Document
10.78false--12-31Q120192019-03-3110-Q0000777917250000falseNon-accelerated FilerPRUCO LIFE INSURANCE COfalse10000052449030001010100000010000002500002500002500002500000031824000289200003000000100000120717000881090000002000000200000010000000004475900044759000 0000777917 2019-01-01 2019-03-31 0000777917 2019-05-09 0000777917 2018-12-31 0000777917 2019-03-31 0000777917 2018-01-01 2018-03-31 0000777917 us-gaap:CommonStockMember 2017-12-31 0000777917 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000777917 us-gaap:RetainedEarningsMember 2018-03-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000777917 cik777917:AccountingStandardUpdate201802Member us-gaap:ParentMember 2018-03-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000777917 us-gaap:ParentMember 2018-01-01 2018-03-31 0000777917 cik777917:AccountingStandardUpdate201802Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000777917 us-gaap:AccountingStandardsUpdate201601Member us-gaap:RetainedEarningsMember 2018-03-31 0000777917 cik777917:AccountingStandardUpdate201802Member us-gaap:RetainedEarningsMember 2018-03-31 0000777917 us-gaap:ParentMember 2018-03-31 0000777917 us-gaap:AccountingStandardsUpdate201601Member us-gaap:ParentMember 2018-03-31 0000777917 us-gaap:CommonStockMember 2018-03-31 0000777917 us-gaap:AccountingStandardsUpdate201601Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000777917 us-gaap:ParentMember 2017-12-31 0000777917 us-gaap:RetainedEarningsMember 2017-12-31 0000777917 us-gaap:RetainedEarningsMember 2019-03-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ParentMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000777917 us-gaap:ParentMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000777917 us-gaap:ParentMember 2018-12-31 0000777917 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000777917 us-gaap:RetainedEarningsMember 2018-12-31 0000777917 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000777917 us-gaap:CommonStockMember 2019-03-31 0000777917 us-gaap:CommonStockMember 2018-12-31 0000777917 2017-12-31 0000777917 2018-03-31 0000777917 us-gaap:RetainedInvestmentInSubsidiaryMember 2019-01-01 2019-03-31 0000777917 us-gaap:FinancingReceivables60To89DaysPastDueMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember 2018-12-31 0000777917 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2018-12-31 0000777917 us-gaap:FinancingReceivables30To59DaysPastDueMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2018-12-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:OtherAffiliatesMember 2018-12-31 0000777917 us-gaap:OtherAffiliatesMember 2019-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember cik777917:AccumulatedAllOtherOtherthanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember cik777917:AccumulatedAllOtherOtherthanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember 2018-12-31 0000777917 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-12-31 0000777917 us-gaap:OtherInvestmentsMember 2019-03-31 0000777917 us-gaap:CommercialLoanMember 2019-03-31 0000777917 cik777917:AgriculturalPropertyLoansMember 2019-03-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:ForeignGovernmentDebtMember 2019-03-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:ForeignGovernmentDebtMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:ForeignGovernmentDebtMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember 2018-12-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:ForeignGovernmentDebtMember 2019-03-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:MaturityUpTo30DaysMember 2019-03-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:ForeignGovernmentDebtMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:MaturityOvernightAndOnDemandMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:ForeignGovernmentDebtMember 2018-12-31 0000777917 us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:MaturityUpTo30DaysMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:CommercialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:PrivateEquityFundsDomesticMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:PrivateEquityFundsForeignMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:AssetBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:ResidentialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:AssetBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:USTreasuryAndGovernmentMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:ResidentialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:CommercialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:USTreasuryAndGovernmentMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 us-gaap:PrivateEquityFundsForeignMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:PrivateEquityFundsDomesticMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2018-12-31 0000777917 cik777917:NAICOtherThanHighorHighestQualityRatingMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 stpr:CA 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:LoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:OtherIncomeMember us-gaap:EquitySecuritiesMember 2019-01-01 2019-03-31 0000777917 stpr:NY 2019-03-31 0000777917 cik777917:NAICHighorHighestQualityRatingMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:LoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2018-12-31 0000777917 srt:EuropeMember 2019-03-31 0000777917 country:MX 2019-03-31 0000777917 stpr:TX 2019-03-31 0000777917 us-gaap:OtherIncomeMember us-gaap:EquitySecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMember 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 cik777917:NAICHighorHighestQualityRatingMember us-gaap:FixedMaturitiesMember 2018-12-31 0000777917 country:AU 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 cik777917:NAICOtherThanHighorHighestQualityRatingMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2019-03-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2019-03-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2019-03-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2019-03-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:PolicyLoansMember 2018-01-01 2018-03-31 0000777917 cik777917:ShortterminvestmentsandcashequivalentsMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember 2019-01-01 2019-03-31 0000777917 cik777917:ShortterminvestmentsandcashequivalentsMember 2019-01-01 2019-03-31 0000777917 us-gaap:PolicyLoansMember 2019-01-01 2019-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:FixedMaturitiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:LoansMember 2019-01-01 2019-03-31 0000777917 cik777917:TradingMember us-gaap:FixedMaturitiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:LoansMember 2018-01-01 2018-03-31 0000777917 cik777917:TradingMember us-gaap:FixedMaturitiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:AssetBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:PrivateEquityFundsForeignMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:PrivateEquityFundsDomesticMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:USTreasuryAndGovernmentMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:CommercialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:ResidentialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember 2019-03-31 0000777917 cik777917:InvestmentInSeparateAccountMember 2018-12-31 0000777917 us-gaap:DerivativeMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:PrivateEquityFundsMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:RealEstateInvestmentMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:HedgeFundsMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:RealEstateInvestmentMember 2018-12-31 0000777917 srt:PartnershipInterestMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:RealEstateInvestmentMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:HedgeFundsMember 2019-03-31 0000777917 us-gaap:DerivativeMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:HedgeFundsMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EquityMethodInvestmentsMember us-gaap:PrivateEquityFundsMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:PrivateEquityFundsMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:HedgeFundsMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:PrivateEquityFundsMember 2019-03-31 0000777917 cik777917:InvestmentInSeparateAccountMember 2019-03-31 0000777917 srt:PartnershipInterestMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:RealEstateInvestmentMember 2019-03-31 0000777917 srt:PartnershipInterestMember 2019-03-31 0000777917 us-gaap:DerivativeMember 2018-01-01 2018-03-31 0000777917 us-gaap:DerivativeMember 2019-01-01 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:FixedMaturitiesMember 2018-01-01 2018-03-31 0000777917 srt:PartnershipInterestMember 2019-01-01 2019-03-31 0000777917 srt:PartnershipInterestMember 2018-01-01 2018-03-31 0000777917 2018-01-01 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember 2019-01-01 2019-03-31 0000777917 us-gaap:CommercialLoanMember 2018-01-01 2018-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember 2018-01-01 2018-12-31 0000777917 us-gaap:CommercialLoanMember 2019-01-01 2019-03-31 0000777917 us-gaap:CommercialLoanMember 2017-12-31 0000777917 cik777917:AgriculturalPropertyLoansMember 2017-12-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSixtyPercentToSixtyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioOnePointEightXToTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember us-gaap:Ltv80To100PercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioLessThanOnePointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:DebtServiceCoverageRatioGreaterThanTwoPointZeroXMember cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioSeventyPercentToSeventyNinePointNineNinePercentMember 2018-12-31 0000777917 cik777917:CommercialMortgageAndAgriculturalLoansMember cik777917:LoanToValueRatioZeroPercentToFortyNinePointNineNinePercentMember 2018-12-31 0000777917 srt:OtherPropertyMember 2019-03-31 0000777917 srt:ApartmentBuildingMember 2019-03-31 0000777917 srt:IndustrialPropertyMember 2019-03-31 0000777917 srt:HotelMember 2019-03-31 0000777917 cik777917:AgriculturalPropertiesMember 2019-03-31 0000777917 srt:OtherPropertyMember 2018-12-31 0000777917 srt:RetailSiteMember 2019-03-31 0000777917 srt:OfficeBuildingMember 2019-03-31 0000777917 srt:RetailSiteMember 2018-12-31 0000777917 srt:HotelMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember 2018-12-31 0000777917 cik777917:AgriculturalPropertiesMember 2018-12-31 0000777917 srt:IndustrialPropertyMember 2018-12-31 0000777917 srt:ApartmentBuildingMember 2018-12-31 0000777917 srt:OfficeBuildingMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember 2019-03-31 0000777917 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:ResidentialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:USTreasuryAndGovernmentMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:CommercialMortgageBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:AssetBackedSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:PrivateEquityFundsDomesticMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:PrivateEquityFundsForeignMember us-gaap:FixedMaturitiesMember us-gaap:AccumulatedOtherThanTemporaryImpairmentMember 2019-03-31 0000777917 us-gaap:CommercialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:ResidentialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:AssetBackedSecuritiesMember 2019-03-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2019-03-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2019-03-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2019-03-31 0000777917 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-03-31 0000777917 us-gaap:FinancingReceivables30To59DaysPastDueMember 2019-03-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2019-03-31 0000777917 cik777917:AgriculturalPropertyLoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-03-31 0000777917 us-gaap:FinancingReceivables60To89DaysPastDueMember 2019-03-31 0000777917 us-gaap:CommercialLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-03-31 0000777917 us-gaap:MaturityOver90DaysMember 2019-03-31 0000777917 us-gaap:MaturityOver90DaysMember 2018-12-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:CreditRiskContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:NondesignatedMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:EquityContractMember us-gaap:NondesignatedMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:InterestRateContractMember us-gaap:NondesignatedMember us-gaap:InvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-03-31 0000777917 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-12-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2018-12-31 0000777917 cik777917:FuturePolicyBenefitsMember 2018-12-31 0000777917 cik777917:PALACandPrudentialInsuranceMember us-gaap:ReinsuranceRecoverableMember 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2019-03-31 0000777917 cik777917:PALACandPrudentialInsuranceMember us-gaap:ReinsuranceRecoverableMember 2018-12-31 0000777917 cik777917:UnionHamiltonReinsuranceLtd.Member us-gaap:ReinsuranceRecoverableMember 2018-12-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2018-12-31 0000777917 cik777917:UnionHamiltonReinsuranceLtd.Member us-gaap:ReinsuranceRecoverableMember 2019-03-31 0000777917 us-gaap:StockOptionMember us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000777917 us-gaap:CreditDefaultSwapMember us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:DesignatedAsHedgingInstrumentMember 2019-03-31 0000777917 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:CreditDefaultSwapMember us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:CurrencySwapMember us-gaap:NondesignatedMember 2019-03-31 0000777917 us-gaap:CurrencySwapMember us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000777917 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-03-31 0000777917 us-gaap:StockOptionMember us-gaap:NondesignatedMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:IncomeApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 srt:MinimumMember us-gaap:FairValueInputsLevel3Member 2019-01-01 2019-03-31 0000777917 cik777917:SeparateAccountAssetsMember 2018-12-31 0000777917 cik777917:SeparateAccountAssetsMember 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember 2019-03-31 0000777917 srt:MaximumMember us-gaap:FairValueInputsLevel3Member 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:IncomeApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 srt:MinimumMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember 2018-12-31 0000777917 us-gaap:OtherLiabilitiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember 2018-01-01 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2018-01-01 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2017-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember 2017-12-31 0000777917 cik777917:FuturePolicyBenefitsMember 2017-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember 2017-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2017-12-31 0000777917 us-gaap:OtherInvestmentsMember 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2017-12-31 0000777917 us-gaap:EquitySecuritiesMember 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2017-12-31 0000777917 us-gaap:OtherInvestmentsMember 2017-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2017-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2017-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2017-12-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2017-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000777917 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0000777917 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember 2019-01-01 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:StructuredFinanceMember us-gaap:AvailableforsaleSecuritiesMember 2018-12-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember 2018-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2018-12-31 0000777917 us-gaap:ShortTermInvestmentsMember 2018-12-31 0000777917 us-gaap:EquitySecuritiesMember 2018-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:CorporateDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember 2018-12-31 0000777917 cik777917:FuturePolicyBenefitsMember 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember 2018-12-31 0000777917 cik777917:PolicyholdersAccountBalancesMember 2018-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2018-12-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:USTreasuryAndGovernmentMember us-gaap:AvailableforsaleSecuritiesMember 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:AvailableforsaleSecuritiesMember 2019-03-31 0000777917 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000777917 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2019-03-31 0000777917 cik777917:FairValueLiabilityMeasuredOnRecurringBasisLiabilityForPayablesToParentAndAffiliatesMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2019-03-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-03-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-03-31 0000777917 cik777917:InternalPricingMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 cik777917:InternalPricingMember us-gaap:ReinsuranceRecoverableMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 cik777917:InternalPricingMember srt:WeightedAverageMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:InternalPricingMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000777917 cik777917:InternalPricingMember srt:WeightedAverageMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember cik777917:IncludedinothercomprehensiveincomelossMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember cik777917:NetInvestmentIncomeMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:ShortTermInvestmentsMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherLiabilitiesMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:GainLossOnInvestmentsMember1 us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 us-gaap:OtherInvestmentsMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ShortTermInvestmentsMember us-gaap:OtherIncomeMember 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:ShortTermInvestmentsMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:OtherIncomeMember us-gaap:AvailableforsaleSecuritiesMember 2018-01-01 2018-03-31 0000777917 cik777917:FuturePolicyBenefitsMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 us-gaap:ShortTermInvestmentsMember us-gaap:GainLossOnInvestmentsMember1 2018-01-01 2018-03-31 0000777917 us-gaap:EquitySecuritiesMember cik777917:IncludedinothercomprehensiveincomelossMember 2018-01-01 2018-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember cik777917:NetInvestmentIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:DebtSecuritiesMember cik777917:NetInvestmentIncomeMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ShortTermInvestmentsMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:GainLossOnInvestmentsMember1 us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 us-gaap:ShortTermInvestmentsMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 cik777917:PolicyholdersAccountBalancesMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ShortTermInvestmentsMember us-gaap:GainLossOnInvestmentsMember1 2019-01-01 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:EquitySecuritiesMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember us-gaap:OtherIncomeMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 cik777917:ReceivablesFromParentsAndAffiliatesMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReinsuranceRecoverableMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:OtherInvestmentsMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 us-gaap:DebtSecuritiesMember cik777917:IncludedinothercomprehensiveincomelossMember us-gaap:AvailableforsaleSecuritiesMember 2019-01-01 2019-03-31 0000777917 us-gaap:ShortTermInvestmentsMember cik777917:NetInvestmentIncomeMember 2019-01-01 2019-03-31 0000777917 cik777917:FuturePolicyBenefitsMember cik777917:IncludedinothercomprehensiveincomelossMember 2019-01-01 2019-03-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2018-12-31 0000777917 cik777917:FairValueLiabilityMeasuredOnRecurringBasisLiabilityForPayablesToParentAndAffiliatesMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AssetBackedSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2018-12-31 0000777917 us-gaap:OtherInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsDomesticMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:PrivateEquityFundsForeignMember 2018-12-31 0000777917 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignCorporateDebtSecuritiesMember 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:IncomeApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:IncomeApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember us-gaap:FairValueInputsLevel3Member cik777917:FuturePolicyBenefitsMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 cik777917:InternalPricingMember srt:WeightedAverageMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MaximumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember us-gaap:ReinsuranceRecoverableMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000777917 cik777917:InternalPricingMember srt:WeightedAverageMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:CostApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 cik777917:InternalPricingMember srt:MinimumMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:IncomeApproachValuationTechniqueMember 2018-01-01 2018-12-31 0000777917 srt:AffiliatedEntityMember cik777917:ParuMember 2010-12-31 2010-12-31 0000777917 srt:AffiliatedEntityMember cik777917:PrudentialOfTaiwanMember 2001-01-31 2001-01-31 0000777917 cik777917:UnaffiliatedMember 2019-01-01 2019-03-31 0000777917 srt:AffiliatedEntityMember cik777917:PurcMember 2011-01-01 2013-12-31 0000777917 cik777917:UnionHamiltonReinsuranceLtd.Member cik777917:QuoteShareReinsuranceforHDIv.3.0VABusinessMember 2015-04-01 2016-12-31 0000777917 cik777917:UnaffiliatedMember 2018-01-01 2018-03-31 0000777917 srt:AffiliatedEntityMember cik777917:ParccMember 2009-12-31 2009-12-31 0000777917 srt:AffiliatedEntityMember us-gaap:SubsidiaryOfCommonParentMember 2019-01-01 2019-03-31 0000777917 cik777917:UnionHamiltonReinsuranceLtd.Member 2019-03-31 0000777917 cik777917:UnaffiliatedMember 2018-12-31 0000777917 cik777917:UnaffiliatedMember 2019-03-31 0000777917 srt:AffiliatedEntityMember cik777917:TermReMember 2014-01-01 2017-12-31 0000777917 srt:AffiliatedEntityMember cik777917:ParuMember 2012-07-01 2012-07-01 0000777917 srt:AffiliatedEntityMember cik777917:GULReMember 2013-12-31 2013-12-31 0000777917 srt:AffiliatedEntityMember cik777917:GULReMember 2017-01-01 2017-01-01 0000777917 srt:AffiliatedEntityMember cik777917:PurcMember 2014-01-01 2016-12-31 0000777917 srt:AffiliatedEntityMember cik777917:DARTMember 2018-01-01 2018-01-01 0000777917 srt:AffiliatedEntityMember cik777917:ParTermMember 2010-01-01 2013-12-31 0000777917 cik777917:UnaffiliatedMember 2019-03-31 0000777917 cik777917:ParTermMember 2019-03-31 0000777917 cik777917:PALACMember 2019-03-31 0000777917 cik777917:DARTMember 2018-12-31 0000777917 cik777917:ParuMember 2019-03-31 0000777917 cik777917:UnaffiliatedMember 2018-12-31 0000777917 us-gaap:SubsidiaryOfCommonParentMember 2018-12-31 0000777917 cik777917:ParccMember 2019-03-31 0000777917 cik777917:GULReMember 2019-03-31 0000777917 cik777917:TermReMember 2019-03-31 0000777917 cik777917:PurcMember 2018-12-31 0000777917 cik777917:ParuMember 2018-12-31 0000777917 us-gaap:SubsidiaryOfCommonParentMember 2019-03-31 0000777917 cik777917:GULReMember 2018-12-31 0000777917 cik777917:ParccMember 2018-12-31 0000777917 cik777917:TermReMember 2018-12-31 0000777917 cik777917:PALACMember 2018-12-31 0000777917 cik777917:DARTMember 2019-03-31 0000777917 cik777917:ParTermMember 2018-12-31 0000777917 cik777917:PrudentialOfTaiwanMember 2018-12-31 0000777917 cik777917:PurcMember 2019-03-31 0000777917 cik777917:PrudentialOfTaiwanMember 2019-03-31 0000777917 cik777917:ItemsEffectedByReinsuranceMember 2018-12-31 0000777917 cik777917:ItemsEffectedByReinsuranceMember 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2018-12-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2019-01-01 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2019-01-01 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2019-01-01 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2019-01-01 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2018-12-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2018-12-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2019-03-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2018-12-31 0000777917 cik777917:OtherNetUnrealizedInvestmentGainsAndLossesMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2018-12-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2018-12-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredCostsPolicyAcquisitionAndSalesInducementsAndValuationOfBusinessAcquiredPreTaxMember 2018-12-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:AccumulatedNetUnrealizedInvestmentGainLossPreTaxMember 2018-12-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:PolicyholdersAccountBalancesPreTaxMember 2019-03-31 0000777917 us-gaap:AccumulatedOtherThanTemporaryImpairmentMember cik777917:DeferredIncomeTaxLiabilityBenefitMember 2019-03-31 0000777917 us-gaap:AccountingStandardsUpdate201601Member us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-03-31 0000777917 cik777917:AccountingStandardUpdate201802Member us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-03-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-03-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-01-01 2018-03-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2017-12-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2018-03-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2018-01-01 2018-03-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2017-12-31 0000777917 us-gaap:AccountingStandardsUpdate201601Member us-gaap:AccumulatedTranslationAdjustmentMember 2018-03-31 0000777917 cik777917:AccountingStandardUpdate201802Member us-gaap:AccumulatedTranslationAdjustmentMember 2018-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:CrossCurrencyInterestRateContractMember us-gaap:CashFlowHedgingMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-01-01 2018-03-31 0000777917 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-03-31 0000777917 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:AvailableforsaleSecuritiesMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-03-31 0000777917 us-gaap:CashFlowHedgingMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2017-12-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-03-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0000777917 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0000777917 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-03-31 0000777917 us-gaap:SubsidiaryOfCommonParentMember 2018-01-01 2018-03-31 0000777917 us-gaap:SubsidiaryOfCommonParentMember 2019-01-01 2019-03-31 0000777917 us-gaap:CorporateJointVentureMember 2019-01-01 2019-03-31 0000777917 srt:ParentCompanyMember 2018-01-01 2018-03-31 0000777917 cik777917:PrudentialInsuranceandPrudentialFInancialMember 2019-01-01 2019-03-31 0000777917 cik777917:PGIMMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:PrudentialInsuranceandPrudentialFInancialMember 2018-12-31 0000777917 cik777917:PrudentialInsuranceandPrudentialFInancialMember 2019-03-31 0000777917 us-gaap:CorporateJointVentureMember 2018-01-01 2018-03-31 0000777917 srt:ParentCompanyMember 2019-01-01 2019-03-31 0000777917 cik777917:PrudentialInsuranceandPrudentialFInancialMember 2018-01-01 2018-03-31 0000777917 cik777917:PrudentialAnnuitiesDistributorsMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:PrudentialAnnuitiesDistributorsMember srt:AffiliatedEntityMember 2018-01-01 2018-03-31 0000777917 us-gaap:CorporateJointVentureMember 2019-03-31 0000777917 us-gaap:CorporateJointVentureMember 2018-12-31 0000777917 cik777917:ASTISIandPGIMInvestmentsMember srt:AffiliatedEntityMember 2018-01-01 2018-03-31 0000777917 cik777917:ASTISIandPGIMInvestmentsMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:PGIMInvestmentsLLCMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 srt:AffiliatedEntityMember 2018-12-31 0000777917 srt:AffiliatedEntityMember 2019-03-31 0000777917 srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 srt:MinimumMember cik777917:U.S.DollarfixedratenotesMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 srt:MaximumMember cik777917:U.S.DollarfloatingratenotesMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:U.S.DollarfixedratenotesMember srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:U.S.DollarfloatingratenotesMember srt:AffiliatedEntityMember 2019-03-31 0000777917 srt:MaximumMember cik777917:U.S.DollarfixedratenotesMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:U.S.DollarfixedratenotesMember srt:AffiliatedEntityMember 2018-12-31 0000777917 srt:MinimumMember cik777917:U.S.DollarfloatingratenotesMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:U.S.DollarfloatingratenotesMember srt:AffiliatedEntityMember 2018-12-31 0000777917 cik777917:DARTMember srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:PruRealtySecuritiesMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:GULRe4Member srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:PALAC2Member srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:GULRe5Member srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:PrudentialInsurance1Member srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:PruRealtySecuritiesMember srt:AffiliatedEntityMember 2019-03-31 0000777917 cik777917:GULRe5Member srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:GULRe4Member srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:DARTMember srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:PALAC2Member srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 cik777917:PrudentialInsurance1Member srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0000777917 srt:AffiliatedEntityMember 2018-01-01 2018-03-31 0000777917 cik777917:PGIMMember srt:AffiliatedEntityMember 2018-01-01 2018-03-31 0000777917 cik777917:PGIMInvestmentsLLCMember srt:AffiliatedEntityMember 2018-01-01 2018-03-31 0000777917 us-gaap:InvestmentsMember us-gaap:CommitmentsMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember us-gaap:CommitmentsMember 2018-12-31 0000777917 us-gaap:CommercialLoanMember us-gaap:CommitmentsMember 2019-03-31 0000777917 country:ID 2017-07-31 0000777917 us-gaap:InvestmentsMember us-gaap:CommitmentsMember 2019-03-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:ParentMember 2017-12-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:ParentMember 2018-03-31 0000777917 srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2017-12-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:RetainedEarningsMember 2017-12-31 0000777917 srt:RestatementAdjustmentMember us-gaap:ParentMember 2017-12-31 0000777917 srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000777917 srt:RestatementAdjustmentMember us-gaap:ParentMember 2018-01-01 2018-03-31 0000777917 srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2018-03-31 0000777917 srt:RestatementAdjustmentMember us-gaap:ParentMember 2018-03-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:ParentMember 2018-01-01 2018-03-31 0000777917 srt:ScenarioPreviouslyReportedMember us-gaap:RetainedEarningsMember 2018-03-31 0000777917 srt:ScenarioPreviouslyReportedMember 2018-01-01 2018-03-31 0000777917 srt:RestatementAdjustmentMember 2018-01-01 2018-03-31 xbrli:pure iso4217:USD xbrli:shares cik777917:subsidiary xbrli:shares iso4217:USD cik777917:policy
Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 ________________________________________
FORM 10-Q
________________________________________
ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
OR
¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from              to             
Commission file number 033-37587        
____________________________________________________________ 
Pruco Life Insurance Company
(Exact name of Registrant as specified in its charter)
Arizona
 
22-1944557
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer Identification No.)
213 Washington Street
Newark, New Jersey 07102
(973) 802-6000
(Address and Telephone Number of Registrant's Principal Executive Offices)
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  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the 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  x    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 definitions of “large accelerated filer", "accelerated filer", "smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
x
Smaller reporting company
¨
 
 
Emerging growth company
¨
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  x
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Not Applicable
Not Applicable
Not Applicable
As of May 9, 2019, 250,000 shares of the registrant’s Common Stock (par value $10) were outstanding. As of such date, The Prudential Insurance Company of America, a New Jersey corporation, owned all of the registrant’s Common Stock.
Pruco Life Insurance Company meets the conditions set
forth in General Instruction (H) (1) (a) and (b) on Form 10-Q and
is therefore filing this Form 10-Q in the reduced disclosure format.

Table of Contents


TABLE OF CONTENTS
 
 
 
Page
Number
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 6.
 
 

2



Table of Contents


FORWARD-LOOKING STATEMENTS
Certain of the statements included in this Quarterly Report on Form 10-Q, including but not limited to those in Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Pruco Life Insurance Company and its subsidiary. There can be no assurance that future developments affecting Pruco Life Insurance Company and its subsidiary will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; (2) losses on insurance products due to mortality experience or policyholder behavior experience that differs significantly from our expectations when we price our products; (3) changes in interest rates and equity prices that may (a) adversely impact the profitability of our products, the value of separate accounts supporting these products or the value of assets we manage, (b) result in losses on derivatives we use to hedge risk or increase collateral posting requirements and (c) limit opportunities to invest at appropriate returns; (4) guarantees within certain of our products which are market sensitive and may decrease our earnings or increase the volatility of our results of operations or financial position; (5) liquidity needs resulting from (a) derivative collateral market exposure, (b) asset/liability mismatches, (c) the lack of available funding in the financial markets or (d) unexpected cash demands due to severe mortality calamity or lapse events; (6) financial or customer losses, or regulatory and legal actions, due to inadequate or failed processes or systems, external events and human error or misconduct such as (a) disruption of our systems and data, (b) an information security breach, (c) a failure to protect the privacy of sensitive data or (d) reliance on third parties; (7) changes in the regulatory landscape, including related to (a) financial sector regulatory reform (b) changes in tax laws, (c) fiduciary rules and other standards of care, (d) state insurance laws and developments regarding group-wide supervision, capital and reserves, and (e) privacy and cybersecurity regulation; (8) technological changes which may adversely impact companies in our investment portfolio or cause insurance experience to deviate from our assumptions; (9) ratings downgrades; (10) market conditions that may adversely affect the sales or persistency of our products; (11) competition; and (12) reputational damage. Pruco Life Insurance Company does not intend, and is under no obligation, to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of certain risks relating to our business and investment in our securities.

3



Table of Contents


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements

PRUCO LIFE INSURANCE COMPANY
Unaudited Interim Consolidated Statements of Financial Position
March 31, 2019 and December 31, 2018 (in thousands, except share amounts)
 
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Fixed maturities, available for sale, at fair value (amortized cost: 2019 – $5,468,161; 2018 - $5,244,903)
$
5,606,209

 
$
5,199,595

Fixed maturities, trading, at fair value (amortized cost: 2019 – $44,759; 2018 – $44,759)
43,000

 
41,627

Equity securities, at fair value (cost: 2019 – $28,920; 2018 – $31,824)
34,747

 
36,922

Policy loans
1,251,094

 
1,236,077

Commercial mortgage and other loans
1,212,618

 
1,209,150

Other invested assets (includes $88,109 and $120,717 measured at fair value at March 31, 2019 and December 31, 2018, respectively)
358,288

 
377,429

Total investments
8,505,956

 
8,100,800

Cash and cash equivalents
403,283

 
416,840

Deferred policy acquisition costs
1,675,860

 
1,613,922

Accrued investment income
89,358

 
88,278

Reinsurance recoverables
36,106,323

 
34,682,127

Receivables from parent and affiliates
278,050

 
289,580

Income taxes receivable
29,763

 
46,102

Other assets
378,154

 
365,219

Separate account assets
128,998,408

 
119,077,916

TOTAL ASSETS
$
176,465,155

 
$
164,680,784

LIABILITIES AND EQUITY
 
 
 
LIABILITIES
 
 
 
Policyholders’ account balances
$
22,209,376

 
$
22,059,692

Future policy benefits
20,943,806

 
19,476,394

Cash collateral for loaned securities
10,334

 
11,063

Payables to parent and affiliates
217,073

 
229,345

Other liabilities
1,133,756

 
1,093,143

Separate account liabilities
128,998,408

 
119,077,916

TOTAL LIABILITIES
173,512,753

 
161,947,553

COMMITMENTS AND CONTINGENT LIABILITIES (See Note 10)

 

EQUITY
 
 
 
Common stock ($10 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding)
2,500

 
2,500

Additional paid-in capital
1,146,588

 
1,146,592

Retained earnings
1,699,109

 
1,612,435

Accumulated other comprehensive income (loss)
104,205

 
(28,296
)
TOTAL EQUITY
2,952,402

 
2,733,231

TOTAL LIABILITIES AND EQUITY
$
176,465,155

 
$
164,680,784


See Notes to Unaudited Interim Consolidated Financial Statements

4



Table of Contents


PRUCO LIFE INSURANCE COMPANY
Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss)
Three Months Ended March 31, 2019 and 2018 (in thousands)
 
 
Three Months Ended March 31,
 
2019
 
2018
REVENUES
 
 
 
Premiums
$
13,994

 
$
7,915

Policy charges and fee income
139,189

 
129,155

Net investment income
93,250

 
77,915

Asset administration fees
3,657

 
3,473

Other income
20,957

 
19,296

Realized investment gains (losses), net:
 
 
 
Other-than-temporary impairments on fixed maturity securities
(2,784
)
 
(594
)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income
(379
)
 
0

Other realized investment gains (losses), net
(45,472
)
 
(48,448
)
Total realized investment gains (losses), net
(48,635
)
 
(49,042
)
TOTAL REVENUES
222,412

 
188,712

BENEFITS AND EXPENSES
 
 
 
Policyholders’ benefits
39,478

 
51,736

Interest credited to policyholders’ account balances
44,197

 
40,798

Amortization of deferred policy acquisition costs
19,179

 
26,145

General, administrative and other expenses
47,944

 
60,790

TOTAL BENEFITS AND EXPENSES
150,798

 
179,469

INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE
71,614

 
9,243

Income tax expense (benefit)
(16,880
)
 
(2,699
)
INCOME (LOSS) FROM OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURE
88,494

 
11,942

Equity in earnings of operating joint venture, net of taxes
(706
)
 
(638
)
NET INCOME (LOSS)
$
87,788

 
$
11,304

Other comprehensive income (loss), before tax:
 
 
 
Foreign currency translation adjustments
6,049

 
(923
)
Net unrealized investment gains (losses)
160,085

 
(145,051
)
Total
166,134

 
(145,974
)
Less: Income tax expense (benefit) related to other comprehensive income (loss)
33,633

 
(30,700
)
Other comprehensive income (loss), net of tax
132,501

 
(115,274
)
COMPREHENSIVE INCOME (LOSS)
$
220,289

 
$
(103,970
)

See Notes to Unaudited Interim Consolidated Financial Statements

5



Table of Contents


PRUCO LIFE INSURANCE COMPANY
Unaudited Interim Consolidated Statements of Equity
Three Months Ended March 31, 2019 and 2018 (in thousands)
 
 
  Common  
Stock
 
 Additional  
Paid-in
Capital
 
Retained Earnings  
 
Accumulated
Other
Comprehensive  
Income
(Loss)
 
Total Equity  
Balance, December 31, 2018
$
2,500

 
$
1,146,592

 
$
1,612,435

 
$
(28,296
)
 
$
2,733,231

Cumulative effect of adoption of accounting changes(1)
 
 
 
 
(1,114
)
 
0

 
(1,114
)
Contributed capital
 
 
0

 
 
 
 
 
0

Contributed (distributed) capital-parent/child asset transfers
 
 
(4
)
 
 
 
 
 
(4
)
Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
 
 
87,788

 
 
 
87,788

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
132,501

 
132,501

Total comprehensive income (loss)
 
 
 
 
 
 
 
 
220,289

Balance, March 31, 2019
$
2,500

 
$
1,146,588

 
$
1,699,109

 
$
104,205

 
$
2,952,402


 
Common  
Stock
 
Additional  
Paid-in
Capital
 
Retained
Earnings  
 
Accumulated
Other
Comprehensive  
Income
(Loss)
 
Total Equity  
Balance, December 31, 2017
$
2,500

 
$
1,141,092

 
$
1,526,310

 
$
165,346

 
$
2,835,248

Cumulative effect of adoption of ASU 2016-01
 
 
 
 
7,936

 
(1,539
)
 
6,397

Cumulative effect of adoption of ASU 2018-02
 
 
 
 
(30,399
)
 
30,399

 
0

Contributed capital
 
 
5,500

 
 
 
 
 
5,500

Contributed (distributed) capital-parent/child asset transfers
 
 
0

 
 
 
 
 
0

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
 
 
11,304

 
 
 
11,304

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
(115,274
)
 
(115,274
)
Total comprehensive income (loss)
 
 
 
 
 
 
 
 
(103,970
)
Balance, March 31, 2018
$
2,500

 
$
1,146,592

 
$
1,515,151

 
$
78,932

 
$
2,743,175


(1)
Includes the impact from the adoption of ASUs 2017-08 and 2017-12. See Note 2.








See Notes to Unaudited Interim Consolidated Financial Statements

6



Table of Contents


PRUCO LIFE INSURANCE COMPANY
Unaudited Interim Consolidated Statements of Cash Flows
Three Months Ended March 31, 2019 and 2018 (in thousands)
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income (loss)
$
87,788

 
$
11,304

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
Policy charges and fee income
(28,634
)
 
(23,697
)
Interest credited to policyholders’ account balances
44,197

 
40,798

Realized investment (gains) losses, net
48,635

 
49,042

Amortization and other non-cash items
(21,640
)
 
(9,397
)
Change in:
 
 
 
Future policy benefits
437,726

 
508,412

Reinsurance recoverables
(423,868
)
 
(424,467
)
Accrued investment income
(1,080
)
 
(1,537
)
Net payables to/receivables from parent and affiliates
(6,905
)
 
29,615

Deferred policy acquisition costs
(74,610
)
 
(45,642
)
Income taxes
(16,996
)
 
(2,902
)
Derivatives, net
66,403

 
(41,944
)
Other, net
(83,032
)
 
(97,354
)
Cash flows from (used in) operating activities
27,984

 
(7,769
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Proceeds from the sale/maturity/prepayment of:
 
 
 
Fixed maturities, available-for-sale
70,725

 
69,410

Equity securities
3,553

 
6

Policy loans
38,542

 
39,271

Ceded policy loans
(3,325
)
 
(5,192
)
Short-term investments
0

 
3,513

Commercial mortgage and other loans
12,184

 
16,369

Other invested assets
4,784

 
2,502

Payments for the purchase/origination of:
 
 
 
Fixed maturities, available-for-sale
(298,629
)
 
(188,613
)
Equity securities
(110
)
 
(5,000
)
Policy loans
(42,342
)
 
(35,689
)
Ceded policy loans
4,344

 
4,957

Short-term investments
0

 
(3,400
)
Commercial mortgage and other loans
(14,143
)
 
(69,717
)
Other invested assets
(10,745
)
 
(30,358
)
Notes receivable from parent and affiliates, net
8,251

 
3,853

Derivatives, net
306

 
(776
)
Other, net
(1,408
)
 
(1,465
)
Cash flows from (used in) investing activities
(228,013
)
 
(200,329
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Policyholders’ account deposits
1,284,926

 
1,119,440

Ceded policyholders’ account deposits
(854,083
)
 
(757,139
)
Policyholders’ account withdrawals
(858,819
)
 
(694,382
)
Ceded policyholders’ account withdrawals
602,592

 
437,445

Net change in securities sold under agreement to repurchase and cash collateral for loaned securities
(729
)
 
(19,593
)
Contributed (distributed) capital - parent/child asset transfers
(5
)
 
0

Net change in financing arrangements (maturities 90 days or less)
0

 
80

Drafts outstanding
12,590

 
(9,136
)
Cash flows from (used in) financing activities
186,472

 
76,715

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(13,557
)
 
(131,383
)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
416,840

 
212,569

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
403,283

 
$
81,186



Significant Non-Cash Transactions

There were no significant non-cash transactions for the three months ended March 31, 2019 and 2018.

See Notes to Unaudited Interim Consolidated Financial Statements

7



Table of Contents


PRUCO LIFE INSURANCE COMPANY
Notes to Unaudited Interim Consolidated Financial Statements
 
1.    BUSINESS AND BASIS OF PRESENTATION

Pruco Life Insurance Company (“Pruco Life”) is a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential Insurance”), which in turn is a direct wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). Pruco Life is a stock life insurance company organized in 1971 under the laws of the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam and in all states except New York, and sells such products primarily through affiliated and unaffiliated distributors.

Pruco Life has one wholly-owned insurance subsidiary, Pruco Life Insurance Company of New Jersey (“PLNJ”) and had one indirect subsidiary formed in 2009 for the purpose of holding certain commercial mortgage loans and other investments, which ceased operations and was dissolved as of December 31, 2018. Pruco Life and its subsidiary are together referred to as the "Company", "we" or "our" and all financial information is shown on a consolidated basis.

PLNJ is a stock life insurance company organized in 1982 under the laws of the state of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York only.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs ("DAC") and related amortization; amortization of deferred sales inducements ("DSI"); valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; reinsurance recoverables; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

Revision to Prior Period Consolidated Financial Statements

In 2018, the Company identified an error in the calculation of reserves for certain individual life insurance products that impacted several line items within previously issued consolidated financial statements. Prior period amounts have been revised in the financial statements and related disclosures to correct this error. Management evaluated these adjustments and concluded they were not material to any previously reported quarterly or annual financial statements. See Note 11 for a more detailed description of the revisions and for comparisons of amounts previously reported to the revised amounts.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.


8



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


2.    SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASU") to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASU. ASU listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASU not listed below were assessed and determined to be either not applicable or not material.

ASU adopted during the three months ended March 31, 2019.
Standard
 
Description
 
Effective date and method of adoption
 
Effect on the financial statements or other significant matters
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities
 
This ASU requires certain premiums on callable debt securities to be amortized to the earliest call date.

 
January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.
 
Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings was immaterial.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
 
This ASU makes targeted changes to the existing hedge accounting model to better portray the economics of an entity’s risk management activities and to simplify the use of hedge accounting. The ASU eliminates separate measurement and recording of hedge ineffectiveness. It requires entities to present the earnings effect of the hedging instrument in the same income statement line item in which the hedged item is reported and also requires expanded disclosures.
 
January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.
 
Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings and accumulated other comprehensive income (loss) ("AOCI") related to ineffectiveness of the hedge instruments outstanding at the date of the adoption was immaterial. See Note 4 for additional required disclosures.


ASU issued but not yet adopted as of March 31, 2019 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The ASU is effective January 1, 2021 (with early adoption permitted), and will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter.










9



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


ASU 2018-12 Amended Topic
 
Description
 
Method of adoption
 
Effect on the financial statements or other significant matters
Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products
 
Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Consolidated Statements of Operations.
 
An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) a full retrospective transition method.
 
The options for method of adoption and the impacts of such methods are under assessment.
Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products
 
Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield and will be required to be updated each quarter with the impact recorded through Other Comprehensive Income ("OCI").
 
As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI.
 
Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between the discount rate locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed.
Amortization of DAC and other balances
 
Requires DAC and other balances, such as unearned revenue reserves and DSI, to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability.
 
An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its future policy benefits, as described above, it is required to also use a retrospective transition method for DAC and other balances.
 
The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI.
Market Risk Benefits
 
Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value with changes in value attributable to changes in an entity’s non-performance risk ("NPR") to be recognized in OCI.
 
An entity will apply a retrospective transition method which will include a cumulative-effect adjustment on the balance sheet as of the earliest period presented.
 
Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed.


10



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Other ASU issued but not yet adopted as of March 31, 2019
Standard
 
Description
 
Effective date and method of adoption
 
Effect on the financial statements or other significant matters
ASU 2016-13,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
 
This ASU provides a new current expected credit loss model to account for credit losses on certain financial assets and off-balance sheet exposures (e.g., loans held for investment, debt securities held to maturity, reinsurance receivables, net investments in leases and loan commitments). The model requires an entity to estimate lifetime credit losses related to such financial assets and exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard also modifies the current other-than-temporary impairment standard for available-for-sale debt securities to require the use of an allowance rather than a direct write down of the investment, and replaces existing standard for purchased credit deteriorated loans and debt securities.
 
January 1, 2020 using the modified retrospective method which will include a cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption. However, prospective application is required for purchased credit deteriorated assets previously accounted for under ASU 310-30 and for debt securities for which an other-than-temporary-impairment was recognized prior to the date of adoption. Early adoption is permitted beginning January 1, 2019.
 
The Company does not plan to early adopt this ASU and is currently assessing its impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.



3.    INVESTMENTS

Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:
 
March 31, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
OTTI
in AOCI(3)
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
77,354

 
$
2,645

 
$
0

 
$
79,999

 
$
0

Obligations of U.S. states and their political subdivisions
608,071

 
31,553

 
18

 
639,606

 
0

Foreign government bonds
209,128

 
8,172

 
2,488

 
214,812

 
0

U.S. public corporate securities
1,926,382

 
96,244

 
17,364

 
2,005,262

 
0

U.S. private corporate securities
890,441

 
19,701

 
9,185

 
900,957

 
0

Foreign public corporate securities
289,697

 
10,112

 
3,953

 
295,856

 
0

Foreign private corporate securities
885,807

 
19,955

 
25,216

 
880,546

 
0

Asset-backed securities(1)
148,802

 
1,462

 
531

 
149,733

 
(85
)
Commercial mortgage-backed securities
345,909

 
7,239

 
1,379

 
351,769

 
0

Residential mortgage-backed securities(2)
86,570

 
1,482

 
383

 
87,669

 
(172
)
Total fixed maturities, available-for-sale
$
5,468,161

 
$
198,565

 
$
60,517

 
$
5,606,209

 
$
(257
)

(1)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, education loans and other asset types.
(2)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(3)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $0.2 million of net unrealized losses on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.


11



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
December 31, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
OTTI
in AOCI(3)
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
75,049

 
$
2,427

 
$
6

 
$
77,470

 
$
0

Obligations of U.S. states and their political subdivisions
609,955

 
15,154

 
2,351

 
622,758

 
0

Foreign government bonds
208,009

 
2,137

 
8,199

 
201,947

 
0

U.S. public corporate securities
1,739,860

 
46,166

 
54,401

 
1,731,625

 
0

U.S. private corporate securities
890,748

 
11,181

 
18,591

 
883,338

 
0

Foreign public corporate securities
270,428

 
3,746

 
12,151

 
262,023

 
0

Foreign private corporate securities
857,604

 
9,797

 
40,022

 
827,379

 
0

Asset-backed securities(1)
156,818

 
1,528

 
750

 
157,596

 
(122
)
Commercial mortgage-backed securities
347,570

 
3,353

 
4,527

 
346,396

 
0

Residential mortgage-backed securities(2)
88,862

 
1,268

 
1,067

 
89,063

 
(177
)
Total fixed maturities, available-for-sale
$
5,244,903

 
$
96,757

 
$
142,065

 
$
5,199,595

 
$
(299
)

(1)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(2)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(3)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $0.4 million of net unrealized losses on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

The following tables set forth the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

 
March 31, 2019
 
Less Than Twelve Months
 
Twelve Months or More
 
Total
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
0

 
$
0

 
$
0

 
$
0

 
$
0

 
$
0

Obligations of U.S. states and their political subdivisions
0

 
0

 
6,771

 
18

 
6,771

 
18

Foreign government bonds
4,181

 
28

 
71,392

 
2,460

 
75,573

 
2,488

U.S. public corporate securities
110,017

 
2,347

 
330,357

 
15,017

 
440,374

 
17,364

U.S. private corporate securities
54,835

 
4,183

 
194,614

 
5,002

 
249,449

 
9,185

Foreign public corporate securities
7,508

 
93

 
83,890

 
3,860

 
91,398

 
3,953

Foreign private corporate securities
114,485

 
3,592

 
228,928

 
21,624

 
343,413

 
25,216

Asset-backed securities
98,426

 
473

 
10,015

 
58

 
108,441

 
531

Commercial mortgage-backed securities
0

 
0

 
110,228

 
1,379

 
110,228

 
1,379

Residential mortgage-backed securities
186

 
1

 
28,181

 
382

 
28,367

 
383

Total fixed maturities, available-for-sale
$
389,638

 
$
10,717

 
$
1,064,376

 
$
49,800

 
$
1,454,014

 
$
60,517



12



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
December 31, 2018
 
Less Than Twelve Months
 
Twelve Months or More
 
Total
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
Fair Value  
 
Gross
  Unrealized  
Losses
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of
U.S. government authorities and agencies
$
0

 
$
0

 
$
630

 
$
6

 
$
630

 
$
6

Obligations of U.S. states and their political subdivisions
124,776

 
1,571

 
31,215

 
780

 
155,991

 
2,351

Foreign government bonds
77,055

 
3,184

 
59,700

 
5,015

 
136,755

 
8,199

U.S. public corporate securities
784,916

 
37,635

 
213,147

 
16,766

 
998,063

 
54,401

U.S. private corporate securities
263,934

 
9,159

 
287,031

 
9,432

 
550,965

 
18,591

Foreign public corporate securities
124,764

 
6,286

 
72,725

 
5,865

 
197,489

 
12,151

Foreign private corporate securities
424,921

 
22,605

 
127,201

 
17,417

 
552,122

 
40,022

Asset-backed securities
112,527

 
650

 
6,523

 
100

 
119,050

 
750

Commercial mortgage-backed securities
49,616

 
434

 
116,786

 
4,093

 
166,402

 
4,527

Residential mortgage-backed securities
34,249

 
240

 
32,432

 
827

 
66,681

 
1,067

Total fixed maturities, available-for-sale
$
1,996,758

 
$
81,764

 
$
947,390

 
$
60,301

 
$
2,944,148

 
$
142,065



As of March 31, 2019 and December 31, 2018, the gross unrealized losses on fixed maturity securities were composed of $46.4 million and $121.3 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $14.1 million and $20.8 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of March 31, 2019, the $49.8 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance, consumer non-cyclical and energy sectors. As of December 31, 2018, the $60.3 million of gross unrealized losses of twelve months or more were concentrated in the Company's corporate securities within the finance, energy and consumer non-cyclical sectors. In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company concluded that an adjustment to earnings for OTTI for these fixed maturity securities was not warranted at either March 31, 2019 or December 31, 2018. These conclusions were based on a detailed analysis of the underlying credit and cash flows on each security. Gross unrealized losses are primarily attributable to general credit spread widening, increases in interest rates and foreign currency exchange rate movements. As of March 31, 2019, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:

 
March 31, 2019
 
Amortized Cost
 
Fair Value
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
Due in one year or less
$
206,941

 
$
208,192

Due after one year through five years
705,933

 
703,752

Due after five years through ten years
993,523

 
1,008,175

Due after ten years
2,980,483

 
3,096,919

Asset-backed securities
148,802

 
149,733

Commercial mortgage-backed securities
345,909

 
351,769

Residential mortgage-backed securities
86,570

 
87,669

Total fixed maturities, available-for-sale
$
5,468,161

 
$
5,606,209




13



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of fixed maturities, for the periods indicated:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
Proceeds from sales(1)
$
24,787

 
$
16,852

Proceeds from maturities/prepayments
52,875

 
54,310

Gross investment gains from sales and maturities
949

 
144

Gross investment losses from sales and maturities
(1,970
)
 
(359
)
OTTI recognized in earnings(2)
(3,163
)
 
(594
)

(1)
Includes $6.9 million and $1.8 million of non-cash related proceeds due to the timing of trade settlements for the three months ended March 31, 2019 and 2018, respectively.
(2)
Excludes the portion of OTTI amounts remaining in OCI, representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment.

The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in thousands)
Credit loss impairments:
 
 
 
Balance, beginning of period
$
1,291

 
$
4,374

New credit loss impairments
3,022

 
0

Increases due to the passage of time on previously recorded credit losses
10

 
37

Reductions for securities which matured, paid down, prepaid or were sold during the period
(593
)
 
(42
)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected
(120
)
 
(25
)
Balance, end of period
$
3,610

 
$
4,344



Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income,” was $0.7 million and $(1.2) million during the three months ended March 31, 2019 and 2018, respectively.


14



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:
 
March 31, 2019
 
December 31, 2018
 
Amount
(in thousands)
 
% of
Total
 
Amount
(in thousands)
 
% of
Total
Commercial mortgage and agricultural property loans by property type:
 
 
 
 
 
 
 
Apartments/Multi-Family
$
356,454

 
29.3
%
 
$
362,811

 
29.9
%
Hospitality
15,969

 
1.3

 
16,083

 
1.3

Industrial
271,953

 
22.5

 
263,999

 
21.8

Office
191,236

 
15.7

 
187,450

 
15.5

Other
131,850

 
10.9

 
131,961

 
10.9

Retail
192,381

 
15.8

 
193,473

 
16.0

Total commercial mortgage loans
1,159,843

 
95.5

 
1,155,777

 
95.4

Agricultural property loans
54,833

 
4.5

 
55,438

 
4.6

Total commercial mortgage and agricultural property loans by property type
1,214,676

 
100.0
%
 
1,211,215

 
100.0
%
Allowance for credit losses
(2,058
)
 
 
 
(2,065
)
 
 
Total commercial mortgage and other loans
$
1,212,618

 
 
 
$
1,209,150

 
 


As of March 31, 2019, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in California (21%), Texas (14%) and New York (7%)) and included loans secured by properties in Europe (6%), Australia (4%) and Mexico (2%).

The following table sets forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:
 
Commercial Mortgage Loans
 
Agricultural Property Loans
 
Total
 
(in thousands)
Balance at December 31, 2017
$
1,728

 
$
66

 
$
1,794

Addition to (release of) allowance for credit losses
298

 
(27
)
 
271

Charge-offs, net of recoveries
0

 
0

 
0

Balance at December 31, 2018
2,026

 
39

 
2,065

Addition to (release of) allowance for credit losses
(10
)
 
3

 
(7
)
Charge-offs, net of recoveries
0

 
0

 
0

Balance at March 31, 2019
$
2,016

 
$
42

 
$
2,058



15



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, as of the dates indicated:
 
March 31, 2019
 
Commercial Mortgage Loans
 
Agricultural Property Loans
 
Total
 
(in thousands)
Allowance for credit losses:
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

Collectively evaluated for impairment
2,016

 
42

 
2,058

Total ending balance(1)
$
2,016

 
$
42

 
$
2,058

Recorded investment(2):
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

Collectively evaluated for impairment
1,159,843

 
54,833

 
1,214,676

Total ending balance(1)
$
1,159,843

 
$
54,833

 
$
1,214,676


(1)
As of March 31, 2019, there were no loans acquired with deteriorated credit quality.
(2)
Recorded investment reflects the carrying value gross of related allowance.
 
December 31, 2018
 
Commercial Mortgage Loans
 
Agricultural Property Loans
 
Total
 
(in thousands)
Allowance for credit losses:
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

Collectively evaluated for impairment
2,026

 
39

 
2,065

Total ending balance(1)
$
2,026

 
$
39

 
$
2,065

Recorded investment(2):
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
816

 
$
816

Collectively evaluated for impairment
1,155,777

 
54,622

 
1,210,399

Total ending balance(1)
$
1,155,777

 
$
55,438

 
$
1,211,215


(1)
As of December 31, 2018, there were no loans acquired with deteriorated credit quality.
(2)
Recorded investment reflects the carrying value gross of related allowance.

The following tables set forth certain key credit quality indicators for commercial mortgage and agricultural property loans based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:

 
March 31, 2019
 
Debt Service Coverage Ratio
 
 
 
≥ 1.2X
 
1.0X to < 1.2X
 
< 1.0X
 
Total
 
(in thousands)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
0%-59.99%
$
698,110

 
$
14,468

 
$
0

 
$
712,578

60%-69.99%
316,532

 
16,469

 
0

 
333,001

70%-79.99%
114,257

 
27,612

 
0

 
141,869

80% or greater
27,000

 
0

 
228

 
27,228

Total commercial mortgage and agricultural property loans
$
1,155,899

 
$
58,549

 
$
228

 
$
1,214,676


16



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
December 31, 2018
 
Debt Service Coverage Ratio
 
 
 
≥ 1.2X
 
1.0X to < 1.2X
 
< 1.0X
 
Total
 
(in thousands)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
0%-59.99%
$
696,507

 
$
12,771

 
$
80

 
$
709,358

60%-69.99%
321,586

 
18,525

 
0

 
340,111

70%-79.99%
105,727

 
27,790

 
0

 
133,517

80% or greater
28,000

 
229

 
0

 
28,229

Total commercial mortgage and agricultural property loans
$
1,151,820

 
$
59,315

 
$
80

 
$
1,211,215


The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:
 
March 31, 2019
 
Current
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due(1)
 
Total Loans
 
Non-Accrual Status(2)
 
(in thousands)
Commercial mortgage loans
$
1,159,843

 
$
0

 
$
0

 
$
0

 
$
1,159,843

 
$
0

Agricultural property loans
54,833

 
0

 
0

 
0

 
54,833

 
0

Total
$
1,214,676

 
$
0

 
$
0

 
$
0

 
$
1,214,676

 
$
0


(1)
As of March 31, 2019, there were no loans in this category accruing interest.
(2)
For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
 
December 31, 2018
 
Current
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due(1)
 
Total Loans
 
Non-Accrual Status(2)
 
(in thousands)
Commercial mortgage loans
$
1,155,777

 
$
0

 
$
0

 
$
0

 
$
1,155,777

 
$
0

Agricultural property loans
55,438

 
0

 
0

 
0

 
55,438

 
0

Total
$
1,211,215

 
$
0

 
$
0

 
$
0

 
$
1,211,215

 
$
0



(1)
As of December 31, 2018, there were no loans in this category accruing interest.
(2)
For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

For the three months ended March 31, 2019 and 2018, there were no commercial mortgage and other loans acquired, other than those through direct origination. For the three months ended March 31, 2019, there were $5 million of commercial mortgage and other loans sold. For the three months ended March 31, 2018, there were no commercial mortgage and other loans sold.


17



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:
 
March 31, 2019
 
December 31, 2018
 
(in thousands)
Company’s investment in separate accounts
$
41,577

 
$
40,126

LPs/LLCs:
 
 
 
Equity method:
 
 
 
Private equity
158,754

 
149,164

Hedge funds
59,513

 
57,171

Real estate-related
10,335

 
10,251

Subtotal equity method
228,602

 
216,586

Fair value:
 
 
 
Private equity
61,817

 
60,118

Hedge funds
769

 
762

Real estate-related
10,055

 
9,024

Subtotal fair value
72,641

 
69,904

Total LPs/LLCs
301,243

 
286,490

Derivative instruments
15,468

 
50,813

Total other invested assets
$
358,288

 
$
377,429



Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in thousands)
Fixed maturities, available-for-sale
$
56,266

 
$
53,260

Fixed maturities, trading
308

 
266

Equity securities, at fair value
221

 
221

Commercial mortgage and other loans
12,491

 
12,405

Policy loans
16,199

 
15,904

Short-term investments and cash equivalents
2,311

 
323

Other invested assets
9,911

 
115

Gross investment income
97,707

 
82,494

Less: investment expenses
(4,457
)
 
(4,579
)
Net investment income
$
93,250

 
$
77,915



18



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Realized Investment Gains (Losses), Net 

The following table sets forth “Realized investment gains (losses), net,” by investment type, for the periods indicated:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in thousands)
Fixed maturities(1)
$
(4,184
)
 
$
(809
)
Commercial mortgage and other loans
7

 
131

LPs/LLCs
12

 
847

Derivatives
(44,477
)
 
(49,193
)
Short-term investments and cash equivalents
7

 
(18
)
Realized investment gains (losses), net
$
(48,635
)
 
$
(49,042
)

 
(1)
Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading.

Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:
 
March 31, 2019
 
December 31, 2018
 
(in thousands)
Fixed maturity securities, available-for-sale—with OTTI
$
(408
)
 
$
(689
)
Fixed maturity securities, available-for-sale—all other
138,456

 
(44,619
)
Derivatives designated as cash flow hedges(1)
15,441

 
22,122

Affiliated notes
2,899

 
810

Other investments
4,942

 
5,055

Net unrealized gains (losses) on investments
$
161,330

 
$
(17,321
)

(1)
For more information on cash flow hedges, see Note 4.

Repurchase Agreements and Securities Lending

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of March 31, 2019 and December 31, 2018, the Company had no repurchase agreements.

The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:
 
March 31, 2019
 
December 31, 2018
 
Remaining Contractual Maturities of the Agreements
 
 
 
Remaining Contractual Maturities of the Agreements
 
 
 
Overnight & Continuous
 
Up to 30 Days
 
Total
 
Overnight & Continuous
 
Up to 30 Days
 
Total
 
(in thousands)
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
3,109

 
$
0

 
$
3,109

 
$
8,169

 
$
0

 
$
8,169

Foreign government bonds
2,121

 
0

 
2,121

 
0

 
0

 
0

U.S. public corporate securities
2,745

 
0

 
2,745

 
628

 
0

 
628

Foreign public corporate securities
2,359

 
0

 
2,359

 
2,266

 
0

 
2,266

Total cash collateral for loaned securities(1)
$
10,334

 
$
0

 
$
10,334

 
$
11,063

 
$
0

 
$
11,063



(1)
The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

19



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



4.    DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to:
• Interest rate contracts: futures, swaps, options, swaptions, caps and floors
•Equity contracts: futures, options and total return swaps
•Foreign exchange contracts: futures, options, forwards and swaps
•Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives include:
•Embedded derivatives

For detailed information on these contracts and the related strategies, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral, and NPR.
 
 
March 31, 2019
 
December 31, 2018
Primary Underlying Risk/Instrument Type
 
 
 
Gross Fair Value
 
 
 
Gross Fair Value
 
Notional
 
Assets
 
Liabilities
 
Notional
 
Assets
 
Liabilities
 
 
(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Currency/Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Currency Swaps
 
$
738,998

 
$
33,171

 
$
(19,619
)
 
$
719,476

 
$
38,333

 
$
(16,638
)
Total Derivatives Designated as Hedge Accounting Instruments
 
$
738,998

 
$
33,171

 
$
(19,619
)
 
$
719,476

 
$
38,333

 
$
(16,638
)
Derivatives Not Qualifying as Hedge Accounting Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swaps
 
$
246,925

 
$
20,945

 
$
0

 
$
246,925

 
$
15,665

 
$
(3,174
)
Foreign Currency
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Currency Forwards
 
23,318

 
331

 
(38
)
 
23,043

 
277

 
(20
)
Credit
 
 
 
 
 
 
 
 
 
 
 
 
Credit Default Swaps
 
0

 
0

 
0

 
756

 
0

 
(9
)
Currency/Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Currency Swaps
 
113,062

 
5,987

 
(1,035
)
 
98,363

 
6,303

 
(2,109
)
Equity
 
 
 
 
 
 
 
 
 
 
 
 
Equity Options
 
2,123,153

 
70,934

 
(19,071
)
 
1,981,693

 
17,312

 
(4,912
)
Total Derivatives Not Qualifying as Hedge Accounting Instruments
 
$
2,506,458

 
$
98,197

 
$
(20,144
)
 
$
2,350,780

 
$
39,557

 
$
(10,224
)
Total Derivatives(1)(2)
 
$
3,245,456

 
$
131,368

 
$
(39,763
)
 
$
3,070,256

 
$
77,890

 
$
(26,862
)

(1)
Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks.
(2)
Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.


20



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


The fair value of the embedded derivatives, included in "Future policy benefits," was a net liability of $6,459 million and $5,589 million as of March 31, 2019 and December 31, 2018, respectively. The fair value of the related reinsurance recoverables, included in "Reinsurance recoverables" or "Other liabilities," was a net asset of $6,468 million and $5,600 million as of March 31, 2019 and December 31, 2018, respectively. Of these reinsurance recoverables, the fair value related to the living benefits guarantee from Prudential Annuities Life Assurance Corporation ("PALAC") and Prudential Insurance was a net asset of $6,430 million and $5,585 million and the fair value related to the Prudential Premier® Retirement Variable Annuity with Highest Daily Lifetime Income ("HDI") v.3.0 from Union Hamilton Reinsurance, Ltd. ("Union Hamilton"), an external counterparty, was a net asset of $38 million and $15 million as of March 31, 2019 and December 31, 2018, respectively. See Note 6 for additional information on these reinsurance agreements.

The fair value of the embedded derivatives, included in "Policyholders' account balances," was a net liability of $53 million and $13 million as of March 31, 2019 and December 31, 2018, respectively. There were no related reinsurance recoverables at each respective period.

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

 
March 31, 2019
 
Gross
Amounts of
Recognized
Financial
Instruments
 
Gross
Amounts
Offset in the
Consolidated Statements of
Financial
Position
 
Net Amounts
Presented in
the Consolidated Statements
of Financial
Position
 
Financial
Instruments/
Collateral (1)
 
Net
Amount
 
(in thousands)
Offsetting of Financial Assets:
 
 
 
 
 
 
 
 
 
Derivatives(1)
$
131,365

 
$
(115,900
)
 
$
15,465

 
$
(12,809
)
 
$
2,656

Securities purchased under agreements to resell
0

 
0

 
0

 
0

 
0

Total Assets
$
131,365

 
$
(115,900
)
 
$
15,465

 
$
(12,809
)
 
$
2,656

Offsetting of Financial Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives(1)
$
39,763

 
$
(39,763
)
 
$
0

 
$
0

 
$
0

Securities sold under agreements to repurchase
0

 
0

 
0

 
0

 
0

Total Liabilities
$
39,763

 
$
(39,763
)
 
$
0

 
$
0

 
$
0



21



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
December 31, 2018
 
Gross
Amounts of
Recognized
Financial
Instruments
 
Gross
Amounts
Offset in the Consolidated
Statements of
Financial
Position
 
Net Amounts
Presented in
the Consolidated Statements
of Financial
Position
 
Financial
Instruments/
Collateral (1)
 
Net
Amount
 
(in thousands)
Offsetting of Financial Assets:
 
 
 
 
 
 
 
 
 
Derivatives(1)
$
77,887

 
$
(27,078
)
 
$
50,809

 
$
(7,307
)
 
$
43,502

Securities purchased under agreements to resell
143,000

 
0

 
143,000

 
(143,000
)
 
0

Total Assets
$
220,887

 
$
(27,078
)
 
$
193,809

 
$
(150,307
)
 
$
43,502

Offsetting of Financial Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives(1)
$
26,862

 
$
(26,862
)
 
$
0

 
$
0

 
$
0

Securities sold under agreements to repurchase
0

 
0

 
0

 
0

 
0

Total Liabilities
$
26,862

 
$
(26,862
)
 
$
0

 
$
0

 
$
0


(1)
Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below and Note 9. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its cash flow hedge accounting relationships.

22



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship.

 
Three Months Ended March 31, 2019
 
Realized
Investment
Gains (Losses)
 
Net
Investment
Income
 
Other
Income
 
AOCI(1)
 
(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
 
 
 
 
 
 
 
Cash flow hedges
 
 
 
 
 
 
 
Currency/Interest Rate
$
(160
)
 
$
2,069

 
$
(1,515
)
 
$
(6,654
)
Total cash flow hedges
(160
)
 
2,069

 
(1,515
)
 
(6,654
)
Derivatives Not Qualifying as Hedge Accounting Instruments:
 
 
 
 
 
 
 
Interest Rate
7,616

 
0

 
0

 
0

Currency
(20
)
 
0

 
0

 
0

Currency/Interest Rate
1,430

 
0

 
1

 
0

Credit
(1
)
 
0

 
0

 
0

Equity
28,863

 
0

 
0

 
0

Embedded Derivatives
(82,205
)
 
0

 
0

 
0

Total Derivatives Not Qualifying as Hedge Accounting Instruments
(44,317
)
 
0

 
1

 
0

Total
$
(44,477
)
 
$
2,069

 
$
(1,514
)
 
$
(6,654
)

 
Three Months Ended March 31, 2018(2)
 
Realized
Investment
Gains (Losses)
 
Net
Investment
Income
 
Other
Income
 
AOCI(1)
 
(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
 
 
 
 
 
 
 
Cash flow hedges
 
 
 
 
 
 
 
Currency/Interest Rate
$
(517
)
 
$
1,538

 
$
(664
)
 
$
(22,862
)
Total cash flow hedges
(517
)
 
1,538

 
(664
)
 
(22,862
)
Derivatives Not Qualifying as Hedge Accounting Instruments:
 
 
 
 
 
 
 
Interest Rate
(9,401
)
 
0

 
0

 
0

Currency
(556
)
 
0

 
0

 
0

Currency/Interest Rate
(3,334
)
 
0

 
(23
)
 
0

Credit
(1
)
 
0

 
0

 
0

Equity
(4,757
)
 
0

 
0

 
0

Embedded Derivatives
(30,627
)
 
0

 
0

 
0

Total Derivatives Not Qualifying as Hedge Accounting Instruments
(48,676
)
 
0

 
(23
)
 
0

Total
$
(49,193
)
 
$
1,538

 
$
(687
)
 
$
(22,862
)

(1)
Net change in AOCI.
(2)
Prior period amounts have been updated to conform to current period presentation.


23



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:
 
(in thousands)    
Balance, December 31, 2018
$
22,122

Cumulative-effect adjustment from the adoption of ASU 2017-12(1)
(27
)
Amount recorded in AOCI
 
Currency/Interest Rate
(6,260
)
Total amount recorded in AOCI
(6,260
)
Amount reclassified from AOCI to income
 
Currency/Interest Rate
(394
)
Total amount reclassified from AOCI to income
(394
)
Balance, March 31, 2019
$
15,441


(1)
See Note 2 for details.

The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings. Using March 31, 2019 values, it is estimated that a pre-tax gain of $7 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending March 31, 2020, offset by amounts pertaining to the hedged items.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Credit Derivatives

The Company has no exposure from credit derivative positions where it has written credit protection as of March 31, 2019 and December 31, 2018.

The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. The Company has outstanding notional amounts of $0.0 million and $1 million reported as of March 31, 2019 and December 31, 2018, respectively with a fair value of $0.0 million for both periods.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparty to financial derivative transactions with a positive fair value. The Company manages credit risk by entering into derivative transactions with its affiliate, Prudential Global Funding LLC (“PGF”), related to its over-the-counter ("OTC") derivatives. PGF, in turn, manages its credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreement, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position.


24



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


5.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement - Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2 – Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

Level 3 – Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 5 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.


25



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

 
As of March 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Netting(1)
 
Total
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
0

 
$
47,811

 
$
32,188

 
$
0

 
$
79,999

Obligations of U.S. states and their political subdivisions
0

 
639,606

 
0

 
0

 
639,606

Foreign government bonds
0

 
214,648

 
164

 
0

 
214,812

U.S. corporate public securities
0

 
2,005,259

 
3

 
0

 
2,005,262

U.S. corporate private securities
0

 
857,453

 
43,504

 
0

 
900,957

Foreign corporate public securities
0

 
295,645

 
211

 
0

 
295,856

Foreign corporate private securities
0

 
869,304

 
11,242

 
0

 
880,546

Asset-backed securities(2)
0

 
147,000

 
2,733

 
0

 
149,733

Commercial mortgage-backed securities
0

 
274,698

 
77,071

 
0

 
351,769

Residential mortgage-backed securities
0

 
87,669

 
0

 
0

 
87,669

Subtotal
0

 
5,439,093

 
167,116

 
0

 
5,606,209

Fixed maturities, trading
0

 
43,000

 
0

 
0

 
43,000

Equity securities
140

 
18,616

 
15,991

 
0

 
34,747

Cash equivalents
104,949

 
250,219

 
0

 
0

 
355,168

Other invested assets(3)
0

 
131,364

 
4

 
(115,900
)
 
15,468

Reinsurance recoverables
0

 
0

 
6,468,704

 
0

 
6,468,704

Receivables from parent and affiliates
0

 
120,687

 
7,792

 
0

 
128,479

Subtotal excluding separate account assets
105,089

 
6,002,979

 
6,659,607

 
(115,900
)
 
12,651,775

Separate account assets(4)(5)
0

 
124,615,650

 
0

 
0

 
124,615,650

Total assets
$
105,089

 
$
130,618,629

 
$
6,659,607

 
$
(115,900
)
 
$
137,267,425

Future policy benefits(6)
$
0

 
$
0

 
$
6,459,377

 
$
0

 
$
6,459,377

Policyholders' account balances
0

 
0

 
53,136

 
0

 
53,136

Payables to parent and affiliates
0

 
39,763

 
0

 
(39,763
)
 
0

Total liabilities
$
0

 
$
39,763

 
$
6,512,513

 
$
(39,763
)
 
$
6,512,513


 
 
 

26



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
As of December 31, 2018
 
Level 1
 
Level 2
 
Level 3
 
Netting(1)
 
Total
 
(in thousands)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
0

 
$
47,654

 
$
29,816

 
$
0

 
$
77,470

Obligations of U.S. states and their political subdivisions
0

 
622,758

 
0

 
0

 
622,758

Foreign government bonds
0

 
201,947

 
0

 
0

 
201,947

U.S. corporate public securities
0

 
1,731,623

 
2

 
0

 
1,731,625

U.S. corporate private securities
0

 
838,497

 
44,841

 
0

 
883,338

Foreign corporate public securities
0

 
262,023

 
0

 
0

 
262,023

Foreign corporate private securities
0

 
815,634

 
11,745

 
0

 
827,379

Asset-backed securities(2)
0

 
151,040

 
6,556

 
0

 
157,596

Commercial mortgage-backed securities
0

 
346,396

 
0

 
0

 
346,396

Residential mortgage-backed securities
0

 
89,063

 
0

 
0

 
89,063

Subtotal
0

 
5,106,635

 
92,960

 
0

 
5,199,595

Fixed maturities, trading
0

 
41,627

 
0

 
0

 
41,627

Equity securities
131

 
20,794

 
15,997

 
0

 
36,922

Cash equivalents
69,903

 
147,043

 
0

 
0

 
216,946

Other invested assets(3)
0

 
77,886

 
4

 
(27,078
)
 
50,812

Reinsurance recoverables
0

 
0

 
5,600,008

 
0

 
5,600,008

Receivables from parent and affiliates
0

 
125,381

 
9,261

 
0

 
134,642

Subtotal excluding separate account assets
70,034

 
5,519,366

 
5,718,230

 
(27,078
)
 
11,280,552

Separate account assets(4)(5)
0

 
114,947,872

 
0

 
0

 
114,947,872

Total assets
$
70,034

 
$
120,467,238

 
$
5,718,230

 
$
(27,078
)
 
$
126,228,424

Future policy benefits(6)
$
0

 
$
0

 
$
5,588,840

 
$
0

 
$
5,588,840

Policyholders' account balances
0

 
0

 
13,015

 
0

 
13,015

Payables to parent and affiliates
0

 
26,862

 
0

 
(26,862
)
 
0

Total liabilities
$
0

 
$
26,862

 
$
5,601,855

 
$
(26,862
)
 
$
5,601,855


(1)
“Netting” amounts represent cash collateral of $76.1 million and $0.2 million as of March 31, 2019 and December 31, 2018, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.
(2)
Includes credit tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)
Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. At March 31, 2019 and December 31, 2018, the fair values of such investments were $73 million and $70 million, respectively.
(4)
Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company's Unaudited Interim Consolidated Statements of Financial Position.
(5)
Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund, for which fair value is measured at NAV per share (or its equivalent). As of March 31, 2019 and December 31, 2018, the fair value of such investments was $4,383 million and $4,130 million, respectively.
(6)
As of March 31, 2019, the net embedded derivative liability position of $6,459 million includes $623 million of embedded derivatives in an asset position and $7,082 million of embedded derivatives in a liability position. As of December 31, 2018, the net embedded derivative liability position of $5,589 million includes $633 million of embedded derivatives in an asset position and $6,222 million of embedded derivatives in a liability position.

27



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.
 
As of March 31, 2019
 
Fair Value  
  Valuation  
Techniques
 
Unobservable Inputs  
 
Minimum  
 
Maximum  
 
  Weighted  
Average
 
  Impact of 
Increase in 
Input on 
Fair Value(1)
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities(2)
$
23,065

Discounted cash flow
 
Discount rate
 
8.25
%
 
 
20.00
%
 
 
13.69
%
 
 
Decrease
 
 
Liquidation
 
Liquidation value
 
13.18
%
 
 
13.18
%
 
 
13.18
%
 
 
Increase
Reinsurance recoverables
$
6,468,704

Fair values are determined using the same unobservable inputs as future policy benefits.
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future policy benefits(3)
$
6,459,377

Discounted cash flow
 
Lapse rate(4)
 
1
%
 
 
13
%
 
 
 
 
 
Decrease
 
 
 
 
Spread over LIBOR(5)
 
0.12
%
 
 
1.35
%
 
 
 
 
 
Decrease
 
 
 
 
Utilization rate(6)
 
50
%
 
 
97
%
 
 
 
 
 
Increase
 
 
 
 
Withdrawal rate 
 
See table footnote (7) below
 
 
 
 
Mortality rate(8)
 
0
%
 
 
15
%
 
 
 
 
 
Decrease
 
 
 
 
Equity volatility curve
 
15
%
 
 
22
%
 
 
 
 
 
Increase
 
As of December 31, 2018
 
Fair Value  
   Valuation  
Techniques
 
  Unobservable
Inputs  
 
Minimum  
 
Maximum  
 
  Weighted  
Average
 
  Impact of 
Increase in 
Input on 
Fair Value(1)
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities(2)
$
31,503

Discounted cash flow
 
Discount rate
 
7.00
%
 
 
20.00
%
 
 
10.21
%
 
 
Decrease
 
 
Liquidation
 
Liquidation value
 
40.71
%
 
 
40.71
%
 
 
40.71
%
 
 
Increase
Reinsurance recoverables
$
5,600,008

Fair values are determined using the same unobservable inputs as future policy benefits.
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future policy benefits(3)
$
5,588,840

Discounted cash flow
 
Lapse rate(4)
 
1
%
 
 
13
%
 
 
 
 
 
Decrease
 
 
 
 
Spread over LIBOR(5)
 
0.36
%
 
 
1.60
%
 
 
 
 
 
Decrease
 
 
 
 
Utilization rate(6)
 
50
%
 
 
97
%
 
 
 
 
 
Increase
 
 
 
 
Withdrawal rate
 
See table footnote (7) below
 
 
 
 
Mortality rate(8)
 
0
%
 
 
15
%
 
 
 
 
 
Decrease
 
 
 
 
Equity volatility curve
 
18
%
 
 
22
%
 
 
 
 
 
Increase

(1)
Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.
(2)
Includes assets classified as fixed maturities, available-for-sale.
(3)
Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(4)
Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.
(5)
The spread over the London Inter-Bank Offered Rate ("LIBOR") swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect our estimates of rates that a market participant would use to value the living benefit contracts in both the accumulation and payout phases. This spread

28



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because both funding agreements and living benefit contracts are insurance liabilities and are therefore senior to debt.
(6)
The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.
(7)
The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of March 31, 2019 and December 31, 2018, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.
(8)
Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. For the discussion of the relationships between unobservable inputs as well as market factors that may affect the range of inputs used in the valuation of Level 3 assets and liabilities, see Note 5 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

29



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
Three Months Ended March 31, 2019
 
 
Fair Value, beginning of period
Total realized and unrealized gains (losses)(1)
Purchases
Sales
Issuances
Settlements
Other(2)
Transfers into Level 3
Transfers out of Level 3
Fair Value, end of period
Unrealized gains (losses) for assets still held(3)
 
(in thousands)
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government
$
29,816

$
0

$
2,372

$
0

$
0

$
0

$
0

$
0

$
0

$
32,188

$
0

Foreign government
0

5

0

0

0

0

0

159

0

164

0

Corporate securities(4)
56,588

(3,412
)
1,331

(28
)
0

(7,097
)
1

7,577

0

54,960

(3,163
)
Structured securities(5)
6,556

1,268

0

(1
)
0

(3,979
)
0

75,960

0

79,804

0

Other assets:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
15,997

(6
)
0

0

0

0

0

0

0

15,991

(6
)
Other invested assets
4

0

0

0

0

0

0

0

0

4

0

Short-term investments
0

0

0

0

0

0

0

0

0

0

0

Reinsurance recoverables
5,600,008

633,318

235,378

0

0

0

0

0

0

6,468,704

677,444

Receivables from parent and affiliates
9,261

111

0

0

0

(1,580
)
0

0

0

7,792

0

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Future policy benefits
(5,588,840
)
(637,102
)
0

0

(233,435
)
0

0

0

0

(6,459,377
)
(681,227
)
Policyholders' account balances
(13,015
)
(33,614
)
0

0

0

(6,507
)
0

0

0

(53,136
)
(33,614
)

 
Three Months Ended March 31, 2019
 
Total realized and unrealized gains (losses)
 
Unrealized gains (losses) for assets still held(3)
 
Realized investment gains (losses), net(1)
Other income (loss)
Included in other comprehensive income (loss)
Net investment income
 
Realized investment gains (losses), net
Other income (loss)
 
(in thousands)
Fixed maturities, available-for-sale
$
(2,402
)
$
0

$
164

$
99

 
$
(3,163
)
$
0

Other assets:
 
 
 
 
 
 
 
Equity securities
0

(6
)
0

0

 
0

(6
)
Other invested assets
0

0

0

0

 
0

0

Short-term investments
0

0

0

0

 
0

0

Reinsurance recoverables
633,318

0

0

0

 
677,444

0

Receivables from parent and affiliates
0

0

0

111

 
0

0

Liabilities:
 
 
 
 
 
 
 
Future policy benefits
(637,102
)
0

0

0

 
(681,227
)
0

Policyholders' account balances
(33,614
)
0

0

0

 
(33,614
)
0



30



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
Three Months Ended March 31, 2018(6)
 
 
Fair Value, beginning of period
Total realized and unrealized gains (losses)(1)
Purchases
Sales
Issuances
Settlements
Other(2)
Transfers into Level 3
Transfers out of Level 3
Fair Value, end of period
Unrealized gains (losses) for assets still held(3)
 
(in thousands)
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government
$
19,204

$
0

$
2,365

$
0

$
0

$
0

$
0

$
0

$
0

$
21,569

$
0

Foreign government
0

(8
)
0

0

0

0

174

0

0

166

0

Corporate securities(4)
75,421

936

1,022

0

0

(4,570
)
15

0

(209
)
72,615

(26
)
Structured securities(5)
111,028

131

190

0

0

(3,195
)
0

13,513

(26,794
)
94,873

0

Other assets:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
17,525

(486
)
0

0

0

0

0

0

0

17,039

(486
)
Other invested assets
0

1

0

0

0

0

0

9

0

10

2

Short-term investments
1,339

(18
)
3,400

0

0

(3,513
)
(14
)
0

0

1,194

(18
)
Reinsurance recoverables
5,457,649

(1,462,992
)
219,457

0

0

0

0

0

0

4,214,114

(1,409,320
)
Receivables from parent and affiliates
0

(20
)
0

0

0

0

0

6,551

0

6,531

0

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Future policy benefits
(5,452,583
)
1,487,555

0

0

(226,345
)
0

0

0

0

(4,191,373
)
1,433,872

Policyholders' account balances
(46,651
)
5,013

0

0

0

2,122

0

0

0

(39,516
)
5,013

Other liabilities
0

(24,780
)
8,825

0

0

0

0

0

0

(15,955
)
(24,780
)

 
Three Months Ended March 31, 2018(6)
 
Total realized and unrealized gains (losses)
 
Unrealized gains (losses) for assets still held(3)
 
Realized investment gains (losses), net(1)
Other income (loss)
Included in other comprehensive income (loss)
Net investment income
 
Realized investment gains (losses), net
Other income (loss)
 
(in thousands)
Fixed maturities, available-for-sale
$
68

$
0

$
914

$
77

 
$
(26
)
$
0

Other assets:
 
 
 
 
 
 
 
Equity securities
0

(486
)
0

0

 
0

(486
)
Other invested assets
1

0

0

0

 
2

0

Short-term investments
(18
)
0

0

0

 
(18
)
0

Reinsurance recoverables
(1,462,992
)
0

0

0

 
(1,409,320
)
0

Receivables from parent and affiliates
0

(20
)
0

0

 
0

0

Liabilities:
 
 
 
 
 
 
 
Future policy benefits
1,487,555

0

0

0

 
1,433,872

0

Policyholders' account balances
5,013

0

0

0

 
5,013

0

Other liabilities
(24,780
)
0

0

0

 
(24,780
)
0


(1)
Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts.
(2)
Other primarily represents reclassifications of certain assets and liabilities between reporting categories.
(3)
Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.
(4)
Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

31



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


(5)
Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.
(6)
Prior period amounts have been updated to conform to current period presentation.
 
Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.
 
March 31, 2019
 
Fair Value
 
Carrying
Amount(1)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Total
 
(in thousands)
Assets:
 
 
 
 
 
 
 
 
 
Commercial mortgage and other loans
$
0

 
$
0

 
$
1,240,689

 
$
1,240,689

 
$
1,212,618

Policy loans
0

 
0

 
1,251,094

 
1,251,094

 
1,251,094

Cash and cash equivalents
48,115

 
0

 
0

 
48,115

 
48,115

Accrued investment income
0

 
89,358

 
0

 
89,358

 
89,358

Receivables from parent and affiliates
0

 
149,571

 
0

 
149,571

 
149,571

Other assets
0

 
35,112

 
0

 
35,112

 
35,112

Total assets
$
48,115

 
$
274,041

 
$
2,491,783

 
$
2,813,939

 
$
2,785,868

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholders’ account balances - investment contracts
$
0

 
$
1,226,786

 
$
276,008

 
$
1,502,794

 
$
1,507,136

Cash collateral for loaned securities
0

 
10,334

 
0

 
10,334

 
10,334

Payables to parent and affiliates
0

 
217,073

 
0

 
217,073

 
217,073

Other liabilities
0

 
358,256

 
0

 
358,256

 
358,256

Total liabilities
$
0

 
$
1,812,449

 
$
276,008

 
$
2,088,457

 
$
2,092,799


 
December 31, 2018
 
Fair Value
 
Carrying
Amount(1)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Total
 
(in thousands)
Assets:
 
 
 
 
 
 
 
 
 
Commercial mortgage and other loans
$
0

 
$
0

 
$
1,214,350

 
$
1,214,350

 
$
1,209,150

Policy loans
0

 
0

 
1,236,077

 
1,236,077

 
1,236,077

Cash and cash equivalents
56,894

 
143,000

 
0

 
199,894

 
199,894

Accrued investment income
0

 
88,278

 
0

 
88,278

 
88,278

Receivables from parent and affiliates
0

 
154,938

 
0

 
154,938

 
154,938

Other assets
0

 
28,950

 
0

 
28,950

 
28,950

Total assets
$
56,894

 
$
415,166

 
$
2,450,427

 
$
2,922,487

 
$
2,917,287

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholders’ account balances - investment contracts
$
0

 
$
1,206,747

 
$
272,322

 
$
1,479,069

 
$
1,486,929

Cash collateral for loaned securities
0

 
11,063

 
0

 
11,063

 
11,063

Payables to parent and affiliates
0

 
229,345

 
0

 
229,345

 
229,345

Other liabilities
0

 
372,997

 
0

 
372,997

 
372,997

Total liabilities
$
0

 
$
1,820,152

 
$
272,322

 
$
2,092,474

 
$
2,100,334


32



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

6.    REINSURANCE

The Company participates in reinsurance with its affiliates Prudential Life Insurance Company of Taiwan Inc. (“Prudential of Taiwan”), Prudential Arizona Reinsurance Captive Company (“PARCC”), Prudential Arizona Reinsurance Term Company (“PAR Term”), Prudential Arizona Reinsurance Universal Company (“PAR U”), Prudential Universal Reinsurance Company ("PURC"), Prudential Term Reinsurance Company (“Term Re”), PALAC, Gibraltar Universal Life Reinsurance Company ("GUL Re") and Dryden Arizona Reinsurance Term Company (“DART”), its parent company Prudential Insurance, as well as third parties. The reinsurance agreements provide risk diversification and additional capacity for future growth, limit the maximum net loss potential, manage statutory capital, and facilitate the Company's capital market hedging program. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely.

Reserves related to reinsured long-duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers for long-duration reinsurance arrangements are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. Reinsurance premiums ceded for universal life products are accounted for as a reduction of policy charges and fee income. Reinsurance premiums ceded for term insurance products are accounted for as a reduction of premiums.

Realized investment gains and losses include the impact of reinsurance agreements, particularly reinsurance agreements involving living benefit guarantees. The Company has entered into reinsurance agreements to transfer the risk related to the living benefit guarantees on variable annuities to PALAC excluding the PLNJ business which was reinsured to Prudential Insurance. These reinsurance agreements are derivatives and have been accounted for in the same manner as embedded derivatives and the changes in the fair value of these derivatives are recognized through “Realized investment gains (losses), net”. See Note 4 for additional information related to the accounting for embedded derivatives.

Reinsurance amounts included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as of March 31, 2019 and December 31, 2018 were as follows:
 
March 31, 2019
 
December 31, 2018
 
(in thousands)
Reinsurance recoverables
$
36,106,323

 
$
34,682,127

Policy loans
(132,433
)
 
(130,502
)
Deferred policy acquisition costs
(7,255,866
)
 
(7,267,847
)
Deferred sales inducements
(567,015
)
 
(562,052
)
Other assets(1)
171,968

 
185,573

Policyholders’ account balances
4,986,354

 
5,004,112

Future policy benefits
3,619,334

 
3,376,048

Other liabilities(2)
653,666

 
621,856



(1)
“Other assets” includes $0.1 million of unaffiliated activity as of both March 31, 2019 and December 31, 2018.
(2)
“Other liabilities” includes $39 million and $27 million of unaffiliated activity as of March 31, 2019 and December 31, 2018, respectively.


33



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


The reinsurance recoverables by counterparty are broken out below:
 
March 31, 2019
 
December 31, 2018
 
(in thousands)
PAR U
$
11,680,401

 
$
11,444,032

PALAC
9,622,605

 
8,828,190

PURC
4,211,368

 
4,127,455

PARCC
2,484,194

 
2,527,690

GUL Re
2,044,196

 
2,017,810

PAR Term
1,691,610

 
1,678,745

Prudential of Taiwan
1,424,669

 
1,414,669

Term Re
1,347,453

 
1,259,141

Prudential Insurance
1,355,025

 
1,226,917

DART
168,676

 
119,946

Unaffiliated
76,126

 
37,532

Total reinsurance recoverables
$
36,106,323

 
$
34,682,127




34



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Reinsurance amounts, included in the Company’s Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, were as follows:
 
 
Three Months Ended March 31,
 
 
2019
 
2018(8)
 
(in thousands)
Premiums:
 
 
 
 
Direct
 
$
462,271

 
$
441,955

Assumed(1)
 
54

 
60

Ceded(2)
 
(448,331
)
 
(434,100
)
Net premiums
 
13,994

 
7,915

Policy charges and fee income:
 
 
 
 
Direct
 
853,195

 
846,247

Assumed
 
126,959

 
121,709

Ceded(3)
 
(840,965
)
 
(838,801
)
Net policy charges and fee income
 
139,189

 
129,155

Net investment income:
 
 
 
 
Direct
 
94,558

 
79,149

Assumed
 
396

 
373

Ceded
 
(1,704
)
 
(1,607
)
Net investment income
 
93,250

 
77,915

Asset administration fees:
 
 
 
 
Direct
 
83,868

 
87,033

Assumed
 
0

 
0

Ceded
 
(80,211
)
 
(83,560
)
Net asset administration fees
 
3,657

 
3,473

Other income:
 
 
 
 
Direct
 
19,798

 
17,253

Assumed(4)
 
(200
)
 
(90
)
Ceded
 
(23
)
 
(52
)
Amortization of reinsurance income
 
1,382

 
2,185

Net other income
 
20,957

 
19,296

Realized investment gains (losses), net:
 
 
 
 
Direct
 
(635,511
)
 
1,474,762

Assumed
 
0

 
0

Ceded(5)
 
586,876

 
(1,523,804
)
Realized investment gains (losses), net
 
(48,635
)
 
(49,042
)
Policyholders’ benefits (including change in reserves):
 
 
 
 
Direct
 
646,311

 
651,672

Assumed(6)
 
211,750

 
112,802

Ceded(7)
 
(818,583
)
 
(712,738
)
Net policyholders’ benefits (including change in reserves)
 
39,478

 
51,736

Interest credited to policyholders’ account balances:
 
 
 
 
Direct
 
94,691

 
124,734

Assumed
 
30,657

 
36,517

Ceded
 
(81,151
)
 
(120,453
)
Net interest credited to policyholders’ account balances
 
44,197

 
40,798

Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization
 
(344,015
)
 
(434,371
)

35



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



(1)
"Premiums assumed" includes $0.1 million of unaffiliated activity for both the three months ended March 31, 2019 and 2018.
(2)
"Premiums ceded" includes $(0.1) million and $0 million of unaffiliated activity for the three months ended March 31, 2019, and 2018 respectively.
(3)
"Policy charges and fee income ceded" includes $(5) million and $(2) million of unaffiliated activity for the three months ended March 31, 2019 and 2018, respectively.
(4)
"Other income assumed" includes $(0.2) million and $(0.1) million of unaffiliated activity for the three months ended March 31, 2019 and 2018, respectively.
(5)
“Realized investment gains (losses), net ceded” includes $14 million and $(38) million of unaffiliated activity for the three months ended March 31, 2019 and 2018, respectively.
(6)
"Policyholders' benefits (including change in reserves) assumed" includes $(0.2) million and $(0.1) million of unaffiliated activity for the three months ended March 31, 2019 and 2018, respectively.
(7)
"Policyholders' benefits (including change in reserves) ceded" includes $(2) million of unaffiliated activity for both the three months ended March 31, 2019 and 2018.
(8)
Prior period amounts in the table above have been revised to correct previously reported numbers. These prior period revisions have also been reflected in the Unaudited Interim Consolidated Financial Statements. See Note 11 for a more detailed description of the revision.

The gross and net amounts of life insurance face amount in force as of March 31, 2019 and 2018 were as follows:
 
2019
 
2018
 
(in thousands)
Direct gross life insurance face amount in force
$
951,643,226

 
$
893,787,108

Assumed gross life insurance face amount in force
40,546,369

 
41,584,568

Reinsurance ceded
(913,655,428
)
 
(864,942,222
)
Net life insurance face amount in force
$
78,534,167

 
$
70,429,454



Information regarding significant affiliated reinsurance agreements is described below.

PAR U

Pruco Life reinsures an amount equal to 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain of its universal policies, with effective dates prior to January 1, 2011.

Effective July 1, 2012, PLNJ reinsures an amount equal to 95% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain of its universal policies, excluding those policies that are subject to principles-based reserving.

On January 2, 2013, Pruco Life began to assume Guaranteed Universal Life ("GUL") business from Prudential Insurance in connection with the acquisition of The Hartford Life Business. The GUL business assumed from Prudential Insurance was subsequently retroceded to PAR U.

PALAC

Effective April 1, 2016, the Company entered into a reinsurance agreement with PALAC to reinsure its variable annuity base contracts, along with the living benefit guarantees, excluding the PLNJ business, which was reinsured to Prudential Insurance. This reinsurance agreement covers new and in force business and excludes business reinsured externally.

PURC

Pruco Life reinsures an amount equal to 70% of all the risks associated with its Universal Protector policies having no-lapse guarantees as well as certain of its universal policies, with effective dates from January 1, 2011 through December 31, 2013, with PURC and 95% of all the risks associated with Universal Protector policies having no-lapse guarantees, as well as certain of its universal policies, with effective dates from January 1, 2014 through December 31, 2016.

PARCC

The Company reinsures 90% of the risks under its term life insurance policies, with effective dates prior to January 1, 2010 through an automatic coinsurance agreement with PARCC.


36



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


GUL Re

Effective January 1, 2017, Pruco Life entered into an automatic coinsurance agreement with GUL Re to reinsure an amount equal to 95% of all the risks associated with Universal Protector policies having no-lapse guarantees, as well as certain of its universal policies, with effective dates on or after January 1, 2017, excluding those policies that are subject to principles-based reserving.

Effective July 1, 2017, Pruco Life amended this agreement to include 30% of Universal Protector policies having no-lapse guarantees as well as certain of its universal policies with effective dates prior to January 1, 2014.

PAR Term

The Company reinsures 95% of the risks under its term life insurance policies with effective dates January 1, 2010 through December 31, 2013, through an automatic coinsurance agreement with PAR Term.

Prudential of Taiwan

On January 31, 2001, Pruco Life transferred all of its assets and liabilities associated with its Taiwanese branch, including its Taiwanese insurance book of business, to Prudential of Taiwan, an affiliated company. The mechanism used to transfer this block of business in Taiwan is referred to as a “full acquisition and assumption” transaction. Under this mechanism, Pruco Life is jointly liable with Prudential of Taiwan for two years from the giving of notice to all obligees for all matured obligations and for two years after the maturity date of not-yet-matured obligations. Prudential of Taiwan is also contractually liable, under indemnification provisions of the transaction, for any liabilities that may be asserted against Pruco Life.

The transfer of the insurance related assets and liabilities was accounted for as a long-duration coinsurance transaction under U.S. GAAP. Under this accounting treatment, the insurance related liabilities remain on the books of Pruco Life and an offsetting reinsurance recoverable is established. These assets and liabilities are denominated in U.S. dollars.

Term Re

The Company reinsures 95% of the risks under its term life insurance policies, with effective dates on or after January 1, 2014 through December 31, 2017, through an automatic coinsurance agreement with Term Re.  

Prudential Insurance

The Company has a yearly renewable term reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. Effective July 1, 2017, this agreement has been terminated for certain new business, primarily Universal Life insurance policies. Effective July 1, 2017, the Company reinsures a portion of the mortality risk directly to third-party reinsurers and retains all of the non-reinsured portion of the mortality risk.

On January 2, 2013, Pruco Life began to assume GUL business from Prudential Insurance in connection with the acquisition of the Hartford Financial Services Group, Inc. ("Hartford Financial"). The GUL business assumed from Prudential Insurance was subsequently retroceded to PAR U. In May 2018, Hartford Financial sold a group of operating subsidiaries, which includes two of Prudential Insurance's counterparties to these reinsurance arrangements. There is no impact to the terms, rights or obligations of Prudential Insurance, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties. Similarly, there is no impact to the Company's reinsurance arrangements with respect to such GUL business as a result of this change in control.

The Company has reinsured a group annuity contract with Prudential Insurance, in consideration for a single premium payment by the Company, providing reinsurance equal to 100% of all payments due under the contract.

Effective April 1, 2016, PLNJ entered into a reinsurance agreement with Prudential Insurance to reinsure its variable annuity base contracts, along with the living benefit guarantees. This reinsurance agreement covers new and in force business and excludes business reinsured externally.

37



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



DART

Effective January 1, 2018, the Company entered into an automatic coinsurance agreement with DART to reinsure an amount equal to 95% of the risks associated with its term life insurance policies with effective dates on or after January 1, 2018.

Information regarding significant third-party reinsurance arrangements is described below.

Union Hamilton

Between April 1, 2015 and December 31, 2016, the Company, excluding its subsidiaries, reinsured approximately 50% of the new business related to “highest daily” living benefits rider guarantees on HDI v.3.0 product, available with Prudential Premier® Retirement Variable Annuity, to Union Hamilton. This reinsurance remains in force for the duration of the underlying annuity contracts. New sales of HDI v.3.0 subsequent to December 31, 2016 are not covered by this external reinsurance agreement. As of March 31, 2019, $3.1 billion of HDI v.3.0 account values are reinsured to Union Hamilton.


7.    INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected "Income tax expense (benefit)" divided by projected "Income (loss) from operations before income taxes and equity in earnings of operating joint venture." Taxes attributable to the operating joint venture are recorded within "Equity in earnings of operating joint venture, net of taxes." The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company's income tax provision, on a consolidated basis, amounted to an income tax benefit of $(16.9) million, or (23.57)% of income (loss) before income taxes and equity in earnings of operating joint venture, in the first three months of 2019, compared to $(2.7) million, or (29.20)%, in the first three months of 2018. The Company's current and prior effective tax rates differed from the U.S. statutory rate of 21% primarily due to non-taxable investment income and tax credits.

8. EQUITY

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Consolidated Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the three months ended March 31, 2019 and 2018, are as follows:
 
Accumulated Other Comprehensive Income (Loss)
 
Foreign
Currency
Translation
Adjustment
 
Net Unrealized
Investment Gains
(Losses)(1)
 
Total Accumulated
Other
Comprehensive
Income (Loss)
 
(in thousands)
Balance, December 31, 2018
$
(17,448
)
 
$
(10,848
)
 
$
(28,296
)
Change in OCI before reclassifications
6,049

 
156,295

 
162,344

Amounts reclassified from AOCI
0

 
3,790

 
3,790

Income tax benefit (expense)
(19
)
 
(33,614
)
 
(33,633
)
Balance, March 31, 2019
$
(11,418
)
 
$
115,623

 
$
104,205

 

38



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


 
Accumulated Other Comprehensive Income (Loss)
 
Foreign
Currency
Translation
Adjustment
 
Net Unrealized
Investment Gains
(Losses)(1)
 
Total Accumulated
Other
Comprehensive
Income (Loss)
 
(in thousands)
Balance, December 31, 2017
$
(234
)
 
$
165,580

 
$
165,346

Change in OCI before reclassifications
(923
)
 
(145,541
)
 
(146,464
)
Amounts reclassified from AOCI
0

 
490

 
490

Income tax benefit (expense)
194

 
30,506

 
30,700

Cumulative effect of adoption of ASU 2016-01
0

 
(1,539
)
 
(1,539
)
Cumulative effect of adoption of ASU 2018-02
(50
)
 
30,449

 
30,399

Balance, March 31, 2018
$
(1,013
)
 
$
79,945

 
$
78,932


(1)
Includes cash flow hedges of $15 million and $(18) million as of March 31, 2019 and December 31, 2018, respectively, and $1 million and $41 million as of March 31, 2018 and December 31, 2017, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in thousands)
Amounts reclassified from AOCI (1)(2):
 
 
 
Net unrealized investment gains (losses):
 
 
 
Cash flow hedges - Currency/Interest rate(3)
$
394

 
$
319

Net unrealized investment gains (losses) on available-for-sale securities
(4,184
)
 
(809
)
Total net unrealized investment gains (losses)(4)
(3,790
)
 
(490
)
Total reclassifications for the period
$
(3,790
)
 
$
(490
)

(1)
All amounts are shown before tax.
(2)
Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
(3)
See Note 4 for additional information on cash flow hedges.
(4)
See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits, policyholders’ account balances and other liabilities. 

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on securities classified as available-for-sale and certain other invested assets and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income” for a period that had been part of OCI in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains (losses), are as follows:

39



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities on which an OTTI loss has been recognized
 
Net Unrealized
Gains (Losses)
on Investments
 
Deferred Policy Acquisition Costs and Other Costs(2)
 
Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(3)
 
Deferred
Income Tax
(Liability)
Benefit
 
Accumulated
Other
Comprehensive
Income (Loss)
Related To Net
Unrealized
Investment
Gains (Losses)
 
(in thousands)
Balance, December 31, 2018
$
(689
)
 
$
(152
)
 
$
37

 
$
(192
)
 
$
(996
)
Net investment gains (losses) on investments arising during the period
573

 
0

 
0

 
(120
)
 
453

Reclassification adjustment for (gains) losses included in net income
(85
)
 
0

 
0

 
18

 
(67
)
Reclassification adjustment for OTTI (gains) losses excluded from net income(1)
(207
)
 
0

 
0

 
43

 
(164
)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs
0

 
110

 
0

 
(23
)
 
87

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities
0

 
0

 
(65
)
 
14

 
(51
)
Balance, March 31, 2019
$
(408
)
 
$
(42
)
 
$
(28
)
 
$
(260
)
 
$
(738
)

(1)
Represents "transfers in" related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.
(2)
"Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses.
(3)
"Other liabilities" primarily includes reinsurance payables.

All Other Net Unrealized Investment Gains (Losses) in AOCI
 
Net Unrealized
Gains (Losses)
on Investments(2)
 
Deferred Policy Acquisition Costs and Other Costs(3)
 
Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(4)
 
Deferred
Income Tax
(Liability)
Benefit
 
Accumulated
Other
Comprehensive
Income (Loss)
Related To Net
Unrealized
Investment
Gains (Losses)
 
(in thousands)
Balance, December 31, 2018
$
(16,632
)
 
$
(65,743
)
 
$
68,005

 
$
4,518

 
$
(9,852
)
Net investment gains (losses) on investments arising during the period
174,288

 
0

 
0

 
(36,596
)
 
137,692

Reclassification adjustment for (gains) losses included in net income
3,875

 
0

 
0

 
(814
)
 
3,061

Reclassification adjustment for OTTI (gains) losses excluded from net income(1)
207

 
0

 
0

 
(43
)
 
164

Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs
0

 
141,369

 
0

 
(29,684
)
 
111,685

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities
0

 
0

 
(159,980
)
 
33,591

 
(126,389
)
Balance, March 31, 2019
$
161,738

 
$
75,626

 
$
(91,975
)
 
$
(29,028
)
 
$
116,361



40



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


(1)
Represents "transfers out" related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.
(2)
Includes cash flow hedges. See Note 4 for information on cash flow hedges.
(3)
"Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses.
(4)
"Other liabilities" primarily includes reinsurance payables.

9.    RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

Expense Charges and Allocations

Many of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses.

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock-based awards program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock-based awards program was $0.1 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively. The expense charged to the Company for the deferred compensation program was $3 million and $2 million for the three months ended March 31, 2019 and 2018, respectively.

The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on final earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during a career. The Company’s share of net expense for the pension plans was $5 million and $6 million for the three months ended March 31, 2019 and 2018, respectively.

The Company is also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses include costs related to medical, dental, life insurance and disability. The Company's share of net expense for the welfare plans was $6 million and $7 million for the three months ended March 31, 2019 and 2018, respectively.

Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company’s expense for its share of the voluntary savings plan was $2 million and $3 million for the three months ended March 31, 2019 and 2018, respectively.

The Company is charged distribution expenses from Prudential Insurance’s agency network for both its domestic life and annuity products through a transfer pricing agreement, which is intended to reflect a market-based pricing arrangement.

The Company pays commissions and certain other fees to Prudential Annuities Distributors, Inc. (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s annuity products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s annuity products. Commissions and fees paid by the Company to PAD were $179 million and $175 million for the three months ended March 31, 2019 and 2018, respectively.

The Company is charged for its share of corporate expenses incurred by Prudential Financial to benefit its businesses, such as advertising, executive oversight, external affairs and philanthropic activity.  The Company’s share of corporate expenses was $17 million and $18 million for the three months ended March 31, 2019 and 2018, respectively.


41



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Corporate Owned Life Insurance

The Company has sold five Corporate-Owned Life Insurance (“COLI”) policies to Prudential Insurance, and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI policies was $4,014 million at March 31, 2019 and $3,631 million at December 31, 2018. Fees related to these COLI policies were $13 million and $12 million for the three months ended March 31, 2019 and 2018. The Company retains the majority of the mortality risk associated with these COLI policies up to $3.5 million per individual policy.

Affiliated Investment Management Expenses

In accordance with an agreement with PGIM, Inc. ("PGIM"), the Company pays investment management expenses to PGIM who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $3 million for both the three months ended March 31, 2019 and 2018. These expenses are recorded as “Net investment income” in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF has a substantially equal and offsetting position with an external counterparty. See Note 4 for additional information.

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $96 million and $88 million as of March 31, 2019 and December 31, 2018, respectively. "Net investment income" related to these ventures includes a gain of $5 million and $0.1 million for the three months ended March 31, 2019 and 2018, respectively.

Affiliated Asset Administration Fee Income

The Company has a revenue sharing agreement with AST Investment Services, Inc. ("ASTISI") and PGIM Investments LLC ("PGIM Investments") whereby the Company receives fee income based on policyholders' separate account balances invested in the Advanced Series Trust. Income received from ASTISI and PGIM Investments related to this agreement was $81 million and $84 million for the three months ended March 31, 2019 and 2018, respectively. These revenues are recorded as “Asset administration fees” in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company has a revenue sharing agreement with PGIM Investments, whereby the Company receives fee income based on policyholders' separate account balances invested in The Prudential Series Fund. Income received from PGIM Investments related to this agreement was $2 million for both the three months ended March 31, 2019 and 2018. These revenues are recorded as “Asset administration fees” in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

Affiliated Notes Receivable

Affiliated notes receivable included in “Receivables from parent and affiliates” at March 31, 2019 and December 31, 2018 were as follows:
 
Maturity Dates
 
Interest Rates
 
March 31, 2019
 
December 31, 2018
 
 
 
 
 
 
 
 
 
(in thousands)
U.S. dollar floating rate notes
2028
 
4.02%
-
4.23
%
 
$
0

 
$
6,502

U.S. dollar fixed rate notes
2020
-
2027
 
0.00%
-
14.85
%
 
128,479

 
128,140

Total notes receivable - affiliated(1)
 
 
 
 
 
 
 
 
$
128,479

 
$
134,642


(1)
All notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances.

The affiliated notes receivable shown above are classified as available-for-sale securities and other trading assets carried at fair value. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Insurance for loans due from affiliates.

42



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



Accrued interest receivable related to these loans was $0.6 million and $1 million at March 31, 2019 and December 31, 2018, respectively, and is included in “Other assets”. Revenues related to these assets were $1 million for both the three months ended March 31, 2019 and 2018, and are included in “Other income”.

Affiliated Asset Transfers

The Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within "Additional paid-in capital" (“APIC”) and "Realized investment gains (losses), net", respectively. The table below shows affiliated asset trades for the three months ended March 31, 2019 and for the year ended December 31, 2018.
Affiliate
 
Date
 
Transaction  
 
Security Type  
 
Fair Value  
 
Book Value  
 
APIC, Net of Tax Increase/(Decrease)
 
Realized
Investment
Gain (Loss)
 
 
 
 
 
 
 
 
(in thousands)
DART
 
January 2018
 
Purchase
 
Other Invested Assets
 
$
21,457

 
$
21,457

 
$
0

 
$
0

PALAC
 
April 2018
 
Purchase
 
Fixed Maturities
 
$
64,313

 
$
64,313

 
$
0

 
$
0

GUL Re
 
May 2018
 
Purchase
 
Fixed Maturities
 
$
87,486

 
$
87,486

 
$
0

 
$
0

GUL Re
 
May 2018
 
Purchase
 
Fixed Maturities
 
$
37,921

 
$
37,921

 
$
0

 
$
0

Prudential Realty Securities, Inc.
 
November 2018
 
Purchase
 
Commercial Mortgages
 
$
3,259

 
$
3,425

 
$
0

 
$
(167
)
Prudential Insurance
 
February 2019
 
Sale
 
Commercial Mortgages
 
$
4,995

 
$
5,000

 
$
(4
)
 
$
0


 
Debt Agreements

The Company is authorized to borrow funds up to $2.2 billion from affiliates to meet its capital and other funding needs. As of March 31, 2019 and December 31, 2018, there was no debt outstanding.

The total interest expense to the Company related to loans payable to affiliates was $0.2 million and $0.1 million for the three months ended March 31, 2019 and 2018, respectively.

Contributed Capital and Dividends

Through March 2019, the Company did not receive any capital contributions from Prudential Insurance. In March 2018, the Company received a capital contribution in the amount of $6 million from Prudential Insurance.

Through March 2019, the Company did not pay any dividends to Prudential Insurance. In 2018, the Company did not pay any dividends.

Reinsurance with Affiliates

As discussed in Note 6, the Company participates in reinsurance transactions with certain affiliates.

10.    COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Company has made commitments to fund commercial mortgage loans. As of March 31, 2019 and December 31, 2018, the outstanding balances on these commitments were $40 million and $14 million, respectively. The Company also made commitments to purchase or fund investments, mostly private fixed maturities. As of March 31, 2019 and December 31, 2018, $276 million and $257 million, respectively, of these commitments were outstanding.


43



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Guarantees

In July 2017, the Company formed a joint venture with CT Corp to provide life insurance solutions in Indonesia. The Company owns a 49% interest in the joint venture and has entered into a shareholders agreement with CT Corp that sets out their respective rights and obligations with respect to the joint venture. Among other things, the shareholders agreement obligates the Company and CT Corp to provide capital to the joint venture, as necessary to comply with applicable law or to maintain a specified minimum amount of capital in the joint venture. This obligation is not limited to a maximum amount. The Company does not expect to make any payments on this guarantee and is not carrying any liabilities associated with the guarantee.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to our customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements.

It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed. The Company estimates that as of March 31, 2019, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $100 million. This estimate is not an indication of expected loss, if any, or the Company's maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 14 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and should be read in conjunction with the complete descriptions provided in the Form 10-K.


44



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Securities Lending and Foreign Tax Reclaim Matter

In 2016, Prudential Financial self-reported to the SEC and the U.S. Department of Labor ("DOL"), and notified other regulators, that in some cases it failed to maximize securities lending income for the benefit of certain separate account investments due to a long-standing restriction benefiting Prudential Financial that limited the availability of loanable securities. Prudential Financial has removed the restriction and implemented a remediation plan for the benefit of customers. As part of Prudential Financial’s review of this matter, in 2018 it further self-reported to the SEC, and notified other regulators, that in some cases it failed to timely process foreign tax reclaims for the separate account investments. Prudential Financial has corrected the foreign tax reclaim process and has implemented a remediation plan for the benefit of customers.

The DOL’s review of the securities lending matter is closed. Prudential Financial is cooperating with the SEC in its review of the securities lending and foreign tax reclaim matters (which includes a review of the remediation plans) and has entered into discussions with the SEC staff regarding a possible settlement of both matters that would potentially involve charges under the Investment Advisers Act and financial remedies. Prudential Financial cannot predict the outcome of the discussions with the SEC regarding these matters.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

11.    REVISION TO PRIOR YEAR INFORMATION

Revisions to 2018 Consolidated Financial Statements

In 2018, the Company identified an error in the calculation of reserves for certain individual life products that impacted several line items within previously issued consolidated financial statements. Prior period amounts have been revised in the financial statements and related disclosures to correct this error as shown below. Management evaluated these adjustments and concluded they were not material to any previously reported quarterly or annual financial statements.

Management assessed the materiality of the misstatement described above on prior period financial statements in accordance with SEC SAB No. 99, Materiality, codified in ASC 250-10, Accounting Changes and Error Corrections ("ASC 250"), and concluded that these misstatements were not material to any prior annual or interim periods. Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the consolidated financial statements as of and for the three months ended March 31, 2018 have been revised.

45



Table of Contents
PRUCO LIFE INSURANCE COMPANY    
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



The following are selected line items from the consolidated financial statements illustrating the effects of these revisions:

Consolidated Statements of Operations and Comprehensive Income (Loss)
 
Three Months Ended March 31, 2018
 
As Previously Reported
 
Revision
 
As Revised
 
(in thousands)
REVENUES
 
 
 
 
 
Policy charges and fee income
$
125,896

 
$
3,259

 
$
129,155

TOTAL REVENUES
185,453

 
3,259

 
188,712

BENEFITS AND EXPENSES
 
 
 
 
 
Policyholders' benefits
48,955

 
2,781

 
51,736

Amortization of deferred policy acquisition costs
26,604

 
(459
)
 
26,145

TOTAL BENEFITS AND EXPENSES
177,147

 
2,322

 
179,469

INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE
8,306

 
937

 
9,243

Income tax expense (benefit)
(2,448
)
 
(251
)
 
(2,699
)
INCOME (LOSS) FROM OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURE
10,754

 
1,188

 
11,942

NET INCOME (LOSS)
$
10,116

 
$
1,188

 
$
11,304

COMPREHENSIVE INCOME (LOSS)
$
(105,158
)
 
$
1,188

 
$
(103,970
)

Consolidated Statements of Equity
 
Retained Earnings
 
Total Equity
 
As Previously Reported
 
Revision
 
As Revised
 
As Previously Reported
 
Revision
 
As Revised
 
(in thousands)
Balance, December 31, 2017
$
1,511,698

 
$
14,612

 
$
1,526,310

 
$
2,820,636

 
$
14,612

 
$
2,835,248

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
10,116

 
1,188

 
11,304

 
10,116

 
1,188

 
11,304

Total comprehensive income (loss)
 
 
 
 
 
 
(105,158
)
 
1,188

 
(103,970
)
Balance, March 31, 2018
$
1,499,351

 
$
15,800

 
$
1,515,151

 
$
2,727,375

 
$
15,800

 
$
2,743,175


Consolidated Statements of Cash Flows
 
Three Months Ended March 31, 2018
 
As Previously Reported
 
Revision
 
As Revised
 
(in thousands)
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
 
 
Net income (loss)
$
10,116

 
$
1,188

 
$
11,304

Policy charges and fee income
(24,173
)
 
476

 
(23,697
)
Future policy benefits
511,380

 
(2,968
)
 
508,412

Reinsurance recoverables
(430,215
)
 
5,748

 
(424,467
)
Deferred policy acquisition costs
(45,184
)
 
(458
)
 
(45,642
)
Income taxes
(2,651
)
 
(251
)
 
(2,902
)
Other, net
(93,619
)
 
(3,735
)
 
(97,354
)
Cash flows from (used in) operating activities
(7,769
)
 
0

 
(7,769
)


46



Table of Contents


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

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the consolidated financial condition of Pruco Life Insurance Company, or the “Company,” as of March 31, 2019, compared with December 31, 2018, and its consolidated results of operations for the three months ended March 31, 2019 and 2018. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the MD&A, the “Risk Factors” section, and the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as well as the statements under “Forward-Looking Statements” and the Unaudited Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Overview

The Company sells variable and fixed annuities, universal life insurance, variable life insurance and term life insurance primarily through affiliated and unaffiliated distributors in the United States.

In July 2017, the Company announced the formation of a joint venture with CT Corp to provide life insurance solutions in Indonesia. CT Corp controls one of Indonesia’s largest and most prominent business groups with primary areas of focus in the financial services, media, retail, property, lifestyle and entertainment sectors. The joint venture, in which the Company owns a 49% interest, is expected to take a multi-product and multi-channel distribution approach and will leverage CT Corp’s existing businesses and strategic partnerships to offer insurance products to customers. While this transaction is expected to provide long-term growth potential, it is not currently significant to the operating results of the Company.

Regulatory Developments

For information on the potential impacts of regulation on the Company see “Business—Regulation” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Impact of a Low Interest Rate Environment

As a global financial services company, market interest rates are a key driver of our results of operations and financial condition. Changes in interest rates can affect our results of operations and/or our financial condition in several ways, including favorable or adverse impacts to:
• investment-related activity, including: investment income returns, net interest margins, net investment spread
results, new money rates, mortgage loan prepayments and bond redemptions;
• insurance reserve levels, market experience true-ups and amortization of deferred policy acquisition costs (“DAC”)
• customer account values, including their impact on fee income;
• product offerings, design features, crediting rates and sales mix; and
• policyholder behavior, including surrender or withdrawal activity.

Interest rates in the U.S. have experienced a period of historically low levels in large part due to Federal Reserve efforts to assist with the economic recovery subsequent to the financial crisis of 2008. While market conditions and events make uncertain the timing, amount and impact of any monetary policy decisions by the Federal Reserve, a trend of rising interest rates may enhance our reinvestment yields, primarily for our investments in fixed maturity securities and commercial mortgage loans. As interest rates rise, our reinvestment yield may approach or exceed the overall portfolio yield. Conversely, if interest rates were to decline, our reinvestment yield may fall below our overall portfolio yield, resulting in an unfavorable impact to earnings.

For more information on interest rate risks, see “Risk Factors—Market Risk” included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Revenues and Expenses

The Company earns revenues principally from insurance premiums, mortality and expense fees, asset administration fees from insurance and investment products, and from net investment income on the investment of general account and other funds. The Company receives premiums primarily from the sale of individual life insurance and annuity products. The Company earns mortality and expense fees, and asset administration fees, primarily from the sale and servicing of universal life insurance and separate account products including variable life insurance and variable annuities. The Company’s operating expenses principally consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, reinsurance premiums, commissions and other costs of selling and servicing the various products sold and interest credited on general account liabilities.

47



Table of Contents



Profitability

The Company’s profitability depends principally on its ability to price our insurance and annuity products at a level that enables us to earn a margin over the costs associated with providing benefits and administering those products. Profitability also depends on, among other items, our actuarial and policyholder behavior experience on insurance and annuity products, our ability to attract and retain customer assets, generate and maintain favorable investment results, and manage expenses.

See “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of risks that have materially affected and may affect in the future the Company’s business, results of operations or financial condition, or cause the Company’s actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company.

Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the application of accounting policies that often involve a significant degree of judgment. Management reviews estimates and assumptions used in the preparation of financial statements on an ongoing basis. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Consolidated Financial Statements could change significantly.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

•
DAC and other costs, including deferred sales inducements (“DSI”);
•
Policyholder liabilities;
•
Valuation of investments, including derivatives, and the recognition of other-than-temporary impairments ("OTTI");
•
Reinsurance recoverables;
•
Taxes on income; and
•
Reserves for contingencies, including reserves for losses in connection with unresolved legal matters.

Market Performance - Equity and Interest Assumptions

DAC and other costs associated with the variable and universal life policies and the variable and fixed annuity contracts are generally amortized over the expected lives of these policies in proportion to total gross profits. Total gross profits include both actual gross profits and estimates of gross profits for future periods. The quarterly adjustments for market performance reflect the impact of changes to our estimate of total gross profits to reflect actual fund performance and market conditions. A significant portion of gross profits for our variable annuity contracts and, to a lesser degree, our variable life policies are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn, costs we incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts, as well as other sources of profit. Returns that are higher than our expectations for a given period produce higher than expected account balances, which increase the future fees we expect to earn and decrease the future costs we expect to incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts. The opposite occurs when returns are lower than our expectations. The changes in future expected gross profits are used to recognize a cumulative adjustment to all prior periods’ amortization.

Furthermore, the calculation of the estimated liability for future policy benefits related to certain insurance products includes an estimate of associated revenues and expenses that are dependent on both historical market performance as well as estimates of market performance in the future. Similar to DAC and other costs described above, these liabilities are subject to quarterly adjustments for experience including market performance, in addition to annual adjustments resulting from our annual reviews of assumptions.

48



Table of Contents



The weighted average rate of return assumptions used in developing estimated market returns consider many factors specific to each business, including asset durations, asset allocations and other factors. With regard to equity market assumptions, the near-term future rate of return assumption used in evaluating DAC, other costs and liabilities for future policy benefits for certain of our products, primarily domestic variable annuity and variable life insurance products is generally updated each quarter and is derived using a reversion to the mean approach, a common industry practice. Under this approach, we consider historical equity returns and adjust projected equity returns over an initial future period of five years (the “near-term”) so that equity returns converge to the long-term expected rate of return. If the near-term projected future rate of return is greater than our near-term maximum future rate of return of 15.0%, we use our maximum future rate of return. As of March 31, 2019, our variable annuities and variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 4.7% near-term mean reversion equity expected rate of return.

With regard to interest rate assumptions, we generally update the future interest rates used to project fixed income returns annually and in any quarter when interest rates vary significantly from these assumptions. As a result of our 2018 annual reviews and update of assumptions and other refinements, we kept our long-term expectation of the 10-year U.S. Treasury rate unchanged and continue to grade to 3.75% over ten years.

Adoption of New Accounting Pronouncements

See Note 2 to our Unaudited Interim Consolidated Financial Statements for a discussion of newly adopted accounting pronouncements and accounting pronouncements issued but not yet adopted.

Changes in Financial Position

March 31, 2019 versus December 31, 2018

Total assets increased $11.8 billion, from $164.7 billion at December 31, 2018 to $176.5 billion at March 31, 2019. Significant components were:

•
Separate account assets increased $9.9 billion, primarily driven by favorable market performance and net inflows partially offset by policy charges;

•
Reinsurance recoverables increased $1.4 billion, primarily driven by continued universal and term life business growth and an increase in the annuity reinsured living benefit liabilities resulting from an increase in future expected benefit payments driven by credit spread tightening and declining rates, partially offset by favorable equity markets;

•
Total investments and cash and cash equivalents increased $0.4 billion primarily driven by universal, term and variable life business growth and unrealized investment gains due to declining rates; and

•
Deferred policy acquisition costs increased $0.1 billion primarily driven by capitalization of acquisition costs in excess of amortization driven by business growth, partially offset by an increase in ceded DAC to affiliates.

Total liabilities increased $11.6 billion, from $161.9 billion at December 31, 2018 to $173.5 billion at March 31, 2019. Significant components were:

•
Separate account liabilities increased $9.9 billion, corresponding to the increase in separate account assets described above;

•
Future policy benefits increased $1.5 billion, primarily driven by growth in term and universal life business, the impact of unrealized gains on guaranteed minimum death benefits reserves and an increase in the annuity reinsured living benefit liabilities, as discussed above; and

•
Policyholders’ account balances increased $0.1 billion, primarily driven by business growth in the life and annuities businesses and unearned revenue reserve ("URR") capitalization, partially offset by a decrease in URR as a result of unrealized gains.

Total equity increased $0.2 billion, from $2.7 billion at December 31, 2018 to $2.9 billion at March 31, 2019, primarily driven by an accumulated other comprehensive income increase of $0.1 billion driven by unrealized investment gains and an increase of $0.1 billion from after tax net income.


49



Table of Contents


Results of Operations

Income (loss) from Operations before Income Taxes

2019 to 2018 Three Months Comparison

Income (loss) from operations before income taxes increased $63 million from $9 million for the three months ended March 31, 2018 to $72 million for the three months ended March 31, 2019. This was primarily driven by underwriting profits in the life business as a result of business growth, higher profits on principle-based reserving ("PBR") products that are retained in the Company and not reinsured to our affiliated captive reinsurance companies, and the impact from less unfavorable mortality. For more information on PBR products, please see the "Term and Universal Life Reserve Financing" section within the "Liquidity and Capital Resources" section below.

Revenues, Benefits and Expenses

2019 to 2018 Three Months Comparison

Revenues increased $34 million from $189 million for the three months ended March 31, 2018 to $222 million for the three months ended March 31, 2019 primarily driven by a $15 million increase in net investment income primarily driven by business growth and higher alternative income and a $10 million increase in Policy charges and fee income primarily driven by business growth and higher profits on PBR products, as discussed above.

Benefits and expenses decreased $28 million from $179 million for the three months ended March 31, 2018 to $151 million for the three months ended March 31, 2019 primarily driven by a $13 million decrease in general, administrative, and other expenses primarily driven by the favorable impact from deferred reinsurance activity in the annuities business and a $12 million decrease in policyholders' benefits primarily reflecting less unfavorable mortality.

Variable Annuity Risks and Risk Mitigants

The following is a summary of: (i) certain risks associated with individual annuity products and (ii) certain strategies in mitigating those risks, including any updates to those strategies since the previous year end. For a more detailed description of these items and their related accounting treatment, refer to the complete descriptions provided in our Annual Report on Form 10-K for the year ended December 31, 2018.

The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For these risk exposures, achievement of our expected earnings and profitability is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. We currently manage our exposure to certain risks driven by capital markets fluctuations primarily through a combination of product design features, an Asset Liability Management ("ALM") Strategy and External Reinsurance.

Product Design Features

A portion of the variable annuity contracts that we offer include an asset transfer feature. This feature is implemented at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate account. The objective of the asset transfer feature is to reduce our exposure to equity market risk and market volatility. The asset transfer feature associated with currently-sold highest daily living benefit products uses a designated bond fund sub-account within the separate account. The transfers are based on a static mathematical formula used with the particular benefit which considers a number of factors, including, but not limited to, the impact of investment performance on the contractholder’s total account value. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of contractholder deposits, as well as a required minimum allocation to our general account for certain of our products. We have also introduced products that diversify our risk profile and have incorporated provisions in product design allowing frequent revisions of key pricing elements for certain products. In addition, there is diversity in our fee arrangements, as certain fees are primarily based on the benefit guarantee amount, the contractholder account value and/or premiums, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

50



Table of Contents


External Reinsurance
As of March 31, 2019, the living benefit guarantees associated with $3.1 billion of HDI v3.0 account values are reinsured to Union Hamilton Reinsurance Ltd., an external counterparty, pursuant to a quota share agreement that covered approximately 50% of new business between April 1, 2015 and December 31, 2016. HDI v3.0 is the current version of our “highest daily” living benefits guarantee that is available with our Prudential Premier® Retirement Variable Annuity. New sales of HDI v3.0 subsequent to December 31, 2016 are not covered by this external reinsurance agreement.

Asset Liability Management Strategy (including fixed income instruments and derivatives)

The current ALM strategy conducted within PALAC and Prudential Insurance utilizes a combination of both traditional fixed income instruments and derivatives to defray potential claims associated with our variable annuity living benefit guarantees. The economic liability we manage with this ALM strategy consists of expected living benefit claims under less severe market conditions, which are managed using a traditional ALM strategy through the accumulation of fixed income and derivative instruments, and potential living benefit claims resulting from more severe market conditions, which are hedged using derivative instruments. For the portion of our ALM strategy executed with derivatives, PALAC and Prudential Insurance enter into a range of exchange-traded, cleared, and over-the-counter (“OTC”) equity and interest rate derivatives, including, but not limited to: equity and treasury futures; total return and interest rate swaps; and options including equity options, swaptions, and floors and caps. Since the ALM strategy is conducted in PALAC and Prudential Insurance, the results of the strategy do not directly impact the Company's results of operations or financial condition.

Capital Hedge Program

We employ a capital hedge program within PALAC to further hedge equity market impacts. The program is intended to protect a portion of the overall capital position of the variable annuities business against its exposure to the equity markets. The capital hedge program is conducted using equity derivatives which include equity call and put options, total return swaps and futures contracts. Since the capital hedge program is conducted in PALAC, the results of the strategy do not directly impact the Company's results of operations or financial condition.

Income Taxes
    
For information regarding income taxes, see Note 7 to the Unaudited Interim Consolidated Financial Statements.

Liquidity and Capital Resources

This section supplements and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of our businesses, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our businesses, general economic conditions, our ability to borrow from affiliates and our access to the capital markets through affiliates as described herein.

Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of Prudential Financial, Prudential Insurance and the Company on a daily basis and projects borrowing and capital needs over a multi-year time horizon through our periodic planning process. We believe that cash flows from available sources of funds are sufficient to satisfy the current liquidity requirements of Prudential Insurance, Prudential Financial and the Company, including under reasonably foreseeable stress scenarios. Prudential Financial has a capital management framework in place that governs the allocation of capital and approval of capital uses. Prudential Financial and the Company also employ a “Capital Protection Framework” to ensure the availability of capital resources to maintain adequate capitalization under various stress scenarios.


51



Table of Contents


Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include, or may include in the future requirements and limitations (many of which are the subject of ongoing rule-making) relating to capital, leverage, liquidity, stress-testing, overall risk management, credit exposure reporting and credit concentration. For information on these regulatory initiatives and their potential impact on us, see "Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Capital

Our capital management framework is primarily based on statutory Risk-Based Capital ("RBC") measures. The RBC ratios are a primary measure of the capital adequacy of the Company. RBC is calculated based on statutory financial statements and risk formulas consistent with the practices of the National Association of Insurance Commissioners ("NAIC"). RBC considers, among other things, risks related to the type and quality of the invested assets, insurance-related risks associated with an insurer’s products and liabilities, interest rate risks and general business risks. RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public. The Company’s capital levels substantially exceed the minimum level required by applicable insurance regulations. Our regulatory capital levels may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators.

In 2018, the NAIC’s RBC framework was revised to reflect the reduction of the corporate tax rate from 35% to 21% under the Tax Act of 2017. The revisions apply to the calculation of our RBC ratios, beginning as of December 31, 2018. While there is no impact on our ability to pay claims, these revisions to the RBC framework have had the effect of increasing certain RBC factors, resulting in an overall decrease in insurers’ RBC ratios.

The regulatory capital level of the Company can be materially impacted by interest rate and equity market fluctuations, changes in the values of derivatives, the level of impairments recorded, credit quality migration of the investment portfolio, and business growth, among other items. In addition, the reinsurance of business or the recapture of business subject to reinsurance arrangements due to defaults by, or credit quality migration affecting, the reinsurers or for other reasons could negatively impact regulatory capital levels. The Company’s regulatory capital level is also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator.

Capital Protection Framework

Prudential Financial and the Company employ a "Capital Protection Framework" ("Framework”) to ensure that sufficient capital resources are available to maintain adequate capitalization and competitive RBC ratios and solvency margins under various stress scenarios. The Framework incorporates the potential impacts from market related stresses, including equity markets, real estate, interest rates, and credit losses.

The Framework accommodates periodic volatility within ranges that are deemed acceptable, while also providing for additional potential sources of capital, including on-balance sheet capital, derivatives, and contingent sources of capital. We believe we currently have access to sufficient resources, either directly, or indirectly through Prudential Financial, to maintain adequate capitalization under a range of potential stress scenarios.

Affiliated Captive Reinsurance Companies

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital—Affiliated Captive Reinsurance Companies” included in our Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of our use of captive reinsurance companies.

Liquidity

Our liquidity is managed to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity is provided by a variety of sources, as described more fully below, including portfolios of liquid assets. Our investment portfolios are integral to the overall liquidity of the Company. We use a projection process for cash flows from operations to ensure sufficient liquidity to meet projected cash outflows, including claims. The impact of Prudential Funding, LLC’s, or Prudential Funding, a wholly-owned subsidiary of Prudential Insurance, financing capacity on liquidity is considered in the internal liquidity measures of the Company.


52



Table of Contents


Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios.

Cash Flow

The principal sources of the Company’s liquidity are premiums and certain annuity considerations, investment and fee income, investment maturities and sales as well as internal borrowings. The principal uses of that liquidity include benefits, claims, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity may include commissions, general and administrative expenses, purchases of investments, the payment of dividends to the parent company, hedging and reinsurance activity and payments in connection with financing activities.

Liquid Assets

Liquid assets include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities, fixed maturities that are not designated as held-to-maturity and public equity securities. As of March 31, 2019 and December 31, 2018 the Company had liquid assets of $6,087 million and $5,695 million, respectively. The portion of liquid assets comprised of cash and cash equivalents and short-term investments was $403 million and $417 million as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, $5,254 million, or 94%, of the fixed maturity investments in Company general account portfolios were rated high or highest quality based on NAIC or equivalent rating.

Term and Universal Life Reserve Financing

The Company uses affiliated captive reinsurance companies to finance the portion of the statutory reserves required to be held under Regulation XXX and Guideline AXXX that is considered to be non-economic. The financing arrangements involve the reinsurance of term and universal life business to our affiliated captive reinsurers and the issuance of surplus notes by those affiliated captives that are treated as capital for statutory purposes. These surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.
As of March 31, 2019, the affiliated captive reinsurance companies have entered into agreements with external counterparties providing for the issuance of up to an aggregate of $13.7 billion of surplus notes by our affiliated captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”), of which $11.4 billion of surplus notes was outstanding as of December 31, 2018. Under the agreements, the affiliated captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate of the Company with an aggregate principal amount equal to the surplus notes outstanding. The affiliated captive holds the credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable. For more information on the Credit-Linked Note Structures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities" in the Annual Report on Form 10-K for the year ended December 31, 2018.
In addition, as of March 31, 2019, our affiliated captive reinsurance companies had outstanding an aggregate of $2.3 billion of debt issued for the purpose of financing Regulation XXX and Guideline AXXX non-economic reserves, of which approximately $0.6 billion relates to Regulation XXX reserves and approximately $1.7 billion relates to Guideline AXXX reserves. In addition, as of March 31, 2019, for purposes of financing Guideline AXXX reserves, our affiliated captives had outstanding approximately $4.0 billion of surplus notes that were issued to affiliates.
The Company has introduced updated versions of several products in its individual life product portfolio in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. During 2017, the Company adopted principle-based reserving for its guaranteed universal life products and introduced updated versions of these products. The guaranteed universal life updated products support the principle-based statutory reserve level without the need for captive reserve financing. The Company is continuing to assess the impact of this new reserving approach on projected statutory reserve levels and product pricing for its remaining portfolio of individual life product offerings.


53



Table of Contents


Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of fluctuations in the value of financial instruments as a result of absolute or relative changes in interest rates, foreign currency exchange rates, equity prices or commodity prices. To varying degrees, our products and services, and the investment activities supporting them, generate exposure to market risk. The market risk incurred, and our strategies for managing this risk, vary by product. As of March 31, 2019, there have been no material changes in our economic exposure to market risk from December 31, 2018, a description of which may be found in our Annual Report on Form 10-K for the year ended December 31, 2018, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” filed with the SEC. See Item 1A, “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of how difficult conditions in the financial markets and the economy generally may materially adversely affect our business and results of our operations.

Item 4.  Controls and Procedures

In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized, and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Securities Exchange Act of 1934, as amended (“Exchange Act”) Rule 13a-15(e), as of March 31, 2019. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2019, our disclosure controls and procedures were effective. No change in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), occurred during the quarter ended March 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

54



Table of Contents


PART II—OTHER INFORMATION

Item 1.  Legal Proceedings

See Note 10 to the Unaudited Interim Consolidated Financial Statements under “—Litigation and Regulatory Matters” for a description of certain pending litigation and regulatory matters affecting us, and certain risks to our business presented by such matters, which is incorporated herein by reference.

Item 1A. Risk Factors

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. These risks could materially affect our business, results of operations or financial condition or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by or on behalf of the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” above and the risks of our business described elsewhere in this Quarterly Report on Form 10-Q.


55



Table of Contents


Item 6. Exhibits

EXHIBIT INDEX
 
 
 
 
 
101.INS - XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
 
101.SCH - XBRL Taxonomy Extension Schema Document.
 
101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document
 
101.LAB - XBRL Taxonomy Extension Label Linkbase Document
 
101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document
 
101.DEF - XBRL Taxonomy Extension Definition Linkbase Document


56



Table of Contents


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pruco Life Insurance Company
 
 
By:
 
/s/    John Chieffo
Name:
 
John Chieffo
 
 
Vice President and Chief Financial Officer
 
 
(Authorized Signatory and Principal Financial Officer)
Date: May 9, 2019


57