounts in millions)	Total		Level 1		Level 2		Level 3		NAV (1)

Assets
Investments:
Fixed maturity securities:
U.S. government, agencies and government-sponsored enterprises	$	3,494	$	—	$	3,494	$	—	$	—
State and political subdivisions		2,302		—		2,242		60		—
Non-U.S. government		626		—		626		—		—
U.S. corporate:
Utilities		4,273		—		3,392		881		—
Energy		2,372		—		2,312		60		—
Finance and insurance		7,278		—		6,561		717		—
Consumer—non-cyclical		4,505		—		4,436		69		—
Technology and communications		3,023		—		3,011		12		—
Industrial		1,233		—		1,210		23		—
Capital goods		2,181		—		2,146		35		—
Consumer—cyclical		1,649		—		1,527		122		—
Transportation		1,162		—		1,140		22		—
Other		309		—		160		149		—

Total U.S. corporate		27,985		—		25,895		2,090		—

Non-U.S. corporate:
Utilities		685		—		416		269		—
Energy		1,027		—		896		131		—
Finance and insurance		1,948		—		1,814		134		—
Consumer—non-cyclical		616		—		535		81		—
Technology and communications		891		—		867		24		—
Industrial		797		—		734		63		—
Capital goods		561		—		508		53		—
Consumer—cyclical		221		—		220		1		—
Transportation		364		—		342		22		—
Other		701		—		649		52		—

Total non-U.S. corporate		7,811		—		6,981		830		—

Residential mortgage-backed		907		—		904		3		—
Commercial mortgage-backed		1,418		—		1,407		11		—
Other asset-backed		2,238		—		2,136		102		—

Total fixed maturity securities		46,781		—		43,685		3,096		—

Equity securities		396		321		43		32		—
Limited partnerships		2,193		—		—		20		2,173
Other invested assets:
Derivative assets:
Interest rate swaps		55		—		55		—		—
Foreign currency swaps		10		—		10		—		—
Equity index options		15		—		—		15		—
Forward bond purchase commitments		51		—		—		51		—

Total derivative assets		131		—		65		66		—

Short-term investments		27		—		20		7		—

Total other invested assets		158		—		85		73		—

Separate account assets		4,509		4,509		—		—		—

Total assets	$	54,037	$	4,830	$	43,813	$	3,221	$	2,173

(1)	Limited partnerships that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.

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The following tables present additional information about assets measured

fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value as of and for the dates indicated:


	Beginning balance as of April 1, 2024		Total realized and unrealized gains (losses)						Purchases		Sales			Issuances		Settlements			Transfer into Level 3 (1)		Transfer out of Level 3 (1)			Ending balance as of June 30, 2024		Total gains (losses) attributable to assets still held
(Amounts in millions)	Beginning balance as of April 1, 2024		Included in net income			Included in OCI			Purchases		Sales			Issuances		Settlements			Transfer into Level 3 (1)		Transfer out of Level 3 (1)			Ending balance as of June 30, 2024		Included in net income			Included in OCI
Fixed maturity securities:
State and political subdivisions	$	65	$	1		$	(1	)	$	—	$	—		$	—	$	—		$	—	$	—		$	65	$	1		$	(1	)
U.S. corporate:
Utilities		867		—			(15	)		—		(13	)		—		—			8		(4	)		843		—			(17	)
Energy		60		(1	)		1			—		(4	)		—		(11	)		—		—			45		—			—
Finance and insurance		730		1			—			—		—			—		(65	)		14		—			680		—			(3	)
Consumer—non-cyclical		64		—			(1	)		—		—			—		—			—		—			63		—			(1	)
Technology and communications		12		—			—			—		—			—		—			—		—			12		—			—
Industrial		15		—			—			—		—			—		—			—		—			15		—			—
Capital goods		34		—			—			20		—			—		—			—		—			54		—			—
Consumer—cyclical		118		—			—			—		—			—		(1	)		—		—			117		—			—
Transportation		21		—			—			—		—			—		(1	)		—		—			20		—			—
Other		143		—			(1	)		—		—			—		(7	)		—		—			135		—			(1	)

Total U.S. corporate		2,064		—			(16	)		20		(17	)		—		(85	)		22		(4	)		1,984		—			(22	)

Non-U.S. corporate:
Utilities		260		—			(5	)		25		—			—		—			—		—			280		—			(6	)
Energy		130		—			—			—		—			—		(11	)		—		—			119		—			—
Finance and insurance		132		1			—			—		—			—		—			—		—			133		1			—
Consumer—non-cyclical		77		—			—			—		—			—		—			—		—			77		—			(1	)
Technology and communications		24		—			—			—		—			—		(7	)		—		—			17		—			—
Industrial		61		—			(1	)		—		—			—		—			—		—			60		—			(1	)
Capital goods		33		—			(2	)		14		—			—		—			—		—			45		—			(1	)
Consumer—cyclical		1		—			(1	)		7		—			—		—			—		—			7		—			—
Transportation		22		—			—			—		—			—		—			—		—			22		—			—
Other		51		—			—			—		—			—		—			—		—			51		—			—

Total non-U.S. corporate		791		1			(9	)		46		—			—		(18	)		—		—			811		1			(9	)

Residential mortgage-backed		3		—			—			—		—			—		(1	)		—		—			2		—			—
Commercial mortgage-backed		11		—			—			—		—			—		—			—		—			11		—			—
Other asset-backed		108		—			(1	)		25		—			—		(5	)		—		(14	)		113		—			—

Total fixed maturity securities		3,042		2			(27	)		91		(17	)		—		(109	)		22		(18	)		2,986		2			(32	)

Equity securities		32		—			—			18		(8	)		—		—			—		—			42		—			—
Limited partnerships		19		(3	)		—			—		—			—		—			—		—			16		(3	)		—
Other invested assets:
Derivative assets:
Equity index options		20		1			—			4		—			—		(4	)		—		—			21		2			—
Forward bond purchase commitments		41		—			(20	)		—		—			—		—			—		—			21		—			(15	)

Total derivative assets		61		1			(20	)		4		—			—		(4	)		—		—			42		2			(15	)

Total other invested assets		61		1			(20	)		4		—			—		(4	)		—		—			42		2			(15	)

Total Level 3 assets	$	3,154	$	—		$	(47	)	$	113	$	(25	)	$	—	$	(113	)	$	22	$	(18	)	$	3,086	$	1		$	(47	)

(1)

The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities.

Table of Contents

GENWORTH FINANCIAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(

Unaudited

)


	Beginning balance as of April 1, 2023		Total realized and unrealized gains (losses)						Purchases		Sales			Issuances		Settlements			Transfer into Level 3 (1)		Transfer out of Level 3 (1)			Ending balance as of June 30, 2023		Total gains (losses) attributable to assets still held
(Amounts in millions)	Beginning balance as of April 1, 2023		Included in net income			Included in OCI			Purchases		Sales			Issuances		Settlements			Transfer into Level 3 (1)		Transfer out of Level 3 (1)			Ending balance as of June 30, 2023		Included in net income		Included in OCI
Fixed maturity securities:
State and political subdivisions	$	59	$	1		$	—		$	—	$	—		$	—	$	—		$	—	$	—		$	60	$	1	$	—
U.S. corporate:
Utilities		859		—			(11	)		—		(31	)		—		(10	)		11		—			818		—		(18	)
Energy		115		—			—			—		—			—		(1	)		—		(55	)		59		—		(1	)
Finance and insurance		697		—			(6	)		48		—			—		(30	)		—		(5	)		704		—		(10	)
Consumer—non-cyclical		69		—			(1	)		—		—			—		—			—		—			68		—		(1	)
Technology and communications		12		—			(1	)		—		—			—		—			—		—			11		—		—
Industrial		22		—			—			—		—			—		—			—		—			22		—		—
Capital goods		34		—			—			—		—			—		—			—		—			34		—		(1	)
Consumer—cyclical		127		—			(2	)		1		—			—		(2	)		—		—			124		—		(2	)
Transportation		24		—			(1	)		—		—			—		—			—		—			23		—		—
Other		156		—			1			—		—			—		(4	)		—		—			153		—		1

Total U.S. corporate		2,115		—			(21	)		49		(31	)		—		(47	)		11		(60	)		2,016		—		(32	)

Non-U.S. corporate:
Utilities		298		—			(9	)		1		—			—		—			30		—			320		—		(8	)
Energy		119		—			(2	)		—		—			—		—			—		—			117		—		(2	)
Finance and insurance		131		2			(7	)		—		—			—		—			—		—			126		2		(6	)
Consumer—non-cyclical		73		—			—			—		—			—		—			—		—			73		—		(1	)
Technology and communications		26		—			—			—		—			—		—			—		—			26		—		—
Industrial		75		—			—			—		—			—		—			—		—			75		—		(1	)
Capital goods		52		—			(1	)		—		—			—		—			—		—			51		—		—
Consumer—cyclical		9		—			1			—		—			—		(1	)		—		—			9		—		—
Transportation		22		—			(1	)		—		—			—		—			—		—			21		—		(1	)
Other		22		—			(1	)		—		—			—		—			—		—			21		—		—

Total non-U.S. corporate		827		2			(20	)		1		—			—		(1	)		30		—			839		2		(19	)

Residential mortgage-backed		8		—			1			—		—			—		(1	)		—		—			8		—		—
Commercial mortgage-backed		12		—			—			—		(1	)		—		—			—		—			11		—		—
Other asset-backed		95		—			(1	)		10		—			—		—			—		—			104		—		(1	)

Total fixed maturity securities		3,116		3			(41	)		60		(32	)		—		(49	)		41		(60	)		3,038		3		(52	)

Equity securities		33		—			—			1		(4	)		—		—			—		—			30		—		—
Limited partnerships		22		(1	)		—			—		—			—		—			—		—			21


		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023		3
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 (Unaudited)		4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (Unaudited)		5
	Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2024 and 2023 (Unaudited)		6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited)		8
	Notes to Condensed Consolidated Financial Statements (Unaudited)		9
	Note 1 — Business and Basis of Presentation		9
	Note 2 — Accounting Changes		10
	Note 3 — Earnings Per Share		11
	Note 4 — Investments		12
	Note 5 — Derivative Instruments		25
	Note 6 — Fair Value of Financial Instruments		31
	Note 7 — Deferred Acquisition Costs		52
	Note 8 — Future Policy Benefits		53
	Note 9 — Policyholder Account Balances		58
	Note 10 — Additional Insurance Liabilities		61
	Note 11 — Market Risk Benefits		62
	Note 12 — Separate Accounts		63
	Note 13 — Liability for Policy and Contract Claims		64
	Note 14 — Borrowings and Other Financings		65
	Note 15 — Income Taxes		67
	Note 16 — Segment Information		67
	Note 17 — Commitments and Contingencies		70
	Note 18 — Changes in Accumulated Other Comprehensive Income (Loss)		75

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		78

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		124

Item 4.	Controls and Procedures		125

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings		126

Item 1A.	Risk Factors		126

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		126

Item 5.	Other Information		126

Item 6.	Exhibits		127

Signatures			128