ThZeal - The Zeal

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-Q

________________________________________


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

For the quarterly period ended June 30, 2024


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

For the Transition Period from 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)						(I.R.S. Employer Identification Number)

213 Washington Street

Newark, NJ 07102

(973) 802-6000

(Address and Telephone Number of Registrant's Principal Executive Offices)

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of 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 ☒ 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	☒	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 ☒

As of August 16, 2024, 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.

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TABLE OF CONTENTS


		Page Number
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Unaudited Interim Consolidated Statements of Financial Position as of June 3 0 , 2024 and December 31, 2023	4

	Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 3 0 , 2024 and 2023	5

	Unaudited Interim Consolidated Statements of Equity for the three and six months ended June 3 0 , 2024 and 2023	6

	Unaudited Interim Consolidated Statements of Cash Flows for the six months ended June 3 0 , 2024 and 2023	8

	Notes to Unaudited Interim Consolidated Financial Statements	9

	1. Business and Basis of Presentation	9

	2. Significant Accounting Policies and Pronouncements	10

	3. Investments	11

	4. Derivatives and Hedging	23

	5. Fair Value of Assets and Liabilities	29

	6. Deferred Policy Acquisition Costs, Deferred Reinsurance, and Deferred Sales Inducements	42

	7. Separate Accounts	44

	8. Liability for Future Policy Benefits	46

	9. Policyholders' Account Balances	54

	10. Market Risk Benefits	57

	11. Reinsurance	59

	12. Income Taxes	67

	13. Equity	68

	14. Related Party Transactions	69

	15. Commitments and Contingent Liabilities	75



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	77



Item 4.	Controls and Procedures	84

PART II—OTHER INFORMATION		85

Item 1.	Legal Proceedings	85

Item 1A.	Risk Factors	85

Item 6.	Exhibits	86

SIGNATURES		87

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FORWARD-LOOKING STATEMENTS

Certain of the statements included in this Quarterly Report on Form 10-Q, 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 subsidiaries. There can be no assurance that future developments affecting Pruco Life Insurance Company and its subsidiaries 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 (d) reliance on third parties or (e) labor and employment matters; (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, 2023 for discussion of certain risks relating to our business and investment in our securities.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Financial Position

June 30, 2024 and December 31, 2023 (in thousands, except share amounts)


	June 30, 2024		December 31, 2023
ASSETS
Fixed maturities, available for sale, at fair value (allowance for credit losses: 2024-$3,348; 2023-$2,008) (amortized cost: 2024–$33,149,962; 2023–$27,538,066)	$	31,110,763	$	26,131,780
Fixed maturities, trading, at fair value (amortized cost: 2024–$3,594,538; 2023–$3,476,746)	3,074,512		2,796,446
Equity securities, at fair value (cost: 2024– $575,874; 2023–$824,270)	565,619		844,950

Policy loans	1,511,288		1,472,677
Short-term investments	416,658		380,366
Commercial mortgage and other loans (net of $41,572 and $37,689 allowance for credit losses at June 30, 2024 and December 31, 2023, respectively)	6,718,386		6,122,721
Other invested assets (includes $77,562 and $85,025 of assets measured at fair value at June 30, 2024 and December 31, 2023, respectively)	1,403,405		1,222,985
Total investments	44,800,631		38,971,925
Cash and cash equivalents	2,886,207		2,139,792
Deferred policy acquisition costs	7,482,833		7,097,511
Accrued investment income	426,302		333,838
Reinsurance recoverables	40,693,991		38,709,651
Receivables from parent and affiliates	416,539		332,583
Deferred sales inducements	337,202		351,424
Income tax assets	1,907,612		1,737,651
Market risk benefit assets	2,550,164		2,367,243
Other assets	2,596,292		2,078,938
Separate account assets	119,980,906		119,188,485
TOTAL ASSETS	$	224,078,679	$	213,309,041
LIABILITIES AND EQUITY
LIABILITIES
Policyholders’ account balances	$	61,036,866	$	53,012,800
Future policy benefits	23,030,579		23,205,205
Market risk benefit liabilities	4,370,960		5,144,401

Cash collateral for loaned securities	19,397		218,310

Short-term debt to affiliates	0		180,411

Payables to parent and affiliates	3,133,697		2,667,696
Other liabilities	8,574,711		5,170,308
Separate account liabilities	119,980,906		119,188,485
Total liabilities	220,147,116		208,787,616
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 15)
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	4,508,290		5,052,602
Retained earnings / (accumulated deficit)	(189,104)		(532,951)
Accumulated other comprehensive income (loss)	(498,247)		(30,920)
Total Pruco Life Insurance Company equity	3,823,439		4,491,231
Noncontrolling interests	108,124		30,194
Total equity	3,931,563		4,521,425
TOTAL LIABILITIES AND EQUITY	$	224,078,679	$	213,309,041

See Notes to Unaudited Interim Consolidated Financial Statements

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PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2024 and 2023 (in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REVENUES
Premiums (includes $(2,192), $4,141, $(2,522) and $5,092 of gains (losses) from change in estimates on deferred profit liability amortization for the three months ended June 30, 2024 and 2023 and the six months ended June 30, 2024 and 2023, respectively)	$	94,921	$	89,965	$	187,103	$	166,621
Policy charges and fee income	388,834		363,536		3,298,039		750,027
Net investment income	579,993		393,075		1,085,313		742,525
Asset administration fees	55,113		56,788		111,745		120,990
Other income (loss)	137,689		105,458		351,174		350,305
Realized investment gains (losses), net	838,882		7,694		861,882		(112,985)
Change in value of market risk benefits, net of related hedging gain (loss)	(282,183)		(38,887)		(190,592)		(18,685)
TOTAL REVENUES	1,813,249		977,629		5,704,664		1,998,798
BENEFITS AND EXPENSES
Policyholders’ benefits	135,879		146,961		4,242,287		252,143
Change in estimates of liability for future policy benefits	(6,174)		(1,133)		(18,179)		(5,535)
Interest credited to policyholders’ account balances	226,224		143,816		450,774		304,038
Amortization of deferred policy acquisition costs	148,010		129,147		16,995		266,642
General, administrative and other expenses	286,660		300,689		594,838		587,336
TOTAL BENEFITS AND EXPENSES	790,599		719,480		5,286,715		1,404,624
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	1,022,650		258,149		417,949		594,174
Income tax expense (benefit)	134,404		40,326		70,787		96,565
INCOME (LOSS) FROM OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	888,246		217,823		347,162		497,609
Equity in earnings of operating joint venture, net of taxes	(86)		(225)		(243)		(332)
NET INCOME (LOSS)	$	888,160	$	217,598	$	346,919	$	497,277
Less: Income (loss) attributable to noncontrolling interests	1,891		0		3,072		0
NET INCOME (LOSS) ATTRIBUTABLE TO PRUCO LIFE INSURANCE COMPANY	$	886,269	$	217,598	$	343,847	$	497,277
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(1,816)		600		(4,178)		3,266
Net unrealized investment gains (losses)	(155,693)		(263,227)		(469,000)		118,874
Interest rate remeasurement of future policy benefits	33,385		20,636		66,215		(17,588)
Gain (loss) from changes in non-performance risk on market risk benefits	55,049		(247,746)		(183,925)		(67,323)
Total	(69,075)		(489,737)		(590,888)		37,229
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(14,270)		(102,846)		(123,561)		7,416
Other comprehensive income (loss), net of taxes	(54,805)		(386,891)		(467,327)		29,813
Comprehensive income (loss)	833,355		(169,293)		(120,408)		527,090
Less: Comprehensive income (loss) attributable to noncontrolling interests	1,891		0		3,072		0
Comprehensive income (loss) attributable to Pruco Life Insurance Company	$	831,464	$	(169,293)	$	(123,480)	$	527,090

See Notes to Unaudited Interim Consolidated Financial Statements

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PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Equity

Three and Six Months Ended June 30, 2024 and 2023 (in thousands)


	Common Stock		Additional Paid-in Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Pruco Life Insurance Company Equity		Noncontrolling Interests		Total Equity
Balance, December 31, 2023	$	2,500	$	5,052,602	$	(532,951)	$	(30,920)	$	4,491,231	$	30,194	$	4,521,425



Contributions from noncontrolling interests											25,310		25,310

Contributed (distributed) capital-parent/child asset transfers			5,722						5,722				5,722
Comprehensive income (loss):
Net income (loss)					(542,422)				(542,422)		1,181		(541,241)
Other comprehensive income (loss), net of tax							(412,522)		(412,522)		0		(412,522)
Total comprehensive income (loss)									(954,944)		1,181		(953,763)
Balance, March 31, 2024	2,500		5,058,324		(1,075,373)		(443,442)		3,542,009		56,685		3,598,694


Return of capital			(550,000)						(550,000)				(550,000)
Contributions from noncontrolling interests											49,548		49,548

Contributed (distributed) capital-parent/child asset transfers			(34)						(34)				(34)
Comprehensive income (loss):
Net income (loss)					886,269				886,269		1,891		888,160
Other comprehensive income (loss), net of taxes							(54,805)		(54,805)		0		(54,805)
Total comprehensive income (loss)									831,464		1,891		833,355
Balance, June 30, 2024	$	2,500	$	4,508,290	$	(189,104)	$	(498,247)	$	3,823,439	$	108,124	$	3,931,563

Table of Contents


	Common Stock		Additional Paid-in Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Pruco Life Insurance Company Equity		Noncontrolling Interests		Total Equity
Balance, December 31, 2022(1)	$	2,500	$	6,037,914	$	(994,154)	$	(10,065)	$	5,036,195	$	0	$	5,036,195


Contributed capital			405,000						405,000				405,000


Contributed (distributed) capital-parent/child asset transfers			1,870						1,870				1,870
Comprehensive income (loss):
Net income (loss)					279,679				279,679				279,679
Other comprehensive income (loss), net of tax							416,704		416,704		0		416,704
Total comprehensive income (loss)									696,383		0		696,383
Balance, March 31, 2023	2,500		6,444,784		(714,475)		406,639		6,139,448		0		6,139,448



Return of capital			(300,000)						(300,000)				(300,000)
Contributed (distributed) capital-parent/child asset transfers			498						498				498
Comprehensive income (loss):
Net income (loss)					217,598				217,598				217,598
Other comprehensive income (loss), net of tax							(386,891)		(386,891)		0		(386,891)
Total comprehensive income (loss)									(169,293)		0		(169,293)
Balance, June 30, 2023	$	2,500	$	6,145,282	$	(496,877)	$	19,748	$	5,670,653	$	0	$	5,670,653

(1) Prior period amounts reflect the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

See Notes to Unaudited Interim Consolidated Financial Statements

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PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Cash Flows

Six Months Ended June 30, 2024 and 2023 (in thousands)


	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	346,919	$	497,277
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Policy charges and fee income	(2,391,091)		32,088
Interest credited to policyholders’ account balances	450,774		304,038
Realized investment (gains) losses, net	(861,882)		112,985
Change in value of market risk benefits, net of related hedging (gains) losses	190,592		18,685

Change in:
Future policy benefits and other insurance liabilities	1,319,243		1,114,998
Reinsurance recoverables	(371,039)		(266,323)
Accrued investment income	(84,564)		(61,627)
Net payables to/receivables from parent and affiliates	34,767		(62,810)
Deferred policy acquisition costs	(700,157)		(247,251)
Income taxes	(47,971)		(131,308)

Derivatives, net	566,749		(24,143)
Other, net	3,465,543		22,671
Cash flows from (used in) operating activities	1,917,883		1,309,280
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	1,508,920		668,943
Fixed maturities, trading	634,302		28,720
Equity securities	599,044		44,737
Policy loans	90,999		96,630
Ceded policy loans	(53,663)		(65,351)
Short-term investments	751,272		188,767
Commercial mortgage and other loans	206,032		65,695
Other invested assets	28,981		6,890

Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(6,966,095)		(4,639,830)
Fixed maturities, trading	(1,033,048)		(508,352)
Equity securities	(355,520)		(84,161)
Policy loans	(116,650)		(1,039,549)
Ceded policy loans	49,226		89,078
Short-term investments	(787,217)		(352,450)
Commercial mortgage and other loans	(810,995)		(499,642)
Other invested assets	(206,518)		(92,315)

Notes receivable from parent and affiliates, net	(180,046)		3,380
Derivatives, net	157,771		(72,609)
Other, net	(7,632)		(6,502)
Cash flows from (used in) investing activities	(6,490,837)		(6,167,921)

CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders’ account deposits	8,432,668		6,380,420
Ceded policyholders’ account deposits	(654,834)		(590,643)
Policyholders’ account withdrawals	(2,047,637)		(1,904,078)
Ceded policyholders’ account withdrawals	410,169		317,163
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities	(198,908)		75,379
Contributed / (return of) capital	(550,000)		105,000

Contributed (distributed) capital - parent/child asset transfers	7,481		2,997
Net change in all other financing arrangements (maturities 90 days or less)	0		(88)

Repayments of debt (maturities longer than 90 days)	(180,411)		0
Drafts outstanding	(84,821)		(83,568)
Other, net	185,662		(60,577)
Cash flows from (used in) financing activities	5,319,369		4,242,005
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	746,415		(616,636)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	2,139,792		2,397,627
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	2,886,207	$	1,780,991

Significant Non-Cash Transactions

"Cash flows from (used in) operating activities" for the six months ended June 30, 2024 excludes certain non-cash activities in the amount of $1,129 million related to the Company's affiliated reinsurance with Prudential Universal Reinsurance Entity Company ("PURE") and The Prudential Insurance Company of America ("Prudential Insurance"). See Note 11 for additional information.

"Cash flows from (used in) operating activities" for the six months ended June 30, 2023 excludes certain non-cash activities in the amount of $335 million related to the novated indexed variable annuities under the reinsurance agreement with Fortitude Life Insurance & Annuity Company ("FLIAC"). See Note 11 for more details regarding this transaction.

See Notes to Unaudited Interim Consolidated Financial Statements

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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 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”). 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. Pruco Life and its subsidiaries are together referred to as the "Company", "we" or "our" and all financial information is shown on a consolidated basis.

Prudential Financial Sale of PALAC

Effective April 1, 2022, Prudential Financial completed the sale of Prudential Annuities Life Assurance Corporation (“PALAC”) to Fortitude Group Holdings, LLC (“Fortitude”). As such, PALAC is no longer an affiliate of Prudential Financial or the Company. Fortitude subsequently renamed the company Fortitude Life Insurance & Annuity Company (“FLIAC”).

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles 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”). The Unaudited Interim Consolidated Financial Statements include the accounts of Pruco Life and entities over which the Company exercises control, including majority-owned subsidiaries. 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, 2023.

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 future policy benefits; policyholders' account balances and reinsurance related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits ("MRBs"); the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments; reinsurance recoverables; any 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.

Reclassifications

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

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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 ASUs to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs 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 June 30, 2024, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASUs issued but not yet adopted as of June 30, 2024

Standard

Description

Effective date and method of adoption

Effect on the financial statements or other significant matters

ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

This ASU requires entities, including those with a single operating or reportable segment, to provide more detailed information about significant segment expenses that are regularly provided to the chief operating decision maker. The ASU also clarifies that all of the disclosures required in the guidance apply to all public entities, including those with a single operating or reportable segment.

Effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, using the retrospective method.

The Company is currently assessing the impact of the ASU on the Company's Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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:


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,198,985	$	13,506	$	91,356	$	0	$	1,121,135
Obligations of U.S. states and their political subdivisions	637,572		1,961		27,051		0		612,482
Foreign government bonds	326,497		855		61,028		0		266,324
U.S. public corporate securities	12,357,109		43,886		987,257		1,616		11,412,122
U.S. private corporate securities	5,540,730		11,550		329,287		1,588		5,221,405
Foreign public corporate securities	3,020,621		9,803		133,192		139		2,897,093
Foreign private corporate securities	5,357,655		48,506		485,061		0		4,921,100
Asset-backed securities(1)	3,403,884		31,590		8,205		0		3,427,269
Commercial mortgage-backed securities	922,301		3,193		66,432		0		859,062
Residential mortgage-backed securities(2)	384,608		606		12,438		5		372,771
Total fixed maturities, available-for-sale	$	33,149,962	$	165,456	$	2,201,307	$	3,348	$	31,110,763

(1)Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans and home equity.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.


	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,009,937	$	38,858	$	73,508	$	0	$	975,287
Obligations of U.S. states and their political subdivisions	789,856		5,288		18,517		0		776,627
Foreign government bonds	330,830		1,840		50,684		0		281,986
U.S. public corporate securities	10,159,089		98,047		760,274		950		9,495,912
U.S. private corporate securities	5,207,699		37,435		254,828		812		4,989,494
Foreign public corporate securities	1,809,347		12,658		115,673		238		1,706,094
Foreign private corporate securities	4,902,391		109,806		381,215		0		4,630,982
Asset-backed securities(1)	2,016,028		23,035		11,512		1		2,027,550
Commercial mortgage-backed securities	913,347		4,776		66,345		0		851,778
Residential mortgage-backed securities(2)	399,542		4,016		7,481		7		396,070
Total fixed maturities, available-for-sale	$	27,538,066	$	335,759	$	1,740,037	$	2,008	$	26,131,780

(1)Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans and home equity.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the fair value and gross unrealized losses on fixed maturity, available-for-sale securities without an allowance for credit 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:


	June 30, 2024
	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	$	230,068	$	2,572	$	294,783	$	88,784	$	524,851	$	91,356
Obligations of U.S. states and their political subdivisions	223,788		3,957		234,192		23,094		457,980		27,051
Foreign government bonds	22,104		674		226,215		60,354		248,319		61,028
U.S. public corporate securities	2,763,982		57,470		5,644,459		929,754		8,408,441		987,224
U.S. private corporate securities	1,257,925		29,254		3,114,266		300,033		4,372,191		329,287
Foreign public corporate securities	891,965		5,472		988,534		127,696		1,880,499		133,168
Foreign private corporate securities	1,238,396		29,092		2,526,982		455,969		3,765,378		485,061
Asset-backed securities	476,496		1,994		193,910		6,211		670,406		8,205
Commercial mortgage-backed securities	69,386		301		568,747		66,131		638,133		66,432
Residential mortgage-backed securities	129,727		1,264		151,836		11,174		281,563		12,438
Total fixed maturities, available-for-sale	$	7,303,837	$	132,050	$	13,943,924	$	2,069,200	$	21,247,761	$	2,201,250


	December 31, 2023
	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	$	98,174	$	945	$	214,889	$	72,563	$	313,063	$	73,508
Obligations of U.S. states and their political subdivisions	83,729		293		218,375		18,224		302,104		18,517
Foreign government bonds	10,226		116		233,757		50,568		243,983		50,684
U.S. public corporate securities	782,904		10,009		5,201,353		750,265		5,984,257		760,274
U.S. private corporate securities	707,674		16,613		2,794,697		238,181		3,502,371		254,794
Foreign public corporate securities	92,955		1,063		948,963		114,169		1,041,918		115,232
Foreign private corporate securities	429,212		8,035		2,461,367		373,180		2,890,579		381,215
Asset-backed securities	208,970		1,761		532,814		9,750		741,784		11,511
Commercial mortgage-backed securities	42,621		298		580,931		66,047		623,552		66,345
Residential mortgage-backed securities	35,904		435		124,956		7,046		160,860		7,481
Total fixed maturities, available-for-sale	$	2,492,369	$	39,568	$	13,312,102	$	1,699,993	$	15,804,471	$	1,739,561

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of June 30, 2024 and December 31, 2023, the gross unrealized losses on fixed maturity, available-for-sale securities without an allowance of $2,071 million and $1,634 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 $130 million and $106 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of June 30, 2024, the $2,069 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 utility sectors. As of December 31, 2023, the $1,700 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 utility 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, 2023, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at June 30, 2024. This conclusion was based on a detailed analysis of the underlying credit and cash flows for each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening and foreign currency exchange rate movements. As of June 30, 2024, 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, available-for-sale by contractual maturities, as of the date indicated:


	June 30, 2024
	Amortized Cost		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
Due in one year or less	$	1,585,826	$	1,549,703
Due after one year through five years	10,560,134		10,212,123
Due after five years through ten years	8,207,957		7,798,270
Due after ten years	8,085,252		6,891,565
Asset-backed securities	3,403,884		3,427,269
Commercial mortgage-backed securities	922,301		859,062
Residential mortgage-backed securities	384,608		372,771
Total fixed maturities, available-for-sale	$	33,149,962	$	31,110,763

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 write-downs and the allowance for credit losses of fixed maturities, available-for-sale, for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	321,870	$	68,308	$	428,025	$	128,681
Proceeds from maturities/prepayments	698,470		193,205		1,135,913		488,333
Gross investment gains from sales and maturities	9,407		6,777		10,344		9,449
Gross investment losses from sales and maturities	(16,340)		(5,587)		(24,472)		(17,525)
Write-downs recognized in earnings(2)	0		4		0		7
(Addition to) release of allowance for credit losses	(1,698)		(1,196)		(1,340)		(154)

(1)Excludes activity from non-cash related proceeds due to the timing of trade settlements of $(55.0) million and $51.9 million for the six months ended June 30, 2024 and 2023, respectively.

(2)Amounts represent write-downs of credit adverse securities and securities actively marketed for sale.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for fixed maturity available-for-sale securities, as of the dates indicated:


	Three Months Ended June 30, 2024
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	1,650	$	0	$	0	$	0	$	1,650
Additions to allowance for credit losses not previously recorded	0		0		339		0		0		5		344
Reductions for securities sold during the period	0		0		(1)		0		0		0		(1)
Additions (reductions) on securities with previous allowance	0		0		1,355		0		0		0		1,355
Assets transferred to parent and affiliates	0		0		0		0		0		0		0
Balance, end of period	$	0	$	0	$	3,343	$	0	$	0	$	5	$	3,348


	Three Months Ended June 30, 2023
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	3,720	$	0	$	0	$	7	$	3,727
Additions to allowance for credit losses not previously recorded	0		0		242		0		0		0		242
Reductions for securities sold during the period	0		0		(41)		0		0		0		(41)
Additions (reductions) on securities with previous allowance	0		0		996		0		0		(1)		995
Balance, end of period	$	0	$	0	$	4,917	$	0	$	0	$	6	$	4,923

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2024
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	2,000	$	1	$	0	$	7	$	2,008
Additions to allowance for credit losses not previously recorded	0		0		396		0		0		5		401
Reductions for securities sold during the period	0		0		(42)		0		0		0		(42)
Additions (reductions) on securities with previous allowance	0		0		510		(1)		0		(7)		502
Assets transferred to parent and affiliates	0		0		479		0		0		0		479
Balance, end of period	$	0	$	0	$	3,343	$	0	$	0	$	5	$	3,348


	Six Months Ended June 30, 2023
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	5	$	4,755	$	0	$	0	$	9	$	4,769
Additions to allowance for credit losses not previously recorded	0		0		3,165		0		0		0		3,165
Reductions for securities sold during the period	0		(1)		(3,774)		0		0		0		(3,775)
Additions (reductions) on securities with previous allowance	0		(4)		771		0		0		(3)		764
Balance, end of period	$	0	$	0	$	4,917	$	0	$	0	$	6	$	4,923

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, 2023 for additional information about the Company's methodology for developing our allowance and expected losses.

For the three months ended June 30, 2024, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the capital goods and finance sectors within corporate securities due to adverse projected cash flows. For the three months ended June 30, 2023, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the technology and communications sectors within corporate securities, due to adverse projected cash flows.

For the six months ended June 30, 2024, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the utility, capital goods and finance sectors within corporate securities. For the six months ended June 30, 2023, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the technology and communications sectors within corporate securities, partially offset by restructurings within the capital goods and transportation sectors within private corporate securities.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company did not have any fixed maturity securities purchased with credit deterioration, as of both June 30, 2024 and December 31, 2023.

Fixed Maturities, Trading

The net change in unrealized gains (losses) from fixed maturities, trading still held at period end, recorded within “Other income (loss),” was $(50.9) million and $(53.5) million during the three months ended June 30, 2024 and 2023, respectively, and $(132.2) million and $42.6 million during the six months ended June 30, 2024 and 2023, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $(9.2) million and $(1.1) million during the three months ended June 30, 2024 and 2023, respectively, and $(21.4) million and $8.1 million during the six months ended June 30, 2024 and 2023, respectively.

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans”, as of the dates indicated:


	June 30, 2024				December 31, 2023
	Amount (in thousands)		% of Total		Amount (in thousands)		% of Total
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	1,776,234	26.3	%	$	1,578,785	25.7	%
Hospitality	99,596		1.5		102,952		1.7
Industrial	2,701,470		40.0		2,486,230		40.4
Office	587,978		8.6		604,611		9.8
Other	666,349		9.9		456,720		7.4
Retail	349,157		5.2		363,706		5.9
Total commercial mortgage loans	6,180,784		91.5		5,593,004		90.9
Agricultural property loans	571,962		8.5		562,046		9.1
Total commercial mortgage and agricultural property loans	6,752,746		100.0	%	6,155,050		100.0	%
Allowance for credit losses	(41,572)				(37,689)
Total net commercial mortgage and agricultural property loans	6,711,174				6,117,361
Other loans:
Other collateralized loans	7,212				5,360
Total other loans	7,212				5,360
Total net commercial mortgage and other loans	$	6,718,386			$	6,122,721

As of June 30, 2024, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in California (27%), Texas (9%) and Washington (7%)), and included loans secured by properties in Europe (10%), Mexico (1%) and Australia (1%).

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:


	Three Months Ended June 30,
	2024				2023
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in thousands)
Allowance, beginning of period	$	41,769	$	913	$	42,682	$	20,427	$	983	$	21,410
Addition to (release of) allowance for expected losses	(1,077)		(33)		(1,110)		706		(23)		683
Allowance, end of period	$	40,692	$	880	$	41,572	$	21,133	$	960	$	22,093


	Six Months Ended June 30,
	2024				2023
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in thousands)
Allowance, beginning of period	$	36,758	$	931	$	37,689	$	19,665	$	598	$	20,263
Addition to (release of) allowance for expected losses	3,934		(51)		3,883		1,468		362		1,830
Allowance, end of period	$	40,692	$	880	$	41,572	$	21,133	$	960	$	22,093

For the three months ended June 30, 2024, the net decrease in the allowance for credit losses on commercial mortgage and other loans was in the general allowance primarily due to loan payoffs, partially offset by loan originations. For the three months ended June 30, 2023, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to an increase in the general allowance due to declining market conditions and loan originations.

For the six months ended June 30, 2024, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to an increase in the loan specific allowance within the office sector and in the general allowance due to loan originations, partially offset by loan payoffs. For the six months ended June 30, 2023, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to an increase in the general allowance due to declining market conditions and loan originations.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:


	June 30, 2024
	Amortized Cost by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
	(in thousands)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	89,035	$	254,068	$	230,308	$	480,391	$	94,393	$	1,197,399	$	0	$	2,345,594
60%-69.99%	541,378		690,428		362,596		445,103		170,063		405,172		0		2,614,740
70%-79.99%	126,919		210,883		121,583		257,377		77,219		57,912		0		851,893
80% or greater	2,130		0		57,764		84,140		3,850		220,673		0		368,557
Total	$	759,462	$	1,155,379	$	772,251	$	1,267,011	$	345,525	$	1,881,156	$	0	$	6,180,784
Debt Service Coverage Ratio:
Greater than 1.2x	$	713,612	$	1,039,629	$	768,777	$	1,267,011	$	275,080	$	1,755,968	$	0	$	5,820,077
1.0 - 1.2x	45,850		115,750		3,474		0		0		49,352		0		214,426
Less than 1.0x	0		0		0		0		70,445		75,836		0		146,281
Total	$	759,462	$	1,155,379	$	772,251	$	1,267,011	$	345,525	$	1,881,156	$	0	$	6,180,784
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	19,587	$	89,733	$	168,400	$	131,887	$	23,775	$	43,900	$	13,789	$	491,071
60%-69.99%	0		19,452		37,889		0		0		0		0		57,341
70%-79.99%	0		0		7,000		0		0		0		14,815		21,815
80% or greater	0		0		0		0		1,735		0		0		1,735
Total	$	19,587	$	109,185	$	213,289	$	131,887	$	25,510	$	43,900	$	28,604	$	571,962
Debt Service Coverage Ratio:
Greater than 1.2x	$	18,587	$	95,419	$	211,289	$	130,184	$	23,775	$	43,900	$	28,604	$	551,758
1.0 - 1.2x	1,000		13,766		2,000		0		1,735		0		0		18,501
Less than 1.0x	0		0		0		1,703		0		0		0		1,703
Total	$	19,587	$	109,185	$	213,289	$	131,887	$	25,510	$	43,900	$	28,604	$	571,962

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2023
	Amortized Cost by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
	(in thousands)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	249,037	$	245,914	$	482,718	$	109,249	$	265,053	$	1,068,763	$	2,420,734
60%-69.99%	675,153		355,984		449,878		172,721		225,803		206,237		2,085,776
70%-79.99%	218,015		133,343		255,299		77,812		20,924		86,806		792,199
80% or greater	0		47,555		73,702		3,817		16,508		152,713		294,295
Total	$	1,142,205	$	782,796	$	1,261,597	$	363,599	$	528,288	$	1,514,519	$	5,593,004
Debt Service Coverage Ratio:
Greater than 1.2x	$	1,038,315	$	779,282	$	1,261,597	$	292,561	$	497,407	$	1,402,831	$	5,271,993
1.0 - 1.2x	103,890		3,514		0		0		15,632		40,521		163,557
Less than 1.0x	0		0		0		71,038		15,249		71,167		157,454
Total	$	1,142,205	$	782,796	$	1,261,597	$	363,599	$	528,288	$	1,514,519	$	5,593,004
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	73,774	$	179,375	$	132,042	$	25,875	$	15,824	$	25,771	$	452,661
60%-69.99%	47,489		56,210		0		0		0		0		103,699
70%-79.99%	5,686		0		0		0		0		0		5,686
80% or greater	0		0		0		0		0		0		0
Total	$	126,949	$	235,585	$	132,042	$	25,875	$	15,824	$	25,771	$	562,046
Debt Service Coverage Ratio:
Greater than 1.2x	$	126,949	$	233,585	$	130,353	$	24,063	$	15,824	$	25,771	$	556,545
1.0 - 1.2x	0		2,000		0		1,812		0		0		3,812
Less than 1.0x	0		0		1,689		0		0		0		1,689
Total	$	126,949	$	235,585	$	132,042	$	25,875	$	15,824	$	25,771	$	562,046

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, 2023 for additional information about the Company’s commercial mortgage and other loans credit quality monitoring process.

The Company may grant loan modifications in its commercial mortgage and other loan portfolios to borrowers experiencing financial difficulties. These loan modifications may be in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or some combination thereof.

During the three and six months ended June 30, 2024, commercial mortgage and other loans with amortized cost of $9 million and $17 million, respectively, were granted term extensions with borrowers experiencing financial difficulties. The modified loans represent less than 1% of the portfolio. These modifications added less than one year to the weighted average life of loans in this portfolio.

During both the three and six months ended June 30, 2023, the Company did not modify any loans to borrowers experiencing financial difficulties.

For the six months ended June 30, 2024, all commercial mortgage and other loans that were modified to borrowers experiencing financial difficulties were current.

The Company did not have any commitments to lend additional funds to borrowers experiencing financial difficulties on modified loans as of June 30, 2024 and December 31, 2023.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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:


	June 30, 2024
	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	$	6,167,492	$	0	$	0	$	13,292	$	6,180,784	$	15,422
Agricultural property loans	571,962		0		0		0		571,962		3,322
Other collateralized loans	7,212		0		0		0		7,212		0
Total	$	6,746,666	$	0	$	0	$	13,292	$	6,759,958	$	18,744

(1)As of June 30, 2024, 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, 2023.


	December 31, 2023
	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	$	5,593,004	$	0	$	0	$	0	$	5,593,004	$	0
Agricultural property loans	562,046		0		0		0		562,046		1,301
Other collateralized loans	5,360		0		0		0		5,360		0
Total	$	6,160,410	$	0	$	0	$	0	$	6,160,410	$	1,301

(1)As of December 31, 2023, there were no loans in this category accruing interest.

Loans on non-accrual status did not recognize any interest income for both the three and six months ended June 30, 2024. Loans on non-accrual status that did not have a related allowance for credit losses were $3 million and $0 million as of June 30, 2024 and December 31, 2023, respectively.

For both the three and six months ended June 30, 2024, there were $14.1 million commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold.

For both the three and six months ended June 30, 2023, there were no commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold.

The Company did not have any commercial mortgage and other loans purchased with credit deterioration, as of both June 30, 2024 and December 31, 2023.

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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:


	June 30, 2024		December 31, 2023
	(in thousands)
LPs/LLCs:
Equity method:
Private equity	$	358,116	$	333,863
Hedge funds	869,690		720,360
Real estate-related	97,597		83,339
Subtotal equity method	1,325,403		1,137,562
Fair value:
Private equity	33,140		48,483
Hedge funds	25		137
Real estate-related	17,153		18,687
Subtotal fair value	50,318		67,307
Total LPs/LLCs	1,375,721		1,204,869
Derivative instruments	27,244		17,718
Other (1)	440		398
Total other invested assets	$	1,403,405	$	1,222,985

(1)Assets consist of investments in separate account funds.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:


	June 30, 2024		December 31, 2023
	(in thousands)
Fixed maturities	$	343,332	$	272,031
Equity securities	220		220
Commercial mortgage and other loans	23,906		21,070
Policy loans	52,057		35,210
Other invested assets	0		43
Short-term investments and cash equivalents	6,787		5,264
Total accrued investment income	$	426,302	$	333,838

There were no significant write-downs on accrued investment income for both the three and six months ended June 30, 2024 and 2023.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities, available-for-sale	$	393,930	$	275,718	$	732,739	$	510,528
Fixed maturities, trading	38,957		21,761		70,626		39,635
Equity securities	6,458		2,543		10,205		5,320
Commercial mortgage and other loans	77,920		56,317		151,678		104,973
Policy loans	16,588		10,622		31,033		15,618
Other invested assets	28,747		15,624		52,067		41,723
Short-term investments and cash equivalents	41,007		29,582		87,322		60,758
Gross investment income	603,607		412,167		1,135,670		778,555
Less: investment expenses	(23,614)		(19,092)		(50,357)		(36,030)
Net investment income	$	579,993	$	393,075	$	1,085,313	$	742,525

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities(1)	$	(8,631)	$	(2)	$	(15,468)	$	(8,223)
Commercial mortgage and other loans	1,162		(806)		(4,619)		(2,084)
Other invested assets	17,635		7,569		33,146		13,196
Derivatives	828,449		600		848,903		(117,670)
Short-term investments and cash equivalents	267		333		(80)		1,796
Realized investment gains (losses), net	$	838,882	$	7,694	$	861,882	$	(112,985)

(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:


	June 30, 2024		December 31, 2023
	(in thousands)
Fixed maturity securities, available-for-sale with an allowance	$	491	$	1,987
Fixed maturity securities, available-for-sale without an allowance	(2,036,342)		(1,406,265)
Derivatives designated as cash flow hedges(1)	75,293		11,934
Affiliated notes	(6,791)		(8,760)
Other investments(2)	(203)		(1,089)
Net unrealized gains (losses) on investments	$	(1,967,552)	$	(1,402,193)

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

(2)Includes net unrealized gains (losses) on certain joint ventures that are strategic in nature and are included in "Other assets".

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 both June 30, 2024 and December 31, 2023, 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:


	June 30, 2024						December 31, 2023
	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)
Foreign government bonds	$	0	$	0	$	0	$	486	$	0	$	486
U.S. public corporate securities	7,712		1,900		9,612		27,247		0		27,247
U.S. private corporate securities	17		0		17		0		0		0
Foreign public corporate securities	9,768		0		9,768		13,101		0		13,101
Equity securities	0		0		0		177,476		0		177,476
Total cash collateral for loaned securities(1)	$	17,497	$	1,900	$	19,397	$	218,310	$	0	$	218,310

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

4. DERIVATIVES AND HEDGING

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, 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 and synthetic guaranteed investment contracts (“GICs”)

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, 2023.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral.


	June 30, 2024						December 31, 2023
Primary Underlying Risk/Instrument Type			Fair Value						Fair Value
	Gross Notional		Assets		Liabilities		Gross Notional		Assets		Liabilities
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Interest Rate Swaps	$	2,975	$	215	$	(491)	$	3,064	$	0	$	(238)
Foreign Currency Swaps	2,725,643		165,873		(32,245)		2,274,636		121,243		(54,044)
Total Derivatives Designated as Hedge Accounting Instruments	$	2,728,618	$	166,088	$	(32,736)	$	2,277,700	$	121,243	$	(54,282)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	167,487,864	$	8,227,910	$	(19,877,550)	$	163,179,764	$	6,605,817	$	(17,820,436)
Interest Rate Futures	859,000		2,964		(291)		1,332,600		3,055		(210)
Interest Rate Options	29,503,000		227,324		(1,181,463)		29,738,000		189,112		(969,718)
Interest Rate Forwards	1,458,000		55,415		(57,927)		1,458,000		741		(3,196)
Foreign Currency
Foreign Currency Forwards	908,100		4,913		(985)		744,576		1,772		(12,232)
Credit
Credit Default Swaps	520,600		4,830		0		643,280		7,727		0
Currency/Interest Rate
Foreign Currency Swaps	2,238,553		125,477		(20,687)		2,237,331		96,618		(31,294)
Equity
Total Return Swaps	15,885,233		599,846		(803,880)		15,049,993		418,084		(803,452)
Equity Options	72,507,886		3,638,902		(2,274,561)		49,247,510		1,600,335		(1,552,706)
Equity Futures	813,292		156		(3,041)		418,973		1,232		(500)
Synthetic GICs	1,208,219		763		(208)		311,302		1		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	293,389,747	$	12,888,500	$	(24,220,593)	$	264,361,329	$	8,924,494	$	(21,193,744)
Total Derivatives(1)(2)	$	296,118,365	$	13,054,588	$	(24,253,329)	$	266,639,029	$	9,045,737	$	(21,248,026)

(1)Excludes embedded derivatives which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $9,606 million and $7,402 million as of June 30, 2024 and December 31, 2023, respectively, primarily included in "Policyholders' account balances".

(2)Recorded in “Other invested assets” and “Payables to parent and affiliates” on the Unaudited Interim Consolidated Statements of Financial Position.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.


	June 30, 2024
	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	$	13,053,807	$	(13,027,344)	$	26,463	$	0	$	26,463
Securities purchased under agreements to resell	325,000		0		325,000		0		325,000
Total Assets	$	13,378,807	$	(13,027,344)	$	351,463	$	0	$	351,463
Offsetting of Financial Liabilities:
Derivatives	$	24,253,121	$	(21,143,003)	$	3,110,118	$	(3,110,118)	$	0
Securities sold under agreements to repurchase	0		0		0		0		0
Total Liabilities	$	24,253,121	$	(21,143,003)	$	3,110,118	$	(3,110,118)	$	0


	December 31, 2023
	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	$	9,045,718	$	(9,028,019)	$	17,699	$	0	$	17,699
Securities purchased under agreements to resell	25,000		0		25,000		0		25,000
Total Assets	$	9,070,718	$	(9,028,019)	$	42,699	$	0	$	42,699
Offsetting of Financial Liabilities:
Derivatives	$	21,248,026	$	(18,596,679)	$	2,651,347	$	(2,651,347)	$	0
Securities sold under agreements to repurchase	0		0		0		0		0
Total Liabilities	$	21,248,026	$	(18,596,679)	$	2,651,347	$	(2,651,347)	$	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 14. 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, 2023.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps and interest rate 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, or equity derivatives in any of its cash flow hedge accounting relationships.

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 June 30, 2024
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	2	$	0	$	(21)
Currency/Interest Rate	(569)		0		12,141		1,258		36,201
Total cash flow hedges	(568)		0		12,143		1,258		36,180
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	28,037		(410,527)		0		0		0
Currency	8,285		0		0		0		0
Currency/Interest Rate	1,556		0		0		(60)		0
Credit	(368)		0		0		0		0
Equity	596,834		(58,063)		0		0		0
Embedded Derivatives	194,673		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	829,017		(468,590)		0		(60)		0
Total	$	828,449	$	(468,590)	$	12,143	$	1,198	$	36,180

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2024
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	(62)	$	0	$	(10)
Currency/Interest Rate	(677)		0		22,869		13,605		63,369
Total cash flow hedges	(676)		0		22,807		13,605		63,359
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	72,509		(1,266,452)		0		0		0
Currency	21,406		0		0		0		0
Currency/Interest Rate	33,532		0		0		123		0
Credit	7,518		0		0		0		0
Equity	2,023,011		(488,930)		0		0		0
Embedded Derivatives	(1,308,397)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	849,579		(1,755,382)		0		123		0
Total	$	848,903	$	(1,755,382)	$	22,807	$	13,728	$	63,359


	Three Months Ended June 30, 2023
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	(29)	$	0	$	(43)
Currency/Interest Rate	(1,944)		0		10,974		(7,027)		(18,636)
Total cash flow hedges	(1,943)		0		10,945		(7,027)		(18,679)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	63,875		(915,225)		0		0		0
Currency	(5,416)		0		0		0		0
Currency/Interest Rate	(23,601)		0		0		(54)		0
Credit	1,392		0		0		0		0
Equity	947,017		(398,134)		0		0		0
Embedded Derivatives	(980,724)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	2,543		(1,313,359)		0		(54)		0
Total	$	600	$	(1,313,359)	$	10,945	$	(7,081)	$	(18,679)

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	(54)	$	0	$	(2)
Currency/Interest Rate	571		0		22,679		(17,453)		(38,964)
Total cash flow hedges	572		0		22,625		(17,453)		(38,966)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	15,712		(707,165)		0		0		0
Currency	(12,026)		0		0		0		0
Currency/Interest Rate	(36,322)		0		0		(200)		0
Credit	2,326		0		0		0		0
Equity	1,143,892		(598,066)		0		0		0
Embedded Derivatives	(1,228,711)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	(115,129)		(1,305,231)		0		(200)		0
Total	$	(114,557)	$	(1,305,231)	$	22,625	$	(17,653)	$	(38,966)

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:


	(in thousands)
Balance, December 31, 2023	$	11,934
Amount recorded in AOCI
Interest Rate	(71)

Currency/Interest Rate	99,166
Total amount recorded in AOCI	99,095
Amount reclassified from AOCI to income
Interest Rate	61

Currency/Interest Rate	(35,797)
Total amount reclassified from AOCI to income	(35,736)
Balance, June 30, 2024	$	75,293

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 June 30, 2024 values, it is estimated that a pre-tax gain of $29 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending June 30, 2025.

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.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Credit Derivatives

Credit Derivatives, where the Company has written credit protection on certain index references, have outstanding notional amounts of $521 million and $643 million as of June 30, 2024 and December 31, 2023, respectively. These credit derivatives are reported at fair value as an asset of $5 million and $8 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 the notional amount of these credit derivatives had the following NAIC ratings: $483 million in NAIC 3 and $38 million in NAIC 6.

The Company has no exposure on purchased credit protection as of June 30, 2024 and December 31, 2023.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by entering into derivative transactions with regulated derivatives exchanges for exchange traded derivatives and 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 agreements, 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.

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 prices in active markets for similar assets and liabilities, quoted 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, 2023.

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.


	June 30, 2024
	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	$	1,121,135	$	0	$		$	1,121,135
Obligations of U.S. states and their political subdivisions	0		612,482		0				612,482
Foreign government bonds	0		265,660		664				266,324
U.S. corporate public securities	0		11,412,122		0				11,412,122
U.S. corporate private securities	0		4,639,796		581,609				5,221,405
Foreign corporate public securities	0		2,890,201		6,892				2,897,093
Foreign corporate private securities	0		4,504,426		416,674				4,921,100
Asset-backed securities(2)	0		2,835,605		591,664				3,427,269
Commercial mortgage-backed securities	0		782,691		76,371				859,062
Residential mortgage-backed securities	0		372,771		0				372,771
Subtotal	0		29,436,889		1,673,874				31,110,763
Market risk benefit assets	0		0		2,550,164				2,550,164
Fixed maturities, trading	0		2,833,692		240,820				3,074,512
Equity securities	521,834		15,455		28,330				565,619
Short-term investments	7,942		347,940		2,674				358,556
Cash equivalents	0		1,667,949		605				1,668,554
Other invested assets(4)	15,921		13,037,904		763		(13,027,344)		27,244
Other assets	0		0		363,440				363,440
Reinsurance recoverables	0		0		127,289				127,289
Receivables from parent and affiliates	0		149,495		181,319				330,814
Subtotal excluding separate account assets	545,697		47,489,324		5,169,278		(13,027,344)		40,176,955
Separate account assets(5)(6)	209,537		114,021,411		9,799				114,240,747
Total assets	$	755,234	$	161,510,735	$	5,179,077	$	(13,027,344)	$	154,417,702
Market risk benefit liabilities	$	0	$	0	$	4,370,960	$		$	4,370,960
Policyholders' account balances	0		0		10,083,258				10,083,258
Payables to parent and affiliates	0		24,249,436		0		(21,142,232)		3,107,204
Other liabilities(7)	3,686		13,178		207		(771)		16,300
Total liabilities	$	3,686	$	24,262,614	$	14,454,425	$	(21,143,003)	$	17,577,722

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2023
	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	$	975,287	$	0	$		$	975,287
Obligations of U.S. states and their political subdivisions	0		776,627		0				776,627
Foreign government bonds	0		281,304		682				281,986
U.S. corporate public securities	0		9,495,912		0				9,495,912
U.S. corporate private securities	0		4,476,258		513,236				4,989,494
Foreign corporate public securities	0		1,698,965		7,129				1,706,094
Foreign corporate private securities	0		4,137,004		493,978				4,630,982
Asset-backed securities(2)	0		1,928,428		99,122				2,027,550
Commercial mortgage-backed securities	0		773,663		78,115				851,778
Residential mortgage-backed securities	0		396,070		0				396,070
Subtotal	0		24,939,518		1,192,262				26,131,780
Market risk benefit assets	0		0		2,367,243				2,367,243
Fixed maturities, trading	0		2,762,398		34,048				2,796,446
Equity securities(3)	790,346		11,285		28,709				830,340
Short-term investments	31,879		280,228		1,759				313,866
Cash equivalents	447,396		1,196,729		0				1,644,125
Other invested assets(4)	23,432		9,022,304		1		(9,028,019)		17,718
Other assets	0		0		224,019				224,019
Reinsurance recoverables	0		0		69,745				69,745
Receivables from parent and affiliates	0		147,984		0				147,984
Subtotal excluding separate account assets	1,293,053		38,360,446		3,917,786		(9,028,019)		34,543,266
Separate account assets(5)(6)	176,239		113,747,569		5,985				113,929,793
Total assets	$	1,469,292	$	152,108,015	$	3,923,771	$	(9,028,019)	$	148,473,059
Market risk benefit liabilities	$	0	$	0	$	5,144,401	$		$	5,144,401
Policyholders' account balances	0		0		7,689,929				7,689,929
Payables to parent and affiliates	0		21,239,770		0		(18,588,647)		2,651,123
Other liabilities(7)	8,032		6,340		0		(8,032)		6,340
Total liabilities	$	8,032	$	21,246,110	$	12,834,330	$	(18,596,679)	$	15,491,793

(1)“Netting” amounts represent cash collateral of $(8,116) million and $(9,569) million as of June 30, 2024 and December 31, 2023, respectively.

(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3)Equity securities excluded from the fair value hierarchy include a fund for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of December 31, 2023, the fair value of this investment was $14.6 million.

(4)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 NAV per share (or its equivalent) as a practical expedient. As of June 30, 2024 and December 31, 2023, the fair value of such investments was $50 million and $67 million, respectively.

(5)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.

(6)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. As of June 30, 2024 and December 31, 2023, the fair value of such investments was $5,740 million and $5,259 million, respectively.

(7)Other liabilities includes embedded derivatives associated with reinsurance agreements.

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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 regarding significant internally-priced Level 3 assets and liabilities.


	June 30, 2024
	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)	$	889,304	Discounted cash flow	Discount rate	7.42	%	20	%	11.75	%	Decrease

Commercial mortgage-backed securities	$	76,371	Discounted cash flow	Liquidity premium	1.00	%	1.00	%	1.00	%	Decrease
Market risk benefit assets(3)	$	2,550,164	Discounted cash flow	Lapse rate(4)	1	%	20	%			Increase
				Spread over SOFR(5)	0.35	%	1.92	%			Increase
				Utilization rate(6)	37	%	94	%			Decrease
				Withdrawal rate	See table footnote (7) below.
				Mortality rate(8)	0	%	16	%			Increase
				Equity volatility curve	15	%	25	%			Decrease
Other assets(9)	$	363,440	Discounted cash flow	Lapse rate(4)	0	%	80	%			Increase
				Spread over SOFR(5)	0.35	%	1.90	%			Increase
				Mortality rate(8)	0	%	23	%			Increase
				Option budget(11)	(1)	%	7	%			Decrease
Receivable from parent and affiliates	$	181,319	Recent purchase price	Recent purchase price
Liabilities:
Market risk benefit liabilities(3)	$	4,370,960	Discounted cash flow	Lapse rate(4)	1	%	20	%			Decrease
				Spread over SOFR(5)	0.35	%	1.92	%			Decrease
				Utilization rate(6)	37	%	94	%			Increase
				Withdrawal rate	See table footnote (7) below.
				Mortality rate(8)	0	%	16	%			Decrease
				Equity volatility curve	15	%	25	%			Increase
Policyholders' account balances(10)	$	10,083,258	Discounted cash flow	Lapse rate(4)	0	%	80	%			Decrease
				Spread over SOFR(5)	0.35	%	1.90	%			Decrease
				Mortality rate(8)	0	%	23	%			Decrease
				Option budget(11)	(1)	%	7	%			Increase

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2023
	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)	$	81,635	Discounted cash flow	Discount rate	6.98	%	20	%	9.73	%	Decrease

			Liquidation	Liquidation value	63.62	%	63.62	%	63.62	%	Increase
Commercial mortgage-backed securities	$	78,115	Discounted cash flow	Liquidity premium	0.60	%	0.75	%	0.71	%	Decrease
Market risk benefit assets(3)	$	2,367,243	Discounted cash flow	Lapse rate(4)	1	%	20	%			Increase
				Spread over SOFR(5)	0.41	%	1.91	%			Increase
				Utilization rate(6)	38	%	95	%			Decrease
				Withdrawal rate	See table footnote (7) below.
				Mortality rate(8)	0	%	15	%			Increase
				Equity volatility curve	15	%	25	%			Decrease
Other assets(9)	$	224,019	Discounted cash flow	Lapse rate(4)	1	%	80	%			Increase
				Spread over SOFR(5)	0.41	%	1.85	%			Increase
				Mortality rate(8)	0	%	23	%			Increase
				Option budget(11)	(1)	%	7	%			Decrease
Liabilities:
Market risk benefit liabilities(3)	$	5,144,401	Discounted cash flow	Lapse rate(4)	1	%	20	%			Decrease
				Spread over SOFR(5)	0.41	%	1.91	%			Decrease
				Utilization rate(6)	38	%	95	%			Increase
				Withdrawal rate	See table footnote (7) below.
				Mortality rate(8)	0	%	15	%			Decrease
				Equity volatility curve	15	%	25	%			Increase
Policyholders' account balances(10)	$	7,689,929	Discounted cash flow	Lapse rate(4)	1	%	80	%			Decrease
				Spread over SOFR(5)	0.41	%	1.85	%			Decrease
				Mortality rate(8)	0	%	23	%			Decrease
				Option budget(11)	(1)	%	7	%			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)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and 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 for contracts with living benefit guarantees 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 for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(5)The spread over the Secured Overnight Financing Rate (“SOFR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of June 30, 2024 and December 31, 2023, respectively. This spread includes an estimate of non-performance risk ("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 funding agreements are insurance liabilities and are therefore senior to debt. Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar Life Insurance Company ("AuguStar"), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of Prudential Defined Income ("PDI") traditional variable annuity contracts with guaranteed living and death benefits. See Note 11 for additional information regarding this transaction. As a result of this transaction, a ceded MRB asset balance was established to fair value the reinsurance reimbursements to the Company. The establishment of the fair value also required an estimate of NPR for AuguStar, which may differ from the Company's; however, the NPR spreads for AuguStar were developed using a methodology similar to that of the Company.

(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 June 30, 2024 and December 31, 2023, the minimum withdrawal rate assumption is 78% and 81%, respectively. As of June 30, 2024 and December 31, 2023 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)The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age, and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

(9)Includes deposit assets related to reinsurance agreements using deposit accounting, which include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain annuity products.

(10)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that 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 a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(11)Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price and interest rate changes. The level of option budget determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives.

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. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increase, credit spreads widen, which results in a decrease in fair value.

Commercial Mortgage-backed Securities – Interrelationships may exist between the prepayment rate, the default rate and/or loss severity, depending on specific market conditions. In stronger economic cycles, prepayment rates are generally driven by underlying property appreciation and subsequent cash-out refinances, while default rates and loss severity may be lower. During weaker economic cycles, prepayment rates may decline, while default rates and loss severity increase. Generally, a change in the assumption used for the probability of default would be accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The impact of these factors on average life and economics varies with the deal structure and tranche subordination.

Market Risk Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 (excluding MRBs disclosed in Note 10). 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. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.


	Three Months Ended June 30, 2024(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:

Foreign government	$	671	$	(7)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	664	$	(11)
Corporate securities(3)	1,009,650		(6,128)		203,749		(65,650)		0		(71,908)		(65,480)		942		0		1,005,175		(7,077)
Structured securities(4)	694,121		(254)		37,188		0		0		(51,300)		65,480		0		(77,200)		668,035		380
Other assets:
Fixed maturities, trading	146,543		(50)		111,784		0		0		(2,261)		0		0		(15,196)		240,820		(42)
Equity securities	28,650		(320)		0		0		0		0		0		0		0		28,330		(320)
Other invested assets	1		761		1		0		0		0		0		0		0		763		761
Short-term investments	3,351		320		304		(8)		0		(1,293)		0		0		0		2,674		308
Cash equivalents	0		0		605		0		0		0		0		0		0		605		0
Other assets	303,538		14,418		58,326		0		0		(12,842)		0		0		0		363,440		1,575
Receivables from parent and affiliates	121,378		0		111,140		(51,199)		0		0		0		0		0		181,319		0
Reinsurance recoverables(5)	96,442		(20,186)		51,033		0		0		0		0		0		0		127,289		(43,624)
Separate account assets	7,894		102		1,805		(2)		0		0		0		0		0		9,799		102
Liabilities:
Policyholders' account balances(5)	(9,752,538)		213,839		0		0		(545,676)		0		1,117		0		0		(10,083,258)		973,682
Other liabilities	(207)		0		0		0		0		0		0		0		0		(207)		0

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2024
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(2,567)	$	0	$	0	$	(4,746)	$	924	$	(1,404)	$	0	$	0	$	(5,304)
Other assets:
Fixed maturities, trading	0		(50)		0		0		0		0		(42)		0		0
Equity securities	0		(320)		0		0		0		0		(320)		0		0
Other invested assets	761		0		0		0		0		761		0		0		0
Short-term investments	308		0		0		0		12		308		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Other assets	14,418		0		0		0		0		1,575		0		0		0
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0
Reinsurance recoverables	(20,186)		0		0		0		0		(43,624)		0		0		0
Separate account assets	0		0		102		0		0		0		0		102		0
Liabilities:
Policyholders' account balances	213,839		0		0		0		0		973,682		0		0		0
Other liabilities	0		0		0		0		0		0		0		0		0

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2024(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other (1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:

Foreign government	$	682	$	(18)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	664	$	(24)
Corporate securities(3)	1,014,343		(16,918)		328,790		(130,702)		0		(125,800)		(65,480)		942		0		1,005,175		(16,678)
Structured securities(4)	177,237		(393)		521,528		0		0		(53,195)		65,480		34,578		(77,200)		668,035		101
Other assets:
Fixed maturities, trading	34,048		(898)		225,127		0		0		(2,261)		0		0		(15,196)		240,820		(890)
Equity securities	28,709		(652)		273		0		0		0		0		0		0		28,330		(652)
Other invested assets	1		762		0		0		0		0		0		0		0		763		762
Short-term investments	1,759		4		2,306		(8)		0		(1,387)		0		0		0		2,674		(8)
Cash equivalents	0		0		605		0		0		0		0		0		0		605		0
Other assets	224,019		51,425		114,032		0		0		(26,036)		0		0		0		363,440		25,388
Receivables from parent and affiliates	0		0		232,518		(51,199)		0		0		0		0		0		181,319		0
Reinsurance recoverables	69,745		(25,707)		83,251		0		0		0		0		0		0		127,289		(78,715)
Separate account assets	5,985		301		4,438		(1,258)		0		(125)		0		458		0		9,799		302
Liabilities:
Policyholders' account balances(5)	(7,689,929)		(1,289,185)		0		0		(1,106,074)		0		1,930		0		0		(10,083,258)		831,176
Other liabilities	0		(207)		0		0		0		0		0		0		0		(207)		(207)
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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2024
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(4,263)	$	0	$	0	$	(14,588)	$	1,522	$	(776)	$	0	$	0	$	(15,825)
Other assets:
Fixed maturities, trading	0		(898)		0		0		0		0		(890)		0		0
Equity securities	0		(652)		0		0		0		0		(652)		0		0
Other invested assets	762		0		0		0		0		762		0		0		0
Short-term investments	(8)		0		0		0		12		(8)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Other assets	51,425		0		0		0		0		25,388		0		0		0
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0
Reinsurance recoverables	(25,707)		0		0		0		0		(78,715)		0		0		0
Separate account assets	0		0		301		0		0		0		0		302		0
Liabilities:
Policyholders' account balances	(1,289,185)		0		0		0		0		831,176		0		0		0
Other liabilities	(207)		0		0		0		0		(207)		0		0		0
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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2023(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:

Foreign government	$	714	$	(13)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	701	$	(16)
Corporate securities(3)	535,893		1,876		216,778		(9,241)		0		(25,418)		1,359		0		0		721,247		1,773
Structured securities(4)	228,869		436		1,291		0		0		(725)		0		0		(83,532)		146,339		484
Other assets:
Fixed maturities, trading	6,250		0		0		0		0		0		0		0		(6,250)		0		0
Equity securities	43,174		19		0		0		0		0		181		0		0		43,374		19

Short-term investments	14,416		717		1,146		0		0		(13,711)		(1,359)		0		0		1,209		0

Other assets	155,763		26,381		38,983		0		0		(3,514)		0		0		0		217,613		19,779
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0		0		0
Reinsurance recoverables	1,357		108		0		0		0		0		0		0		0		1,465		108
Separate account assets	4,553		159		840		(420)		0		(150)		0		0		0		4,982		159
Liabilities:
Policyholders' account balances(5)	(4,129,043)		(1,017,564)		0		0		(439,615)		0		72,773		0		0		(5,513,449)		(150,676)


	Three Months Ended June 30, 2023
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(1,138)	$	0	$	0	$	3,476	$	(39)	$	(1,118)	$	0	$	0	$	3,359
Other assets:
Fixed maturities, trading	0		0		0		0		0		0		0		0		0
Equity securities	0		19		0		0		0		0		19		0		0

Short-term investments	423		0		0		(124)		418		0		0		0		0

Other assets	26,381		0		0		0		0		19,779		0		0		0
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0
Reinsurance recoverables	108		0		0		0		0		108		0		0		0
Separate account assets	0		0		159		0		0		0		0		159		0
Liabilities:
Policyholders' account balances	(1,017,564)		0		0		0		0		(150,676)		0		0		0

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:

Foreign government	$	724	$	(23)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	701	$	(28)
Corporate securities(3)	507,496		7,199		310,874		(28,839)		0		(76,842)		1,359		0		0		721,247		6,413
Structured securities(4)	104,724		(3,199)		147,307		(27)		0		(1,338)		0		2,240		(103,368)		146,339		(3,129)
Other assets:
Fixed maturities, trading	0		0		6,250		0		0		0		0		0		(6,250)		0		0
Equity securities	28,593		(811)		0		0		0		0		15,592		0		0		43,374		(811)
Short-term investments	16,945		2,573		2,688		0		0		(19,638)		(1,359)		0		0		1,209		51
Other assets	141,041		8,020		73,603		0		0		(5,051)		0		0		0		217,613		2,969
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0		0		0
Reinsurance recoverables	0		1,465		0		0		0		0		0		0		0		1,465		1,465
Separate account assets	4,645		257		840		(600)		0		(160)		0		0		0		4,982		255
Liabilities:
Policyholders' account balances(5)	(3,502,096)		(1,247,483)		0		0		(838,238)		0		74,368		0		0		(5,513,449)		(234,970)


	Six Months Ended June 30, 2023
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(813)	$	0	$	0	$	4,440	$	350	$	(2,019)	$	0	$	0	$	5,275
Other assets:
Fixed maturities, trading	0		0		0		0		0		0		0		0		0
Equity securities	0		(811)		0		0		0		0		(811)		0		0
Short-term investments	1,857		0		0		(73)		789		0		0		0		51

Other assets	8,020		0		0		0		0		2,969		0		0		0
Receivables from parent and affiliates	0		0		0		0		0		0		0		0		0
Reinsurance recoverables	1,465		0		0		0		0		1,465		0		0		0
Separate account assets	0		0		257		0		0		0		0		255		0
Liabilities:
Policyholders' account balances	(1,247,483)		0		0		0		0		(234,970)		0		0		0

(1)"Other" includes additional activity not allocated to the specific categories within the rollforward of Level 3 Assets and Liabilities.

(2)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.

(3)Includes U.S. corporate private, foreign corporate public, and foreign corporate private securities.

(4)Includes asset-backed and commercial mortgage-backed securities.

(5)Purchases/issuances and settlements for Policyholders' account balances and Reinsurance recoverables are presented net in the rollforward.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(6)Excludes MRB assets of $2,550 million and $2,340 million and MRB liabilities of $4,371 million and $5,090 million for the periods ended June 30, 2024 and 2023, respectively. See Note 10 for additional information.

(7)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

Fair Value of Financial Instruments

The tables below present 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.


	June 30, 2024
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	0	$	0	$	6,465,057	$	6,465,057	$	6,718,386
Policy loans	0		0		1,511,288		1,511,288		1,511,288
Short-term investments	58,102		0		0		58,102		58,102
Cash and cash equivalents	892,653		325,000		0		1,217,653		1,217,653
Accrued investment income	0		426,302		0		426,302		426,302
Reinsurance recoverables	0		0		21,733		21,733		23,508
Receivables from parent and affiliates	0		85,725		0		85,725		85,725
Other assets	0		89,182		1,910,626		1,999,808		1,999,808
Total assets	$	950,755	$	926,209	$	9,908,704	$	11,785,668	$	12,040,772
Liabilities:
Policyholders’ account balances - investment contracts	$	0	$	872,062	$	7,849,872	$	8,721,934	$	8,739,221
Cash collateral for loaned securities	0		19,397		0		19,397		19,397


Payables to parent and affiliates	0		26,493		0		26,493		26,493
Other liabilities	0		2,582,917		31,606		2,614,523		2,614,523
Total liabilities	$	0	$	3,500,869	$	7,881,478	$	11,382,347	$	11,399,634

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2023
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	0	$	0	$	5,918,386	$	5,918,386	$	6,122,721
Policy loans	0		0		1,472,677		1,472,677		1,472,677
Short-term investments	66,500		0		0		66,500		66,500
Cash and cash equivalents	470,668		24,999		0		495,667		495,667
Accrued investment income	0		333,838		0		333,838		333,838
Reinsurance recoverables	0		0		22,155		22,155		23,537
Receivables from parent and affiliates	0		184,599		0		184,599		184,599
Other assets	0		80,646		1,489,983		1,570,629		1,570,629
Total assets	$	537,168	$	624,082	$	8,903,201	$	10,064,451	$	10,270,168
Liabilities:
Policyholders’ account balances - investment contracts	$	0	$	955,647	$	5,396,885	$	6,352,532	$	6,368,061
Cash collateral for loaned securities	0		218,310		0		218,310		218,310
Short-term debt to affiliates	0		176,110		0		176,110		180,411

Payables to parent and affiliates	0		16,573		0		16,573		16,573
Other liabilities	0		2,121,861		32,423		2,154,284		2,154,283
Total liabilities	$	0	$	3,488,501	$	5,429,308	$	8,917,809	$	8,937,638

(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 out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

6. DEFERRED POLICY ACQUISITION COSTS, DEFERRED REINSURANCE AND DEFERRED SALES INDUCEMENTS

Deferred Policy Acquisition Costs ("DAC")

The following tables show a rollforward for the lines of business that contain DAC balances, along with a reconciliation to the Company's total DAC balance:


	Six Months Ended June 30, 2024
	Fixed Annuities		Variable Annuities		Term Life		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	197,937	$	3,257,761	$	743,888	$	2,897,925	$	7,097,511
Capitalization	120,883		175,313		90,283		311,263		697,742
Amortization expense	(18,538)		(170,567)		(36,597)		(68,114)		(293,816)
Other(1)	0		0		(97)		(18,507)		(18,604)
Balance, end of period	$	300,282	$	3,262,507	$	797,477	$	3,122,567	$	7,482,833

(1) Other includes the impact of the Universal Life reinsurance transaction with Prudential Arizona Reinsurance Universal Company (“PAR U”) and PURE. See Note 11 for additional information.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Fixed Annuities		Variable Annuities		Term Life		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	102,251	$	3,736,454	$	648,837	$	2,442,883	$	6,930,425
Capitalization	48,552		117,342		72,216		275,783		513,893
Amortization expense	(9,490)		(166,332)		(31,084)		(59,736)		(266,642)
Other(1)	0		(393,385)		0		0		(393,385)
Balance, end of period	$	141,313	$	3,294,079	$	689,969	$	2,658,930	$	6,784,291

(1)Other includes the impact of the reinsurance agreement with AuguStar. See Note 11 for additional information.

Deferred Reinsurance Losses ("DRL")

The following tables show a rollforward for the lines of business that contain DRL balances, along with a reconciliation to the Company's total DRL balance:


	Six Months Ended June 30, 2024

	Variable Annuities		Term Life		Total
	(in thousands)
Balance, beginning of period	$	194,110	$	61,003	$	255,113

Amortization expense	(14,824)		(3,870)		(18,694)
Other	1		0		1
Balance, end of period	$	179,287	$	57,133	$	236,420


	Six Months Ended June 30, 2023

	Variable Annuities		Term Life		Total
	(in thousands)
Balance, beginning of period	$	223,515	$	69,378	$	292,893

Amortization expense	(15,113)		(4,280)		(19,393)

Balance, end of period	$	208,402	$	65,098	$	273,500

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Deferred Reinsurance Gains ("DRG")

The following tables show a rollforward for the lines of business that contain DRG balances, along with a reconciliation to the Company's total DRG balance:


	Six Months Ended June 30, 2024
	Fixed Annuities		Variable Annuities		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	48,073	$	261,721	$	1,363,496	$	1,673,290

Amortization	(5,444)		(10,119)		(58,690)		(74,253)

Other(1)	(8)		(40)		1,092,199		1,092,151
Balance, end of period	$	42,621	$	251,562	$	2,397,005	$	2,691,188

(1)Other includes the impact of the Universal Life reinsurance transaction with PAR U, PURE and Prudential Insurance, including $1,207 million of DRG, partially offset by a $116 million write-off. See Note 11 for additional information.


	Six Months Ended June 30, 2023
	Fixed Annuities		Variable Annuities		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	57,898	$	0	$	1,434,958	$	1,492,856
Amortization	(4,406)		(5,209)		(36,032)		(45,647)
Other(1)	0		277,262		0		277,262
Balance, end of period	$	53,492	$	272,053	$	1,398,926	$	1,724,471

(1)Other includes the impact of the reinsurance agreement with AuguStar. See Note 11 for additional information.

Deferred Sales Inducements ("DSI")

The following table shows a rollforward of DSI balances for variable annuity products, which is the only line of business that contains a DSI balance, along with a reconciliation to the Company's total DSI balance:


	Six Months Ended June 30,
	2024		2023

	(in thousands)
Balance, beginning of period	$	351,424	$	381,504
Capitalization	1,214		1,503
Amortization expense	(15,436)		(16,088)
Other	0		(3)
Balance, end of period	$	337,202	$	366,916

7. SEPARATE ACCOUNTS

The Company issues variable annuity and variable life insurance contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. Most variable annuity and variable life insurance contracts are offered with both separate and general account options. See Note 9 for additional information.

The assets supporting the variable portion of variable annuity and variable life insurance contracts are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities”. The liabilities related to the net amount at risk are reflected within future policy benefits or market risk benefits. Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits” or “Realized investment gains (losses), net”.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Assets

The aggregate fair value of assets, by major investment asset category, supporting separate accounts is as follows:


	June 30, 2024		December 31, 2023
	(in thousands)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	4,925	$	2,954
Obligations of U.S. states and their political subdivisions authorities	65		0

U.S. corporate securities	11,788		9,504
Foreign corporate securities	2,237		1,763
Asset-backed securities	1,016		0
Mortgage-backed securities	175		186
Mutual funds:
Equity	75,066,834		72,614,821
Fixed Income	34,707,360		37,065,162
Other	4,324,051		4,101,661
Equity securities	99,581		104,159

Other invested assets	5,740,307		5,258,900
Short-term investments	574		2,126
Cash and cash equivalents	21,993		27,249
Total	$	119,980,906	$	119,188,485

For the six months ended June 30, 2024 and year ended December 31, 2023, there were no transfers of assets, other than cash, from the general account to a separate account; therefore, no gains or losses were recorded.

Separate Account Liabilities

The balances of and changes in separate account liabilities as of and for the periods indicated are as follows:


	Six Months Ended June 30, 2024
	Variable Annuities		Variable Life		Total
	(in thousands)
Balance, beginning of period	$	92,383,121	$	26,805,364	$	119,188,485
Deposits	291,602		1,506,531		1,798,133
Investment performance	5,034,082		2,795,950		7,830,032

Policy charges	(1,112,504)		(447,119)		(1,559,623)
Surrenders and withdrawals	(6,694,864)		(235,991)		(6,930,855)
Benefit payments	(33,831)		(131,243)		(165,074)
Net transfers (to) from general account	(41,403)		(169,366)		(210,769)

Other	2,825		27,752		30,577
Balance, end of period	$	89,829,028	$	30,151,878	$	119,980,906

Cash surrender value(2)	$	88,793,191	$	26,797,766	$	115,590,957

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Variable Annuities		Variable Life		Total
	(in thousands)
Balance, beginning of period	$	91,785,448	$	22,265,798	$	114,051,246
Deposits	200,961		1,376,552		1,577,513
Investment performance	7,184,460		2,535,342		9,719,802

Policy charges	(1,171,455)		(405,108)		(1,576,563)
Surrenders and withdrawals	(4,561,633)		(214,686)		(4,776,319)
Benefit payments	(43,056)		(107,641)		(150,697)
Net transfers (to) from general account(1)	(4,995)		(1,035,554)		(1,040,549)

Other	5,405		30,317		35,722
Balance, end of period	$	93,395,135	$	24,445,020	$	117,840,155

Cash surrender value(2)	$	92,036,034	$	21,526,262	$	113,562,296

(1) Variable life includes $900 million of funding for a policy loan to an affiliated irrevocable trust. See Note 14 for additional information.

(2) Represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges.

8. LIABILITY FOR FUTURE POLICY BENEFITS

Liability for Future Policy Benefits primarily consists of the following sub-components, which are discussed in greater detail below.

•Benefit Reserves;

•Deferred Profit Liability ("DPL"); and

•Additional Insurance Reserves ("AIR")

In 2024, the Company recognized an impact to net income attributable to our annual reviews and update of assumptions and other refinements. Overall impact is immaterial for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort. Additionally, for direct and assumed AIR, the Company recognized an unfavorable impact primarily due to updates to policyholder behavior assumptions on universal life policies with secondary guarantees.

In 2023, the Company recognized an impact to net income attributable to the annual reviews and update of assumptions and other refinements. Overall impact is immaterial for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort. Additionally, for direct and assumed AIR, the Company recognized an unfavorable impact primarily due to unfavorable model refinements, partially offset by updates to economic assumptions, including expected future rates of returns on universal life policies with secondary guarantees.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Benefit Reserves

The balances of and changes in Benefit Reserves as of and for the periods indicated consist of the three tables presented below: Present Value of Expected Net Premiums rollforward, Present Value of Expected Future Policy Benefits rollforward, and Net Liability for Future Policy Benefits.


	Six Months Ended June 30, 2024
	Present Value of Expected Net Premiums
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	10,927,833	$	0	$	10,927,833
Effect of cumulative changes in discount rate assumptions, beginning of period	225,711		0		225,711
Balance at original discount rate, beginning of period	11,153,544		0		11,153,544

Effect of assumption update	21,466		0		21,466
Effect of actual variances from expected experience and other activity	(127,507)		(380)		(127,887)
Adjusted balance, beginning of period	11,047,503		(380)		11,047,123
Issuances	403,742		18,328		422,070
Net premiums / considerations collected	(661,611)		(17,948)		(679,559)
Interest accrual	254,945		0		254,945
Other adjustments	(78)		0		(78)
Balance at original discount rate, end of period	11,044,501		0		11,044,501
Effect of cumulative changes in discount rate assumptions, end of period	(577,768)		0		(577,768)
Balance, end of period	$	10,466,733	$	0	$	10,466,733


	Six Months Ended June 30, 2024
	Present Value of Expected Future Policy Benefits
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	18,426,207	$	228,788	$	18,654,995
Effect of cumulative changes in discount rate assumptions, beginning of period	331,571		19,521		351,092
Balance at original discount rate, beginning of period	18,757,778		248,309		19,006,087

Effect of assumption update	21,480		(3,643)		17,837
Effect of actual variances from expected experience and other activity	(153,025)		(130)		(153,155)
Adjusted balance, beginning of period	18,626,233		244,536		18,870,769
Issuances	403,742		18,328		422,070
Interest accrual	444,536		4,453		448,989
Benefit payments	(721,798)		(15,519)		(737,317)
Other adjustments	1,103		(150)		953
Balance at original discount rate, end of period	18,753,816		251,648		19,005,464
Effect of cumulative changes in discount rate assumptions, end of period	(1,064,363)		(24,870)		(1,089,233)
Balance, end of period	$	17,689,453	$	226,778	$	17,916,231
Other, end of period					1,633
Total balance, end of period					$	17,917,864

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2024
	Net Liability for Future Policy Benefits (Benefit Reserves)
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, end of period, pre-flooring	$	7,222,720	$	226,778	$	7,449,498
Flooring impact, end of period	44		0		44
Balance, end of period, post-flooring	7,222,764		226,778		7,449,542
Less: Reinsurance recoverables	6,518,048		18,453		6,536,501
Balance after reinsurance recoverables, end of period, post-flooring	$	704,716	$	208,325	$	913,041


	Six Months Ended June 30, 2023
	Present Value of Expected Net Premiums
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	10,911,794	$	0	$	10,911,794
Effect of cumulative changes in discount rate assumptions, beginning of period	554,896		0		554,896
Balance at original discount rate, beginning of period	11,466,690		0		11,466,690

Effect of assumption update	(790)		0		(790)
Effect of actual variances from expected experience and other activity	(65,230)		(1,257)		(66,487)
Adjusted balance, beginning of period	11,400,670		(1,257)		11,399,413
Issuances	318,867		23,211		342,078
Net premiums / considerations collected	(674,147)		(21,954)		(696,101)
Interest accrual	261,862		0		261,862

Balance at original discount rate, end of period	11,307,252		0		11,307,252
Effect of cumulative changes in discount rate assumptions, end of period	(484,287)		0		(484,287)
Balance, end of period	$	10,822,965	$	0	$	10,822,965

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Present Value of Expected Future Policy Benefits
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	17,835,251	$	204,727	$	18,039,978
Effect of cumulative changes in discount rate assumptions, beginning of period	962,034		24,876		986,910
Balance at original discount rate, beginning of period	18,797,285		229,603		19,026,888

Effect of assumption update	(1,044)		0		(1,044)
Effect of actual variances from expected experience and other activity	(87,110)		4,195		(82,915)
Adjusted balance, beginning of period	18,709,131		233,798		18,942,929
Issuances	318,867		23,211		342,078
Interest accrual	447,387		4,201		451,588
Benefit payments	(716,919)		(14,838)		(731,757)
Other adjustments	1,558		(33)		1,525
Balance at original discount rate, end of period	18,760,024		246,339		19,006,363
Effect of cumulative changes in discount rate assumptions, end of period	(791,413)		(26,245)		(817,658)
Balance, end of period	$	17,968,611	$	220,094	$	18,188,705
Other, end of period					1,941
Total balance, end of period					$	18,190,646


	Six Months Ended June 30, 2023
	Net Liability for Future Policy Benefits (Benefit Reserves)
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, end of period, pre-flooring	$	7,145,646	$	220,094	$	7,365,740
Flooring impact, end of period	0		0		0
Balance, end of period, post-flooring	$	7,145,646	$	220,094	$	7,365,740
Less: Reinsurance recoverables	6,614,071		17,835		6,631,906
Balance after reinsurance recoverables, end of period, post-flooring	$	531,575	$	202,259	$	733,834

The following tables provide supplemental information related to the balances of and changes in Benefit Reserves included in the disaggregated tables above, on a gross (direct and assumed) basis, as of and for the periods indicated:


	Six Months Ended June 30, 2024
	Term Life			Fixed Annuities
	($ in thousands)
Undiscounted expected future gross premiums	$	21,795,982		$	0
Discounted expected future gross premiums (at original discount rate)	$	14,920,888		$	0
Discounted expected future gross premiums (at current discount rate)	$	14,173,894		$	0
Undiscounted expected future benefits and expenses	$	29,155,998		$	337,236
Interest accrual	$	189,591		$	4,453
Gross premiums	$	901,158		$	21,461
Weighted-average duration of the liability in years (at original discount rate)	10			7
Weighted-average duration of the liability in years (at current discount rate)	9			6
Weighted-average interest rate (at original discount rate)	5.15		%	3.83		%
Weighted-average interest rate (at current discount rate)	5.53		%	5.47		%

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Term Life			Fixed Annuities
	($ in thousands)
Undiscounted expected future gross premiums	$	21,948,491		$	0
Discounted expected future gross premiums (at original discount rate)	$	15,125,847		$	0
Discounted expected future gross premiums (at current discount rate)	$	14,493,623		$	0
Undiscounted expected future benefits and expenses	$	29,156,389		$	328,414
Interest accrual	$	185,524		$	4,201
Gross premiums	$	900,634		$	24,200
Weighted-average duration of the liability in years (at original discount rate)	10			7
Weighted-average duration of the liability in years (at current discount rate)	10			6
Weighted-average interest rate (at original discount rate)	5.20		%	3.57		%
Weighted-average interest rate (at current discount rate)	5.28		%	5.27		%

For additional information regarding observable market information and the techniques used to determine the interest rate assumptions seen above, see Note 2 to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

For non-participating traditional and limited-payment products, if a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for the present value of expected future policy benefits and non-level claim settlement expenses, then the liability for future policy benefits is adjusted at that time, and thereafter such that all changes, both favorable and unfavorable, in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately as a gain or loss, respectively.

In the first six months of 2024, there was a $22 million gain in net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, which was offset by a $21 million charge, reflecting the impact of ceded reinsurance on the affected cohorts.

In the first six months of 2023, there was a $30 million gain in net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, which was offset by a $30 million charge, reflecting the impact of ceded reinsurance on the affected cohorts.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Deferred Profit Liability

The balances of and changes in DPL as of and for the periods indicated are as follows:


	Six Months Ended June 30,
	2024		2023
	Fixed Annuities
	(in thousands)
Balance, beginning of period, post-flooring	$	14,818	$	18,193

Effect of assumption update	2,110		0
Effect of actual variances from expected experience and other activity	412		(5,092)
Adjusted balance, beginning of period	17,340		13,101
Profits deferred	3,389		2,088
Interest accrual	319		294
Amortization	(1,025)		(973)
Other adjustments	(16)		(8)
Balance, end of period, post-flooring	20,007		14,502


Less: Reinsurance recoverables	1,439		1,558
Balance after reinsurance recoverables, end of period	$	18,568	$	12,944

Additional Insurance Reserves

AIR represents the additional liability for annuitization, death, or other insurance benefits, including guaranteed minimum death benefits ("GMDB") and guaranteed minimum income benefits ("GMIB") contract features, that are above and beyond the contractholder's account balance for certain long-duration life contracts.

The following table shows a rollforward of AIR balances for variable and universal life products for the periods indicated:


	Six Months Ended June 30,
	2024		2023
	(in thousands)
Balance, including amounts in AOCI, beginning of period, post-flooring	$	14,280,793	$	12,664,445
Flooring impact and amounts in AOCI	831,583		1,269,237





Balance, excluding amounts in AOCI, beginning of period, pre-flooring	15,112,376		13,933,682
Effect of assumption update	154,058		22,910
Effect of actual variances from expected experience and other activity	161,320		26,204
Adjusted balance, beginning of period	15,427,754		13,982,796
Assessments collected(1)	586,734		513,593
Interest accrual	261,019		237,869
Benefits paid	(158,757)		(151,097)

Balance, excluding amounts in AOCI, end of period, pre-flooring	16,116,750		14,583,161





Flooring impact and amounts in AOCI	(1,642,621)		(1,094,298)
Balance, including amounts in AOCI, end of period, post-flooring	14,474,129		13,488,863
Less: Reinsurance recoverables	14,286,902		13,268,534
Balance after reinsurance recoverables, including amounts in AOCI, end of period	$	187,227	$	220,329

(1) Represents the portion of gross assessments required to fund the future policy benefits.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30,
	2024			2023

	($ in thousands)
Interest accrual	$	261,019		$	237,869
Gross assessments	$	903,426		$	785,370
Weighted-average duration of the liability in years (at original discount rate)	22			22
Weighted-average interest rate (at original discount rate)	3.40		%	3.39		%

Future Policy Benefits Reconciliation

The following table presents the reconciliation of the ending balances from the above rollforwards, Benefit Reserves, DPL, and AIR, including other liabilities, gross of related reinsurance recoverables, to the total liability for Future Policy Benefits as reported on the Company's Unaudited Interim Consolidated Statements of Financial Position as of the periods indicated:


	Six Months Ended June 30,
	2024		2023
	(in thousands)
Benefit reserves, end of period, post-flooring	$	7,449,542	$	7,365,740
Deferred profit liability, end of period, post-flooring	20,007		14,502
Additional insurance reserves, including amounts in AOCI, end of period, post-flooring	14,474,129		13,488,863
Subtotal of amounts disclosed above	21,943,678		20,869,105


Other Future policy benefits reserves(1)	1,086,901		1,108,889
Total Future policy benefits	$	23,030,579	$	21,977,994

(1)Primarily represents balances for which disaggregated rollforward disclosures are not required, including unpaid claims and claims expenses, and incurred but not reported and in course of settlement claim liabilities.

Revenue and Interest Expense

The following tables present revenue and interest expense related to Benefit Reserves, DPL, and AIR, as well as related revenue and interest expense not presented in the above supplemental tables, in the Company's Consolidated Statement of Operations for the periods indicated:


	Six Months Ended June 30, 2024
	Revenues(1)
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	901,158	$	0	$	21,461	$	922,619
Deferred profit liability	0		0		(5,187)		(5,187)
Additional insurance reserves	0		903,426		0		903,426
Total	$	901,158	$	903,426	$	16,274	$	1,820,858

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



	Six Months Ended June 30, 2023
	Revenues(1)
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	900,634	$	0	$	24,200	$	924,834
Deferred profit liability	0		0		3,691		3,691
Additional insurance reserves	0		785,370		0		785,370
Total	$	900,634	$	785,370	$	27,891	$	1,713,895

(1)Represents "Gross premiums" for benefit reserves; "Revenue" for DPL and "Gross assessments" for AIR.


	Six Months Ended June 30, 2024
	Interest Expense
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	189,591	$	0	$	4,453	$	194,044
Deferred profit liability	0		0		319		319
Additional insurance reserves	0		261,019		0		261,019
Total	$	189,591	$	261,019	$	4,772	$	455,382


	Six Months Ended June 30, 2023
	Interest Expense
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	185,524	$	0	$	4,201	$	189,725
Deferred profit liability	0		0		294		294
Additional insurance reserves	0		237,869		0		237,869
Total	$	185,524	$	237,869	$	4,495	$	427,888

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

9. POLICYHOLDERS' ACCOUNT BALANCES

Policyholders' Account Balances

The balances of and changes in policyholders' account balances as of and for the periods ended are as follows:


	Six Months Ended June 30, 2024

	Fixed Annuities			Variable Annuities			Variable Life / Universal Life			Total
	($ in thousands)
Balance, beginning of period	$	6,164,313		$	22,836,765		$	20,167,713		$	49,168,791
Deposits	2,787,898			3,752,999			1,062,220			7,603,117
Interest credited	90,612			207,176			279,382			577,170

Policy charges	(87)			(12,007)			(910,191)			(922,285)
Surrenders and withdrawals	(251,521)			(370,351)			(376,600)			(998,472)
Benefit payments	(24,948)			(12,688)			(33,912)			(71,548)
Net transfers (to) from separate account	0			41,403			169,366			210,769
Change in market value and other adjustments(1)	124,805			1,092,901			65,431			1,283,137

Balance, end of period	8,891,072			27,536,198			20,423,409			56,850,679
Unearned revenue reserve										4,082,015
Other										104,172
Total Policyholders' account balance										$	61,036,866

Weighted-average crediting rate	2.41		%	1.65		%	2.75		%	2.18		%
Net amount at risk(2)	$	20		$	0		$	332,247,799		$	332,247,819
Cash surrender value(3)	$	7,711,710		$	25,912,600		$	19,133,660		$	52,757,970


	Six Months Ended June 30, 2023

	Fixed Annuities(4)			Variable Annuities			Variable Life / Universal Life			Total
	($ in thousands)
Balance, beginning of period	$	3,575,824		$	16,432,032		$	18,736,365		$	38,744,221
Deposits	1,180,342			2,225,558			1,030,843			4,436,743
Interest credited	44,970			131,119			278,886			454,975

Policy charges	(3,078)			(10,684)			(903,228)			(916,990)
Surrenders and withdrawals	(101,470)			(233,470)			(400,194)			(735,134)
Benefit payments	(25,668)			(15,067)			(42,131)			(82,866)
Net transfers (to) from separate account	0			4,995			1,035,554			1,040,549
Change in market value and other adjustments(1)	69,817			954,563			139,608			1,163,988

Balance, end of period	4,740,737			19,489,046			19,875,703			44,105,486


Unearned revenue reserve										3,401,994
Other(4)										100,675
Total Policyholders' account balance										$	47,608,155

Weighted-average crediting rate	2.15		%	1.46		%	2.89		%	2.20		%
Net amount at risk(2)	$	38		$	0		$	313,218,977		$	313,219,015
Cash surrender value(3)	$	3,975,581		$	17,391,104		$	18,341,323		$	39,708,008

(1) Primarily relates to changes in the value of embedded derivative instruments associated with the indexed options of certain products.

(2) The net amount at risk calculation includes both general and separate account balances.

(3) Represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges.

(4) Prior period amounts have been updated to conform to current period presentation.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company issues variable life and universal life insurance contracts which may also include a “no-lapse guarantee” where the Company contractually guarantees to the contractholder a death benefit even when the account value drops to zero, as long as the “no-lapse guarantee” premium is paid.

The net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including contractholder mortality, contract lapses, and premium pattern, as well as interest rate and equity market returns.

The Company also issues annuity contracts that provide certain death benefit and/or living benefit guarantees and are accounted for as MRBs. See Note 10 for additional information, including the net amount at risk associated with these guarantees.

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums are as follows:


	June 30, 2024
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 -50 bps above guaranteed minimum		51 -150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in thousands)
Fixed Annuities
Less than 1.00%	$	412	$	3,827	$	9,924	$	707,366	$	721,529
1.00% - 1.99%	448,198		69,557		200,379		78,195		796,329
2.00% - 2.99%	303,024		461,269		562,666		16,064		1,343,023
3.00% - 4.00%	825,027		5,007		7,862		2,261		840,157
Greater than 4.00%	0		0		0		0		0
Total	$	1,576,661	$	539,660	$	780,831	$	803,886	$	3,701,038
Variable Annuities
Less than 1.00%	$	618,306	$	651,182	$	253,768	$	178	$	1,523,434
1.00% - 1.99%	184,745		118,146		2,380		0		305,271
2.00% - 2.99%	19,218		4,138		4,185		0		27,541
3.00% - 4.00%	856,020		5,501		2		0		861,523
Greater than 4.00%	2,059		0		0		0		2,059
Total	$	1,680,348	$	778,967	$	260,335	$	178	$	2,719,828
Variable Life / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	171,754	$	171,754
1.00% - 1.99%	246,886		0		1,678,254		1,580,722		3,505,862
2.00% - 2.99%	28,501		1,479,940		2,693,293		371,908		4,573,642
3.00% - 4.00%	3,841,175		2,170,158		1,107,301		0		7,118,634
Greater than 4.00%	2,114,438		0		0		0		2,114,438
Total	$	6,231,000	$	3,650,098	$	5,478,848	$	2,124,384	$	17,484,330

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	June 30, 2023
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 - 50 bps above guaranteed minimum		51 -150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in thousands)
Fixed Annuities(2)
Less than 1.00%	$	0	$	94	$	27	$	180	$	301
1.00% - 1.99%	504,431		75,476		242,780		83,650		906,337
2.00% - 2.99%	261,482		466,971		47,851		10,920		787,224
3.00% - 4.00%	32,738		0		0		0		32,738
Greater than 4.00%	0		0		0		0		0
Total	$	798,651	$	542,541	$	290,658	$	94,750	$	1,726,600
Variable Annuities
Less than 1.00%	$	972,976	$	833,696	$	18,454	$	2	$	1,825,128
1.00% - 1.99%	229,049		2,126		1,094		0		232,269
2.00% - 2.99%	24,531		4,090		0		0		28,621
3.00% - 4.00%	990,408		2,859		0		0		993,267
Greater than 4.00%	2,091		0		0		0		2,091
Total	$	2,219,055	$	842,771	$	19,548	$	2	$	3,081,376
Variable Life / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	9,078	$	9,078
1.00% - 1.99%	163,616		0		2,706,552		363,119		3,233,287
2.00% - 2.99%	21,001		1,399,691		2,765,577		267,001		4,453,270
3.00% - 4.00%	4,555,992		1,985,262		1,110,457		0		7,651,711
Greater than 4.00%	2,159,217		0		0		0		2,159,217
Total	$	6,899,826	$	3,384,953	$	6,582,586	$	639,198	$	17,506,563

(1) Excludes contracts without minimum guaranteed crediting rates, such as funds with indexed-linked crediting options.

(2) Prior period amounts have been updated to conform to current period presentation.

Unearned Revenue Reserve ("URR")

The balances of and changes in URR as of and for the periods ended are as follows:


	Six Months Ended June 30,
	2024		2023

	Variable Life / Universal Life
	(in thousands)


Balance, beginning of period	$	3,741,426	$	3,067,336
Unearned revenue	430,230		405,732
Amortization expense	(89,640)		(70,981)
Other adjustments	(1)		(93)

Balance, end of period	$	4,082,015	$	3,401,994
Less: Reinsurance recoverables	1,794,071		1,621,229
Balance after reinsurance recoverables, end of period	$	2,287,944	$	1,780,765

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

10. MARKET RISK BENEFITS

The following tables show a rollforward of MRB balances for variable annuity products, along with a reconciliation to the Company’s total net MRB positions as of the following dates:


	Six Months Ended June 30, 2024
	Variable Annuities		Less: Reinsured Market Risk Benefits		Total, Net of Reinsurance
	(in thousands)
Balance, beginning of period	$	3,694,950	$	(917,792)	$	2,777,158
Effect of cumulative changes in non-performance risk	1,068,035		0		1,068,035
Balance, beginning of period, before effect of changes in non-performance risk	4,762,985		(917,792)		3,845,193
Attributed fees collected	556,055		(131,047)		425,008
Claims paid	(31,466)		3,110		(28,356)
Interest accrual	119,334		(28,372)		90,962
Actual in force different from expected	(2,637)		(10,203)		(12,840)
Effect of changes in interest rates	(870,637)		126,966		(743,671)
Effect of changes in equity markets	(1,112,214)		115,601		(996,613)
Effect of assumption update	85,619		3,984		89,603
Issuances	28,190		(1,654)		26,536
Other adjustments	14,784		398		15,182
Effect of changes in current period counterparty non-performance risk	0		(6,098)		(6,098)
Balance, end of period, before effect of changes in non-performance risk	3,550,013		(845,107)		2,704,906
Effect of cumulative changes in non-performance risk	(884,110)		0		(884,110)
Balance, end of period	$	2,665,903	$	(845,107)	$	1,820,796

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2023
	Variable Annuities		Less: Reinsured Market Risk Benefits		Total, Net of Reinsurance
	(in thousands)
Balance, beginning of period	$	4,550,625	$	(422,261)	$	4,128,364
Effect of cumulative changes in non-performance risk	1,727,910		0		1,727,910
Balance, beginning of period, before effect of changes in non-performance risk	6,278,535		(422,261)		5,856,274
Attributed fees collected	587,663		(107,425)		480,238
Claims paid	(43,782)		3,681		(40,101)
Interest accrual	160,106		(20,505)		139,601
Actual in force different from expected	36,193		(6,069)		30,124
Effect of changes in interest rates	(671,989)		169,229		(502,760)
Effect of changes in equity markets	(1,314,461)		127,157		(1,187,304)
Effect of assumption update	330,769		(54,067)		276,702
Issuances	11,403		9,025		20,428
Other adjustments(1)	(17,436)		(638,198)		(655,634)
Effect of changes in current period counterparty non-performance risk	0		(7,445)		(7,445)
Balance, end of period, before effect of changes in non-performance risk	5,357,001		(946,878)		4,410,123
Effect of cumulative changes in non-performance risk	(1,660,587)		0		(1,660,587)
Balance, end of period	$	3,696,414	$	(946,878)	$	2,749,536

(1) Other adjustments for June 30, 2023 primarily includes $638 million related to the reinsurance transaction with AuguStar. See Note 11 for additional information.

In both 2024 and 2023, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to policyholder behavior assumptions on certain variable annuities.

The Company issues certain variable annuity insurance contracts where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, and/or (2) the highest anniversary contract value on a specified date adjusted for any withdrawals. These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues indexed variable annuity contracts for which the return is tied to the return of specific indices where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals upon death. In certain of these indexed variable annuity contracts, the Company also contractually guarantees to the contractholder withdrawal benefits payable during specific periods.

For guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, timing of annuitization, contract lapses and contractholder mortality.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.

For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility and contractholder behavior.

The following table presents accompanying information to the rollforward table above.


	June 30, 2024		June 30, 2023
	Variable Annuities
	($ in thousands)
Net amount at risk(1)	$	8,732,024	$	10,067,522
Weighted-average attained age of contractholders	71		69

(1)For contracts with multiple benefit features, the highest net amount at risk for each contract is included.

The table below reconciles MRB asset and liability positions as of the following dates:


	June 30, 2024		June 30, 2023
	Variable Annuities
	(in thousands)
Direct and assumed	$	1,419,114	$	1,165,762
Ceded	1,131,050		1,174,468
Total market risk benefit assets	$	2,550,164	$	2,340,230

Direct and assumed	$	4,085,018	$	4,862,177
Ceded	285,942		227,589
Total market risk benefit liabilities	$	4,370,960	$	5,089,766

Net liability	$	1,820,796	$	2,749,536

11. REINSURANCE

The Company participates in reinsurance with its affiliates Prudential Arizona Reinsurance Captive Company (“PARCC”), Prudential Arizona Reinsurance Term Company (“PAR Term”), PAR U, PURE, Prudential Term Reinsurance Company (“Term Re”), Dryden Arizona Reinsurance Term Company (“DART”), Lotus Reinsurance Company Ltd. (“Lotus Re”), PALAC, a former subsidiary of Prudential Financial that was sold to Fortitude on April 1, 2022, and prior to January 1, 2024 with its affiliates Prudential Universal Reinsurance Company (“PURC”) and Gibraltar Universal Life Reinsurance Company (“GUL Re”). The Company also participates in reinsurance with 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 (“YRT”) 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.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Effective January 2024, the Company entered into an agreement with Somerset Reinsurance Ltd. (“Somerset Re”) to coinsure a closed block of guaranteed universal life (“GUL”) policies to PURE, a wholly-owned subsidiary of Prudential Insurance, with retrocession by PURE of such liabilities on a modified coinsurance basis, to Somerset Re. This transaction is effective as of January 1, 2024, whereby, the Company recaptured all risks associated with the subject GUL policies from PAR U, PURC and GUL Re and subsequently established YRT reinsurance for the subject GUL business with Prudential Insurance. As a result of the transactions, the Company recognized a $990 million pre-tax recapture loss and a $1,207 million DRG that will be amortized into income over the estimated remaining life of the reinsured policies.

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 policy charges and fee income ceded for universal life and variable annuity 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.

Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance are recorded within “Other assets” and the corresponding funds withheld liability for assets retained under these reinsurance agreements are recorded within “Other liabilities.” Balances associated with these agreements are included in the tables below.

"Change in value of market risk benefits, net of related hedging gain (loss)" 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 within the PLNJ business to Prudential Insurance. These reinsurance agreements are market risk benefits and have been accounted for in the same manner.

Reinsurance amounts included in the Company’s Unaudited Interim Consolidated Statements of Financial Position were as follows:


	June 30, 2024		December 31, 2023
	(in thousands)
Reinsurance recoverables	$	40,693,991	$	38,709,651
Policy loans	(1,098,752)		(1,082,584)
Deferred policy acquisition costs	(3,154,068)		(3,195,161)
Deferred sales inducements	(33,943)		(35,313)
Market risk benefit assets	1,131,482		1,165,378
Other assets	2,413,087		1,897,410
Policyholders’ account balances	5,746,173		5,977,108
Future policy benefits	7,197,282		7,026,209
Market risk benefit liabilities	287,741		249,538
Other liabilities	7,830,608		4,397,862

Unaffiliated reinsurance amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Financial Position were as follows:


	June 30, 2024		December 31, 2023
	(in thousands)
Deferred policy acquisition costs	$	65,299	$	71,315
Market risk benefit assets	780,056		745,662
Other assets	2,313,943		1,795,422
Policyholders’ account balances	1,726,686		1,830,579
Future policy benefits	185		453
Market risk benefit liabilities	146,676		131,594
Other liabilities	2,352,382		1,915,205

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance recoverables by counterparty are as follows:


	June 30, 2024		December 31, 2023
	(in thousands)
PAR U	$	18,630,892	$	15,722,061
PURC	0		7,565,968
PARCC	2,123,485		2,304,270
GUL Re	0		3,211,899
PAR Term	1,987,253		2,101,004
Prudential Insurance	4,164,836		1,311,525
Term Re	1,980,014		2,080,564
Lotus Re	2,077,391		2,051,831
DART	765,376		744,043
PURE	7,383,771		0
Unaffiliated	1,580,973		1,616,486
Total reinsurance recoverables	$	40,693,991	$	38,709,651

Reinsurance amounts, included in the Company’s Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Premiums:
Direct	$	462,458	$	476,472	$	922,086	$	938,539
Assumed	30		34		63		(122)
Ceded	(367,567)		(386,541)		(735,046)		(771,796)
Net premiums	94,921		89,965		187,103		166,621
Policy charges and fee income:
Direct	785,299		749,037		1,556,488		1,484,975
Assumed	239,838		148,479		498,608		301,079
Ceded	(636,303)		(533,980)		1,242,943		(1,036,027)
Net policy charges and fee income	388,834		363,536		3,298,039		750,027
Net investment income:
Direct	592,448		402,761		1,111,500		753,084
Assumed	333		343		663		686
Ceded	(12,788)		(10,029)		(26,850)		(11,245)
Net investment income(1)	579,993		393,075		1,085,313		742,525
Asset administration fees:
Direct	79,776		80,952		162,464		161,308
Assumed	0		0		0		0
Ceded	(24,663)		(24,164)		(50,719)		(40,318)
Net asset administration fees	55,113		56,788		111,745		120,990
Other income (loss):
Direct	84,931		79,657		129,747		305,391
Assumed	24		(56)		349		(349)
Ceded	52,734		25,857		221,078		45,263

Net other income (loss)(1)	137,689		105,458		351,174		350,305

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Realized investment gains (losses), net:
Direct	765,146	(88,715)	777,502	(334,638)
Assumed	72,351	82,278	63,184	220,944
Ceded	1,385	14,131	21,196	709
Realized investment gains (losses), net(1)	838,882	7,694	861,882	(112,985)
Change in value of market risk benefits, net of related hedging gain (loss):
Direct	(298,559)	174,084	15,327	207,204
Assumed	1,072	2,774	606	(3,443)
Ceded	15,304	(215,745)	(206,525)	(222,446)
Net change in value of market risk benefits, net of related hedging gain (loss)	(282,183)	(38,887)	(190,592)	(18,685)
Policyholders’ benefits (including change in reserves):
Direct	909,374	848,495	1,910,820	1,727,280
Assumed	245,810	332,048	533,221	649,335
Ceded	(1,019,305)	(1,033,582)	1,798,246	(2,124,472)
Net policyholders’ benefits (including change in reserves)(1)	135,879	146,961	4,242,287	252,143
Change in estimates of liability for future policy benefits:
Direct	72,870	31,146	212,456	(17,355)
Assumed	74,378	23,844	64,868	25,651
Ceded	(153,422)	(56,123)	(295,503)	(13,831)
Net change in estimates of liability for future policy benefits	(6,174)	(1,133)	(18,179)	(5,535)
Interest credited to policyholders’ account balances:
Direct	297,194	215,973	575,584	438,548
Assumed	36,344	27,957	82,492	66,463
Ceded	(107,314)	(100,114)	(207,302)	(200,973)
Net interest credited to policyholders’ account balances	226,224	143,816	450,774	304,038
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(116,030)	(105,195)	(506,173)	(223,025)

(1)Amounts include reinsurance agreements using the deposit method of accounting.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Unaffiliated reinsurance assumed and ceded amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023(1)		2024		2023
	(in thousands)
Premiums:
Assumed	$	30	$	34	$	60	$	(132)
Ceded	(26,827)		(16,802)		(51,979)		(33,377)

Policy charges and fee income:
Assumed	356		383		628		923
Ceded	(44,958)		(38,338)		(86,970)		(62,276)

Net investment income(1):
Ceded	0		1,993		0		12,913

Asset administration fees:
Ceded	(7,007)		(7,740)		(14,323)		(7,740)

Other income (loss)(1):
Assumed	24		55		453		(238)
Ceded	26,002		8,031		47,806		9,653

Realized investment gains (losses), net(1):
Assumed	72,351		82,278		63,184		220,944
Ceded	21,774		13,952		46,999		(629)

Change in value of market risk benefits, net of related hedging gain (loss):
Assumed	1,072		2,774		606		(3,443)
Ceded	34,461		(75,325)		(63,547)		(80,098)

Policyholders’ benefits (including change in reserves)(1):
Assumed	28		189		361		280
Ceded	(64,243)		(36,118)		(211,071)		(63,820)

Change in estimates of liability for future policy benefits:
Ceded	29		(416)		91,902		(416)

Interest credited to policyholders’ account balances:
Assumed	7,657		(2,370)		25,116		5,099
Ceded	(1)		(85)		(1)		(85)

(1)Amounts include reinsurance agreements using the deposit method of accounting.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The gross and net amounts of life insurance face amount in force as of June 30, 2024 and 2023 were as follows:


	2024		2023
	(in thousands)
Direct gross life insurance face amount in force	$	1,147,562,454	$	1,107,571,392
Assumed gross life insurance face amount in force	35,029,437		36,059,164
Reinsurance ceded	(1,041,974,560)		(1,015,213,859)
Net life insurance face amount in force	$	140,617,331	$	128,416,697

Significant Affiliated Reinsurance Agreements

PAR U

Effective July 1, 2012, PLNJ reinsures 95% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates through December 31, 2019, excluding those policies that are subject to principle-based reserving.

On January 2, 2013, Pruco Life began to assume 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.

Effective January 1, 2024, Pruco Life recaptured the policies equal to 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2011. Effective January 1, 2024, Pruco Life reinsures 25% of the risks associated with universal life policies with effective dates prior to January 1, 2015 and 100% of the risks associated with universal life policies with effective dates beginning January 1, 2015.

Effective January 1, 2024, PLNJ recaptured the policies previously reinsured by PAR U with effective dates prior to January 1, 2015. Effective January 1, 2024, PLNJ reinsures 100% of the risks associated with universal life policies, with effective dates from January 1, 2015 to December 31, 2019.

On March 28, 2024, PURC and GUL Re merged into PAR U.

PURE

Effective January 1, 2024, Pruco Life reinsures 75% of the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2015.

Effective January 1, 2024, PLNJ reinsures 100% of the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2015.

PURC

Pruco Life reinsures 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life 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 other universal life policies, with effective dates from January 1, 2014 through December 31, 2016.

Effective January 1, 2024, the Company recaptured the policies previously reinsured by PURC. As a result of the recapture, the Company recorded a write-off of $116 million of DRG that was recognized with the previous reinsurance agreement.

On March 28, 2024, PURC merged into PAR U.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

PARCC

Prior to July 1, 2019, the Company reinsured 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. Effective July 1, 2019, the Company amended the coinsurance agreement to increase the percentage from 90% to 100% of the policy risk amount reinsured. The amended agreement does not impact contracts issued by PLNJ, which remain at the original percentage.

GUL Re

Effective January 1, 2017, Pruco Life entered into an automatic coinsurance agreement with GUL Re to reinsure 95% of all the risks associated with Universal Protector policies having no-lapse guarantees, as well as certain other universal life policies, with effective dates on or after January 1, 2017 through December 31, 2019, excluding those policies that are subject to principle-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 other universal life policies with effective dates prior to January 1, 2014.

Effective January 1, 2024, the Company recaptured the policies previously reinsured by GUL Re.

On March 28, 2024, GUL Re merged into PAR U.

PAR Term

Prior to July 1, 2019, 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. Effective July 1, 2019, the Company amended the coinsurance agreement to increase the percentage from 95% to 100% of the policy risk amount reinsured. The amended agreement does not impact contracts issued by PLNJ, which remain at the original percentage.

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 YRT reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. This agreement was terminated for new business effective January 1, 2020, with certain new business (primarily universal life policies) terminated as early as 2017. The Company now reinsures a portion of the mortality risk directly to third-party reinsurers and retains all of the non-reinsured portion of the mortality risk. Effective July 1, 2019, certain term life insurance policies were recaptured and subsequently reinsured to PARCC and PAR Term as noted above. As of January 1, 2022, most of the variable life insurance policies were recaptured resulting in a $305 million loss recorded through "Policy charges and fee income." Those policies were then reinsured to Lotus Re as mentioned below. Effective January 1, 2024, the Company recaptured all GUL policies with Prudential Insurance and subsequently entered into a YRT reinsurance agreement with Prudential Insurance to reinsure the mortality risk for the totality of GUL policies reinsured to PURE.

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 was 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 was no impact to the Company's reinsurance arrangements with respect to such GUL business as a result of this change in control. In January 2021, there was a definitive agreement announced to subsequently sell the two counterparties mentioned above, which were then acquired by Sixth Street in July 2021. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties.

Table of Contents

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 to reinsure its variable annuity base contracts, along with the living benefit guarantees to Prudential Insurance. This reinsurance agreement covers new and in force business. Effective February 1, 2023, PLNJ began selling indexed variable annuities products, which is reinsured to Prudential Insurance through the existing reinsurance agreement. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts to Prudential Insurance. As a result of the agreement, reinsurance payables includes the ceded modified coinsurance arrangement, which reflects the value of the invested assets retained by the Company and the associated asset returns.

Lotus Re

Effective October 1, 2021, the Company entered into an automatic coinsurance agreement with Lotus Re to reinsure $32 million of liabilities associated with the risks associated with a portion of its variable life policies in the extended term policy status.

Effective January 1, 2022 the Company recaptured the risks that were previously ceded to Lotus Re from October 1, 2021 through December 31, 2021. Immediately thereafter, the Company entered into a reinsurance agreement with Lotus Re to cede 100% of the risks associated with a closed block of variable life business on a coinsurance and modified coinsurance basis including policies in the extended term policy status. The amount of the net liabilities associated with the transaction for coinsurance and modified coinsurance were $1,387 million and $14,037 million, respectively. As part of the consideration, the Company also ceded to Lotus Re $855 million of policy loan assets associated with the reinsured policies while receiving $820 million in cash from Lotus Re. As a result, the Company recorded a $1,352 million deferred gain, which will be recognized over the remaining life of the underlying policies. In tandem with the transaction, effective January 1, 2022, Lotus Re established an automatic YRT agreement with the Company to cede back a portion of the mortality risks associated with the reinsured policies for the purposes of the Company maintaining YRT reinsurance with external counterparties.

DART

Effective January 1, 2018, the Company entered into an automatic coinsurance agreement with DART to reinsure 95% of the risks associated with its term life insurance policies with effective dates on or after January 1, 2018 through December 31, 2019, excluding those policies that are subject to principle-based reserving.

Significant Third-Party Reinsurance Arrangements

AuguStar Life Insurance Company (Formerly Known as The Ohio National Life Insurance Company)

Effective April 1, 2023, the Company entered into an agreement with AuguStar, an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits. This block represents approximately 10% of the Company’s remaining legacy in force traditional variable annuity block by account value. The Company ceded 100% of separate account liabilities under modified coinsurance and 100% of general account liabilities under coinsurance of its PDI traditional variable annuity contracts. The general account liabilities associated with PDI's guaranteed living and death benefits and the corresponding reinsurance of those liabilities are accounted for as market risk benefits. As a result of the transaction, the Company recognized a $277 million DRG that will be amortized into income over the estimated remaining life of the reinsured policies.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

FLIAC

Effective December 1, 2021, the Company entered into a reinsurance agreement with FLIAC under which the Company assumed all of FLIAC's indexed variable annuities under modified coinsurance. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts to the Company. As a result of the agreement, "Reinsurance recoverables" includes the assumed modified coinsurance receivable, which reflects the value of the invested assets retained by FLIAC and the associated asset returns. The Company also assumed via coinsurance all of FLIAC’s fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature which are accounted for under deposit accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from FLIAC to the Company and any such novated contracts shall cease to be reinsured under this agreement. As of June 30, 2024, the total account value of contracts novated from FLIAC to the Company were $5.3 billion for indexed variable annuities contracts and $2.0 billion for fixed annuities and fixed indexed annuities contracts, which is approximately 80% of the total reinsured block.

Somerset Re

Effective October 1, 2021, the Company entered into a reinsurance agreement with Somerset Re to coinsure business, on a quota share funds withheld basis, related to fixed index annuities. Under the reinsurance agreement, the Company cedes to Somerset Re its quota share of the insurance liabilities with respect to the reinsured contracts. The deposit assets on reinsurance totaled $2,152 million and $1,618 million at June 30, 2024 and December 31, 2023, respectively. The funds withheld liabilities totaled $1,974 million and $1,518 million at June 30, 2024 and December 31, 2023, respectively.

Union Hamilton

Between April 1, 2015 and December 31, 2016, the Company, excluding its subsidiary, 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 June 30, 2024, $2.1 billion of HDI v.3.0 account values are reinsured to Union Hamilton.

12. INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In determining the full year projected tax rate, the Company considers the realizability of deferred tax assets, including those associated with unrealized investment losses, and has determined based upon the weight of available evidence that no valuation allowance is necessary related to unrealized investment losses. 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 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 expense of $70.8 million, or 16.94% of income (loss) from operations before income taxes and equity in earnings of operating joint venture, in the first six months of 2024, compared to $96.6 million, or 16.25%, in the first six months of 2023. The Company's current and prior effective tax rates differed from the U.S. statutory tax rate of 21% primarily due to non-taxable investment income and tax credits.

Inflation Reduction Act. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), (House of Representatives, 5376). One of the most significant provisions of the Inflation Reduction Act is a 15% corporate alternative minimum tax (CAMT) based on the Company’s GAAP income, with certain adjustments. This provision, which is applicable only to companies with average applicable financial statement income in excess of $1 billion for any three-year period ending in 2022 or later, is effective in taxable years beginning after December 31, 2022. The impact of the book-income alternative minimum tax, if any, will vary from year to year based on the relationship of the Company’s GAAP income to the Company’s taxable income. Any tax paid pursuant to this provision is available as a tax credit in future years when the Company’s tax rate exceeds the 15% minimum tax threshold. The Company is subject to CAMT for 2024 which may or may not result in a CAMT cash tax liability and will have no impact to the full year effective tax rate.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

13. EQUITY

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss). The balance of and changes in each component of AOCI as of and for the six months ended June 30, 2024 and 2023, are as follows:


	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest Rate Remeasurement of Future Policy Benefits		Gain (Loss) from Changes in Non-Performance Risk on Market Risk Benefits		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2023	$	(18,085)	$	(927,778)	$	71,195	$	843,748	$	(30,920)
Change in OCI before reclassifications	(4,178)		(448,732)		66,215		(183,925)		(570,620)
Amounts reclassified from AOCI	0		(20,268)		0		0		(20,268)
Income tax benefit (expense)	275		98,567		(13,905)		38,624		123,561
Balance, June 30, 2024	$	(21,988)	$	(1,298,211)	$	123,505	$	698,447	$	(498,247)


	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest Rate Remeasurement of Future Policy Benefits		Gain (Loss) from Changes in Non-Performance Risk on Market Risk Benefits		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2022	$	(20,007)	$	(1,474,475)	$	119,368	$	1,365,049	$	(10,065)
Change in OCI before reclassifications	3,266		116,395		(17,588)		(67,323)		34,750
Amounts reclassified from AOCI	0		2,479		0		0		2,479
Income tax benefit (expense)	(363)		(24,884)		3,693		14,138		(7,416)
Balance, June 30, 2023	$	(17,104)	$	(1,380,485)	$	105,473	$	1,311,864	$	19,748

(1)Includes cash flow hedges of $75 million and $12 million as of June 30, 2024 and December 31, 2023, respectively, and $100 million and $139 million as of June 30, 2023 and December 31, 2022, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges - Currency/Interest rate(3)	$	12,832	$	1,974	$	35,736	$	5,744
Net unrealized investment gains (losses) on available-for-sale securities	(8,631)		(2)		(15,468)		(8,223)
Total net unrealized investment gains (losses)(4)	4,201		1,972		20,268		(2,479)
Total reclassifications for the period	$	4,201	$	1,972	$	20,268	$	(2,479)

(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 future policy benefits, policyholders’ account balances and other liabilities.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities 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 (loss)” for a period that had been part of OCI in earlier periods. The amounts for the periods indicated below, split between amounts related to net unrealized investment gains (losses) on available-for-sale fixed maturity securities on which an allowance for credit losses has been recognized, and all other net unrealized investment gains (losses), are as follows:


	Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on Which an Allowance for Credit Losses has been Recognized		Net Unrealized Gains (Losses) on All Other Investments(1)		Other Costs(2)		Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2023	$	1,987	$	(1,404,180)	$	(801,351)	$	1,029,098	$	246,668	$	(927,778)
Net investment gains (losses) on investments arising during the period	(1,461)		(543,630)		0		0		114,566		(430,525)
Reclassification adjustment for (gains) losses included in net income	(9)		(20,259)		0		0		4,260		(16,008)
Reclassification due to allowance for credit losses recorded during the period	(26)		26		0		0		0		0


Impact of net unrealized investment (gains) losses	0		0		(797,795)		894,154		(20,259)		76,100
Balance, June 30, 2024	$	491	$	(1,968,043)	$	(1,599,146)	$	1,923,252	$	345,235	$	(1,298,211)

(1)Includes cash flow hedges. See Note 4 for information on cash flow hedges.

(2)"Other costs" primarily includes reinsurance recoverables and DRL.

(3)"Other liabilities" primarily includes reinsurance payables.

Noncontrolling interests

For certain subsidiaries, the Company owns a controlling interest that is less than 100% ownership of the subsidiary but must consolidate 100% of the subsidiary’s financial statements in accordance with U.S. GAAP. Noncontrolling interests represent the portion of equity ownership in a consolidated subsidiary that is not attributable to the Company.

14. 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

The majority 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.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 $0.4 million for both the three months ended June 30, 2024 and 2023, and $0.6 million and $0.5 million for the six months ended June 30, 2024 and 2023, respectively. The expense charged to the Company for the deferred compensation program was $0.8 million and $0.7 million for the three months ended June 30, 2024 and 2023, respectively, and $4.1 million and $3.4 million for the six months ended June 30, 2024 and 2023, respectively.

The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded, 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 $2 million and $4 million for the three months ended June 30, 2024 and 2023, respectively, and $5 million and $7 million for the six months ended June 30, 2024 and 2023, 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 $5 million and $3 million for the three months ended June 30, 2024 and 2023, respectively, and $9 million and $7 million for the six months ended June 30, 2024 and 2023, 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 for both the three months ended June 30, 2024 and 2023, and $4 million for both the six months ended June 30, 2024 and 2023.

The Company is charged distribution expenses from Prudential’s proprietary nationwide sales organization, “Prudential Advisors” through a transfer pricing agreement, which is intended to reflect a market-based pricing arrangement. Prudential Advisors distributes Prudential life insurance, annuities, and investment products with proprietary and non-proprietary product options.

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 $211 million and $147 million for the three months ended June 30, 2024 and 2023, respectively, and $389 million and $287 million for the six months ended June 30, 2024 and 2023, 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 $32 million and $34 million for the three months ended June 30, 2024 and 2023, respectively, and $68 million and $73 million six months ended June 30, 2024 and 2023, respectively.

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 $4,410 million and $4,156 million at June 30, 2024 and December 31, 2023, respectively. Fees related to these COLI policies were $14 million and $12 million for the three months ended June 30, 2024 and 2023, respectively, and $27 million and $25 million for the six months ended June 30, 2024 and 2023, respectively. The Company reinsures the risk associated with these COLI policies to an affiliate reinsurer as part of a broader program related to variable insurance policies.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

In May 2023, the Company funded a policy loan from the Prudential Financial COLI policy noted above in an amount of $900 million to an affiliated irrevocable trust, commonly referred to as a “rabbi trust”, which Prudential Financial created to support certain non-qualified retirement plans. The outstanding balance of the policy loan with the rabbi trust was $897 million and $898 million as of June 30, 2024 and December 31, 2023, respectively. Interest income related to the policy loan was $11 million and $5 million for the three months ended June 30, 2024 and 2023, respectively, and $21 million and $5 million for the six months ended June 30, 2024 and 2023, respectively.

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 $17 million and $13 million for the three months ended June 30, 2024 and 2023, respectively, and $32 million and $25 million for the six months ended June 30, 2024 and 2023, respectively. These expenses are recorded as “Net investment income” in the 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.

The interest income to the Company from PGF related to affiliated cash collateral was $127 million and $120 million for the three months ended June 30, 2024 and 2023, respectively, and $254 million and $230 million for the six months ended June 30, 2024 and 2023, respectively, and are included in "Other income (loss)".

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $936 million and $754 million of investments in joint ventures as of June 30, 2024 and December 31, 2023, respectively. "Net investment income" related to these ventures includes gains (losses) of $10 million and $(6) million for the three months ended June 30, 2024 and 2023, respectively, and $19 million and $(4) million for the six months ended June 30, 2024 and 2023, 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 $67 million and $70 million for the three months ended June 30, 2024 and 2023, respectively, and $136 million and $139 million for the six months ended June 30, 2024 and 2023, respectively. These revenues are recorded as “Asset administration fees” in the 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 $11 million and $9 million for the three months ended June 30, 2024 and 2023, respectively, and $22 million and $18 million for the six months ended June 30, 2024 and 2023, respectively. These revenues are recorded as “Asset administration fees” in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Affiliated Notes Receivable

Affiliated notes receivable included in “Receivables from parent and affiliates” at June 30, 2024 and December 31, 2023 is as follows:


	Maturity Dates			Interest Rates				June 30, 2024		December 31, 2023
								(in thousands)

U.S. dollar fixed rate notes	2025	-	2032	0.00%	-	14.85	%	$	330,814	$	147,984

Total notes receivable - affiliated(1)								$	330,814	$	147,984

(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.

Accrued interest receivable related to these loans was $1 million at both June 30, 2024 and December 31, 2023, and is included in “Other assets”. Revenues related to these loans were $0 million and $1 million for the three months ended June 30, 2024 and 2023, respectively, and $1 million and $2 million for the six months ended June 30, 2024 and 2023, respectively, and are included in “Other income (loss)”.

Affiliated Commercial Mortgage Loan

The affiliated commercial mortgage loan included in "Commercial mortgage and other loans" at June 30, 2024 and December 31, 2023 were as follows:


	Maturity Date	Interest Rate		June 30, 2024		December 31, 2023
				(in thousands)
Affiliated Commercial Mortgage Loan	2025	9.83	%	$	70,445	$	71,038

The commercial mortgage loan shown above is carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses, and net of an allowance for losses. The Company reviews the performance and credit quality of the commercial mortgage loan on an on-going basis.

Accrued interest receivable related to the loan was $0.5 million at both June 30, 2024 and December 31, 2023, and is included in "Accrued investment income". Revenues were $2 million and $1 million for the three months ended June 30, 2024 and 2023, respectively, and $4 million and $3 million for the six months ended June 30, 2024 and 2023, respectively, and are included in "Net investment 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 six months ended June 30, 2024 and for the year ended December 31, 2023.


Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		APIC, Net of Tax Increase/(Decrease)		Realized Investment Gain (Loss)
				(in thousands)




Prudential Insurance	January 2023	Purchase	Fixed Maturities	$	48,329	$	50,372	$	1,614	$	0
Prudential Insurance	March 2023	Purchase	Fixed Maturities	$	7,175	$	7,500	$	256	$	0
PURC	April 2023	Purchase	Fixed Maturities	$	102,804	$	102,804	$	0	$	0

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Term Re	June 2023	Purchase	Fixed Maturities	$	115,573	$	115,573	$	0	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	4,298	$	4,443	$	114	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	4,394	$	4,494	$	80	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	19,453	$	19,203	$	(198)	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	14,452	$	15,086	$	502	$	0
Prudential Insurance	September 2023	Purchase	Fixed Maturities	$	15,880	$	15,801	$	(62)	$	0
PURC	December 2023	Sale	Commercial Mortgage and Other Loans	$	762	$	754	$	0	$	8
PAR U	January 2024	Transfer in	Fixed Maturities	$	1,598,161	$	1,598,161	$	0	$	0
PAR U	January 2024	Transfer in	Fixed Maturities	$	778,745	$	778,745	$	0	$	0
PURC	January 2024	Transfer in	Fixed Maturities	$	2,155,560	$	2,155,560	$	0	$	0
GUL Re	January 2024	Transfer in	Fixed Maturities	$	1,685,582	$	1,685,582	$	0	$	0
GUL Re	January 2024	Transfer in	Fixed Maturities	$	4,976	$	4,976	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	1,598,161	$	1,598,161	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	778,745	$	778,745	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	2,155,560	$	2,155,560	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	1,685,582	$	1,685,582	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	4,976	$	4,976	$	0	$	0
Ironbound	January 2024	Purchase	Other Invested Assets	$	60,414	$	60,414	$	0	$	0
Windhill CLO 1, Ltd.	February 2024	Sale	Fixed Maturities	$	18,428	$	18,858	$	0	$	(430)
Windhill CLO 2, Ltd.	February 2024	Sale	Fixed Maturities	$	19,652	$	20,057	$	0	$	(405)
PAR Term	February 2024	Purchase	Fixed Maturities	$	43,084	$	43,084	$	0	$	0
Windhill CLO 1, Ltd.	March 2024	Sale	Fixed Maturities	$	10,148	$	10,387	$	0	$	(239)
Windhill CLO 2, Ltd.	March 2024	Sale	Fixed Maturities	$	14,763	$	15,091	$	0	$	(328)
Prudential Insurance	March 2024	Purchase	Fixed Maturities	$	198,804	$	206,285	$	5,910	$	0
PAR U	March 2024	Transfer in	Other Invested Assets	$	188,500	$	188,500	$	0	$	0
PURE	March 2024	Transfer out	Other Invested Assets	$	188,500	$	188,500	$	0	$	0
Windhill CLO 1, Ltd.	April 2024	Sale	Fixed Maturities	$	2,261	$	2,300	$	0	$	(39)
Windhill CLO 2, Ltd.	May 2024	Sale	Fixed Maturities	$	14,034	$	14,415	$	0	$	(381)

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Windhill CLO 1, Ltd.	June 2024	Sale	Fixed Maturities	$	2,045	$	2,100	$	0	$	(55)
Windhill CLO 2, Ltd.	June 2024	Sale	Fixed Maturities	$	23,342	$	23,743	$	0	$	(401)
PAR U	June 2024	Transfer in	Other Invested Assets	$	326	$	326	$	0	$	0
PURE	June 2024	Transfer out	Other Invested Assets	$	326	$	326	$	0	$	0
PAR U	June 2024	Purchase	Commercial Mortgage and Other Loans	$	12,555	$	12,555	$	0	$	0

Debt Agreements

The Company is authorized to borrow funds up to $7 billion from affiliates to meet its capital and other funding needs. The following table provides the breakout of the Company's short-term debt. There is no long-term debt to affiliates as of June 30, 2024 and December 31, 2023.


Affiliate	Date Issued	Amount of Notes - June 30, 2024		Amount of Notes - December 31, 2023		Interest Rate			Date of Maturity
		(in thousands)
Prudential Insurance	8/13/2021	$	0	$	94,953		3.95	%		6/20/2024
Prudential Insurance	8/13/2021	0		37,981			3.95	%		6/20/2024
Prudential Insurance	8/13/2021	0		47,477			3.95	%		6/20/2024
Total Loans Payable to Affiliates(1)		$	0	$	180,411

(1) Includes $180 million of loans reclassified as current portion of long-term debt as of December 31, 2023.

The total interest expense to the Company related to affiliated loans and cash collateral with PGF was $7 million and $2 million for the three months ended June 30, 2024 and 2023, respectively, and $11 million and $5 million for the six months ended June 30, 2024 and 2023, respectively.

All debt outstanding as of December 31, 2023 is that of Pruco Life.

Contributed Capital and Dividends

In February and December 2023, the Company received capital contributions in the amount of $405 million and $7 million, respectively, from Prudential Insurance.

In June 2024, there was a $550 million return of capital to Prudential Insurance. In June, September, and December 2023, there was a $300 million, $650 million and $450 million return of capital, respectively, to Prudential Insurance.

Through June 2024 and December 2023, the Company did not pay any dividends to Prudential Insurance.

Reinsurance with Affiliates

As discussed in Note 11, the Company participates in reinsurance transactions with certain affiliates.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

15. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Company has made commitments to fund commercial mortgage loans. As of June 30, 2024 and December 31, 2023, the outstanding balances on these commitments were $235 million and $270 million, respectively. These amounts include unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was an allowance for credit losses of $0.2 million and $0.3 million as of June 30, 2024 and December 31, 2023, respectively. There was a change in allowance of $0.0 million and $0.1 million for the three and six months ended June 30, 2024, respectively and $0.1 million for both the three and six months ended June 30, 2023. The Company also made commitments to purchase or fund investments, mostly fund investments and private fixed maturities, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts. As of June 30, 2024 and December 31, 2023, $1,167 million and $1,182 million, respectively, of these commitments were outstanding. These amounts include unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for either the three or six months ended June 30, 2024 or 2023.

Guarantees

In July 2017, Pruco Life formed a joint venture with CT Corp to provide life insurance solutions in Indonesia. Pruco Life 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 Pruco Life 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. Pruco Life does not expect to make any payments on this guarantee and is not carrying any liabilities associated with the guarantee.

Since 2001, Pruco Life entered into an arrangement with Prudential of Taiwan. In June 2021, PIIH completed the sale of Prudential of Taiwan. As a result of the sale, Pruco Life has a financial guarantee to stand ready to perform in an event that both Prudential of Taiwan and the Buyer default and fail to perform their obligations to make payments to the policyholders. Pruco Life has a liability of $32 million as of both June 30, 2024 and December 31, 2023, which represents the fair value of the guarantee and is amortized in revenue over a period which approximates the life of the underlying insurance in force. Since this obligation is not subject to limitations, it is not possible to determine the maximum potential amount due under this guarantee.

Guarantees of Asset Values



	June 30, 2024		December 31, 2023
	(in thousands)
Guaranteed value of third-parties' assets	$	1,208,219	$	311,302
Fair value of collateral supporting these assets	$	1,047,957	$	287,621
Asset (liability) associated with guarantee, carried at fair value	$	762	$	1

Certain contracts underwritten by Pruco Life include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

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 its 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.

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PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 June 30, 2024, 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 16 to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities and Individual Life

California Advocates for Nursing Home Reform v. The Prudential Insurance Company of America and Pruco Life Insurance Company, et al.

In February 2024, defendants removed the action from California state court to the United States District Court for the Northern District of California.

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 statements. 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 statements.

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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 June 30, 2024, compared with December 31, 2023, and its consolidated results of operations for the three and six months ended June 30, 2024 and 2023. 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, 2023, 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 annuities, indexed variable annuities, fixed annuities, universal life insurance, variable life insurance and term life insurance primarily through affiliated and unaffiliated distributors in the United States.

Effective January 2024, the Company entered into an agreement with Somerset Reinsurance Ltd. ("Somerset Re") to coinsure a closed block of guaranteed universal life (“GUL”) policies to Prudential Universal Reinsurance Entity Company ("PURE"), a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential Insurance"), with retrocession by PURE of such liabilities on a modified coinsurance basis, to Somerset Re. This transaction is effective as of January 1, 2024, whereby, the Company recaptured all risks associated with the subject GUL policies from Prudential Arizona Reinsurance Universal Company ("PAR U"), Prudential Universal Reinsurance Company ("PURC") and Gibraltar Universal Life Reinsurance Company ("GUL Re") and subsequently established yearly renewable term ("YRT") reinsurance for the subject GUL business with Prudential Insurance. See Note 11 to the Unaudited Interim Consolidated Financial Statements for additional information.

In May 2023, the Company entered into an agreement with AuguStar Life Insurance Company (formerly known as The Ohio National Life Insurance Company), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of Prudential Defined Income (“PDI”) traditional variable annuity contracts with guaranteed living and death benefits. The transaction was completed on June 30, 2023 with an effective date of April 1, 2023. See Note 11 to the Unaudited Interim Consolidated Financial Statements for additional information.

Impact of Changes in the Interest Rate Environment

As a global financial services company, market interest rates are a key driver of our liquidity and capital positions, cash flows, results of operations and financial position. Changes in interest rates can affect these in several ways, including favorable or adverse impacts to:

•investment-related activity, including: investment income returns, net investment spread results,

new money rates, mortgage loan prepayments and bond redemptions;

•the valuation of fixed income investments and derivative instruments;

•collateral posting requirements, hedging costs and other risk mitigation activities;

•customer account values and assets under management, including their impacts on fee-related income;

•insurance reserve levels, including market risk benefits ("MRBs"), and market experience true-ups;

•policyholder behavior, including surrender or withdrawal activity; and

•product offerings, design features, crediting rates and sales mix.

For additional information regarding interest rate risks, see “Risk Factors—Market Risk” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

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.

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Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") requires the application of accounting policies that often involve a significant degree of judgment. Management, on an ongoing basis, reviews the estimates and assumptions used in the preparation of the Company's financial statements. If management determines that modifications to 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:

•Insurance liabilities;

•Valuation of investments including derivatives, measurement of allowance for credit losses, and 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 Rate Assumptions

The liability for future policy benefits for certain of our universal life type products includes quarterly adjustments for the impact of changes to our estimate of future rates of returns on investments to reflect actual fund performance and market conditions. A portion of the returns on investments for our variable life contracts 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 and expected claims to be paid on variable life 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 on variable life contracts and decrease expected claims to be paid on variable life contracts. The opposite occurs when returns are lower than our expectations.

The weighted average rate of return assumptions used in developing estimated market returns consider many factors specific to each product type, 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 liabilities for future policy benefits for certain of our products, primarily our domestic 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. If the near-term projected future rate of return is lower than our near-term minimum future rate of return of 0%, we use our minimum future rate of return. As of June 30, 2024, our variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 3.2% near-term mean reversion equity expected rate of return.

With regard to interest rate assumptions used in evaluating liabilities for future policy benefits for certain of our products, we generally update the long-term and near-term future rates used to project fixed income returns annually and quarterly, respectively. As a result of our 2024 annual reviews and update of assumptions and other refinements, we increased our long-term expectation of the 10-year U.S. Treasury rate by 25 basis points and now grade to a rate of 3.50% over ten years. As part of our quarterly market experience updates, we update our near-term projections of interest rates to reflect changes in current rates.

For further discussion of impacts that could result from changes in these key estimates and assumptions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Policies and Pronouncements—Application of Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023.

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Adoption of New Accounting Pronouncements

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

Changes in Financial Position

Total assets increased $10.8 billion from $213.3 billion at December 31, 2023 to $224.1 billion at June 30, 2024. Significant components were:

•Total investments increased $5.8 billion driven by new sales of general account annuity products;

•Reinsurance recoverables increased $2.0 billion primarily driven by the reinsurance of the Company's guaranteed universal life block to PURE; and

•Separate account assets increased $0.8 billion primarily driven by favorable equity market performance, partially offset by net outflows.

Total liabilities increased $11.3 billion from $208.8 billion at December 31, 2023 to $220.1 billion at June 30, 2024. Significant components were:

•Policyholders' account balances increased $8.0 billion primarily driven by incremental indexed product sales;

•Other liabilities increased $3.4 billion primarily driven by the additional reinsurance of the Company's guaranteed universal life mortality risk ceded to Prudential Insurance and deferred gains associated with the reinsurance of the Company's guaranteed universal life block to PURE; and

•Separate account liabilities increased $0.8 billion corresponding to the increase in separate account assets, as discussed above.

Total equity decreased $0.6 primarily driven by $0.5 billion of returns of capital and $0.5 billion in unrealized losses on investments due to rising rates and changes direct NPR spreads, partially offset by net income of $0.3 billion.

Results of Operations

Income (loss) from Operations before Income Taxes

Three Months Comparison

Income (loss) from operations before income taxes increased $765 million from income of $258 million for the three months ended June 30, 2023 to a gain of $1,023 million for the three months ended June 30, 2024. The impact from our annual reviews and update of assumptions and other refinements was a net gain of $1,060 million. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, income (loss) from operations before income taxes decreased $295 million primarily driven by:

•Higher loss in Change in value of market risk benefits, net of related hedging gain (loss) due to net losses from higher interest rates in the second quarter of 2024; and

•Higher Interest credited to policyholders’ account balances due to growth in variable indexed annuities.

Partially offset by:

•Higher gain in Net investment income due to higher market rates and net business growth by incremental indexed product sales.

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Six Months Comparison

Income (loss) from operations before income taxes decreased $176 million from income of $594 million for the six months ended June 30, 2023 to income of $418 million for the six months ended June 30, 2024. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, as mentioned above, income (loss) from operations decreased $1,236 million primarily driven by:

•Higher Policyholders' benefits driven by the reinsurance recapture of the Company's guaranteed universal life insurance policies.

Partially offset by:

•Higher Policy charges and fee income driven by the reinsurance recapture of the Company's guaranteed universal life insurance policies.

Revenues, Benefits and Expenses

Three Months Comparison

Revenues increased $835 million from $978 million for the three months ended June 30, 2023 to $1,813 million for the three months ended June 30, 2024. This includes a favorable comparative increase of $1,023 million from our annual reviews and update of assumptions and other refinements. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, revenues decreased $188 million primarily driven by:

•Higher loss in Change in value of market risk benefits, net of related hedging gain (loss) due to net losses from higher interest rates in the second quarter of 2024;

Partially offset by:

•Higher gain in Net investment income due to higher market rates and net business growth by incremental indexed product sales.

Benefits and expenses increased $72 million from $719 million for the three months ended June 30, 2023 to $791 million for the three months ended June 30, 2024. This includes a favorable comparative decrease of $37 million from our annual reviews and update of assumptions and other refinements. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, benefits and expenses increased $109 million primarily driven by:

•Higher Interest credited to policyholders’ account balances due to growth in variable indexed annuities.

Six Months Comparison

Revenues increased $3,706 million from $1,999 million for the six months ended June 30, 2023 to $5,705 million for the six months ended June 30, 2024. Excluding the comparative impact of our annual review and update of assumptions and other refinements, as mentioned above, revenues increased $2,683 million primarily driven by the items mentioned above in Income (loss) from operations before income taxes.

Benefits and expenses increased $3,882 million from $1,405 million for the six months ended June 30, 2023 to $5,287 million for the six months ended June 30, 2024. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, as mentioned above, benefits and expenses increased $3,919 million primarily driven by the items mentioned above in Income (loss) from operations before income taxes.

Risks and Risk Mitigants:

Fixed Annuity Risks and Risk Mitigants. The primary risk exposure of these fixed annuity products relates to investment risks we bear for providing customers a minimum guaranteed interest rate or an index-linked interest rate required to be credited to the customer’s account value, which include interest rate fluctuations and/or sustained periods of low interest rates, and credit risk related to the underlying investments. We manage these risk exposures primarily through our investment strategies and product design features, which include credit rate resetting subject to the minimum guaranteed interest rate, as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, a portion of our fixed annuity products has a market value adjustment provision that affords protection of lapse in the case of rising interest rates. We also manage these risk exposures through external reinsurance for certain of our fixed annuity products.

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Indexed Variable Annuity Risks and Risk Mitigants. The primary risk exposure of these indexed variable annuity products relates to the investment risks we bear in order to credit to the customer’s account balance the required crediting rate based on the performance of the elected indices at the end of each term. We manage this risk primarily through our investment strategies including derivatives and product design features, which include credit rate resetting subject to contractual minimums as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, our indexed variable annuity strategies have an interim value provision that provides protection from lapse in the case of rising interest rates.

Variable Annuity Risks and Risk Mitigants. 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 returns is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. Prudential Financial manages our exposure to certain risks driven by fluctuations in capital markets primarily through a combination of i) Product Design Features, and ii) our Asset Liability Management Strategy ("ALM"), as discussed below. The Company also manages these risk exposures through external reinsurance for certain of our variable annuity products. For additional information regarding our external reinsurance agreements, see Note 1 of the Consolidated Financial Statements. Sales of traditional variable annuities with guaranteed living benefit riders were discontinued as of December 31, 2020, and, in April 2022, the sale of a portion of our in force traditional variable annuity block was completed, as discussed in Note 1.

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 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 purchase payments, as well as a required minimum allocation to our general account for certain of our 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.

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

We employ an ALM strategy that utilizes a combination of both traditional fixed income instruments and derivatives to meet expected liabilities associated with our annuity guarantees. The MRB liability that we hedge consists of expected living and death benefit claims under various market conditions, which are managed using fixed income instruments, derivatives, or a combination thereof. For our Prudential Defined Income variable annuity, we utilize fixed income instruments to meet expected liabilities. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded and over-the-counter (“OTC”) equity, interest rate and credit derivatives, including, but not limited to: equity and treasury futures; total return, credit default and interest rate swaps; and options including equity options, swaptions, and floors and caps. The intent of this strategy is to more efficiently manage the capital and liquidity associated with these products while continuing to mitigate fluctuations in net income due to movements in capital markets. To achieve this, we periodically review and recalibrate the ALM strategy by optimizing the mix of derivatives and fixed income instruments to achieve expected outcomes.

Under our ALM strategy, we expect differences in the U.S. GAAP net income impact between the changes in value of the fixed income instruments (either designated as available-for-sale or designated as trading) and derivatives as compared to the changes in the MRB liability these assets support. These differences can be primarily attributed to two distinct areas:

•Different accounting treatment between liabilities and assets supporting those liabilities. Under U.S. GAAP, changes in the fair value of the derivative instruments and fixed income instruments designated as trading, and MRB, excluding the changes in the Company’s NPR spreads, are immediately reflected in net income, while changes in the fair value of fixed income instruments that are designated as available-for-sale are recorded as unrealized gains (losses) in other comprehensive income.

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•General hedge results. For the derivative portion of the ALM strategy, the net hedging impact (the extent to which the changes in value of the hedging instruments offset the change in value of the portion of the MRB we are hedging) may be impacted by a number of factors, including: cash flow timing differences between our hedging instruments and the corresponding portion of the MRB we are hedging, basis differences attributable to actual underlying contractholder funds to be hedged versus hedgeable indices, rebalancing costs related to dynamic rebalancing of hedging instruments as markets move, certain elements of the MRB that may not be hedged (including certain actuarial assumptions), and implied and realized market volatility on the hedge positions relative to the portion of the MRB we seek to hedge.

Income Taxes

For information regarding income taxes, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

Liquidity and Capital Resources

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 business, 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 business, 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 the Company on a daily basis and projects borrowing and capital needs over a multi-year time horizon. We use a Risk Appetite Framework ("RAF") to ensure that all risks taken by the Company align with our capacity and willingness to take those risks. The RAF provides a dynamic assessment of capital and liquidity stress impacts, including scenarios similar to, and more severe than, those occurring due to COVID-19, and is intended to ensure that sufficient resources are available to absorb those impacts. We believe that our capital and liquidity resources are sufficient to satisfy the capital and liquidity requirements of the Company.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include requirements (many of which are the subject of ongoing rule-making) relating to capital and liquidity management. 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, 2023.

Capital

We manage the Company to regulatory capital levels consistent with our "AA" ratings targets. We utilize the risk-based capital (“RBC”) ratio as a primary measure of capital adequacy. 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.

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, and credit quality migration of the investment portfolio, 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. For information regarding the NAIC’s August 2023 adoption of changes to the treatment of negative interest maintenance reserves, see “Regulatory Developments” above.

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, 2023, for a discussion of our use of captive reinsurance companies.

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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 ("Prudential Funding"), a wholly-owned subsidiary of Prudential Insurance, financing capacity on liquidity (as described below) is considered in the internal liquidity measures of the Company.

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.

The principal sources of the Company’s liquidity are premiums and certain annuity considerations, investment and fee income, investment maturities, sales of investments and 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 include commissions, general and administrative expenses, purchases of investments, the payment of dividends and returns of capital to the parent company, hedging and reinsurance activity and payments in connection with financing activities.

In managing liquidity, we consider the risk of policyholder and contractholder withdrawals of funds earlier than our assumptions when selecting assets to support these contractual obligations. We use surrender charges and other contract provisions to mitigate the extent, timing and profitability impact of withdrawals of funds by customers.

Liquid Assets

Liquid assets include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities, and fixed maturities that are not designated as held-to-maturity and public equity securities. As of June 30, 2024 and December 31, 2023, the Company had liquid assets of $38.1 billion and $32.3 billion, respectively. The portion of liquid assets comprised of cash and cash equivalents and short-term investments was $3.3 billion and $2.5 billion as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, $28.7 billion, or 92%, of the fixed maturity investments in the Company's general account portfolios, were rated high or highest quality based on NAIC or equivalent rating.

Prudential Funding, LLC

Prudential Financial and Prudential Funding borrow funds in the capital markets primarily through the direct issuance of commercial paper. The borrowings serve as an additional source of financing to meet our working capital needs. Prudential Funding operates under a support agreement with Prudential Insurance whereby Prudential Insurance has agreed to maintain Prudential Funding’s positive tangible net worth at all times.

Hedging activities associated with Annuities

For the portion of the risk management strategy executed through hedging, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives in order to hedge certain capital market risks related to more severe market conditions. This portion of our ALM strategy requires access to liquidity to meet payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior.

The hedging portion of our ALM strategy may also result in derivative-related collateral postings to (when we are in a net pay position) or from (when we are in a net receive position) counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs when we are in a net post position.

Term and Universal Life Reserve Financing

The Company uses captive reinsurance subsidiaries 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.

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As of June 30, 2024 the affiliated captive reinsurance companies have entered into agreements with external counterparties providing for the issuance of up to an aggregate of $11,250 million of surplus notes by our affiliated captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”), of which $8,780 million of surplus notes was outstanding, as compared to an aggregate issuance capacity of $15,700 million, of which $13,820 million was outstanding as of

December 31, 2023. 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.

As of June 30, 2024, our affiliated captive reinsurance companies had outstanding an aggregate of $2,600 million of debt issued for the purpose of financing Regulation XXX and Guideline AXXX non-economic reserves, of which approximately $700 million relates to Regulation XXX reserves and approximately $1,900 million relates to Guideline AXXX reserves. In addition, as of June 30, 2024, for purposes of financing Guideline AXXX reserves, one of our affiliated captives had approximately $3,982 million of surplus notes outstanding that were issued to affiliates.

The Company has introduced updated versions of its individual life products in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. These updated products are currently priced to support the principle-based statutory reserve level without the need for reserve financing.

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 15d-15(e), as of June 30, 2024. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2024, our disclosure controls and procedures were not effective due to the identification of the material weakness, as reported in the Company’s Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission on August 16, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on this definition, management has concluded that the material weakness reported previously continued to exist in the Company’s internal control over financial reporting as of June 30, 2024 as management's remediation plans have not yet been completed.

Material Weakness in Internal Control over Financial Reporting

As previously reported, the Company did not design and maintain effective controls over the completeness, accuracy, and timeliness of the review of the manual calculations and related adjustments for the Policyholder Account Balance liability for variable annuity products. This material weakness continued to exist as of June 30, 2024.

Remediation plan

Management's initial remediation plans to address the material weakness include, (i) enhanced communications across impacted stakeholders with respect to the set-up of new investment strategy funds, (ii) enhancements to the valuation model to eliminate the need for the manual adjustment in the short term, and (iii) review of the end-to-end process with enhancements to the current attribution review threshold. The material weakness cannot be considered remediated until after the applicable control operates for a sufficient period of time, and management has concluded, through testing, that the control is operating effectively.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting, as defined in Exchange Act Rule 15d-15(f), occurred during the quarter ended June 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 15 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, 2023. 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” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

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Item 6. Exhibits


EXHIBIT INDEX

31.1 Section 302 Certification of the Chief Executive Officer

31.2 Section 302 Certification of the Chief Financial Officer

32.1 Section 906 Certification of the Chief Executive Officer

32.2 Section 906 Certification of the Chief Financial Officer

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

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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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/ Elizabeth Dietrich
Name:						Elizabeth Dietrich
						Vice President, Chief Financial Officer and Chief Accounting Officer
						(Authorized Signatory and Principal Financial Officer)

Date: August 16, 2024