SEC Filing | American International Group, Inc.

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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 March 31, 2022

☐ 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 1-8787

American International Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-2592361
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1271 Avenue of the Americas, New York, New York	10020
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 770-7000

________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $2.50 Per Share	AIG	New York Stock Exchange
5.75% Series A-2 Junior Subordinated Debentures	AIG 67BP	New York Stock Exchange
4.875% Series A-3 Junior Subordinated Debentures	AIG 67EU	New York Stock Exchange
Stock Purchase Rights		New York Stock Exchange
Depositary Shares Each Representing a 1/1,000th Interest in a Share of Series A 5.85% Non-Cumulative Perpetual Preferred Stock	AIG PRA	New York Stock Exchange

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

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

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

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 April 26, 2022, there were 792,191,972 shares outstanding of the registrant’s common stock.

AMERICAN INTERNATIONAL GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED

March 31, 2022

Table of Contents

FORM 10-Q
Item Number	Description		Page
Part I – Financial Information
ITEM 1	Financial Statements		2
	Note 1.	Basis of Presentation	8
	Note 2.	Summary of Significant Accounting Policies	10
	Note 3.	Segment Information	12
	Note 4.	Fair Value Measurements	14
	Note 5.	Investments	28
	Note 6.	Lending Activities	36
	Note 7.	Reinsurance	39
	Note 8.	Variable Interest Entities	41
	Note 9.	Derivatives and Hedge Accounting	43
	Note 10.	Insurance Liabilities	47
	Note 11.	Contingencies, Commitments and Guarantees	49
	Note 12.	Equity	51
	Note 13.	Earnings Per Common Share (EPS)	55
	Note 14.	Employee Benefits	56
	Note 15.	Income Taxes	57
	Note 16.	Subsequent Events	60
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		61
	 Cautionary Statement Regarding Forward-Looking Information		61
	 Use of Non-GAAP Measures		64
	 Critical Accounting Estimates		66
	 Executive Summary		67
	 Consolidated Results of Operations		74
	 Business Segment Operations		78
	 Investments		104
	 Insurance Reserves		114
	 Liquidity and Capital Resources		123
	 Enterprise Risk Management		132
	 Regulatory Environment		133
	 Glossary		134
	 Acronyms		137
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk		138
ITEM 4	Controls and Procedures		138
Part II – Other Information
ITEM 1	Legal Proceedings		139
ITEM 1A	Risk Factors		139
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds		139
ITEM 4	Mine Safety Disclosures		139
ITEM 6	Exhibits		140
Signatures			141

1 AIG | First Quarter 2022 Form 10-Q

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Part I – Financial Information

Item 1. | Financial Statements

American International Group, Inc.

Condensed Consolidated Balance Sheets (unaudited)

	March 31,		December 31,
(in millions, except for share data)		2022		2021
Assets:
Investments:
Fixed maturity securities:
Bonds available for sale, at fair value, net of allowance for credit losses of $191 in 2022 and $98 in 2021
(amortized cost: 2022 - $259,480; 2021 - $259,210)^*	$	257,219	$	277,202
Other bond securities, at fair value (See Note 5)^*		6,582		6,278
Equity securities, at fair value (See Note 5)^*		695		739
Mortgage and other loans receivable, net of allowance for credit losses of $617 in 2022 and $629 in 2021^*		47,470		46,048
Other invested assets (portion measured at fair value: 2022 - $11,687; 2021 - $10,504)^*		16,186		15,668
Short-term investments, including restricted cash of $152 in 2022 and $197 in 2021
(portion measured at fair value: 2022 - $3,430; 2021 - $4,426)^*		9,718		13,357
Total investments		337,870		359,292

Cash^*		2,537		2,198
Accrued investment income^*		2,272		2,239
Premiums and other receivables, net of allowance for credit losses and disputes of $184 in 2022 and $185 in 2021		14,827		12,409
Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes of $0 in 2022 and $0 in 2021		33,276		33,365
Reinsurance assets - other, net of allowance for credit losses and disputes of $342 in 2022 and $333 in 2021		42,326		40,919
Deferred income taxes		13,435		11,714
Deferred policy acquisition costs		12,915		10,514
Other assets, net of allowance for credit losses of $49 in 2022 and $49 in 2021, including restricted cash of $40 in 2022
and $32 in 2021 (portion measured at fair value: 2022 - $764; 2021 - $957)^*		13,205		14,351
Separate account assets, at fair value		100,850		109,111
Total assets	$	573,513	$	596,112
Liabilities:
Liability for unpaid losses and loss adjustment expenses, including allowance for credit losses of $14 in 2022 and $14 in 2021	$	78,183	$	79,026
Unearned premiums		21,764		19,313
Future policy benefits for life and accident and health insurance contracts		58,650		59,950
Policyholder contract deposits (portion measured at fair value: 2022 - $8,080; 2021 - $9,736)		156,476		156,686
Other policyholder funds		3,768		3,476
Fortitude Re funds withheld payable (portion measured at fair value: 2022 - $2,206; 2021 - $5,922)		36,481		40,771
Other liabilities (portion measured at fair value: 2022 - $396; 2021 - $586)^*		29,300		28,704
Long-term debt (portion measured at fair value: 2022 - $1,782; 2021 - $1,871)		23,572		23,741
Debt of consolidated investment entities^*		6,366		6,422
Separate account liabilities		100,850		109,111
Total liabilities		515,410		527,200
Contingencies, commitments and guarantees (See Note 11)		nil		nil

AIG shareholders’ equity:
Series A non-cumulative preferred stock and additional paid in capital, $5.00 par value; 100,000,000 shares
authorized; shares issued: 2022 - 20,000 and 2021 - 20,000; liquidation preference $500		485		485
Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued: 2022 - 1,906,671,492 and
2021 - 1,906,671,492		4,766		4,766
Treasury stock, at cost; 2022 - 1,106,447,402 shares; 2021 - 1,087,984,129 shares of common stock		(52,791)		(51,618)
Additional paid-in capital		81,620		81,851
Retained earnings		27,764		23,785
Accumulated other comprehensive income (loss)		(5,900)		6,687
Total AIG shareholders’ equity		55,944		65,956
Non-redeemable noncontrolling interests		2,159		2,956
Total equity		58,103		68,912
Total liabilities and equity	$	573,513	$	596,112

* See Note 8 for details of balances associated with variable interest entities.

See accompanying Notes to Condensed Consolidated Financial Statements.

AIG | First Quarter 2022 Form 10-Q 2

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American International Group, Inc.

Condensed Consolidated Statements of Income (Loss) (unaudited)

	Three Months Ended March 31,
(dollars in millions, except per common share data)		2022		2021
Revenues:
Premiums	$	7,110	$	6,507
Policy fees		764		784
Net investment income:
Net investment income - excluding Fortitude Re funds withheld assets		2,946		3,171
Net investment income - Fortitude Re funds withheld assets		291		486
Total net investment income		3,237		3,657
Net realized gains:
Net realized gains - excluding Fortitude Re funds withheld
assets and embedded derivative		1,241		695
Net realized gains (losses) on Fortitude Re funds withheld assets		(140)		173
Net realized gains on Fortitude Re funds withheld embedded derivative		3,318		2,382
Total net realized gains		4,419		3,250
Other income		278		256
Total revenues		15,808		14,454
Benefits, losses and expenses:
Policyholder benefits and losses incurred		5,255		5,139
Interest credited to policyholder account balances		877		868
Amortization of deferred policy acquisition costs		1,437		1,304
General operating and other expenses		2,181		2,088
Interest expense		263		342
Gain on extinguishment of debt		-		(8)
Net gain on divestitures		(40)		(7)
Total benefits, losses and expenses		9,973		9,726
Income from continuing operations before income tax expense		5,835		4,728
Income tax expense		1,179		798
Income from continuing operations		4,656		3,930
Income (loss) from discontinued operations, net of income taxes		-		-
Net income		4,656		3,930
Less:
Net income from continuing operations attributable to noncontrolling interests		396		54
Net income attributable to AIG		4,260		3,876
Less: Dividends on preferred stock		7		7
Net income attributable to AIG common shareholders	$	4,253	$	3,869

Income per common share attributable to AIG common shareholders:
Basic:
Income from continuing operations	$	5.21	$	4.45
Income from discontinued operations	$	-	$	-
Net income attributable to AIG common shareholders	$	5.21	$	4.45
Diluted:
Income from continuing operations	$	5.15	$	4.41
Income from discontinued operations	$	-	$	-
Net income attributable to AIG common shareholders	$	5.15	$	4.41
Weighted average shares outstanding:
Basic		816,314,273		868,105,069
Diluted		826,012,610		876,269,924

See accompanying Notes to Condensed Consolidated Financial Statements.

3 AIG | First Quarter 2022 Form 10-Q

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American International Group, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

	Three Months Ended March 31,
(in millions)		2022		2021
Net income (loss)	$	4,656	$	3,930
Other comprehensive income (loss), net of tax
Change in unrealized appreciation (depreciation) of fixed maturity securities on which
allowance for credit losses was taken		(45)		33
Change in unrealized depreciation of all other investments		(13,607)		(7,199)
Change in foreign currency translation adjustments		(5)		125
Change in retirement plan liabilities adjustment		9		(3)
Change in fair value of liabilities under fair value option attributable to changes in own credit risk		-		(1)
Other comprehensive loss		(13,648)		(7,045)
Comprehensive loss		(8,992)		(3,115)
Comprehensive income (loss) attributable to noncontrolling interests		(665)		54
Comprehensive loss attributable to AIG	$	(8,327)	$	(3,169)

See accompanying Notes to Condensed Consolidated Financial Statements.

AIG | First Quarter 2022 Form 10-Q 4

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American International Group, Inc.

Condensed Consolidated Statements of Equity (unaudited)

		Preferred														Non-
	Stock and											Accumulated		Total AIG		redeemable
	Additional							Additional				Other		Share-		Non-
		Paid-in		Common		Treasury		Paid-in		Retained	Comprehensive			holders'		controlling		Total
(in millions)		Capital		Stock		Stock		Capital		Earnings	Income (Loss)			Equity		Interests		Equity
Three Months Ended March 31, 2022
Balance, beginning of year	$	485	$	4,766	$	(51,618)	$	81,851	$	23,785	$	6,687	$	65,956	$	2,956	$	68,912
Common stock issued under stock plans		-		-		230		(320)		-		-		(90)		-		(90)
Purchase of common stock		-		-		(1,403)		-		-		-		(1,403)		-		(1,403)
Net income attributable to AIG or
noncontrolling interests		-		-		-		-		4,260		-		4,260		396		4,656
Dividends on preferred stock		-		-		-		-		(7)		-		(7)		-		(7)
Dividends on common stock		-		-		-		-		(258)		-		(258)		-		(258)
Other comprehensive loss		-		-		-		-		-		(12,587)		(12,587)		(1,061)		(13,648)
Net increase (decrease) due to divestitures
and acquisitions		-		-		-		-		-		-		-		-		-
Contributions from noncontrolling interests		-		-		-		-		-		-		-		-		-
Distributions to noncontrolling interests		-		-		-		-		-		-		-		(132)		(132)
Other		-		-		-		89		(16)		-		73		-		73
Balance, end of period	$	485	$	4,766	$	(52,791)	$	81,620	$	27,764	$	(5,900)	$	55,944	$	2,159	$	58,103

Three Months Ended March 31, 2021
Balance, beginning of year	$	485	$	4,766	$	(49,322)	$	81,418	$	15,504	$	13,511	$	66,362	$	837	$	67,199
Common stock issued under stock plans		-		-		171		(255)		-		-		(84)		-		(84)
Purchase of common stock		-		-		(362)		-		-		-		(362)		-		(362)
Net income attributable to AIG or
noncontrolling interests		-		-		-		-		3,876		-		3,876		54		3,930
Dividends on preferred stock		-		-		-		-		(7)		-		(7)		-		(7)
Dividends on common stock		-		-		-		-		(276)		-		(276)		-		(276)
Other comprehensive loss		-		-		-		-		-		(7,045)		(7,045)		-		(7,045)
Net increase due to divestitures
and acquisitions		-		-		-		-		-		-		-		75		75
Contributions from noncontrolling interests		-		-		-		-		-		-		-		5		5
Distributions to noncontrolling interests		-		-		-		-		-		-		-		(90)		(90)
Other		-		-		101		90		24		-		215		-		215
Balance, end of period	$	485	$	4,766	$	(49,412)	$	81,253	$	19,121	$	6,466	$	62,679	$	881	$	63,560

See accompanying Notes to Condensed Consolidated Financial Statements.

5 AIG | First Quarter 2022 Form 10-Q

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American International Group, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three Months Ended March 31,
(in millions)		2022		2021
Cash flows from operating activities:
Net income	$	4,656	$	3,930
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Net (gains) losses on sales of securities available for sale and other assets		165		(417)
Net gain on divestitures		(40)		(7)
Gains on extinguishment of debt		-		(8)
Unrealized gains in earnings - net		(2,006)		(853)
Equity in (income) loss from equity method investments, net of dividends or distributions		(91)		3
Depreciation and other amortization		1,447		1,423
Impairments of assets		-		6
Changes in operating assets and liabilities:
Insurance reserves		1,734		3,628
Premiums and other receivables and payables - net		(4,164)		(2,863)
Reinsurance assets, net		(1,223)		(2,879)
Capitalization of deferred policy acquisition costs		(1,386)		(1,422)
Current and deferred income taxes - net		1,123		756
Other, net		(158)		(657)
Total adjustments		(4,599)		(3,290)
Net cash provided by operating activities		57		640
Cash flows from investing activities:
Proceeds from (payments for)
Sales or distributions of:
Available for sale securities		6,097		6,200
Other securities		411		248
Other invested assets		795		1,147
Maturities of fixed maturity securities available for sale		5,674		7,823
Principal payments received on and sales of mortgage and other loans receivable		1,921		2,009
Purchases of:
Available for sale securities		(12,263)		(15,329)
Other securities		(1,061)		(64)
Other invested assets		(674)		(649)
Mortgage and other loans receivable		(3,515)		(1,997)
Net change in short-term investments		3,645		4,067
Other, net		(177)		(1,950)
Net cash provided by investing activities		853		1,505
Cash flows from financing activities:
Proceeds from (payments for)
Policyholder contract deposits		6,392		5,716
Policyholder contract withdrawals		(4,802)		(5,190)
Issuance of long-term debt		11		27
Issuance of debt of consolidated investment entities		697		495
Repayments of long-term debt		(7)		(1,515)
Repayments of debt of consolidated investment entities		(737)		(900)
Purchase of common stock		(1,394)		(362)
Dividends paid on preferred stock		(7)		(7)
Dividends paid on common stock		(258)		(276)
Other, net		(490)		(102)
Net cash used in financing activities		(595)		(2,114)
Effect of exchange rate changes on cash and restricted cash		(13)		(17)
Net increase in cash and restricted cash		302		14
Cash and restricted cash at beginning of year		2,427		3,230
Cash and restricted cash at end of period	$	2,729	$	3,244

AIG | First Quarter 2022 Form 10-Q 6

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American International Group, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)(continued)

Supplementary Disclosure of Condensed Consolidated Cash Flow Information

	Three Months Ended March 31,
(in millions)		2022		2021
Cash	$	2,537	$	2,796
Restricted cash included in Short-term investments^*		152		210
Restricted cash included in Other assets^*		40		238
Total cash and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	2,729	$	3,244


Cash paid during the period for:
Interest	$	243	$	255
Taxes	$	56	$	42
Non-cash investing activities:
Fixed maturity securities received in connection with reinsurance transactions	$	2	$	161
Fixed maturity securities transferred in connection with reinsurance transactions	$	(204)	$	(194)
Non-cash financing activities:
Interest credited to policyholder contract deposits included in financing activities	$	835	$	860
Fee income debited to policyholder contract deposits included in financing activities	$	(420)	$	(423)

* Includes funds held for tax sharing payments to AIG Parent, security deposits, and replacement reserve deposits related to real estate.

See accompanying Notes to Condensed Consolidated Financial Statements.

7 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 1. Basis of Presentation

1. Basis of Presentation

American International Group, Inc. (AIG) is a leading global insurance organization serving customers in approximately 70 countries and jurisdictions. AIG companies serve commercial and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG Common Stock, par value $2.50 per share (AIG Common Stock), is listed on the New York Stock Exchange (NYSE: AIG). Unless the context indicates otherwise, the terms “AIG,” “we,” “us” “our” or “the Company” mean American International Group, Inc. and its consolidated subsidiaries and the term “AIG Parent” means American International Group, Inc. and not any of its consolidated subsidiaries.

These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) and should be read in conjunction with the audited Consolidated Financial Statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the 2021 Annual Report). The condensed consolidated financial information as of December 31, 2021 included herein has been derived from the audited Consolidated Financial Statements in the 2021 Annual Report.

Certain of our foreign subsidiaries included in the Condensed Consolidated Financial Statements report on the basis of a fiscal year ending November 30. The effect on our consolidated financial condition and results of operations of all material events occurring at these subsidiaries through the date of each of the periods presented in these Condensed Consolidated Financial Statements has been considered for adjustment and/or disclosure. In the opinion of management, these Condensed Consolidated Financial Statements contain normal recurring adjustments, including eliminations of material intercompany accounts and transactions, necessary for a fair statement of the results presented herein. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

We evaluated the need to recognize or disclose events that occurred subsequent to March 31, 2022 and prior to the issuance of these Condensed Consolidated Financial Statements.

Sales/disposals of ASSETS AND Businesses

Separation of Life and Retirement Business and Relationship with Blackstone Inc.

On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. On November 2, 2021, AIG and Blackstone Inc. (Blackstone) completed the acquisition by Blackstone of a 9.9 percent equity stake in Corebridge Financial, Inc., formerly known as SAFG Retirement Services, Inc. (Corebridge), which is the holding company for AIG’s Life and Retirement business, for $2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. This resulted in a $629 million decrease to AIG’s shareholders’ equity in the fourth quarter of 2021. As part of the separation, most of AIG’s investment operations were transferred to Corebridge or its subsidiaries as of December 31, 2021, and AIG entered into a long-term asset management relationship with Blackstone to manage an initial $50 billion of Life and Retirement’s existing investment portfolio beginning in the fourth quarter of 2021, with that amount increasing by increments of $8.5 billion per year for five years beginning in the fourth quarter of 2022, for an aggregate of $92.5 billion. In addition, Blackstone designated one member of the Board of Directors of Corebridge, which currently consists of 11 directors. Pursuant to the definitive agreement, Blackstone will be required to hold its ownership interest in Corebridge following the completion of the separation of the Life and Retirement business, subject to exceptions permitting Blackstone to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the initial public offering of Corebridge (the IPO), with the transfer restrictions terminating in full on the fifth anniversary of the IPO. In the event that the IPO of Corebridge is not completed prior to November 2, 2023, Blackstone will have the right to require AIG to undertake the IPO, and in the event that the IPO has not been completed prior to November 2, 2024, Blackstone will have the right to exchange all or a portion of its ownership interest in Corebridge for shares of AIG’s common stock on the terms set forth in the definitive agreement. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of

AIG | First Quarter 2022 Form 10-Q 8

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 1. Basis of Presentation

Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission.

On December 15, 2021, AIG and Blackstone Real Estate Income Trust (BREIT), a long-term, perpetual capital vehicle affiliated with Blackstone, completed the acquisition by BREIT of AIG’s interests in a U.S. affordable housing portfolio for $4.9 billion, in an all cash transaction, resulting in a pre-tax gain of $3.0 billion. The historical results of the U.S. affordable housing portfolio were reported in our Life and Retirement operating segments.

For additional information regarding the debt issuance of Corebridge, see Note 16.

Sale of Certain AIG Life and Retirement Retail Mutual Funds Business

On February 8, 2021, AIG announced the execution of a definitive agreement with Touchstone Investments (Touchstone), an indirect wholly-owned subsidiary of Western & Southern Financial Group, to sell certain assets of Life and Retirement’s Retail Mutual Funds business. This sale consisted of the reorganization of twelve of the retail mutual funds managed by SunAmerica Asset Management, LLC (SAAMCo), a Life and Retirement entity, into certain Touchstone funds and was subject to certain conditions, including approval of the fund reorganizations by the retail mutual fund boards of directors/trustees and fund shareholders. The transaction closed on July 16, 2021, at which time we received initial proceeds and the twelve retail mutual funds managed by SAAMCo, with $6.8 billion in assets, were reorganized into Touchstone funds. Additional consideration may be earned over a three-year period based on asset levels in certain reorganized funds. Six retail mutual funds managed by SAAMCo and not included in the transaction were liquidated. We will retain our fund management platform and capabilities dedicated to our variable annuity insurance products.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires the application of accounting policies that often involve a significant degree of judgment. Accounting policies that we believe are most dependent on the application of estimates and assumptions are considered our critical accounting estimates and are related to the determination of:

 loss reserves;

 future policy benefit reserves for life and accident and health insurance contracts;

 liabilities for guaranteed benefit features of variable annuity, fixed annuity and fixed index annuity products;

 embedded derivative liabilities for fixed index annuity and life products;

 estimated gross profits to value deferred acquisition costs and unearned revenue for investment-oriented products;

 reinsurance assets, including the allowance for credit losses and disputes;

 goodwill impairment;

 allowance for credit losses on certain investments, primarily on loans and available for sale fixed maturity securities;

 legal contingencies;

 fair value measurements of certain financial assets and financial liabilities; and

 income taxes, in particular the recoverability of our deferred tax asset and establishment of provisions for uncertain tax positions.

These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial condition, results of operations and cash flows could be materially affected.

9 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 2. Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Accounting Standards Adopted

Reference Rate Reform

On March 12, 2020, the FASB issued an accounting standard that provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The standard allows us to account for certain contract modifications that result from the discontinuation of the London Inter-Bank Offered Rate (LIBOR) or another reference rate as a continuation of the existing contract without additional analysis. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur.

Where permitted by the guidance, we have accounted for contract modifications stemming from the discontinuation of LIBOR or another reference rate as a continuation of the existing contract. As part of our implementation efforts, we have and will continue to assess our operational readiness and current and alternative reference rates’ merits, limitations, risks and suitability for our investment and insurance processes. The adoption of the standard has not had, and is not expected to have, a material impact on our reported consolidated financial condition, results of operations, cash flows and required disclosures.

Future Application of Accounting Standards

Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB issued an accounting standard update with the objective of making targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity.

The Company will adopt the standard on January 1, 2023. We continue to evaluate and expect the adoption of this standard will impact our financial condition, results of operations, statement of cash flows and disclosures, as well as systems, processes and controls.

The Company will adopt the standard using the modified retrospective transition method relating to liabilities for traditional and limited payment contracts and deferred policy acquisition costs associated therewith. The Company will adopt the standard in relation to market risk benefits (MRBs) on a retrospective basis. Based upon this transition method, the Company currently estimates that the January 1, 2021 transition date (Transition Date) impact from adoption is likely to result in a decrease in AIG’s equity between approximately $1.0 billion and $3.0 billion in AIG’s Life and Retirement business. The most significant drivers of the transition adjustment are expected to be (1) changes related to market risk benefits in our Individual Retirement and Group Retirement segments, including the impact of non-performance adjustments (2) changes to the discount rate which will most significantly impact our Life Insurance and Institutional Markets segments and (3) the removal of balances recorded in accumulated other comprehensive income (loss) (AOCI) related to changes in unrealized appreciation (depreciation) on investments.

Market risk benefits: The standard requires the measurement of all MRBs associated with deposit (or account balance) contracts at fair value at each reporting period. Changes in fair value compared to prior periods will be recorded and presented separately within the income statement, with the exception of instrument-specific credit risk changes (non-performance adjustments), which will be recognized in other comprehensive income. MRBs will impact both retained earnings and AOCI upon transition.

As MRBs are required to be accounted for at fair value, the quarterly valuation of these items will result in variability and volatility in the Company’s results following adoption.

Discount rate assumption: The standard requires the discount rate assumption for the liability for future policy benefits to be updated at the end of each reporting period using an upper-medium grade (low credit risk) fixed income instrument yield that maximizes the use of observable market inputs. Upon transition, the Company currently estimates an adjustment to AOCI due to the fact that the market upper-medium grade (low credit risk) interest rates as of the Transition Date differ from reserve interest accretion rates. Lower interest rates result in a higher liability for future policy benefits, and are anticipated to more significantly impact our Life Insurance and Institutional Markets segments.

Following adoption, the impact of changes to discount rates will be recognized through other comprehensive income. Changes resulting from unlocking the discount rate each reporting period will primarily impact term life insurance and other traditional life insurance products, as well as pension risk transfer and structured settlement products.

AIG | First Quarter 2022 Form 10-Q 10

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 2. Summary of Significant Accounting Policies

Removal of balances related to changes in unrealized appreciation (depreciation) on investments: Under the standard, the majority of balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments will be eliminated.

In addition to the above, the standard also:

 Requires the review and if necessary, update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted above) in the income statement.

 Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test.

 Increased disclosures of disaggregated roll-forwards of several balances, including: liabilities for future policy benefits, deferred acquisition costs, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes.

We expect that the accounting for Fortitude Reinsurance Company Ltd. (Fortitude Re) will continue to remain largely unchanged. With respect to Fortitude Re, the reinsurance assets, including the discount rates, will continue to be calculated using the same methodology and assumptions as the direct policies. Accounting for modified coinsurance (modco) remains unchanged.

The Company has created a governance framework and a plan to support implementation of the updated standard. As part of its implementation plan, the Company has also advanced the modernization of its actuarial technology platform to enhance its modeling, data management, experience study and analytical capabilities, increase the end-to-end automation of key reporting and analytical processes and optimize its control framework. The Company has designed and begun implementation and testing of internal controls related to the new processes created as part of implementing the updated standard and will continue to refine these internal controls until the formal implementation in the first quarter of 2023.

Troubled Debt Restructuring and Vintage Disclosures

In March 2022, the FASB issued an accounting standard update that eliminates the accounting guidance for troubled debt restructurings for creditors and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The standard also updates the requirements for accounting for credit losses by adding enhanced disclosures for creditors related to loan refinancings and restructurings for borrowers experiencing financial difficulty. Because the Company has already adopted the current expected credit loss (CECL) model, the amendments in this standard are effective for fiscal years beginning after December 15, 2022, including interim periods within those years. We are assessing the impact of this standard.

11 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 3. Segment Information

3. Segment Information

We report our results of operations consistent with the manner in which our chief operating decision makers review the business to assess performance and allocate resources, as follows:

General Insurance

General Insurance business is presented as two operating segments:

 North America – consists of insurance businesses in the United States, Canada and Bermuda, and our global reinsurance business, AIG Re.

 International – consists of regional insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China. International also includes the results of Talbot Holdings, Ltd. as well as AIG’s Global Specialty business.

North America and International operating segments consist of the following products:

–Commercial Lines – consists of Property, Liability, Financial Lines, and Specialty.

–Personal Insurance – consists of Accident & Health and Personal Lines.

Life and Retirement

Life and Retirement business is presented as four operating segments:

 Individual Retirement – consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds.

 Group Retirement – consists of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered to employer-defined contribution plan participants, along with proprietary and non-proprietary annuities and advisory and brokerage products offered outside of plans.

 Life Insurance – primary products in the U.S. include term life and universal life insurance. International operations primarily include distribution of life and health products in the UK and Ireland.

 Institutional Markets – consists of stable value wrap products, structured settlement and pension risk transfer annuities, corporate- and bank-owned life insurance, high net worth products and guaranteed investment contracts (GICs).

For additional information on the Life and Retirement business, see Note 1.

Other Operations

Other Operations primarily consists of income from assets held by AIG Parent and other corporate subsidiaries, deferred tax assets related to tax attributes, corporate expenses and intercompany eliminations, our institutional asset management business and results of our consolidated investment entities, General Insurance portfolios in run-off as well as the historical results of our legacy insurance lines ceded to Fortitude Re.

We evaluate segment performance based on adjusted revenues and adjusted pre-tax income (loss). Adjusted revenues and adjusted pre-tax income (loss) are derived by excluding certain items from total revenues and net income (loss) attributable to AIG, respectively. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. Legal entities are attributed to each segment based upon the predominance of activity in that legal entity. For the items excluded from adjusted revenues and adjusted pre-tax income (loss) see the table below.

AIG | First Quarter 2022 Form 10-Q 12

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 3. Segment Information

The following table presents AIG’s continuing operations by operating segment:

Three Months Ended March 31,	2022					2021
				Adjusted					Adjusted
		Adjusted		Pre-tax			Adjusted		Pre-tax
(in millions)		Revenues		Income (Loss)			Revenues		Income (Loss)
General Insurance
North America	$	2,789	$	256	^(a)	$	2,388	$	(202)	^(a)
International		3,467		190	^(a)		3,478		275	^(a)
Net investment income		765		765			772		772
Total General Insurance		7,021		1,211			6,638		845
Life and Retirement
Individual Retirement		1,385		384			1,477		532
Group Retirement		744		225			806		307
Life Insurance		1,287		(9)			1,333		(40)
Institutional Markets		549		124			364		142
Total Life and Retirement		3,965		724			3,980		941
Other Operations
Other Operations before consolidation and eliminations		294		(288)			324		(354)
Consolidation and eliminations		(136)		(133)			(180)		(176)
Total Other Operations		158		(421)			144		(530)
Total		11,144		1,514			10,762		1,256
Reconciling items:
Changes in fair value of securities used to hedge guaranteed living benefits		14		13			18		22
Changes in benefit reserves and DAC, VOBA and DSI related to net realized
gains (losses)		-		(273)			-		(203)
Changes in the fair value of equity securities		(27)		(27)			22		22
Other income (expense) - net		(7)		-			(6)		-
Gain on extinguishment of debt		-		-			-		8
Net investment income on Fortitude Re funds withheld assets		291		291			486		486
Net realized gains (losses) on Fortitude Re funds withheld assets		(140)		(140)			173		173
Net realized gains on Fortitude Re funds withheld
embedded derivative		3,318		3,318			2,382		2,382
Net realized gains^(b)		1,181		1,188			617		627
Net gain on divestitures		-		40			-		7
Non-operating litigation reserves and settlements		34		34			-		-
Favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		-			-		19
Net loss reserve discount benefit		-		20			-		32
Integration and transaction costs associated with acquiring or divesting
businesses		-		(46)			-		(9)
Restructuring and other costs		-		(93)			-		(74)
Non-recurring costs related to regulatory or accounting changes		-		(4)			-		(20)
Revenues and pre-tax income	$	15,808	$	5,835		$	14,454	$	4,728

(a) General Insurance North America’s and General Insurance International’s Adjusted pre-tax income does not include Net investment income as the investment portfolio results are managed at the General Insurance level. Net investment income is shown separately as a component of General Insurance’s total Adjusted pre-tax income results.

(b) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets).

13 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

4. Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs:

 Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments.

 Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

 Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

AIG | First Quarter 2022 Form 10-Q 14

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

March 31, 2022							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting^(a)	Collateral			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	8	$	7,859	$	-	$	-	$	-	$	7,867
Obligations of states, municipalities and political subdivisions		-		12,426		1,087		-		-		13,513
Non-U.S. governments		112		14,862		8		-		-		14,982
Corporate debt		-		158,884		2,744		-		-		161,628
RMBS		-		15,610		8,925		-		-		24,535
CMBS		-		14,236		864		-		-		15,100
CDO/ABS		-		7,818		11,776		-		-		19,594
Total bonds available for sale		120		231,695		25,404		-		-		257,219
Other bond securities:
U.S. government and government sponsored entities		-		1,689		-		-		-		1,689
Obligations of states, municipalities and political subdivisions		-		98		-		-		-		98
Non-U.S. governments		-		85		-		-		-		85
Corporate debt		-		1,081		260		-		-		1,341
RMBS		-		113		199		-		-		312
CMBS		-		284		33		-		-		317
CDO/ABS		-		272		2,468		-		-		2,740
Total other bond securities		-		3,622		2,960		-		-		6,582
Equity securities		639		50		6		-		-		695
Other invested assets^(b)		-		145		1,935		-		-		2,080
Derivative assets^(c):
Interest rate contracts		1		3,998		4		-		-		4,003
Foreign exchange contracts		-		1,404		-		-		-		1,404
Equity contracts		31		182		190		-		-		403
Commodity contracts		-		3		-		-		-		3
Credit contracts		-		-		1		-		-		1
Other contracts		-		-		14		-		-		14
Counterparty netting and cash collateral		-		-		-		(3,295)		(1,877)		(5,172)
Total derivative assets		32		5,587		209		(3,295)		(1,877)		656
Short-term investments		2,140		1,290		-		-		-		3,430
Other assets		-		-		108		-		-		108
Separate account assets		97,083		3,767		-		-		-		100,850
Total	$	100,014	$	246,156	$	30,622	$	(3,295)	$	(1,877)	$	371,620
Liabilities:
Policyholder contract deposits	$	-	$	50	$	8,030	$	-	$	-	$	8,080
Derivative liabilities^(c):
Interest rate contracts		2		4,402		-		-		-		4,404
Foreign exchange contracts		-		665		-		-		-		665
Equity contracts		7		36		12		-		-		55
Credit contracts		-		13		32		-		-		45
Counterparty netting and cash collateral		-		-		-		(3,295)		(1,478)		(4,773)
Total derivative liabilities		9		5,116		44		(3,295)		(1,478)		396
Fortitude Re funds withheld payable		-		-		2,206		-		-		2,206
Long-term debt		-		1,782		-		-		-		1,782
Total	$	9	$	6,948	$	10,280	$	(3,295)	$	(1,478)	$	12,464

15 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

December 31, 2021							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting^(a)		Collateral		Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	2,553	$	5,641	$	-	$	-	$	-	$	8,194
Obligations of states, municipalities and political subdivisions		-		13,096		1,431		-		-		14,527
Non-U.S. governments		9		16,314		7		-		-		16,330
Corporate debt		-		172,967		2,641		-		-		175,608
RMBS		-		16,909		10,378		-		-		27,287
CMBS		-		14,619		1,190		-		-		15,809
CDO/ABS		-		8,232		11,215		-		-		19,447
Total bonds available for sale		2,562		247,778		26,862		-		-		277,202
Other bond securities:
U.S. government and government sponsored entities		-		1,750		-		-		-		1,750
Obligations of states, municipalities and political subdivisions		-		97		-		-		-		97
Non-U.S. governments		-		76		-		-		-		76
Corporate debt		-		916		134		-		-		1,050
RMBS		-		215		196		-		-		411
CMBS		-		280		35		-		-		315
CDO/ABS		-		247		2,332		-		-		2,579
Total other bond securities		-		3,581		2,697		-		-		6,278
Equity securities		669		64		6		-		-		739
Other invested assets^(b)		-		138		1,948		-		-		2,086
Derivative assets^(c):
Interest rate contracts		-		3,873		-		-		-		3,873
Foreign exchange contracts		-		1,188		1		-		-		1,189
Equity contracts		7		224		450		-		-		681
Commodity contracts		-		4		-		-		-		4
Credit contracts		-		-		1		-		-		1
Other contracts		-		-		13		-		-		13
Counterparty netting and cash collateral		-		-		-		(2,779)		(2,139)		(4,918)
Total derivative assets		7		5,289		465		(2,779)		(2,139)		843
Short-term investments		2,584		1,842		-		-		-		4,426
Other assets		-		-		114		-		-		114
Separate account assets		105,221		3,890		-		-		-		109,111
Total	$	111,043	$	262,582	$	32,092	$	(2,779)	$	(2,139)	$	400,799
Liabilities:
Policyholder contract deposits	$	-	$	54	$	9,682	$	-	$	-	$	9,736
Derivative liabilities^(c):
Interest rate contracts		1		3,632		-		-		-		3,633
Foreign exchange contracts		-		721		-		-		-		721
Equity contracts		1		46		6		-		-		53
Credit contracts		-		16		31		-		-		47
Counterparty netting and cash collateral		-		-		-		(2,779)		(1,089)		(3,868)
Total derivative liabilities		2		4,415		37		(2,779)		(1,089)		586
Fortitude Re funds withheld payable		-		-		5,922		-		-		5,922
Long-term debt		-		1,871		-		-		-		1,871
Total	$	2	$	6,340	$	15,641	$	(2,779)	$	(1,089)	$	18,115

(a)Represents netting of derivative exposures covered by qualifying master netting agreements.

(b) Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $9.5 billion and $8.4 billion as of March 31, 2022 and December 31, 2021, respectively.

AIG | First Quarter 2022 Form 10-Q 16

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Changes in Level 3 Recurring Fair Value Measurements

The following tables present changes during the three-month periods ended March 31, 2022 and 2021 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the Condensed Consolidated Balance Sheets at March 31, 2022 and 2021:

				Net																Changes in
				Realized																Unrealized Gains
				and				Purchases,										Changes in		(Losses) Included in
				Unrealized				Sales,										Unrealized Gains		Other Comprehensive
				Gains				Issuances										(Losses) Included		Income (Loss) for
		Fair Value		(Losses)		Other		and		Gross		Gross			Fair Value			in Income on		Recurring Level 3
		Beginning		Included	Comprehensive		Settlements,		Transfers		Transfers					End		Instruments Held		Instruments Held
(in millions)		of Period		in Income		Income (Loss)		Net		In		Out	Other		of Period			at End of Period		at End of Period
Three Months Ended March 31, 2022
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	1,431	$	2	$	(285)	$	(61)	$	-	$	-	$	-	$	1,087	$	-	$	(273)
Non-U.S. governments		7		-		-		-		1		-		-		8		-		-
Corporate debt		2,641		(11)		(73)		177		130		(120)		-		2,744		-		(69)
RMBS		10,378		130		(553)		(608)		-		(422)		-		8,925		-		(544)
CMBS		1,190		8		(67)		32		-		(299)		-		864		-		(64)
CDO/ABS		11,215		16		(501)		545		1,115		(614)		-		11,776		-		(501)
Total bonds available for sale		26,862		145		(1,479)		85		1,246		(1,455)		-		25,404		-		(1,451)
Other bond securities:
Corporate debt		134		-		-		77		61		(12)		-		260		-		-
RMBS		196		(5)		(1)		9		-		-		-		199		(8)		-
CMBS		35		(2)		-		-		-		-		-		33		(2)		-
CDO/ABS		2,332		(114)		-		195		57		(2)		-		2,468		(161)		-
Total other bond securities		2,697		(121)		(1)		281		118		(14)		-		2,960		(171)		-
Equity securities		6		-		(1)		1		-		-		-		6		-		-
Other invested assets		1,948		112		(4)		(15)		47		(153)		-		1,935		121		-
Other assets		114		-		-		(6)		-		-		-		108		-		-
Total	$	31,627	$	136	$	(1,485)	$	346	$	1,411	$	(1,622)	$	-	$	30,413	$	(50)	$	(1,451)
				Net																Changes in
				Realized																Unrealized Gains
				and				Purchases,										Changes in		(Losses) Included in
				Unrealized				Sales,										Unrealized Gains		Other Comprehensive
				(Gains)				Issuances										(Losses) Included		Income (Loss) for
		Fair Value		Losses		Other		and		Gross		Gross				Fair Value		in Income on		Recurring Level 3
		Beginning		Included	Comprehensive		Settlements,		Transfers		Transfers					End		Instruments Held		Instruments Held
(in millions)		of Period		in Income		Income (Loss)		Net		In		Out	Other			of Period		at End of Period		at End of Period
Liabilities:
Policyholder contract deposits	$	9,682	$	(1,797)	$	-	$	145	$	-	$	-	$	-	$	8,030	$	1,983	$	-
Derivative liabilities, net:
Interest rate contracts		-		(1)		-		(3)		-		-		-		(4)		1		-
Foreign exchange contracts		(1)		-		-		1		-		-		-		-		(1)		-
Equity contracts		(444)		301		-		(35)		-		-		-		(178)		(241)		-
Credit contracts		30		1		-		-		-		-		-		31		(1)		-
Other contracts		(13)		(18)		-		17		-		-		-		(14)		18		-
Total derivative liabilities, net^(a)		(428)		283		-		(20)		-		-		-		(165)		(224)		-
Fortitude Re funds withheld payable		5,922		(3,318)		-		(398)		-		-		-		2,206		3,480		-
Total	$	15,176	$	(4,832)	$	-	$	(273)	$	-	$	-	$	-	$	10,071	$	5,239	$	-

17 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

				Net																Changes in
				Realized															Unrealized Gains
				and				Purchases,										Changes in	(Losses) Included in
				Unrealized				Sales,										Unrealized Gains	Other Comprehensive
				Gains				Issuances										(Losses) Included		Income (Loss) for
		Fair Value		(Losses)		Other		and		Gross		Gross			Fair Value			in Income on		Recurring Level 3
		Beginning		Included	Comprehensive		Settlements,		Transfers		Transfers					End		Instruments Held		Instruments Held
(in millions)		of Period		in Income		Income (Loss)		Net		In		Out		Other		of Period		at End of Period		at End of Period
Three Months Ended March 31, 2021
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	2,105	$	3	$	(159)	$	(53)	$	-	$	-	$	-	$	1,896	$	-	$	(10)
Non-U.S. governments		5		-		-		-		1		-		-		6		-		-
Corporate debt		2,349		(1)		(10)		177		187		(132)		-		2,570		-		(159)
RMBS		11,694		167		64		(431)		-		(30)		-		11,464		-		(14)
CMBS		922		9		(56)		173		56		-		-		1,104		-		(56)
CDO/ABS		9,814		16		(14)		(164)		454		(504)		-		9,602		-		64
Total bonds available for sale		26,889		194		(175)		(298)		698		(666)		-		26,642		-		(175)
Other bond securities:
RMBS		139		3		-		(16)		-		-		-		126		(98)		-
CMBS		47		(1)		-		(6)		6		-		-		46		(2)		-
CDO/ABS		2,512		(11)		-		(155)		-		-		-		2,346		2		-
Total other bond securities		2,698		(9)		-		(177)		6		-		-		2,518		(98)		-
Equity securities		51		11		3		(11)		75		(1)		-		128		3		-
Other invested assets		1,827		142		(6)		(66)		-		-		-		1,897		123		-
Other assets		113		-		-		-		-		-		-		113		-		-
Total	$	31,578	$	338	$	(178)	$	(552)	$	779	$	(667)	$	-	$	31,298	$	28	$	(175)

				Net																Changes in
				Realized															Unrealized Gains
				and				Purchases,										Changes in	(Losses) Included in
				Unrealized				Sales,										Unrealized Gains	Other Comprehensive
				(Gains)				Issuances										(Losses) Included		Income (Loss) for
		Fair Value		Losses		Other		and		Gross		Gross			Fair Value			in Income on		Recurring Level 3
		Beginning		Included	Comprehensive		Settlements,		Transfers		Transfers					End		Instruments Held		Instruments Held
(in millions)		of Period		in Income		Income (Loss)		Net		In		Out		Other		of Period		at End of Period		at End of Period
Liabilities:
Policyholder contract deposits	$	9,798	$	(2,260)	$	-	$	79	$	-	$	-	$	-	$	7,617	$	2,570	$	-
Derivative liabilities, net:
Interest rate contracts		-		-		-		-		-		-		-		-		-		-
Foreign exchange contracts		(2)		1		-		1		-		-		-		-		(1)		-
Equity contracts		(151)		(26)		-		(85)		-		40		-		(222)		(118)		-
Credit contracts		42		5		-		(3)		-		-		-		44		(3)		-
Other contracts		(8)		(17)		-		16		-		-		-		(9)		16		-
Total derivative liabilities, net^(a)		(119)		(37)		-		(71)		-		40		-		(187)		(106)		-
Fortitude Re funds withheld payable		6,042		(2,382)		-		(173)		-		-		-		3,487		2,955		-
Total	$	15,721	$	(4,679)	$	-	$	(165)	$	-	$	40	$	-	$	10,917	$	5,419	$	-

(a)Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

AIG | First Quarter 2022 Form 10-Q 18

TABLE OF CONTENTS

ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Net realized and unrealized gains and losses included in income related to Level 3 assets and liabilities shown above are reported in the Condensed Consolidated Statements of Income (Loss) as follows:

		Net
		Investment		Net Realized		Other
(in millions)		Income	Gains (Losses)			Income		Total
Three Months Ended March 31, 2022
Assets:
Bonds available for sale	$	164	$	(19)	$	-	$	145
Other bond securities		(121)		-		-		(121)
Other invested assets		112		-		-		112
Three Months Ended March 31, 2021
Assets:
Bonds available for sale	$	185	$	9	$	-	$	194
Other bond securities		(9)		-		-		(9)
Equity securities		11		-		-		11
Other invested assets		142		-		-		142

		Net
		Investment		Net Realized		Other
(in millions)		Income	(Gains) Losses			Income		Total
Three Months Ended March 31, 2022
Liabilities:
Policyholder contract deposits^*	$	-	$	(1,797)	$	-	$	(1,797)
Derivative liabilities, net		-		298		(15)		283
Fortitude Re funds withheld payable		-		(3,318)		-		(3,318)
Three Months Ended March 31, 2021
Liabilities:
Policyholder contract deposits^*	$	-	$	(2,260)	$	-	$	(2,260)
Derivative liabilities, net		-		(23)		(14)		(37)
Fortitude Re funds withheld payable		-		(2,382)		-		(2,382)

*Primarily embedded derivatives.

19 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

The following table presents the gross components of purchases, sales, issuances and settlements, net, shown above, for the three-month periods ended March 31, 2022 and 2021 related to Level 3 assets and liabilities in the Condensed Consolidated Balance Sheets:

						Issuances		Purchases, Sales,
						and		Issuances and
(in millions)		Purchases		Sales		Settlements^(a)		Settlements, Net^(a)
Three Months Ended March 31, 2022
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	1	$	(60)	$	(2)	$	(61)
Corporate debt		9		-		168		177
RMBS		109		-		(717)		(608)
CMBS		70		-		(38)		32
CDO/ABS		886		-		(341)		545
Total bonds available for sale		1,075		(60)		(930)		85
Other bond securities:
Corporate debt		19		-		58		77
RMBS		17		-		(8)		9
CDO/ABS		323		-		(128)		195
Total other bond securities		359		-		(78)		281
Equity securities		-		-		1		1
Other invested assets		258		-		(273)		(15)
Other assets		-		-		(6)		(6)
Total	$	1,692	$	(60)	$	(1,286)	$	346
Liabilities:
Policyholder contract deposits	$	-	$	217	$	(72)	$	145
Derivative liabilities, net		(85)		2		63		(20)
Fortitude Re funds withheld payable		-		-		(398)		(398)
Total	$	(85)	$	219	$	(407)	$	(273)
Three Months Ended March 31, 2021
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	8	$	(20)	$	(41)	$	(53)
Corporate debt		741		(1)		(563)		177
RMBS		164		-		(595)		(431)
CMBS		193		-		(20)		173
CDO/ABS		376		(49)		(491)		(164)
Total bonds available for sale		1,482		(70)		(1,710)		(298)
Other bond securities:
RMBS		-		-		(16)		(16)
CMBS		-		(6)		-		(6)
CDO/ABS		-		(39)		(116)		(155)
Total other bond securities		-		(45)		(132)		(177)
Equity securities		-		-		(11)		(11)
Other invested assets		198		-		(264)		(66)
Total	$	1,680	$	(115)	$	(2,117)	$	(552)
Liabilities:
Policyholder contract deposits	$	-	$	191	$	(112)	$	79
Derivative liabilities, net		(52)		1		(20)		(71)
Fortitude Re funds withheld payable		-		-		(173)		(173)
Total	$	(52)	$	192	$	(305)	$	(165)

(a)There were no issuances during the three-month periods ended March 31, 2022 and 2021.

AIG | First Quarter 2022 Form 10-Q 20

TABLE OF CONTENTS

ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized gains (losses) on instruments held at March 31, 2022 and 2021 may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable inputs (e.g., changes in unobservable long-dated volatilities).

Transfers of Level 3 Assets and Liabilities

The Net realized and unrealized gains (losses) included in income (loss) or Other comprehensive income (loss) as shown in the table above excludes $(34) million and $19 million of net gains (losses) related to assets and liabilities transferred into Level 3 during the three-month periods ended March 31, 2022 and 2021, respectively, and includes $(41) million and $(4) million of net gains (losses) related to assets and liabilities transferred out of Level 3 during the three-month periods ended March 31, 2022 and 2021, respectively.

Transfers of Level 3 Assets

During the three-month periods ended March 31, 2022 and 2021, transfers into Level 3 assets primarily included certain investments in private placement corporate debt, RMBS, CMBS and CDO/ABS. Transfers of private placement corporate debt and certain ABS into Level 3 assets were primarily the result of limited market pricing information that required us to determine fair value for these securities based on inputs that are adjusted to better reflect our own assumptions regarding the characteristics of a specific security or associated market liquidity. The transfers of investments in RMBS, CMBS and CDO and certain ABS into Level 3 assets were due to diminished market transparency and liquidity for individual security types.

During the three-month periods ended March 31, 2022 and 2021, transfers out of Level 3 assets primarily included private placement and other corporate debt, CMBS, RMBS, CDO/ABS and certain investments in municipal securities. Transfers of corporate debt, RMBS, CMBS, CDO/ABS and certain investments in municipal securities out of Level 3 assets were based on consideration of market liquidity as well as related transparency of pricing and associated observable inputs for these investments. Transfers of certain investments in private placement corporate debt and certain ABS out of Level 3 assets were primarily the result of using observable pricing information that reflects the fair value of those securities without the need for adjustment based on our own assumptions regarding the characteristics of a specific security or the current liquidity in the market.

Transfers of Level 3 Liabilities

There were no significant transfers of derivative or other liabilities into or out of Level 3 for the three-month periods ended March 31, 2022 and 2021.

21 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably available to us, such as data from independent third-party valuation service providers. Because input information from third-parties with respect to certain Level 3 instruments (primarily CDO/ABS) may not be reasonably available to us, balances shown below may not equal total amounts reported for such Level 3 assets and liabilities:

	Fair Value at
	March 31,		Valuation		Range
(in millions)	2022		Technique	Unobservable Input^(b)	(Weighted Average)^(c)
Assets:

Obligations of states, municipalities
and political subdivisions	$	1,057	Discounted cash flow	Yield	3.70% - 4.49% (4.10%)

Corporate debt		2,563	Discounted cash flow	Yield	1.98% - 6.54% (4.26%)

RMBS^(a)		7,006	Discounted cash flow	Constant prepayment rate	4.90% - 10.37% (7.63%)
				Loss severity	38.04% - 67.75% (52.90%)
				Constant default rate	1.23% - 3.47% (2.35%)
				Yield	3.54% - 5.34% (4.44%)

CDO/ABS^(a)		8,496	Discounted cash flow	Yield	3.44% - 6.15% (4.79%)

CMBS		626	Discounted cash flow	Yield	3.17% - 5.62% (4.40%)
Liabilities^(d):

Embedded derivatives within
Policyholder contract deposits:

Variable annuity guaranteed
minimum withdrawal benefits
(GMWB)		1,667	Discounted cash flow	Equity volatility	5.85% - 46.25%
				Base lapse rate	0.16% - 12.60%
				Dynamic lapse multiplier	20.00% - 186.00%
				Mortality multiplier^(e)	38.00% - 147.00%
				Utilization	90.00% - 100.00%
				Equity / interest rate correlation	20.00% - 40.00%
				NPA^(f)	0.17% - 1.72%

Fixed Index annuities including
certain
GMWB		5,673	Discounted cash flow	Base lapse rate	0.50% - 50.00%
				Dynamic lapse multiplier	20.00% - 186.00%
				Mortality multiplier^(e)	24.00% - 180.00%
				Utilization^(g)	60.00% - 95.00%
				Option budget	0.00% - 4.00%
				NPA^(f)	0.17% - 1.72%

Indexed life		690	Discounted cash flow	Base lapse rate	0.00% - 37.97%
				Mortality rate	0.00% - 100.00%
				NPA^(f)	0.17% - 1.72%

AIG | First Quarter 2022 Form 10-Q 22

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

		Fair Value at
		December 31,	Valuation		Range
(in millions)		2021	Technique	Unobservable Input^(b)	(Weighted Average)^(c)
Assets:

Obligations of states, municipalities
and political subdivisions	$	1,400	Discounted cash flow	Yield	2.74% - 3.33% (3.06%)

Corporate debt		1,561	Discounted cash flow	Yield	2.23% - 7.69% (4.96%)

RMBS^(a)		9,916	Discounted cash flow	Constant prepayment rate	5.25% - 17.70% (11.47%)
				Loss severity	26.13% - 71.93% (49.03%)
				Constant default rate	1.15% - 5.85% (3.50%)
				Yield	1.69% - 3.97% (2.83%)

CDO/ABS^(a)		8,229	Discounted cash flow	Yield	1.84% - 4.77% (3.31%)

CMBS		580	Discounted cash flow	Yield	1.50% - 5.01% (3.25%)
Liabilities^(d):

Embedded derivatives within
Policyholder contract deposits:

GMWB		2,472	Discounted cash flow	Equity volatility	5.95% - 46.65%
				Base lapse rate	0.16% - 12.60%
				Dynamic lapse multiplier	20.00% - 186.00%
				Mortality multiplier^(e)	38.00% - 147.00%
				Utilization	90.00% - 100.00%
				Equity / interest rate correlation	20.00% - 40.00%
				NPA^(f)	0.01% - 1.40%

Fixed Index annuities including
certain
GMWB		6,445	Discounted cash flow	Base lapse rate	0.50% - 50.00%
				Dynamic lapse multiplier	20.00% - 186.00%
				Mortality multiplier^(e)	24.00% - 180.00%
				Utilization^(g)	60.00% - 95.00%
				Option budget	0.00% - 4.00%
				NPA^(f)	0.01% - 1.40%

Indexed life		765	Discounted cash flow	Base lapse rate	0.00% - 37.97%
				Mortality rate	0.00% - 100.00%
				NPA^(f)	0.01% - 1.40%

(a) Information received from third-party valuation service providers. The ranges of the unobservable inputs for constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CDO securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by us, because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points.

(b) Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities.

(c) The weighted averaging for fixed maturity securities is based on the estimated fair value of the securities. Because the valuation methodology for embedded derivatives within Policyholder contract deposits uses a range of inputs that vary at the contract level over the cash flow projection period, management believes that presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(d) The Fortitude Re funds withheld payable has been excluded from the above table. As discussed in Note 7, the Fortitude Re funds withheld payable is created through modco and funds withheld reinsurance arrangements where the investments supporting the reinsurance agreements are withheld by, and continue to reside on AIG’s balance sheet. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by AIG. Accordingly, the unobservable inputs utilized in the valuation of the embedded derivative are a component of the invested assets supporting the reinsurance agreements that are held on AIG’s balance sheet.

(e) Mortality inputs are shown as multipliers of the 2012 Individual Annuity Mortality Basic table.

(f) The non-performance risk adjustment (NPA) applied as a spread over risk-free curve for discounting.

(g) The partial withdrawal utilization unobservable input range shown applies only to policies with guaranteed minimum withdrawal benefit riders that are accounted for as an embedded derivative. The total embedded derivative liability at March 31, 2022 and December 31, 2021 was approximately $1.0 billion and $1.2 billion, respectively. The remaining guaranteed minimum riders on the fixed index annuities are valued under the accounting guidance for certain nontraditional long-duration contracts.

The ranges of reported inputs for Obligations of states, municipalities and political subdivisions, Corporate debt, RMBS, CDO/ABS, and CMBS valued using a discounted cash flow technique consist of one standard deviation in either direction from the

23 AIG | First Quarter 2022 Form 10-Q

TABLE OF CONTENTS

ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

value-weighted average. The preceding table does not give effect to our risk management practices that might offset risks inherent in these Level 3 assets and liabilities.

Interrelationships between Unobservable Inputs

We consider unobservable inputs to be those for which market data is not available and that are developed using the best information available to us about the assumptions that market participants would use when pricing the asset or liability. Relevant inputs vary depending on the nature of the instrument being measured at fair value. The following paragraphs provide a general description of significant unobservable inputs along with interrelationships between and among the significant unobservable inputs and their impact on the fair value measurements. In practice, simultaneous changes in assumptions may not always have a linear effect on the inputs discussed below. Interrelationships may also exist between observable and unobservable inputs. Such relationships have not been included in the discussion below. For each of the individual relationships described below, the inverse relationship would also generally apply.

Fixed Maturity Securities

The significant unobservable input used in the fair value measurement of fixed maturity securities is yield. The yield is affected by the market movements in credit spreads and U.S. Treasury yields. The yield may be affected by other factors including constant prepayment rates, loss severity, and constant default rates. In general, increases in the yield would decrease the fair value of investments, and conversely, decreases in the yield would increase the fair value of investments.

Embedded derivatives within Policyholder contract deposits

Embedded derivatives reported within Policyholder contract deposits include interest crediting rates based on market indices within fixed index annuities, indexed life, and GICs as well as GMWB within variable annuity and certain fixed index annuity products. For any given contract, assumptions for unobservable inputs vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. The following unobservable inputs are used for valuing embedded derivatives measured at fair value:

 Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. Increases in assumed volatility will generally increase the fair value of both the projected cash flows from rider fees as well as the projected cash flows related to benefit payments. Therefore, the net change in the fair value of the liability may be either a decrease or an increase, depending on the relative changes in projected rider fees and projected benefit payments.

 Equity / interest rate correlation estimates the relationship between changes in equity returns and interest rates in the economic scenario generator used to value our GMWB embedded derivatives. In general, a higher positive correlation assumes that equity markets and interest rates move in a more correlated fashion, which generally increases the fair value of the liability.

 Base lapse rate assumptions are determined by company experience and are adjusted at the contract level using a dynamic lapse function, which reduces the base lapse rate when the contract is in-the-money (when the contract holder’s guaranteed value, as estimated by the company, is worth more than their underlying account value). Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. Increases in assumed lapse rates will generally decrease the fair value of the liability, as fewer policyholders would persist to collect guaranteed withdrawal amounts.

 Mortality rate assumptions, which vary by age and gender, are based on company experience and include a mortality improvement assumption. Increases in assumed mortality rates will decrease the fair value of the liability, while lower mortality rate assumptions will generally increase the fair value of the liability, because guaranteed payments will be made for a longer period of time.

 Utilization assumptions estimate the timing when policyholders with a GMWB will elect to utilize their benefit and begin taking withdrawals. The assumptions may vary by the type of guarantee, tax-qualified status, the contract’s withdrawal history and the age of the policyholder. Utilization assumptions are based on company experience and other factors, which includes partial withdrawal behavior. Increases in assumed utilization rates will generally increase the fair value of the liability.

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

 Non-performance or “own credit” risk adjustment used in the valuation of embedded derivatives, which reflects a market participant’s view of our claims-paying ability by incorporating a different spread (the NPA spread) to the curve used to discount projected benefit cash flows. When corporate credit spreads widen, the change in the NPA spread generally reduces the fair value of the embedded derivative liabilities, resulting in a gain, and when corporate credit spreads narrow or tighten, the change in the NPA spread generally increases the fair value of the embedded derivative liabilities, resulting in a loss. In addition to changes driven by credit market-related movements in the NPA spread, the NPA balance also reflects changes in business activity and in the net amount at risk from the underlying guaranteed living benefits offered by variable and certain fixed index annuities.

AIG | First Quarter 2022 Form 10-Q 24

TABLE OF CONTENTS

ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Embedded derivatives within reinsurance contracts

The fair value of embedded derivatives associated with funds withheld reinsurance contracts is determined based upon a total return swap technique with reference to the fair value of the investments held by AIG related to AIG’s funds withheld payable. The fair value of the underlying assets is generally based on market observable inputs using industry standard valuation techniques. The valuation also requires certain significant inputs, which are generally not observable and accordingly, the valuation is considered Level 3 in the fair value hierarchy.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value Per Share

The following table includes information related to our investments in certain other invested assets, including private equity funds, hedge funds and other alternative investments that calculate net asset value per share (or its equivalent). For these investments, which are measured at fair value on a recurring basis, we use the net asset value per share to measure fair value.

		March 31, 2022				December 31, 2021
			Fair Value			Fair Value
			Using NAV			Using NAV
			Per Share (or		Unfunded	Per Share (or			Unfunded
(in millions)	Investment Category Includes		its equivalent)	Commitments		its equivalent)		Commitments
Investment Category
Private equity funds:
Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	2,993	$	1,979	$	2,768	$	1,798

Real assets	Investments in real estate properties, agricultural and infrastructure assets, including power plants and other energy producing assets		1,515		613		904		487

Venture capital	Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company		266		211		252		201

Growth equity	Funds that make investments in established companies for the purpose of growing their businesses		917		67		914		82

Mezzanine	Funds that make investments in the junior debt and equity securities of leveraged companies		566		313		534		354

Other	Includes distressed funds that invest in securities of companies that are in default or under bankruptcy protection, as well as funds that have multi-strategy, and other strategies		1,490		362		1,216		408
Total private equity funds			7,747		3,545		6,588		3,330
Hedge funds:
Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		484		-		466		-

Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		345		-		432		-

Macro	Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions		474		-		516		-

Other	Includes investments held in funds that are less liquid, as well as other strategies which allow for broader allocation between public and private investments		401		-		416		-
Total hedge funds			1,704		-		1,830		-
Total		$	9,451	$	3,545	$	8,418	$	3,330

25 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

Private equity fund investments included above are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one or two-year increments.

The hedge fund investments included above, which are carried at fair value, are generally redeemable subject to the redemption notices period. The majority of our hedge fund investments are redeemable monthly or quarterly.

Fair Value Option

The following table presents the gains or losses recorded related to the eligible instruments for which we elected the fair value option:

Three Months Ended March 31,	Gain (Loss)
(in millions)		2022		2021
Assets:
Other bond securities^(a)	$	(201)	$	(99)
Alternative investments^(b)		398		417
Liabilities:
Long-term debt^(c)		103		71
Total gain	$	300	$	389

(a) Includes certain securities supporting the funds withheld arrangements with Fortitude Re. For additional information regarding the gains and losses for Other bond securities, see Note 5. For additional information regarding the funds withheld arrangements with Fortitude Re, see Note 7.

(b) Includes certain hedge funds, private equity funds and other investment partnerships.

We calculate the effect of these credit spread changes using discounted cash flow techniques that incorporate current market interest rates, our observable credit spreads on these liabilities and other factors that mitigate the risk of nonperformance such as cash collateral posted.

The following table presents the difference between fair value and the aggregate contractual principal amount of long-term debt for which the fair value option was elected:

	March 31, 2022						December 31, 2021
			Outstanding						Outstanding
(in millions)	Fair Value		Principal Amount		Difference		Fair Value		Principal Amount		Difference
Liabilities:
Long-term debt^*	$	1,782	$	1,437	$	345	$	1,871	$	1,405	$	466

*Includes GIAs, notes, bonds, loans and mortgages payable.

FAIR VALUE MEASUREMENTS ON A NON-RECURRING BASIS

The following table presents assets measured at fair value on a non-recurring basis at the time of impairment and the related impairment charges recorded during the periods presented:

		Assets at Fair Value							Impairment Charges
		Non-Recurring Basis							Three Months Ended March 31,
(in millions)		Level 1		Level 2		Level 3		Total		2022		2021
March 31, 2022
Other investments	$	-	$	-	$	-	$	-	$	-	$	6
Total	$	-	$	-	$	-	$	-	$	-	$	6
December 31, 2021
Other investments	$	-	$	-	$	104	$	104
Total	$	-	$	-	$	104	$	104

In addition to the assets presented in the table above, at March 31, 2022, AIG carried $156 million of Other invested assets that are measured at fair value on a non-recurring basis. Such investments are accounted for using the measurement alternative for equity securities. For additional information, see Note 5.

AIG | First Quarter 2022 Form 10-Q 26

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 4. Fair Value Measurements

FAIR VALUE INFORMATION ABOUT FINANCIAL INSTRUMENTS NOT MEASURED AT FAIR VALUE

The following table presents the carrying amounts and estimated fair values of our financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

	Estimated Fair Value									Carrying
(in millions)		Level 1		Level 2		Level 3		Total		Value
March 31, 2022
Assets:
Mortgage and other loans receivable	$	-	$	76	$	47,337	$	47,413	$	47,428
Other invested assets		-		822		6		828		828
Short-term investments		-		6,288		-		6,288		6,288
Cash		2,537		-		-		2,537		2,537
Other assets		29		11		-		40		40
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		155		142,466		142,621		134,562
Fortitude Re funds withheld payable		-		-		34,275		34,275		34,275
Other liabilities		-		3,574		-		3,574		3,574
Long-term debt		-		22,674		330		23,004		21,790
Debt of consolidated investment entities		-		3,184		3,166		6,350		6,366
Separate account liabilities - investment contracts		-		96,097		-		96,097		96,097
December 31, 2021
Assets:
Mortgage and other loans receivable	$	-	$	82	$	47,947	$	48,029	$	46,033
Other invested assets		-		871		6		877		878
Short-term investments		-		8,931		-		8,931		8,931
Cash		2,198		-		-		2,198		2,198
Other assets		21		11		-		32		32
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		169		142,974		143,143		133,043
Fortitude Re funds withheld payable		-		-		34,849		34,849		34,849
Other liabilities		-		3,704		-		3,704		3,704
Long-term debt		-		24,758		336		25,094		21,870
Debt of consolidated investment entities		-		3,077		3,313		6,390		6,422
Separate account liabilities - investment contracts		-		104,126		-		104,126		104,126

27 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

5. Investments

Securities Available for Sale

The following table presents the amortized cost and fair value of our available for sale securities:

				Allowance		Gross		Gross
		Amortized		for Credit		Unrealized		Unrealized		Fair
(in millions)		Cost		Losses^(a)		Gains		Losses		Value
March 31, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	7,976	$	-	$	130	$	(239)	$	7,867
Obligations of states, municipalities and political subdivisions		13,105		-		674		(266)		13,513
Non-U.S. governments		15,408		(39)		284		(671)		14,982
Corporate debt		163,889		(137)		5,120		(7,244)		161,628
Mortgage-backed, asset-backed and collateralized:
RMBS		23,644		(13)		1,551		(647)		24,535
CMBS		15,413		-		138		(451)		15,100
CDO/ABS		20,045		(2)		85		(534)		19,594
Total mortgage-backed, asset-backed and collateralized		59,102		(15)		1,774		(1,632)		59,229
Total bonds available for sale^(b)	$	259,480	$	(191)	$	7,982	$	(10,052)	$	257,219
December 31, 2021
Bonds available for sale:
U.S. government and government sponsored entities	$	7,874	$	-	$	347	$	(27)	$	8,194
Obligations of states, municipalities and political subdivisions		12,760		-		1,782		(15)		14,527
Non-U.S. governments		15,858		-		719		(247)		16,330
Corporate debt		163,064		(89)		13,892		(1,259)		175,608
Mortgage-backed, asset-backed and collateralized:
RMBS		25,027		(9)		2,422		(153)		27,287
CMBS		15,333		-		555		(79)		15,809
CDO/ABS		19,294		-		276		(123)		19,447
Total mortgage-backed, asset-backed and collateralized		59,654		(9)		3,253		(355)		62,543
Total bonds available for sale^(b)	$	259,210	$	(98)	$	19,993	$	(1,903)	$	277,202

(a) Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through Net realized gains (losses) and are not recognized in Other comprehensive income (loss).

(b) At March 31, 2022 and December 31, 2021, bonds available for sale held by us that were below investment grade or not rated totaled $24.8 billion or 10 percent and $27.0 billion or 10 percent, respectively.

AIG | First Quarter 2022 Form 10-Q 28

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Securities Available for Sale in a Loss Position for Which No Allowance for Credit Loss Has Been Recorded

The following table summarizes the fair value and gross unrealized losses on our available for sale securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit loss has been recorded:

	Less than 12 Months				12 Months or More				Total
				Gross				Gross				Gross
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)		Value		Losses		Value		Losses		Value		Losses
March 31, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	5,488	$	205	$	441	$	34	$	5,929	$	239
Obligations of states, municipalities and political
subdivisions		3,468		248		104		18		3,572		266
Non-U.S. governments		7,062		377		1,915		294		8,977		671
Corporate debt		77,592		5,689		10,362		1,531		87,954		7,220
RMBS		9,499		475		1,650		137		11,149		612
CMBS		9,615		423		220		28		9,835		451
CDO/ABS		15,337		512		394		22		15,731		534
Total bonds available for sale	$	128,061	$	7,929	$	15,086	$	2,064	$	143,147	$	9,993

December 31, 2021
Bonds available for sale:
U.S. government and government sponsored entities	$	3,696	$	14	$	447	$	13	$	4,143	$	27
Obligations of states, municipalities and political
subdivisions		714		11		57		4		771		15
Non-U.S. governments		4,644		115		1,324		132		5,968		247
Corporate debt		31,914		720		8,819		467		40,733		1,187
RMBS		5,362		102		1,154		46		6,516		148
CMBS		3,980		63		153		16		4,133		79
CDO/ABS		8,263		112		339		11		8,602		123
Total bonds available for sale	$	58,573	$	1,137	$	12,293	$	689	$	70,866	$	1,826

At March 31, 2022, we held 26,173 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 3,631 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). At December 31, 2021, we held 15,029 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 2,644 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). We did not recognize the unrealized losses in earnings on these fixed maturity securities at March 31, 2022 because it was determined that such losses were due to non-credit factors. Additionally, we neither intend to sell the securities nor do we believe that it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, we performed fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, liquidity position, expected defaults, industry and sector analysis, forecasts and available market data.

29 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Contractual Maturities of Fixed Maturity Securities Available for Sale

The following table presents the amortized cost and fair value of fixed maturity securities available for sale by contractual maturity:

	Total Fixed Maturity Securities
	Available for Sale
		Amortized Cost,
(in millions)		Net of Allowance		Fair Value
March 31, 2022
Due in one year or less	$	7,577	$	7,574
Due after one year through five years		50,250		49,857
Due after five years through ten years		47,081		46,347
Due after ten years		95,294		94,212
Mortgage-backed, asset-backed and collateralized		59,087		59,229
Total	$	259,289	$	257,219

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

The following table presents the gross realized gains and gross realized losses from sales or maturities of our available for sale securities:

Three Months Ended March 31,		2022				2021
		Gross		Gross		Gross		Gross
	Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses
Fixed maturity securities	$	97	$	236	$	460	$	71

For the three-month periods ended March 31, 2022 and 2021, the aggregate fair value of available for sale securities sold was $4.8 billion and $6.4 billion, respectively, which resulted in net realized gains (losses) of $(139) million and $389 million, respectively. Included within the net realized gains (losses) are $(32) million and $295 million of net realized gains (losses) for the three-month periods ended March 31, 2022 and 2021, respectively, which relate to Fortitude Re funds withheld assets. These net realized gains (losses) are included in Net realized gains (losses) on Fortitude Re funds withheld assets.

Other Securities Measured at Fair Value

The following table presents the fair value of fixed maturity securities measured at fair value based on our election of the fair value option, which are reported in the other bond securities caption in the financial statements, and equity securities measured at fair value:

		March 31, 2022				December 31, 2021
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	1,689	23	%	$	1,750	25	%
Obligations of states, municipalities and political subdivisions		98	1			97	1
Non-U.S. governments		85	1			76	1
Corporate debt		1,341	18			1,050	15
Mortgage-backed, asset-backed and collateralized:
RMBS		312	4			411	6
CMBS		317	4			315	4
CDO/ABS and other collateralized		2,740	38			2,579	37
Total mortgage-backed, asset-backed and collateralized		3,369	46			3,305	47
Total fixed maturity securities		6,582	89			6,278	89
Equity securities		695	11			739	11
Total	$	7,277	100	%	$	7,017	100	%

AIG | First Quarter 2022 Form 10-Q 30

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Other Invested Assets

The following table summarizes the carrying amounts of other invested assets:

		March 31,		December 31,
(in millions)		2022		2021
Alternative investments^{(a) (b)}	$	11,583	$	10,951
Investment real estate^(c)		2,627		2,727
All other investments^(d)		1,976		1,990
Total	$	16,186	$	15,668

(a) At March 31, 2022, included hedge funds of $1.8 billion and private equity funds of $9.7 billion. At December 31, 2021, included hedge funds of $2.0 billion, private equity funds of $8.9 billion.

(b) At March 31, 2022, approximately 67 percent of our hedge fund portfolio is available for redemption in 2022. The remaining 33 percent will be available for redemption between 2023 and 2028.

(c) Represents values net of accumulated depreciation. At March 31, 2022 and December 31, 2021, the accumulated depreciation was $802 million and $778 million, respectively.

(d) Includes AIG’s ownership interest in Fortitude Group Holdings, LLC (FRL), which is recorded using the measurement alternative for equity securities. Our investment in FRL totaled $156 million and $100 million at March 31, 2022 and December 31, 2021, respectively.

Net Investment Income

The following table presents the components of Net investment income:

Three Months Ended March 31,	2022						2021
	Excluding Fortitude		Fortitude Re				Excluding Fortitude		Fortitude Re
	Re Funds		Funds Withheld				Re Funds		Funds Withheld
(in millions)	Withheld Assets		Assets		Total		Withheld Assets		Assets		Total
Available for sale fixed maturity securities,
including short-term investments	$	2,041	$	301	$	2,342	$	2,178	$	377	$	2,555
Other fixed maturity securities^(a)		(201)		(118)		(319)		(102)		-		(102)
Equity securities		(27)		-		(27)		22		-		22
Interest on mortgage and other loans		453		46		499		414		47		461
Alternative investments^(b)		669		71		740		572		69		641
Real estate		-		-		-		59		-		59
Other investments^(c)		157		-		157		140		1		141
Total investment income		3,092		300		3,392		3,283		494		3,777
Investment expenses		146		9		155		112		8		120
Net investment income	$	2,946	$	291	$	3,237	$	3,171	$	486	$	3,657

(a) Included in the three-month periods ended March 31, 2022 and 2021 was income (loss) of $(95) million and $(81) million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below.

(b) Included income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag.

(c) Included in the three-month periods ended March 31, 2022 and 2021 was income (loss) of $91 million and $83 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above.

31 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Net Realized Gains and Losses

The following table presents the components of Net realized gains (losses):

Three Months Ended March 31,	2022						2021
	Excluding		Fortitude Re				Excluding		Fortitude Re
	Fortitude Re			Funds			Fortitude Re			Funds
	Funds		Withheld				Funds		Withheld
(in millions)	Withheld Assets		Assets			Total	Withheld Assets			Assets		Total
Sales of fixed maturity securities	$	(107)	$	(32)	$	(139)	$	94	$	295	$	389
Change in allowance for credit losses on fixed maturity
securities		(53)		(40)		(93)		51		2		53
Change in allowance for credit losses on loans		(19)		(8)		(27)		41		(5)		36
Foreign exchange transactions		(14)		(9)		(23)		(49)		(6)		(55)
Variable annuity embedded derivatives, net of related
hedges		506		-		506		89		-		89
All other derivatives and hedge accounting		939		(56)		883		351		(117)		234
Sales of alternative investments and real estate
investments		16		1		17		26		4		30
Other		(27)		4		(23)		92		-		92
Net realized gains (losses) – excluding Fortitude Re
funds withheld embedded derivative		1,241		(140)		1,101		695		173		868
Net realized gains on Fortitude Re
funds withheld embedded derivative		-		3,318		3,318		-		2,382		2,382
Net realized gains	$	1,241	$	3,178	$	4,419	$	695	$	2,555	$	3,250

Change in Unrealized Appreciation (Depreciation) of Investments

The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments:

Three Months Ended March 31,
(in millions)		2022		2021
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	(20,160)	$	(11,649)
Other investments		(7)		-
Total increase (decrease) in unrealized appreciation (depreciation) of investments	$	(20,167)	$	(11,649)

The following table summarizes the unrealized gains and losses recognized in Net investment income during the reporting period on equity securities and other investments still held at the reporting date:

Three Months Ended March 31,	2022						2021
				Other						Other
				Invested						Invested
(in millions)		Equities		Assets		Total		Equities		Assets		Total
Net gains (losses) recognized during the period on equity securities and
other investments	$	(27)	$	475	$	448	$	22	$	470	$	492
Less: Net gains (losses) recognized during the period on equity
securities and other investments sold during the period		94		(3)		91		(21)		24		3
Unrealized gains (losses) recognized during the reporting period on
equity securities and other investments still held at the reporting date	$	(121)	$	478	$	357	$	43	$	446	$	489

AIG | First Quarter 2022 Form 10-Q 32

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Evaluating Investments for AN ALLOWANCE FOR CREDIT LOSSES

For a discussion of our policy for evaluating investments for an allowance for credit losses, see Note 5 to the Consolidated Financial Statements in the 2021 Annual Report.

Credit Impairments

The following table presents a rollforward of the changes in allowance for credit losses on available for sale fixed maturity securities by major investment category:

Three Months Ended March 31,	2022						2021
				Non-						Non-
(in millions)	Structured		Structured			Total	Structured		Structured			Total
Balance, beginning of period	$	8	$	90	$	98	$	17	$	169	$	186
Additions:
Securities for which allowance for credit losses were not previously recorded		49		128		177		2		13		15
Reductions:
Securities sold during the period		-		(1)		(1)		(1)		(4)		(5)
Addition to (release of) the allowance for credit losses on securities that
had an allowance recorded in a previous period, for which there was
no intent to sell before recovery of amortized cost basis		(42)		(42)		(84)		(4)		(64)		(68)
Write-offs charged against the allowance		-		-		-		-		(6)		(6)
Other		-		1		1		-		-		-
Balance, end of period	$	15	$	176	$	191	$	14	$	108	$	122

Purchased Credit Deteriorated (PCD) Securities

We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination. These are referred to as PCD assets. At the time of purchase an allowance is recognized for these PCD assets by adding it to the purchase price to arrive at the initial amortized cost. There is no credit loss expense recognized upon acquisition of a PCD asset. When determining the initial allowance for credit losses, management considers the historical performance of underlying assets and available market information as well as bond-specific structural considerations, such as credit enhancement and the priority of payment structure of the security. In addition, the process of estimating future cash flows includes, but is not limited to, the following critical inputs:

• Current delinquency rates;

• Expected default rates and the timing of such defaults;

• Loss severity and the timing of any recovery; and

• Expected prepayment speeds.

Subsequent to the acquisition date, the PCD assets follow the same accounting as other structured securities that are not high credit quality.

We did not purchase securities with more than insignificant credit deterioration since their origination during the three-month periods ended March 31, 2022 and 2021.

Pledged Investments

Secured Financing and Similar Arrangements

We enter into secured financing transactions whereby certain securities are sold under agreements to repurchase (repurchase agreements), in which we transfer securities in exchange for cash, with an agreement by us to repurchase the same or substantially similar securities. Our secured financing transactions also include those that involve the transfer of securities to financial institutions in exchange for cash (securities lending agreements). In all of these secured financing transactions, the securities transferred by us (pledged collateral) may be sold or repledged by the counterparties. These agreements are recorded at their contracted amounts plus accrued interest, other than those that are accounted for at fair value.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral under these secured financing transactions, we may be required to transfer cash or additional securities as pledged collateral under these agreements. At the termination of the transactions, we and our counterparties are obligated to return the amounts borrowed and the securities transferred, respectively.

The following table presents the fair value of securities pledged to counterparties under secured financing transactions, including repurchase and securities lending agreements:

(in millions)		March 31, 2022		December 31, 2021
Fixed maturity securities available for sale	$	3,277	$	3,583
Other bond securities, at fair value	$	31	$	-

At March 31, 2022 and December 31, 2021, amounts borrowed under repurchase and securities lending agreements totaled $3.6 billion and $3.7 billion, respectively.

The following table presents the fair value of securities pledged under our repurchase agreements by collateral type and by remaining contractual maturity:

	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous			up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
March 31, 2022
Bonds available for sale:
Non-U.S. governments	$	64	$	-	$	-	$	-	$	-	$	64
Corporate debt		212		73		-		-		-		285
Total	$	276	$	73	$	-	$	-	$	-	$	349

December 31, 2021
Bonds available for sale:
Non-U.S. governments	$	48	$	-	$	-	$	-	$	-	$	48
Corporate debt		128		61		22		-		-		211
Total	$	176	$	61	$	22	$	-	$	-	$	259

The following table presents the fair value of securities pledged under our securities lending agreements by collateral type and by remaining contractual maturity:

	Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
March 31, 2022
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	149	$	-	$	-	$	-	$	149
Non-U.S. governments		-		420		80		-		-		500
Corporate debt		-		1,812		469		-		-		2,281
Other bond securities:
Non-U.S. governments		-		-		9		-		-		9
Corporate debt		-		-		20		-		-		20
Total	$	-	$	2,381	$	578	$	-	$	-	$	2,959

December 31, 2021
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	-	$	106	$	-	$	-	$	106
Non-U.S. governments		-		-		43		-		-		43
Corporate debt		-		534		2,641		-		-		3,175
Total	$	-	$	534	$	2,790	$	-	$	-	$	3,324

AIG | First Quarter 2022 Form 10-Q 34

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 5. Investments

We also enter into agreements in which securities are purchased by us under agreements to resell (reverse repurchase agreements), which are accounted for as secured financing transactions and reported as short-term investments or other assets, depending on their terms. These agreements are recorded at their contracted resale amounts plus accrued interest, other than those that are accounted for at fair value. In all reverse repurchase transactions, we take possession of or obtain a security interest in the related securities, and we have the right to sell or repledge this collateral received.

The following table presents information on the fair value of securities pledged to us under reverse repurchase agreements:

(in millions)		March 31, 2022		December 31, 2021
Securities collateral pledged to us	$	530	$	1,839

At March 31, 2022 and December 31, 2021, the carrying value of reverse repurchase agreements totaled $0.5 billion and $1.9 billion, respectively.

We do not currently offset any secured financing transactions. All such transactions are collateralized and margined on a daily basis consistent with market standards and subject to enforceable master netting arrangements with rights of set off.

Insurance – Statutory and Other Deposits

The total carrying value of cash and securities deposited by our insurance subsidiaries under requirements of regulatory authorities or other insurance-related arrangements, including certain annuity-related obligations and certain reinsurance contracts, was $12.6 billion and $13.5 billion at March 31, 2022 and December 31, 2021, respectively.

Other Pledges and Restrictions

Certain of our subsidiaries are members of Federal Home Loan Banks (FHLBs) and such membership requires the members to own stock in these FHLBs. We owned an aggregate of $212 million and $211 million of stock in FHLBs at March 31, 2022 and December 31, 2021, respectively. In addition, our subsidiaries have pledged securities available for sale and residential loans associated with borrowings and funding agreements from FHLBs, with a fair value of $5.0 billion and $1.5 billion, respectively, at March 31, 2022 and $5.1 billion and $1.5 billion, respectively, at December 31, 2021.

Certain GIAs have provisions that require collateral to be posted or payments to be made by us upon a downgrade of our long-term debt ratings. The actual amount of collateral required to be posted to the counterparties in the event of such downgrades, and the aggregate amount of payments that we could be required to make, depend on market conditions, the fair value of outstanding affected transactions and other factors prevailing at and after the time of the downgrade. The fair value of securities pledged as collateral with respect to these obligations was approximately $1.5 billion and $1.4 billion, at March 31, 2022 and December 31, 2021, respectively. This collateral primarily consists of securities of the U.S. government and government sponsored entities and generally cannot be repledged or resold by the counterparties.

Investments held in escrow accounts or otherwise subject to restriction as to their use were $530 million and $514 million, comprised of bonds available for sale and short-term investments at March 31, 2022 and December 31, 2021, respectively.

Reinsurance transactions between AIG and Fortitude Re were structured as modco and loss portfolio transfer arrangements with funds withheld.

35 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 6. Lending Activities

6. Lending Activities

The following table presents the composition of Mortgage and other loans receivable, net:

	March 31,			December 31,
(in millions)		2022		2021
Commercial mortgages^(a)	$	36,103	$	35,665
Residential mortgages		5,666		5,492
Life insurance policy loans		1,816		1,843
Commercial loans, other loans and notes receivable^(b)		4,502		3,677
Total mortgage and other loans receivable		48,087		46,677
Allowance for credit losses^(c)		(617)		(629)
Mortgage and other loans receivable, net	$	47,470	$	46,048

(a) Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 19 percent and 10 percent, respectively, at March 31, 2022 and 21 percent and 10 percent, respectively, at December 31, 2021).

(b) Includes loans held for sale which are carried at lower of cost or market and are collateralized primarily by apartments. As of March 31, 2022 and December 31, 2021, the net carrying value of these loans were $105 million and $15 million, respectively.

(c)Does not include allowance for credit losses of $106 million and $71 million, respectively, at March 31, 2022 and December 31, 2021, in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities.

Interest income is not accrued when payment of contractual principal and interest is not expected. Any cash received on impaired loans is generally recorded as a reduction of the current carrying amount of the loan. Accrual of interest income is generally resumed when delinquent contractual principal and interest is repaid or when a portion of the delinquent contractual payments are made and the ongoing required contractual payments have been made for an appropriate period. As of March 31, 2022, $12 million and $210 million of residential mortgage loans and commercial mortgage loans, respectively, were placed on nonaccrual status. As of December 31, 2021, $7 million and $226 million of residential mortgage loans and commercial mortgage loans, respectively, were placed on nonaccrual status.

Accrued interest is presented separately and is included in Accrued Investment Income on the Condensed Consolidated Balance Sheets. As of March 31, 2022, accrued interest receivable was $13 million and $127 million associated with residential mortgage loans and commercial mortgage loans, respectively. As of December 31, 2021, accrued interest receivable was $12 million and $126 million associated with residential mortgage loans and commercial mortgage loans, respectively.

A significant majority of commercial mortgages in the portfolio are non-recourse loans and, accordingly, the only guarantees are for specific items that are exceptions to the non-recourse provisions. It is therefore extremely rare for us to have cause to enforce the provisions of a guarantee on a commercial real estate or mortgage loan.

Nonperforming loans are generally those loans where payment of contractual principal or interest is more than 90 days past due. Nonperforming loans were not significant for any of the periods presented.

AIG | First Quarter 2022 Form 10-Q 36

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 6. Lending Activities

Credit Quality of Commercial Mortgages

The following table presents debt service coverage ratios^(a) for commercial mortgages by year of vintage:

March 31, 2022
(in millions)		2022		2021		2020		2019		2018		Prior		Total
>1.2X	$	1,573	$	2,294	$	1,667	$	5,061	$	3,882	$	13,760	$	28,237
1.00 - 1.20X		21		620		1,036		606		1,403		2,170		5,856
<1.00X		-		1		25		71		640		1,273		2,010
Total commercial mortgages	$	1,594	$	2,915	$	2,728	$	5,738	$	5,925	$	17,203	$	36,103

December 31, 2021
(in millions)		2021		2020		2019		2018		2017		Prior		Total
>1.2X	$	2,245	$	1,662	$	5,126	$	3,926	$	3,557	$	10,796	$	27,312
1.00 - 1.20X		574		1,019		700		1,138		136		1,929		5,496
<1.00X		1		27		71		925		41		1,792		2,857
Total commercial mortgages	$	2,820	$	2,708	$	5,897	$	5,989	$	3,734	$	14,517	$	35,665

The following table presents loan-to-value ratios^(b) for commercial mortgages by year of vintage:

March 31, 2022
(in millions)		2022		2021		2020		2019		2018		Prior		Total
Less than 65%	$	1,070	$	2,337	$	2,276	$	4,027	$	4,756	$	12,095	$	26,561
65% to 75%		524		371		426		1,711		1,139		3,503		7,674
76% to 80%		-		206		-		-		30		470		706
Greater than 80%		-		1		26		-		-		1,135		1,162
Total commercial mortgages	$	1,594	$	2,915	$	2,728	$	5,738	$	5,925	$	17,203	$	36,103

December 31, 2021
(in millions)		2021		2020		2019		2018		2017		Prior		Total
Less than 65%	$	2,286	$	2,272	$	4,149	$	4,815	$	2,892	$	9,902	$	26,316
65% to 75%		372		410		1,748		1,174		406		3,490		7,600
76% to 80%		-		-		-		-		188		274		462
Greater than 80%		162		26		-		-		248		851		1,287
Total commercial mortgages	$	2,820	$	2,708	$	5,897	$	5,989	$	3,734	$	14,517	$	35,665

(a) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio was 2.0X at March 31, 2022 and 1.9X at December 31, 2021. The debt service coverage ratios have been updated within the last three months. The debt service coverage ratios are updated when additional relevant information becomes available.

(b)The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 57 percent at March 31, 2022 and was 57 percent at December 31, 2021. The loan-to-value ratios have been updated within the last three months.

The following table presents the credit quality performance indicators for commercial mortgages:

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total	Total
March 31, 2022
Credit Quality Performance
Indicator:
In good standing	627	$	13,760	$	9,592	$	4,945	$	4,554	$	2,084	$	420	$	35,355	98	%
Restructured^(a)	10		-		353		140		-		137		-		630	2
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	3		-		67		51		-		-		-		118	-
Total^(b)	640	$	13,760	$	10,012	$	5,136	$	4,554	$	2,221	$	420	$	36,103	100	%
Allowance for credit losses		$	101	$	227	$	106	$	56	$	33	$	10	$	533	1	%

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 6. Lending Activities

December 31, 2021
Credit Quality Performance
Indicator:
In good standing	636	$	14,267	$	9,695	$	4,778	$	3,858	$	1,985	$	432	$	35,015	98	%
Restructured^(a)	8		-		354		25		-		136		-		515	2
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	5		-		81		54		-		-		-		135	-
Total^(b)	649	$	14,267	$	10,130	$	4,857	$	3,858	$	2,121	$	432	$	35,665	100	%
Allowance for credit losses		$	109	$	247	$	103	$	47	$	31	$	8	$	545	2	%

(a)Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings see Note 6 to the Consolidated Financial Statements in the 2021 Annual Report.

(b) Does not reflect allowance for credit losses.

The following table presents credit quality performance indicators for residential mortgages by year of vintage:

March 31, 2022
(in millions)		2022		2021		2020		2019		2018		Prior		Total
FICO*:
780 and greater	$	93	$	2,307	$	693	$	255	$	95	$	631	$	4,074
720 - 779		90		763		179		85		34		191		1,342
660 - 719		1		84		30		18		11		69		213
600 - 659		-		4		2		3		2		17		28
Less than 600		-		-		-		1		-		8		9
Total residential mortgages	$	184	$	3,158	$	904	$	362	$	142	$	916	$	5,666

December 31, 2021
(in millions)		2021		2020		2019		2018		2017		Prior		Total
FICO*:
780 and greater	$	1,601	$	691	$	297	$	107	$	192	$	501	$	3,389
720 - 779		1,306		230		86		44		58		154		1,878
660 - 719		48		42		22		12		20		49		193
600 - 659		1		1		2		3		2		12		21
Less than 600		-		-		1		1		2		7		11
Total residential mortgages	$	2,956	$	964	$	408	$	167	$	274	$	723	$	5,492

*Fair Isaac Corporation (FICO) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last twelve months.

Methodology Used to Estimate the Allowance for Credit Losses

For a discussion of our accounting policy for evaluating Mortgage and other loans receivable for impairment see Note 6 to the Consolidated Financial Statements in the 2021 Annual Report.

The following table presents a rollforward of the changes in the allowance for credit losses on Mortgage and other loans receivable^(a):

Three Months Ended March 31,	2022						2021
		Commercial		Other				Commercial		Other
(in millions)		Mortgages		Loans		Total		Mortgages		Loans		Total
Allowance, beginning of year	$	545	$	84	$	629	$	685	$	129	$	814
Loans charged off		(4)		-		(4)		-		-		-
Net charge-offs		(4)		-		(4)		-		-		-
Addition to (release of) allowance for loan losses		(8)		-		(8)		(23)		(4)		(27)
Allowance, end of period	$	533	$	84	$	617	$	662	$	125	$	787

(a)Does not include allowance for credit losses of $106 million and $70 million, respectively, at March 31, 2022 and 2021 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities.

AIG | First Quarter 2022 Form 10-Q 38

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 6. Lending Activities

Our expectations and models used to estimate the allowance for losses on commercial and residential mortgage loans are regularly updated to reflect the current economic environment. The full impact of COVID-19 on real estate valuations remains uncertain and we will continue to review our valuations as further information becomes available.

TROUBLED DEBT RESTRUCTURINGS

We modify loans to optimize their returns and improve their collectability, among other things. When we undertake such a modification with a borrower that is experiencing financial difficulty and the modification involves us granting a concession to the troubled debtor, the modification is a troubled debt restructuring (TDR). We assess whether a borrower is experiencing financial difficulty based on a variety of factors, including the borrower’s current default on any of its outstanding debt, the probability of a default on any of its debt in the foreseeable future without the modification, the insufficiency of the borrower’s forecasted cash flows to service any of its outstanding debt (including both principal and interest), and the borrower’s inability to access alternative third-party financing at an interest rate that would be reflective of current market conditions for a non-troubled debtor. Concessions granted may include extended maturity dates, interest rate changes, principal or interest forgiveness, payment deferrals and easing of loan covenants.

During the three-month periods ended March 31, 2022 and 2021, loans with a carrying value of $115 million and $46 million, respectively, were modified in TDRs.

7. Reinsurance

Fortitude RE

Fortitude Re is the reinsurer of the majority of AIG’s run-off operations. The reinsurance transactions are structured as modco and loss portfolio transfer arrangements with funds withheld (funds withheld). In modco and funds withheld arrangements, the investments supporting the reinsurance agreements, and which reflect the majority of the consideration that would be paid to the reinsurer for entering into the transaction, are withheld by, and therefore continue to reside on the balance sheet of, the ceding company (i.e., AIG) thereby creating an obligation for the ceding company to pay the reinsurer (i.e., Fortitude Re) at a later date. Additionally, as AIG maintains ownership of these investments, AIG will maintain its existing accounting for these assets (e.g., the changes in fair value of available for sale securities will be recognized within Other comprehensive income (loss)). As a result of the deconsolidation resulting from the Majority Interest Fortitude Sale, AIG has established a funds withheld payable to Fortitude Re while simultaneously establishing a reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed. The funds withheld payable contains an embedded derivative and changes in fair value of the embedded derivative related to the funds withheld payable are recognized in earnings through Net realized gains (losses). This embedded derivative is considered a total return swap with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements.

For additional information on Fortitude Re see Note 7 to the Consolidated Financial Statements in the 2021 Annual Report.

There is a diverse pool of assets supporting the funds withheld arrangements with Fortitude Re. The following summarizes the composition of the pool of assets:

	March 31, 2022				December 31, 2021
	Carrying			Fair	Carrying			Fair
(in millions)		Value		Value		Value		Value	Corresponding Accounting Policy
Fixed maturity securities - available for sale^(a)	$	26,513	$	26,513	$	31,815	$	31,815	Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option		2,711		2,711		1,983		1,983	Fair value through net investment income
Commercial mortgage loans		3,889		3,940		3,637		3,859	Amortized cost
Real estate investments		178		414		201		395	Amortized cost
Private equity funds / hedge funds		1,724		1,724		1,606		1,606	Fair value through net investment income
Policy loans		373		373		380		380	Amortized cost
Short-term investments		81		81		50		50	Fair value through net investment income
Funds withheld investment assets		35,469		35,756		39,672		40,088
Derivative assets, net^(b)		72		72		81		81	Fair value through net realized gains (losses)
Other^(c)		653		653		602		602	Amortized cost
Total	$	36,194	$	36,481	$	40,355	$	40,771

(a)The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $(3.3) billion ($(2.6) billion after-tax) and $(2.9) billion ($(2.3) billion after-tax), respectively for the three months ended March 31, 2022 and 2021.

39 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 7. Reinsurance

(b) The derivative assets and liabilities have been presented net of cash collateral. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $349 million and $16 million, respectively, as of March 31, 2022. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $389 million and $10 million, respectively, as of December 31, 2021. These derivative assets and liabilities are fully collateralized either by cash or securities.

The impact of the funds withheld arrangements with Fortitude Re was as follows:

Three Months Ended March 31,
(in millions)	2022		2021
Net underwriting income	$	-	$	-
Net investment income - Fortitude Re funds withheld assets		291		486
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized gains (losses) - Fortitude Re funds withheld assets		(140)		173
Net realized gains - Fortitude Re embedded derivatives		3,318		2,382
Net realized gains on Fortitude Re funds withheld assets		3,178		2,555
Income from continuing operations before income tax expense		3,469		3,041
Income tax expense^(a)		728		639
Net income		2,741		2,402
Change in unrealized depreciation of all other investments^(a)		(2,638)		(2,340)
Comprehensive income	$	103	$	62

(a)The income tax expense (benefit) and the tax impact in AOCI was computed using AIG’s U.S. statutory tax rate of 21 percent.

Various assets supporting the Fortitude Re funds withheld arrangements are reported at amortized cost, and as such, changes in the fair value of these assets are not reflected in the financial statements. However, changes in the fair value of these assets are included in the embedded derivative in the Fortitude Re funds withheld arrangements and the appreciation of these assets is the primary driver of the comprehensive income (loss) reflected above.

Reinsurance – Credit Losses

The estimation of reinsurance recoverables involves a significant amount of judgment, particularly for latent exposures, such as asbestos, due to their long-tail nature. Reinsurance assets include reinsurance recoverables on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and, consequently, are subject to similar judgments and uncertainties as the estimation of gross loss reserves. Similarly, Other assets include reinsurance recoverables for contracts which are accounted for as deposits.

We assess the collectability of reinsurance recoverable balances in each reporting period, through either historical trends of disputes and credit events or financial analysis of the credit quality of the reinsurer. We record adjustments to reflect the results of these assessments through an allowance for credit losses and disputes that reduces the carrying amount of reinsurance and other assets on the consolidated balance sheets (collectively, reinsurance recoverables). This estimate requires significant judgment for which key considerations include:

•paid and unpaid amounts recoverable;

•whether the balance is in dispute or subject to legal collection;

•the relative financial health of the reinsurer as determined by the Obligor Risk Ratings (ORRs) we assign to each reinsurer based upon our financial reviews; reinsurers that are financially troubled (i.e., in run-off, have voluntarily or involuntarily been placed in receivership, are insolvent, are in the process of liquidation or otherwise subject to formal or informal regulatory restriction) are assigned ORRs that will generate a significant allowance; and

•whether collateral and collateral arrangements exist.

AIG | First Quarter 2022 Form 10-Q 40

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 7. Reinsurance

An estimate of the reinsurance recoverables lifetime expected credit losses is established utilizing a probability of default and loss given default method, which reflects the reinsurer’s ORR rating. The allowance for credit losses excludes disputed amounts. An allowance for disputes is established for a reinsurance recoverable using the losses incurred model for contingencies.

The total reinsurance recoverables as of March 31, 2022 were $77.7 billion. As of that date, utilizing AIG’s ORRs, (i) approximately 93 percent of the reinsurance recoverables were investment grade, of which 53 percent related to General Insurance and 40 percent related to Life and Retirement; (ii) approximately 6 percent of the reinsurance recoverables were non-investment grade, the majority of which related to General Insurance; (iii) less than one percent of the non-investment grade reinsurance recoverables related to Life and Retirement and (iv) approximately one percent of the reinsurance recoverables related to entities that were not rated by AIG.

The total reinsurance recoverables as of December 31, 2021 were $76.3 billion. As of that date, utilizing AIG’s ORRs, (i) approximately 92 percent of the reinsurance recoverables were investment grade, of which 52 percent related to General Insurance and 40 percent related to Life and Retirement; (ii) approximately 7 percent of the reinsurance recoverables were noninvestment grade, the majority of which related to General Insurance; (iii) less than one percent of the non-investment grade reinsurance recoverables related to Life and Retirement and (iv) approximately one percent of the reinsurance recoverables related to entities that were not rated by AIG.

As of both March 31, 2022 and December 31, 2021, approximately 71 percent of our non-investment grade reinsurance exposure related to captive insurers. These arrangements are typically collateralized by letters of credit, funds withheld or trust agreements.

Reinsurance Recoverable Allowance

The following table presents a rollforward of the reinsurance recoverable allowance:

Three Months Ended March 31,	2022						2021
		General		Life and				General		Life and
(in millions)	Insurance		Retirement			Total	Insurance		Retirement			Total
Balance, beginning of year	$	281	$	101	$	382	$	292	$	83	$	375
Addition to (release of) allowance for expected credit losses and disputes, net		5		4		9		1		4		5
Write-offs charged against the allowance for credit losses and disputes		(2)		-		(2)		(4)		-		(4)
Other changes		2		-		2		2		-		2
Balance, end of period	$	286	$	105	$	391	$	291	$	87	$	378

There were no material recoveries of credit losses previously written off for the three-month periods ended March 31, 2022 and 2021.

Past-Due Status

We consider a reinsurance asset to be past due when it is 90 days past due. The allowance for credit losses is estimated excluding disputed amounts. An allowance for disputes is established using the losses incurred method for contingencies. Past due balances on claims that are not in dispute were not material for any of the periods presented.

8. Variable Interest Entities

We enter into various arrangements with variable interest entities (VIEs) in the normal course of business and consolidate the VIEs when we determine we are the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms, nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks to which the entity was designed to expose the variable interest holders.

The primary beneficiary is the entity that has both (i) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of our decision-making ability and our ability to influence activities that significantly affect the economic performance of the VIE.

41 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 8. Variable Interest Entities

Balance Sheet Classification and Exposure to Loss

Creditors or beneficial interest holders of VIEs for which AIG is the primary beneficiary generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to AIG, except in limited circumstances when AIG has provided a guarantee to the VIE’s interest holders. The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Balance Sheets:

		Real Estate and
		Investment		Securitization
(in millions)		Entities^(d)		Vehicles		Total
March 31, 2022
Assets:
Bonds available for sale	$	-	$	5,581	$	5,581
Other bond securities		-		1,648		1,648
Equity securities		69		-		69
Mortgage and other loans receivable		-		2,352		2,352
Other invested assets
Alternative investments^(a)		3,247		-		3,247
Investment real estate		2,191		-		2,191
Short-term investments		243		130		373
Cash		82		-		82
Accrued investment income		-		17		17
Other assets		173		59		232
Total^(b)	$	6,005	$	9,787	$	15,792
Liabilities:
Debt of consolidated investment entities	$	1,694	$	4,498	$	6,192
Other^(c)		112		117		229
Total	$	1,806	$	4,615	$	6,421

December 31, 2021
Assets:
Bonds available for sale	$	-	$	5,543	$	5,543
Other bond securities		-		1,852		1,852
Equity securities		223		-		223
Mortgage and other loans receivable		-		2,523		2,523
Other invested assets
Alternative investments^(a)		3,017		-		3,017
Investment real estate		2,257		-		2,257
Short-term investments		487		151		638
Cash		96		-		96
Accrued investment income		-		17		17
Other assets		190		558		748
Total^(b)	$	6,270	$	10,644	$	16,914
Liabilities:
Debt of consolidated investment entities	$	1,743	$	4,504	$	6,247
Other^(c)		122		722		844
Total	$	1,865	$	5,226	$	7,091

(a)Comprised primarily of investments in real estate joint ventures at March 31, 2022 and December 31, 2021.

(b) The assets of each VIE can be used only to settle specific obligations of that VIE.

(d) At March 31, 2022 and December 31, 2021, off-balance sheet exposure primarily consisting of our insurance companies’ commitments to real estate and investment entities were $2.0 billion and $2.2 billion, respectively, of which commitments to external parties were $0.5 billion and $0.6 billion, respectively.

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE.

AIG | First Quarter 2022 Form 10-Q 42

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 8. Variable Interest Entities

The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
		Total VIE		On-Balance			Off-Balance
(in millions)		Assets		Sheet	^(b)		Sheet			Total
March 31, 2022
Real estate and investment entities^(a)	$	461,827	$	8,021		$	3,617	^(c)	$	11,638
Other		1,745		248			749	^(d)		997
Total	$	463,572	$	8,269		$	4,366		$	12,635
December 31, 2021
Real estate and investment entities^(a)	$	457,335	$	7,650		$	3,448	^(c)	$	11,098
Other		1,738		237			528	^(d)		765
Total	$	459,073	$	7,887		$	3,976		$	11,863

(a)Comprised primarily of hedge funds and private equity funds.

(b) At March 31, 2022 and December 31, 2021, $8.2 billion and $7.8 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets.

(d) These amounts represent our estimate of the maximum exposure to loss under certain insurance policies issued to VIEs if a hypothetical loss occurred to the extent of the full amount of the insured value. Our insurance policies cover defined risks and our estimate of liability is included in our insurance reserves on the balance sheet.

For additional information on VIEs see Note 9 to the Consolidated Financial Statements in the 2021 Annual Report.

9. Derivatives and Hedge Accounting

We use derivatives and other financial instruments as part of our financial risk management programs and as part of our investment operations. Interest rate derivatives (such as interest rate swaps) are used to manage interest rate risk associated with embedded derivatives contained in insurance contract liabilities, fixed maturity securities, outstanding medium- and long-term notes as well as other interest rate sensitive assets and liabilities. Foreign exchange derivatives (principally foreign exchange forwards and swaps) are used to economically mitigate risk associated with non-U.S. dollar denominated debt, net capital exposures, foreign currency transactions, and foreign denominated investments. Equity derivatives are used to mitigate financial risk embedded in certain insurance liabilities and economically hedge certain investments. We use credit derivatives to manage our credit exposures. Commodity derivatives are used to hedge exposures within reinsurance contracts. The derivatives are effective economic hedges of the exposures that they are meant to offset. In addition to hedging activities, we also enter into derivative contracts with respect to investment operations, which may include, among other things, credit default swaps (CDSs), total return swaps and purchases of investments with embedded derivatives, such as equity-linked notes and convertible bonds.

43 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 9. Derivatives and Hedge Accounting

The following table presents the notional amounts of our derivatives and the fair value of derivative assets and liabilities in the Condensed Consolidated Balance Sheets:

	March 31, 2022								December 31, 2021
	Gross Derivative Assets				Gross Derivative Liabilities				Gross Derivative Assets				Gross Derivative Liabilities
		Notional		Fair		Notional		Fair		Notional		Fair		Notional		Fair
(in millions)		Amount		Value		Amount		Value		Amount		Value		Amount		Value
Derivatives designated as
hedging instruments:^(a)
Interest rate contracts	$	242	$	3	$	918	$	28	$	265	$	5	$	895	$	11
Foreign exchange contracts		7,522		571		3,276		195		5,431		467		5,828		197
Derivatives not designated
as hedging instruments:^(a)
Interest rate contracts		51,215		4,000		53,844		4,376		47,499		3,868		42,113		3,622
Foreign exchange contracts		11,132		833		6,672		470		7,905		722		9,997		524
Equity contracts		26,873		403		4,250		55		27,423		681		5,091		53
Commodity contracts		196		3		138		-		303		4		219		-
Credit contracts^(b)		2,789		1		933		45		3,790		1		936		47
Other contracts^(c)		44,152		14		-		-		43,892		13		51		-
Total derivatives, gross	$	144,121	$	5,828	$	70,031	$	5,169	$	136,508	$	5,761	$	65,130	$	4,454
Counterparty netting^(d)				(3,295)				(3,295)				(2,779)				(2,779)
Cash collateral^(e)				(1,877)				(1,478)				(2,139)				(1,089)
Total derivatives on Condensed
Consolidated Balance Sheets^(f)			$	656			$	396			$	843			$	586

(a) Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral.

(b) As of March 31, 2022 and December 31, 2021, included CDSs on super senior multi-sector CDOs with a net notional amount of $94 million and $97 million (fair value liability of $31 million and $30 million), respectively. The net notional amount represents the maximum exposure to loss on the portfolio.

(d) Represents netting of derivative exposures covered by a qualifying master netting agreement.

(e) Represents cash collateral posted and received that is eligible for netting.

(f) Freestanding derivatives only, excludes embedded derivatives. Derivative instrument assets and liabilities are recorded in Other assets and Other liabilities, respectively. Fair value of assets related to bifurcated embedded derivatives was zero at both March 31, 2022 and December 31, 2021. Fair value of liabilities related to bifurcated embedded derivatives was $10.3 billion and $14.5 billion, respectively, at March 31, 2022 and December 31, 2021. A bifurcated embedded derivative is generally presented with the host contract in the Condensed Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in variable annuity products, which include equity and interest rate components, and the funds withheld arrangement with Fortitude Re. For additional information see Note 7.

Collateral

We engage in derivative transactions that are not subject to a clearing requirement directly with unaffiliated third parties, in most cases, under International Swaps and Derivatives Association, Inc. (ISDA) Master Agreements. Many of the ISDA Master Agreements also include Credit Support Annex provisions, which provide for collateral postings that may vary at various ratings and threshold levels. We attempt to reduce our risk with certain counterparties by entering into agreements that enable collateral to be obtained from a counterparty on an upfront or contingent basis. We minimize the risk that counterparties might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value and generally requiring additional collateral to be posted upon the occurrence of certain events or circumstances. In addition, certain derivative transactions have provisions that require collateral to be posted by us upon a downgrade of our long-term debt ratings or give the counterparty the right to terminate the transaction. In the case of some of the derivative transactions, upon a downgrade of our long-term debt ratings, as an alternative to posting collateral and subject to certain conditions, we may assign the transaction to an obligor with higher debt ratings or arrange for a substitute guarantee of our obligations by an obligor with higher debt ratings or take other similar action. The actual amount of collateral required to be posted to counterparties in the event of such downgrades, or the aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors prevailing at and after the time of the downgrade.

Collateral posted by us to third parties for derivative transactions was $2.6 billion at March 31, 2022 and $2.7 billion at December 31, 2021. In the case of collateral posted under derivative transactions that are not subject to clearing, this collateral can generally be repledged or resold by the counterparties. Collateral provided to us from third parties for derivative transactions was $2.0 billion and $2.4 billion at March 31, 2022 and December 31, 2021, respectively. In the case of collateral provided to us under derivative transactions that are not subject to clearing, we generally can repledge or resell collateral.

AIG | First Quarter 2022 Form 10-Q 44

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 9. Derivatives and Hedge Accounting

Offsetting

We have elected to present all derivative receivables and derivative payables, and the related cash collateral received and paid, on a net basis on our Condensed Consolidated Balance Sheets when a legally enforceable ISDA Master Agreement exists between us and our derivative counterparty. An ISDA Master Agreement is an agreement governing multiple derivative transactions between two counterparties. The ISDA Master Agreement generally provides for the net settlement of all, or a specified group, of these derivative transactions, as well as transferred collateral, through a single payment, and in a single currency, as applicable. The net settlement provisions apply in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions governed by the ISDA Master Agreement.

Hedge Accounting

We designated certain derivatives entered into with third parties as fair value hedges of available for sale investment securities held by our insurance subsidiaries. The fair value hedges include foreign currency forwards and cross currency swaps designated as hedges of the change in fair value of foreign currency denominated available for sale securities attributable to changes in foreign exchange rates. We also designated certain interest rate swaps entered into with third parties as fair value hedges of fixed rate GICs attributable to changes in benchmark interest rates.

We use foreign currency denominated debt and cross-currency swaps as hedging instruments in net investment hedge relationships to mitigate the foreign exchange risk associated with our non-U.S. dollar functional currency foreign subsidiaries. For net investment hedge relationships where issued debt is used as a hedging instrument, we assess the hedge effectiveness and measure the amount of ineffectiveness based on changes in spot rates. For net investment hedge relationships that use derivatives as hedging instruments, we assess hedge effectiveness and measure hedge ineffectiveness using changes in forward rates. For the three-month periods ended March 31, 2022 and 2021, we recognized gains (losses) of $87 million and $101 million, respectively, included in Change in foreign currency translation adjustments in Other comprehensive income (loss) related to the net investment hedge relationships.

A qualitative methodology is utilized to assess hedge effectiveness for net investment hedges, while regression analysis is employed for all other hedges.

The following table presents the gain (loss) recognized in income on our derivative instruments in fair value hedging relationships in the Condensed Consolidated Statements of Income (Loss):

	Gains/(Losses) Recognized in Income for:
	Hedging		Excluded		Hedged
(in millions)	Derivatives^(a)		Components^(b)		Items		Net Impact
Three Months Ended March 31, 2022
Interest rate contracts:
Interest credited to policyholder account balances	$	(21)	$	-	$	23	$	2
Net investment income (loss)		1		-		(1)		-
Foreign exchange contracts:
Net realized gains/(losses)		109		42		(109)		42
Three Months Ended March 31, 2021
Interest rate contracts:
Interest credited to policyholder account balances	$	(4)	$	-	$	6	$	2
Net investment income (loss)		8		-		(7)		1
Foreign exchange contracts:
Net realized gains/(losses)		32		(29)		(32)		(29)

(a) Gains and losses on derivative instruments designated and qualifying in fair value hedges that are included in the assessment of hedge effectiveness.

(b) Gains and losses on derivative instruments designated and qualifying in fair value hedges that are excluded from the assessment of hedge effectiveness and recognized in income on a mark-to-market basis.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 9. Derivatives and Hedge Accounting

Derivatives Not Designated as Hedging Instruments

The following table presents the effect of derivative instruments not designated as hedging instruments in the Condensed Consolidated Statements of Income (Loss):

	Gains (Losses)
Three Months Ended March 31,	Recognized in Income
(in millions)		2022		2021
By Derivative Type:
Interest rate contracts	$	(613)	$	(1,545)
Foreign exchange contracts		236		(87)
Equity contracts		(204)		(519)
Commodity contracts		(4)		-
Credit contracts		(1)		(5)
Other contracts		18		15
Embedded derivatives		5,285		4,839
Total	$	4,717	$	2,698
By Classification:
Policy fees	$	15	$	15
Net investment income		(1)		(12)
Net realized gains - excluding Fortitude Re funds withheld assets		1,448		440
Net realized gains on Fortitude Re funds withheld assets^(a)		3,262		2,265
Policyholder benefits and claims incurred		(7)		(10)
Total	$	4,717	$	2,698

(a)Includes over-the-counter derivatives supporting the funds withheld arrangements with Fortitude Re and the embedded derivative contained within the funds withheld payable with Fortitude Re.

CREDIT RISK-RELATED CONTINGENT FEATURES

We estimate that at March 31, 2022, based on our outstanding financial derivative transactions, a downgrade of our long-term senior debt ratings to BBB or BBB– by Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., and/or a downgrade to Baa2 or Baa3 by Moody’s Investors’ Service, Inc. would permit counterparties to make additional collateral calls and permit certain counterparties to elect early termination of contracts, resulting in corresponding collateral postings and termination payments in the total amount of up to approximately $26 million. The aggregate fair value of our derivatives that were in a net liability position and that contain such credit risk-related contingencies which can be triggered below our long-term senior debt ratings of BBB+ or Baa1 was approximately $142 million and $206 million at March 31, 2022 and December 31, 2021, respectively. The aggregate fair value of assets posted as collateral under these contracts at March 31, 2022 and December 31, 2021, was approximately $163 million and $239 million, respectively.

Hybrid Securities with Embedded Credit Derivatives

We invest in hybrid securities (such as credit-linked notes) with the intent of generating income and not specifically to acquire exposure to embedded derivative risk. As is the case with our other investments in RMBS, CMBS, CDOs and ABS, our investments in these hybrid securities are exposed to losses only up to the amount of our initial investment in the hybrid security. Other than our initial investment in the hybrid securities, we have no further obligation to make payments on the embedded credit derivatives in the related hybrid securities.

We elect to account for our investments in these hybrid securities with embedded written credit derivatives at fair value, with changes in fair value recognized in Net investment income. Our investments in these hybrid securities are reported as Other bond securities in the Condensed Consolidated Balance Sheets. The fair values of these hybrid securities were $1.8 billion and $2.0 billion at March 31, 2022 and December 31, 2021, respectively. These securities have par amounts of $4.5 billion and $4.6 billion at March 31, 2022 and December 31, 2021, respectively, and have remaining stated maturity dates that extend to 2052.

AIG | First Quarter 2022 Form 10-Q 46

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 10. Insurance Liabilities

10. Insurance Liabilities

Liability for Unpaid Losses and Loss Adjustment Expenses (Loss Reserves)

Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve estimates. Because these estimates are subject to the outcome of future events, changes in estimates are common given that loss trends vary and time is often required for changes in trends to be recognized and confirmed. Any adjustments resulting from this review are reflected currently in pre-tax income, except to the extent such adjustment impacts a deferred gain under a retroactive reinsurance agreement, in which case the ceded portion would be amortized into pre-tax income in subsequent periods. Reserve changes that increase previous estimates of ultimate cost are referred to as unfavorable or adverse development or reserve strengthening. Reserve changes that decrease previous estimates of ultimate cost are referred to as favorable development or reserve releases.

Our gross loss reserves before reinsurance and discount are net of contractual deductible recoverable amounts due from policyholders of approximately $12.3 billion at both March 31, 2022 and December 31, 2021. These recoverable amounts are related to certain policies with high deductibles (in excess of high dollar amounts retained by the insured through self-insured retentions, deductibles, retrospective programs, or captive arrangements, each referred to generically as “deductibles”), primarily for U.S. Commercial casualty business. With respect to the deductible portion of the claim, we manage and pay the entire claim on behalf of the insured and are reimbursed by the insured for the deductible portion of the claim. Thus, these recoverable amounts represent a credit exposure to us. At March 31, 2022 and December 31, 2021, we held collateral of approximately $8.5 billion and $8.6 billion, respectively, for these deductible recoverable amounts, consisting primarily of letters of credit and funded trust agreements. Allowance for credit losses for the unsecured portion of these recoverable amounts was $14 million at both March 31, 2022 and December 31, 2021.

The following table presents the rollforward of activity in loss reserves:

	Three Months Ended
	March 31,
(in millions)		2022		2021
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	79,026	$	77,720
Reinsurance recoverable		(35,213)		(34,431)
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		43,813		43,289
Losses and loss adjustment expenses incurred:
Current year		3,882		3,925
Prior years, excluding discount and amortization of deferred gain		(51)		16
Prior years, discount charge (benefit)		4		(18)
Prior years, amortization of deferred gain on retroactive reinsurance^(a)		(42)		(72)
Total losses and loss adjustment expenses incurred		3,793		3,851
Losses and loss adjustment expenses paid:
Current year		(323)		(328)
Prior years		(3,442)		(3,584)
Total losses and loss adjustment expenses paid		(3,765)		(3,912)
Other changes:
Foreign exchange effect		4		244
Retroactive reinsurance adjustment (net of discount)^(b)		17		89
Total other changes		21		333
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		43,862		43,561
Reinsurance recoverable		34,321		35,271
Total	$	78,183	$	78,832

(a)Includes $4 million and $17 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended March 31, 2022 and 2021, respectively.

(b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $39 million for both the three-month periods ended March 31, 2022 and 2021.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 10. Insurance Liabilities

On January 20, 2017, we entered into an adverse development reinsurance agreement with NICO, under which we transferred to NICO 80 percent of the reserve risk on substantially all of our U.S. commercial long-tail exposures for accident years 2015 and prior. Under this agreement, we ceded to NICO 80 percent of the paid losses on subject business paid on or after January 1, 2016 in excess of $25 billion of net paid losses, up to an aggregate limit of $25 billion. At NICO’s 80 percent share, NICO’s limit of liability under the contract is $20 billion. We account for this transaction as retroactive reinsurance. We paid total consideration, including interest, of $10.2 billion. The consideration was placed into a collateral trust account as security for NICO’s claim payment obligations, and Berkshire has provided a parental guarantee to secure the obligations of NICO under the agreement.

Prior Year Development

During the three-month period ended March 31, 2022, we recognized favorable prior year loss reserve development of $51 million excluding discount and amortization of deferred gain. The development in these periods was largely driven by favorable development on U.S. Workers Compensation, and Japan Personal Insurance, partially offset by unfavorable development on U.S Property and Special Risks.

During the three-month period ended March 31, 2021, we recognized unfavorable prior year loss reserve development of $16 million excluding discount and amortization of deferred gain. The development in these periods was primarily driven by unfavorable development on prior-year catastrophes and the Blackboard insurance portfolio, offset by favorable development on Property, Specialty and U.S Workers Compensation.

Discounting of Loss Reserves

At March 31, 2022 and December 31, 2021, the loss reserves reflect a net loss reserve discount of $935 million and $876 million, respectively, including tabular and non-tabular calculations based upon the following assumptions:

 The non-tabular workers’ compensation discount is calculated separately for companies domiciled in New York, Pennsylvania and Delaware, and follows the statutory regulations (prescribed or permitted) for each state.

– For New York companies, the discount is based on a 5 percent interest rate and the companies’ own payout patterns.

– The Pennsylvania and Delaware regulators approved use of a consistent benchmark discount rate and spread (U.S. Treasury rate plus a liquidity premium) to all of our workers’ compensation reserves in our Pennsylvania domiciled and Delaware domiciled companies, as well as our use of updated payout patterns specific to our primary and excess workers compensation portfolios. In 2020, the regulators also approved that the discount rate will be updated on an annual basis.

 The tabular workers’ compensation discount is calculated based on the mortality rate used in the 2007 U.S. Life table and interest rates prescribed or permitted by each state (i.e. New York is based on 5 percent interest rate and Pennsylvania and Delaware are based on U.S. Treasury rate plus a liquidity premium). In the case that applying this tabular discount factor to our nominal reserves produces a tabular discount that is greater than the indemnity portion of our case reserves, the tabular discount is capped at our estimate of the indemnity portion of our cases reserves (45 percent).

The discount for asbestos reserves has been fully accreted.

At March 31, 2022 and December 31, 2021, the discount consists of $279 million and $260 million of tabular discount, respectively, and $656 million and $616 million of non-tabular discount for workers’ compensation, respectively. During the three-month periods ended March 31, 2022 and 2021, the benefit / (charge) from changes in discount of $20 million and $32 million, respectively, were recorded as part of the policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income (Loss).

The following table presents the components of the loss reserve discount discussed above:

(in millions)	March 31, 2022		December 31, 2021
U.S. workers' compensation	$	1,849	$	1,829
Retroactive reinsurance		(914)		(953)
Total reserve discount^(a)(b)	$	935	$	876

(a)Excludes $118 million and $116 million of discount related to certain long-tail liabilities in the UK at March 31, 2022 and December 31, 2021, respectively.

(b) Includes gross discount of $493 million and $500 million, which was 100 percent ceded to Fortitude Re at March 31, 2022 and December 31, 2021, respectively.

AIG | First Quarter 2022 Form 10-Q 48

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 10. Insurance Liabilities

The following table presents the net loss reserve discount benefit (charge):

Three Months Ended March 31,
(in millions)	2022	2021
Current accident year	24	$	14
Accretion and other adjustments to prior year discount	(4)		18
Net reserve discount benefit (charge)	20		32
Change in discount on loss reserves ceded under retroactive reinsurance	39		39
Net change in total reserve discount^*	59	$	71

*Excludes $2 million and $7 million discount related to certain long-tail liabilities in the UK for the three-month periods ended March 31, 2022 and 2021, respectively.

Amortization of Deferred Gain on Retroactive Reinsurance

Amortization of the deferred gain on retroactive reinsurance includes $38 million and $55 million related to the adverse development reinsurance cover with NICO for the three-month periods ended March 31, 2022 and 2021, respectively.

Amounts recognized reflect the amortization of the initial deferred gain at inception, as amended for subsequent changes in the deferred gain due to changes in subject reserves.

11. Contingencies, Commitments and Guarantees

In the normal course of business, various contingent liabilities and commitments are entered into by AIG and our subsidiaries. In addition, AIG Parent guarantees various obligations of certain subsidiaries.

Although AIG cannot currently quantify its ultimate liability for unresolved litigation and investigation matters, including those referred to below, it is possible that such liability could have a material adverse effect on AIG’s consolidated financial condition or its consolidated results of operations or consolidated cash flows for an individual reporting period.

Legal Contingencies

Overview

In the normal course of business, AIG and our subsidiaries are subject to regulatory and government investigations and actions, and litigation and other forms of dispute resolution in a large number of proceedings pending in various domestic and foreign jurisdictions. Certain of these matters involve potentially significant risk of loss due to potential for significant jury awards and settlements, punitive damages or other penalties. Many of these matters are also highly complex and may seek recovery on behalf of a class or similarly large number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from these matters. In our insurance and reinsurance operations, litigation and arbitration concerning the scope of coverage under insurance and reinsurance contracts, and litigation and arbitration in which our subsidiaries defend or indemnify their insureds under insurance contracts, are generally considered in the establishment of our loss reserves. Separate and apart from the foregoing matters involving insurance and reinsurance coverage, AIG, our subsidiaries and their respective officers and directors are subject to a variety of additional types of legal proceedings brought by holders of AIG securities, customers, employees and others, alleging, among other things, breach of contractual or fiduciary duties, bad faith, indemnification and violations of federal and state statutes and regulations. With respect to these other categories of matters not arising out of claims for insurance or reinsurance coverage, we establish reserves for loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In many instances, we are unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from legal proceedings may exceed the amount of liabilities that we have recorded in our financial statements covering these matters. While such potential future charges could be material, based on information currently known to management, management does not believe, other than as may be discussed below, that any such charges are likely to have a material adverse effect on our financial position or results of operation.

Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of AIG and our subsidiaries in connection with industry-wide and other inquiries or examinations into, among other matters, the business practices of current and former operating insurance subsidiaries. Such investigations, inquiries or examinations could develop into administrative, civil or criminal proceedings or enforcement actions, in which remedies could include fines, penalties, restitution or alterations in our business practices, and could result in additional expenses, limitations on certain business activities and reputational damage.

49 AIG | First Quarter 2022 Form 10-Q

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 11. Contingencies, Commitments and Guarantees

Moriarty Litigation

Effective January 1, 2013, the California legislature enacted AB 1747 (the Act), which amended the Insurance Code to mandate that life insurance policies issued and delivered in California contain a 60-day grace period during which time the policies must remain in force after a premium payment is missed, and that life insurers provide both a 30-day minimum notification of lapse and the right of policy owners to designate a secondary recipient for lapse and termination notices. Following guidance from the California Department of Insurance and certain industry trade groups, American General Life Insurance Company (AGL) interpreted the Act to be prospective in nature, applying only to policies issued and delivered on or after the Act’s January 1, 2013, effective date. On July 18, 2017, AGL was sued in a putative class action captioned Moriarty v. American General Life Insurance Company, No. 17-cv-1709 (S.D. Cal.), challenging AGL’s prospective application of the Act. Plaintiff’s complaint, which is similar to complaints filed against other insurers, argues that policies issued and delivered prior to January 1, 2013, like the $1 million policy issued to Plaintiff’s husband do not lapse—despite nonpayment of premiums—if the insurer has not complied with the Act’s terms. On August 30, 2021, the California Supreme Court issued an opinion in McHugh v. Protective Life Insurance, 12 Cal. 5th 213 (2021), ruling that the Act applies to all policies in force on January 1, 2013, regardless of when the policies were issued. The District Court in Moriarty reached effectively the same result on October 2, 2020, when it held that the Act applied to Plaintiff’s husband’s 25-year term life insurance policy under the theory that the payment of premiums “renewed” Plaintiff’s policy after the effective date of the Act. However, the District Court in Moriarty also ruled on October 2, 2020 that various fact issues precluded a final determination as to AGL’s liability and what (if any) corresponding damages may have resulted. In addition, the District Court denied Plaintiff’s motion for class certification without prejudice on November 25, 2020. On February 7, 2022, Plaintiff filed motions for summary judgment and class certification; AGL has opposed both motions. In addition, on February 7, 2022, AGL filed a motion for partial summary judgment, which Plaintiff has opposed. The District Court heard arguments on these motions on April 11, 2022. Proceedings are ongoing in other California cases that raise similar industry-wide issues. We have accrued our current estimate of probable loss with respect to this litigation.

Other Commitments

In the normal course of business, we enter into commitments to invest in limited partnerships, private equity funds and hedge funds and to purchase and develop real estate in the U.S. and abroad. These commitments totaled $7.1 billion and $7.3 billion at March 31, 2022 and December 31, 2021, respectively.

Guarantees

Subsidiaries

We have issued unconditional guarantees with respect to the prompt payment, when due, of all present and future payment obligations and liabilities of AIG Financial Products Corp. and related subsidiaries (collectively AIGFP) and of AIG Markets, Inc. arising from transactions entered into by AIG Markets, Inc.

In connection with AIGFP’s business activities, AIGFP has issued, in a limited number of transactions, standby letters of credit or similar facilities to equity investors of structured leasing transactions in an amount equal to the termination value owing to the equity investor by the lessee in the event of a lessee default (the equity termination value). The total amount outstanding at March 31, 2022 was $70 million. In those transactions, AIGFP has agreed to pay such amount if the lessee fails to pay. The amount payable by AIGFP is, in certain cases, partially offset by amounts payable under other instruments typically equal to the present value of scheduled payments to be made by AIGFP. In the event that AIGFP is required to make a payment to the equity investor, the lessee is unconditionally obligated to reimburse AIGFP. To the extent that the equity investor is paid the equity termination value from the standby letter of credit and/or other sources, including payments by the lessee, AIGFP takes an assignment of the equity investor’s rights under the lease of the underlying property. Because the obligations of the lessee under the lease transactions are generally economically defeased, lessee bankruptcy is the most likely circumstance in which AIGFP would be required to pay without reimbursement.

AIG Parent files a consolidated federal income tax return with certain subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service (IRS). AIG Parent and its subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Under an Amended and Restated Tax Payment Allocation Agreement dated June 6, 2011 between AIG Parent and one of its Bermuda-domiciled insurance subsidiaries, AIG Life of Bermuda, Ltd. (AIGB), AIG Parent has agreed to indemnify AIGB for any tax liability (including interest and penalties) resulting from adjustments made by the IRS or other appropriate authorities to taxable income, special deductions or credits in connection with investments made by AIGB in certain affiliated entities.

AIG | First Quarter 2022 Form 10-Q 50

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 11. Contingencies, Commitments and Guarantees

Business and Asset Dispositions

We are subject to financial guarantees and indemnity arrangements in connection with the completed sales of businesses and assets. The various arrangements may be triggered by, among other things, declines in asset values, the occurrence of specified business contingencies, the realization of contingent liabilities, developments in litigation or breaches of representations, warranties or covenants provided by us. These arrangements are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or are not applicable.

We are unable to develop a reasonable estimate of the maximum potential payout under certain of these arrangements. Overall, we believe the likelihood that we will have to make any material payments related to completed sales under these arrangements is remote, and no material liabilities related to these arrangements have been recorded in the Condensed Consolidated Balance Sheets.

Other

 For additional information on commitments and guarantees associated with VIEs, see Note 8.

 For additional information on derivatives, see Note 9.

12. Equity

Shares Outstanding

Preferred Stock

On March 14, 2019, we issued 20,000 shares of Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock) (equivalent to 20,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock), $5.00 par value and $25,000 liquidation preference per share (equivalent to $25 per Depositary Share). After underwriting discounts and expenses, we received net proceeds of approximately $485 million.

The following table presents declaration date, record date, payment date and dividends paid per preferred share and per depository share on the Series A Preferred Stock in the three months ended March 31, 2022 and 2021:

			Dividends Paid
Declaration Date	Record Date	Payment Date		Per Preferred Share		Per Depositary Share
February 16, 2022	February 28, 2022	March 15, 2022	$	365.625	$	0.365625
February 16, 2021	February 26, 2021	March 15, 2021	$	365.625	$	0.365625

Common Stock

The following table presents a rollforward of outstanding shares:

Three Months Ended March 31, 2022	Common	Treasury	Common Stock
	Stock Issued	Stock	Outstanding
Shares, beginning of year	1,906,671,492	(1,087,984,129)	818,687,363
Shares issued	-	4,910,231	4,910,231
Shares repurchased	-	(23,373,504)	(23,373,504)
Shares, end of period	1,906,671,492	(1,106,447,402)	800,224,090

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 12. Equity

Dividends

Dividends are payable on AIG Common Stock only when, as and if declared by our Board of Directors in its discretion, from funds legally available for this purpose. In considering whether to pay a dividend on or purchase shares of AIG Common Stock, our Board of Directors considers a number of factors, including, but not limited to: the capital resources available to support our insurance operations and business strategies, AIG’s funding capacity and capital resources in comparison to internal benchmarks, expectations for capital generation, rating agency expectations for capital, regulatory standards for capital and capital distributions, and such other factors as our Board of Directors may deem relevant. The payment of dividends is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which no dividends may be declared or paid on any AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.

The following table presents declaration date, record date, payment date and dividends paid per common share on AIG Common Stock in the three months ended March 31, 2022 and 2021:

				Dividends Paid
Declaration Date	Record Date	Payment Date		Per Common Share
February 16, 2022	March 17, 2022	March 31, 2022	$	0.32
February 16, 2021	March 16, 2021	March 30, 2021	$	0.32

For a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries see Note 18 to the Consolidated Financial Statements in the 2021 Annual Report.

Repurchase of AIG Common Stock

The following table presents repurchases of AIG Common Stock:

Three Months Ended March 31,
(in millions)		2022		2021
Aggregate repurchases of common stock^*	$	1,403	$	362
Total number of common shares repurchased		23		8

*For the three months ended March 31, 2021, approximately $92 million of these share repurchases were funded with proceeds received from warrant exercises that occurred prior to the expiration of warrants to purchase shares of AIG Common Stock on January 19, 2021.

The timing of any future repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. The repurchase of AIG Common Stock is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which AIG may not (other than in limited circumstances) purchase, redeem or otherwise acquire AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 12. Equity

Accumulated Other Comprehensive INCOME (LOSS)

The following table presents a rollforward of Accumulated other comprehensive income (loss):

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)		Credit Losses Was Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Balance, December 31, 2021, net of tax	$	(57)	$	10,094	$	(2,453)	$	(903)	$	6	$	6,687
Change in unrealized depreciation
of investments		(57)		(20,110)		-		-		-		(20,167)
Change in deferred policy acquisition costs
adjustment and other		-		2,815		-		-		-		2,815
Change in future policy benefits		-		1,183		-		-		-		1,183
Change in foreign currency translation adjustments		-		-		(1)		-		-		(1)
Change in net actuarial loss		-		-		-		11		-		11
Change in prior service cost		-		-		-		1		-		1
Change in deferred tax asset (liability)		12		2,505		(4)		(3)		-		2,510
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		-		-
Total other comprehensive income (loss)		(45)		(13,607)		(5)		9		-		(13,648)
Noncontrolling interests		(5)		(1,076)		20		-		-		(1,061)
Balance, March 31, 2022, net of tax	$	(97)	$	(2,437)	$	(2,478)	$	(894)	$	6	$	(5,900)

Balance, December 31, 2020, net of tax	$	(95)	$	17,093	$	(2,267)	$	(1,228)	$	8	$	13,511
Change in unrealized appreciation (depreciation)
of investments		41		(11,690)		-		-		-		(11,649)
Change in deferred policy acquisition costs
adjustment and other		(2)		1,393		-		-		-		1,391
Change in future policy benefits		-		1,145		-		-		-		1,145
Change in foreign currency translation adjustments		-		-		170		-		-		170
Change in net actuarial gain		-		-		-		(1)		-		(1)
Change in prior service cost		-		-		-		2		-		2
Change in deferred tax asset (liability)		(6)		1,953		(45)		(4)		-		1,898
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		(1)		(1)
Total other comprehensive income (loss)		33		(7,199)		125		(3)		(1)		(7,045)
Noncontrolling interests		-		-		-		-		-		-
Balance, March 31, 2021, net of tax	$	(62)	$	9,894	$	(2,142)	$	(1,231)	$	7	$	6,466

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 12. Equity

The following table presents the other comprehensive income (loss) reclassification adjustments for the three-month periods ended March 31, 2022 and 2021, respectively:

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)	Credit Losses Was Taken			Investments		Adjustments		Adjustment		Own Credit Risk		Total
March 31, 2022
Unrealized change arising during period	$	(57)	$	(16,251)	$	(1)	$	4	$	-	$	(16,305)
Less: Reclassification adjustments
included in net income		-		(139)		-		(8)		-		(147)
Total other comprehensive income (loss),
before income tax expense (benefit)		(57)		(16,112)		(1)		12		-		(16,158)
Less: Income tax expense (benefit)		(12)		(2,505)		4		3		-		(2,510)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(45)	$	(13,607)	$	(5)	$	9	$	-	$	(13,648)

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)	Credit Losses Was Taken			Investments		Adjustments		Adjustment		Own Credit Risk		Total
March 31, 2021
Unrealized change arising during period	$	37	$	(8,761)	$	170	$	(11)	$	(1)	$	(8,566)
Less: Reclassification adjustments
included in net income		(2)		391		-		(12)		-		377
Total other comprehensive income (loss),
before income tax expense (benefit)		39		(9,152)		170		1		(1)		(8,943)
Less: Income tax expense (benefit)		6		(1,953)		45		4		-		(1,898)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	33	$	(7,199)	$	125	$	(3)	$	(1)	$	(7,045)

The following table presents the effect of the reclassification of significant items out of AOCI on the respective line items in the Condensed Consolidated Statements of Income (Loss):

	Amount Reclassified
	from AOCI					Affected Line Item in the
	Three Months Ended March 31,					Condensed Consolidated
(in millions)			2022		2021	Statements of Income (Loss)
Unrealized appreciation (depreciation) of fixed
maturity securities on which allowance
for credit losses was taken
Investments		$	-	$	(2)	Net realized gains (losses)
Total			-		(2)
Unrealized appreciation (depreciation) of
all other investments
Investments			(139)		391	Net realized gains (losses)
Total			(139)		391
Change in retirement plan liabilities adjustment
Prior-service credit			(1)		(1)	*
Actuarial losses			(7)		(11)	*
Total			(8)		(12)
Total reclassifications for the period		$	(147)	$	377

*These AOCI components are included in the computation of net periodic pension cost. For additional information see Note 14.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 13. Earnings Per Common Share (EPS)

13. Earnings Per Common Share (EPS)

The basic EPS computation is based on the weighted average number of common shares outstanding, adjusted to reflect all stock dividends and stock splits. The diluted EPS computation is based on those shares used in the basic EPS computation plus common shares that would have been outstanding assuming issuance of common shares for all dilutive potential common shares outstanding and adjusted to reflect all stock dividends and stock splits, using the treasury stock method or the if-converted method, as applicable.

The following table presents the computation of basic and diluted EPS:

Three Months Ended March 31,
(dollars in millions, except per common share data)		2022		2021
Numerator for EPS:
Income from continuing operations	$	4,656	$	3,930
Less: Net income from continuing operations attributable to noncontrolling interests		396		54
Less: Preferred stock dividends		7		7
Income attributable to AIG common shareholders from continuing operations		4,253		3,869
Income from discontinued operations, net of income tax expense		-		-
Net income attributable to AIG common shareholders		4,253		3,869
Denominator for EPS:
Weighted average common shares outstanding - basic		816,314,273		868,105,069
Dilutive common shares		9,698,337		8,164,855
Weighted average common shares outstanding - diluted^(a)		826,012,610		876,269,924
Income per common share attributable to AIG common shareholders:
Basic:
Income from continuing operations	$	5.21	$	4.45
Income from discontinued operations	$	-	$	-
Income attributable to AIG common shareholders	$	5.21	$	4.45
Diluted:
Income from continuing operations	$	5.15	$	4.41
Income from discontinued operations	$	-	$	-
Income attributable to AIG common shareholders	$	5.15	$	4.41

(a)Potential dilutive common shares include our share-based employee compensation plans, a weighted average portion of the 10-year warrants issued to AIG shareholders as part of AIG’s recapitalization in January 2011, which expired in January 2021 and an option for Blackstone to exchange all or a portion of its ownership interest in Corebridge for AIG common shares. The number of common shares excluded from diluted shares outstanding was 39.9 million and 9.2 million for the three-month periods ended March 31, 2022 and 2021, respectively, because the effect of including those common shares in the calculation would have been anti-dilutive.

For information regarding the Blackstone option to exchange all or a portion of its ownership interest in Corebridge for AIG common shares, see Note 1. For information regarding our repurchases of AIG Common Stock, see Note 16.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 14. Employee Benefits

14. Employee Benefits

We sponsor various defined benefit plans for eligible employees and retirees in the U.S. and certain non-U.S. countries.

The following table presents the components of net periodic benefit cost (credit) with respect to pension benefits:

	Pension
		U.S.		Non-U.S.
(in millions)		Plans		Plans		Total
Three Months Ended March 31, 2022
Components of net periodic benefit cost:
Service cost	$	1	$	5	$	6
Interest cost		27		3		30
Expected return on assets		(53)		(5)		(58)
Amortization of prior service cost		-		1		1
Amortization of net loss		7		1		8
Net periodic benefit cost (credit)	$	(18)	$	5	$	(13)
Three Months Ended March 31, 2021
Components of net periodic benefit cost:
Service cost	$	1	$	5	$	6
Interest cost		22		3		25
Expected return on assets		(61)		(6)		(67)
Amortization of prior service cost		-		1		1
Amortization of net loss		9		2		11
Net periodic benefit cost (credit)	$	(29)	$	5	$	(24)

The service cost for our U.S. defined benefit plans only reflects administrative fees as the plans are frozen and no longer accrue benefits. We recognized net expense of $1 million and $2 million for our U.S. and non-U.S. postretirement benefit plans for the three-month periods ended March 31, 2022 and 2021, respectively.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 15. Income Taxes

15. Income Taxes

U.S. Tax law changes

The IRS has continued to issue new guidance in relation to the Tax Cuts and Jobs Act (the Tax Act) enacted in 2017. Guidance has been issued covering provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries, foreign tax credits by which the U.S. mitigates double taxation of foreign operations, and other elements of tax law. Changes to this guidance, and other provisions of tax law, are expected in future periods. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of the Tax Act, possibly materially. Consistent with accounting guidance, we have made an accounting policy election to treat GILTI taxes as a period tax charge in the period the tax is incurred.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to mitigate the economic impacts of the COVID-19 pandemic. The tax provisions of the CARES Act have not had and are currently not expected to have a material impact on AIG’s U.S. federal tax liabilities.

On November 15, 2021, the U.S. enacted the Infrastructure Investment and Jobs Act to improve infrastructure in the U.S. The tax provisions of the Infrastructure Investment and Jobs Act have not had and are currently not expected to have a material impact on AIG’s U.S. federal tax liabilities.

RECLASSIFICATION OF CERTAIN TAX EFFECTS FROM AOCI

We use an item-by-item approach to release the stranded or disproportionate income tax effects in AOCI related to our available-for-sale securities. Under this approach, a portion of the disproportionate tax effects is assigned to each individual security lot at the date the amount becomes lodged. When the individual securities are sold, mature, or are otherwise impaired on an other-than-temporary basis, the assigned portion of the disproportionate tax effect is reclassified from AOCI to income (loss) from continuing operations.

Interim Tax Calculation Method

We use the estimated annual effective tax rate method in computing our interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rate. In these cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in uncertain tax positions and realizability of deferred tax assets, and are recorded in the period in which the change occurs. While certain impacts of the Tax Act are included in our annual effective tax rate, we continue to refine our calculations as additional information becomes available, which may result in changes to the estimated annual effective tax rate.

Interim Tax Expense (Benefit)

For the three-month period ended March 31, 2022, the effective tax rate on income from continuing operations was 20.2 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax benefits associated with tax exempt income, reclassifications from AOCI to income from continuing operations related to the disposal of available for sale securities, excess tax benefits related to share based compensation payments recorded through the income statement, tax adjustments related to prior year returns and adjustments to interest related to items challenged by the IRS during the audit of AIG’s 2006 and prior tax years. These tax benefits were partially offset by tax charges associated with the effect of foreign operations, state and local income taxes, and non-deductible transfer pricing charges. The effect of foreign operations is primarily related to income of our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation.

For the three-month period ended March 31, 2021, the effective tax rate on loss from continuing operations was 16.9 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax benefits associated with the release of reserves for uncertain tax positions, penalties and interest related to the recent completion of audit activity by the IRS, tax exempt income, and reclassifications from AOCI to income from continuing operations related to the disposal of available for sale securities. These tax benefits were partially offset by tax charges associated with the establishment of U.S. federal valuation allowance related to certain tax attribute carryforwards, the effect of foreign operations, excess tax charges related to share based compensation payments recorded through the income statement, state and local income taxes, and non-deductible

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 15. Income Taxes

transfer pricing charges. The effect of foreign operations is primarily related to income of our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation.

For the three-month period ended March 31, 2022, we consider our foreign earnings with respect to certain operations in Canada, South Africa, Japan, Latin America, Bermuda as well as the European, Asia Pacific and Middle East regions to be indefinitely reinvested. These earnings relate to ongoing operations and have been reinvested in active business operations. Deferred taxes, if necessary, have been provided on earnings of non-U.S. affiliates whose earnings are not indefinitely reinvested.

Assessment of Deferred Tax Asset Valuation Allowance

The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed.

Our framework for assessing the recoverability of the deferred tax asset requires us to consider all available evidence, including:

 the nature, frequency, and amount of cumulative financial reporting income and losses in recent years;

 the sustainability of recent operating profitability of our subsidiaries;

 the predictability of future operating profitability of the character necessary to realize the net deferred tax asset, including forecasts of future income for each of our businesses and actual and planned business and operational changes;

 the carryforward periods for the net operating loss, capital loss and foreign tax credit carryforwards, including the effect of reversing taxable temporary differences; and

 prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset.

In performing our assessment of the recoverability of the deferred tax asset under this framework, we consider tax laws governing the utilization of the net operating loss, capital loss and foreign tax credit carryforwards in each applicable jurisdiction. Under U.S. tax law, a company generally must use its net operating loss carryforwards before it can use its foreign tax credit carryforwards, even though the carryforward period for the foreign tax credit is shorter than for the net operating loss. Our U.S. consolidated federal income tax group includes both life companies and non-life companies. While the U.S. taxable income of our non-life companies can be offset by our net operating loss carryforwards, only a portion (no more than 35 percent) of the U.S. taxable income of our life companies can be offset by those net operating loss carryforwards. The remaining tax liability of our life companies can be offset by the foreign tax credit carryforwards. Accordingly, we are able to utilize both the net operating loss and foreign tax credit carryforwards concurrently.

Recent events, including changes in target interest rates by the Board of Governors of the Federal Reserve System, and significant market volatility, continue to impact actual and projected results of our business operations as well as our views on potential effectiveness of certain prudent and feasible tax planning strategies. In order to demonstrate the predictability and sufficiency of future taxable income necessary to support the realizability of the net operating losses and foreign tax credit carryforwards, we have considered forecasts of future income for each of our businesses, including assumptions about future macro-economic and AIG-specific conditions and events, and any impact these conditions and events may have on our prudent and feasible tax planning strategies. We also subjected the forecasts to a variety of stresses of key assumptions and evaluated the effect on tax attribute utilization.

The carryforward period of our foreign tax credit carryforwards runs through 2023. Carryforward periods for our net operating losses extend from 2028 forward. However, utilization of a portion of our net operating losses is limited under separate return limitation year rules.

To the extent that the valuation allowance is attributed to changes in forecast of current year taxable income, the impact is included in our estimated annualized effective tax rate. A valuation allowance related to changes in forecasts of income in future periods as well as other items not related to the current year is recorded discretely.

As of March 31, 2022, the balance sheet reflects a valuation allowance of $850 million related to a portion of our tax attribute carryforwards that are no longer more-likely-than-not to be realized. No change in valuation allowance was recorded for the three-month period ended March 31, 2022.

Estimates of future taxable income, including income generated from prudent and feasible actions and tax planning strategies, impact of settlements with taxing authorities, and any changes to interpretations and assumptions related to the impact of the Tax Act could change in the near term, perhaps materially, which may require us to consider any potential impact to our assessment of the

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 15. Income Taxes

recoverability of the deferred tax asset. Such potential impact could be material to our consolidated financial condition or results of operations for an individual reporting period.

Further, the planned separation of the Life and Retirement business from AIG, if completed, would result in tax deconsolidation of these entities from the AIG Consolidated Federal Tax Group and potentially impact our ability to utilize certain tax loss and credit carryforwards. Such potential impact could result in valuation allowance being established with respect to such tax attributes in the reporting period in which tax deconsolidation occurs.

For the three-month period ended March 31, 2022, recent changes in market conditions, including rising interest rates, impacted the unrealized tax gains and losses in the available for sale securities portfolios of both our U.S. Life Insurance and non-life insurance companies, resulting in deferred tax assets related to net unrealized tax capital losses. The deferred tax asset relates to the unrealized losses for which the carryforward period has not yet begun, and as such, when assessing its recoverability, we consider our ability and intent to hold the underlying securities to recovery. As of March 31, 2022, based on all available evidence, we concluded that a valuation allowance should be established on a portion of the deferred tax asset related to unrealized losses that are not more-likely-than-not to be realized. For the three months ended March 31, 2022, we established $770 million of valuation allowance associated with the unrealized tax losses in the U.S. Life Insurance Companies’ available for sale securities portfolio and $170 million of valuation allowance associated with the unrealized tax losses in the non-life insurance companies’ available for sale securities portfolio. All of the valuation allowance establishment was allocated to other comprehensive income.

For the three-month period ended March 31, 2022, we recognized a net $6 million decrease in deferred tax asset valuation allowance associated with certain foreign and state jurisdictions, primarily attributable to current year activity.

Tax Examinations and Litigation

We file a consolidated U.S. federal income tax return with our eligible U.S. subsidiaries. Income earned by subsidiaries operating outside the U.S. is taxed, and income tax expense is recorded, based on applicable U.S. and foreign laws.

We are currently under examination by the IRS for the tax years 2011 through 2013.

In September 2020, we received the IRS Revenue Agent Report containing agreed and disagreed issues for the audit of tax years 2007-2010. In October 2020, we filed a protest of the disagreed issues with the IRS Independent Office of Appeals (IRS Appeals). In March 2021, the IRS audit team issued their rebuttal to the protest of disagreed issues to IRS Appeals. We had an IRS Appeals conference in October 2021 and are continuing to engage in the Appeals process.

In 2009, after paying amounts due on a statutory notice of deficiency related to the disallowance of foreign tax credits associated with cross border financing transactions, we filed a refund lawsuit in the Southern District of New York (Southern District) with respect to tax year 1997. During the fourth quarter of 2020, the parties executed a binding settlement agreement with respect to the underlying issues in the lawsuit. On October 22, 2020, the Southern District dismissed the case based upon the settlement reached between AIG and the government. During June 2021 and October 2021, AIG made additional payments of $354 million and $10 million to the U.S. Treasury with respect to this matter. In March 2022, interest amounts due on the settlement of items challenged by the IRS during the audit of AIG’s 2006 and prior years were agreed to between AIG and the IRS.

Accounting for Uncertainty in Income Taxes

At both March 31, 2022 and December 31, 2021, our unrecognized tax benefits, excluding interest and penalties, were $1.2 billion. At both March 31, 2022 and December 31, 2021, our unrecognized tax benefits related to tax positions that, if recognized, would not affect the effective tax rate because they relate to such factors as the timing, rather than the permissibility, of the deduction were $22 million. Accordingly, at both March 31, 2022 and December 31, 2021, the amounts of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate were $1.1 billion.

Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. At both March 31, 2022 and December 31, 2021, we had accrued liabilities of $69 million for the payment of interest (net of the federal benefit) and penalties. For the three-month period ended March 31, 2021, we accrued benefit of $183 million for the payment of interest and penalties. There was no interest activity related to unrecognized tax benefits for the three-month period ended March 31, 2022. The activity for the three-month period ended March 31, 2021 primarily related to the completion of audit activity by the IRS.

We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next 12 months by as much as $11 million, principally as a result of potential resolutions or settlements of prior years’ tax items. The prior years’ tax items include unrecognized tax benefits related to the deductibility of certain expenses.

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ITEM 1 | Notes to Condensed Consolidated Financial Statements (unaudited) | 16. Subsequent Events

16. Subsequent Events

Dividends Declared

On May 3, 2022, our Board of Directors declared a cash dividend on AIG Common Stock of $0.32 per share, payable on June 30, 2022 to shareholders of record on June 16, 2022. On May 3, 2022, our Board of Directors declared a cash dividend on AIG’s Series A Preferred Stock of $365.625 per share, payable on June 15, 2022 to holders of record on May 31, 2022.

REPURCHASE OF COMMON STOCK

Pursuant to an Exchange Act Rule 10b5-1 repurchase plan that expires on May 20, 2022 (the Current 10b5-1 Plan), from April 1, 2022 to April 29, 2022, we repurchased approximately 10 million shares of AIG Common Stock for an aggregate purchase price of approximately $598 million. On May 3, 2022, the Board of Directors authorized the repurchase of $6.5 billion of AIG Common Stock (inclusive of the approximately $1.5 billion of expected remaining authorization upon expiration of the Current 10b5-1 Plan as of May 20, 2022).

DEBT CASH TENDER OFFERS

In April 2022, AIG repurchased, through cash tender offers, approximately $6.8 billion aggregate principal amount of certain notes and debentures issued or guaranteed by AIG, and announced that it will redeem €750 million aggregate principal amount of its 1.500% Notes due 2023 on May 10, 2022.

COREBRIDGE

On February 25, 2022, Corebridge entered into an 18-Month Delayed Draw Term Loan Agreement (the 18-Month DDTL Facility) among Corebridge, as borrower, the lenders party thereto and the administrative agent thereto, and a 3-Year Delayed Draw Term Loan Agreement (the 3-Year DDTL Facility) among Corebridge, as borrower, the lenders party thereto and the administrative agent thereto.

The 18-Month DDTL Facility and 3-Year DDTL Facility provided Corebridge with committed delayed draw term loan facilities in the aggregate principal amount of $6 billion and $3 billion, respectively. On April 5, 2022, Corebridge issued and sold senior unsecured notes in the aggregate principal amount of $6.5 billion consisting of: $1,000,000,000 aggregate principal amount of its 3.500% Senior Notes due 2025, $1,250,000,000 aggregate principal amount of its 3.650% Senior Notes due 2027, $1,000,000,000 aggregate principal amount of its 3.850% Senior Notes due 2029, $1,500,000,000 aggregate principal amount of its 3.900% Senior Notes due 2032, $500,000,000 aggregate principal amount of its 4.350% Senior Notes due 2042 and $1,250,000,000 aggregate principal amount of its 4.400% Senior Notes due 2052. Corebridge used the net proceeds of the issuance of the notes, in the amount of approximately $6.5 billion, to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG.

On April 6, 2022, in connection with the issuance of the senior unsecured notes of Corebridge, (i) the commitments under the 18-Month DDTL Facility were terminated in full and (ii) the commitments under the 3-Year DDTL Facility were reduced from $3.0 billion to $2.5 billion. The ability to borrow under the 3-Year DDTL Facility is subject to, among other conditions, Corebridge’s confirmation to the administrative agent that an initial public offering of Corebridge is expected to be consummated within five business days following such borrowing. Commitments under the 3-Year DDTL Facility will remain available for borrowing until December 30, 2022, subject to the terms and conditions thereof.

As of May 3, 2022, a total of $2.5 billion remained available under the 3-Year DDTL Facility.

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ITEM 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations

Glossary and Acronyms of Selected Insurance Terms and References

Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms.

American International Group, Inc. (AIG) has incorporated into this discussion a number of cross-references to additional information included throughout this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021 (the 2021 Annual Report) to assist readers seeking additional information related to a particular subject.

In this Quarterly Report on Form 10-Q, unless otherwise mentioned or unless the context indicates otherwise, we use the terms “AIG,” “we,” “us” and “our” to refer to American International Group, Inc., a Delaware corporation, and its consolidated subsidiaries. We use the term “AIG Parent” to refer solely to American International Group, Inc., and not to any of its consolidated subsidiaries.

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q and other publicly available documents may include, and officers and representatives of AIG may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are intended to provide management’s current expectations or plans for AIG’s future operating and financial performance, based on assumptions currently believed to be valid or accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, such as the separation of the Life and Retirement business from AIG, the effect of catastrophes, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.

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All forward-looking statements involve risks, uncertainties and other factors that may cause AIG’s actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include, without limitation:

 AIG’s ability to continue to separate the Life and Retirement business, including through an initial public offering, and the impact separation may have on AIG, its businesses, employees, contracts and customers;

 the effects of economic conditions in the markets in which AIG and its businesses operate in the U.S. and globally and any changes therein, including from the effects of financial market conditions, fluctuations in interest rates and foreign currency exchange rates and inflationary pressures, each of which may also be affected by geopolitical conflicts, including the conflict between Russia and Ukraine;

 the occurrence of catastrophic events, both natural and man-made, including geopolitical conflicts, pandemics, civil unrest and the effects of climate change;

 the effects of sanctions related to the conflict between Russia and Ukraine and failure to comply therewith;

 the impact of potential information technology, cybersecurity or data security breaches, including as a result of supply chain disruptions, cyber-attacks or security vulnerabilities, the likelihood of which may increase due to extended remote business operations as a result of COVID-19;

 AIG’s ability to effectively execute on the AIG 200 operational programs designed to modernize AIG’s operating infrastructure and enhance user and customer experiences, and AIG’s ability to achieve anticipated cost savings from AIG 200;

 availability of reinsurance or access to reinsurance on acceptable terms;

 the effectiveness of strategies to recruit and retain key personnel and to implement effective succession plans;

 concentrations in AIG’s investment portfolios, including as a result of our asset management relationships with Blackstone Inc. (Blackstone) and BlackRock, Inc. (BlackRock);

 disruptions in the availability of AIG’s electronic data systems or those of third parties;

 changes to the valuation of AIG’s investments;

 actions by rating agencies with respect to AIG’s credit and financial strength ratings as well as those of its businesses and subsidiaries;

 the impact of COVID-19 and its variants and responses thereto;

 the effectiveness of AIG’s enterprise risk management policies and procedures, including with respect to business continuity and disaster recovery plans;

 changes in judgments concerning potential cost-saving opportunities;

 changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill;

 AIG’s ability to effectively execute on environmental, social and governance targets and standards;

 the requirements, which may change from time to time, of the global regulatory framework to which AIG is subject;

 nonperformance or defaults by counterparties, including Fortitude Reinsurance Company Ltd. (Fortitude Re);

 AIG’s ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses;

 changes in judgments or assumptions concerning insurance underwriting and insurance liabilities;

 changes to our sources of or access to liquidity;

 significant legal, regulatory or governmental proceedings; and

 such other factors discussed in:

–Part I, Item 2. MD&A of this Quarterly Report on Form 10-Q; and

–Part I, Item 1A. Risk Factors and Part II, Item 7. MD&A of the 2021 Annual Report.

The forward-looking statements speak only as of the date of this report, or in the case of any document incorporated by reference, the date of that document. We are not under any obligation (and expressly disclaim any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the Securities and Exchange Commission (SEC).

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INDEX TO ITEM 2
		Page
Use of Non-GAAP Measures		64
Critical Accounting Estimates		66
Executive Summary		67
Overview		67
Operating Structure		68
Financial Performance Summary		69
AIG's Outlook – Industry and Economic Factors		71
Consolidated Results of Operations		74
Business Segment Operations		78
General Insurance		79
Life and Retirement		87
Other Operations		102
Investments		104
Overview		104
Investment Highlights in the First Quarter of 2022		104
Investment Strategies		104
Credit Ratings		106
Insurance Reserves		114
Loss Reserves		114
Life and Annuity Future Policy Benefits, Policyholder Contract Deposits and DAC		118
Liquidity and Capital Resources		123
Overview		123
Analysis of Sources and Uses of Cash		124
Liquidity and Capital Resources of AIG Parent and Subsidiaries		125
Credit Facilities		127
Contractual Obligations		128
Off-Balance Sheet Arrangements and Commercial Commitments		128
Debt		128
Credit Ratings		130
Financial Strength Ratings		130
Rating Agency Actions Related to Corebridge Senior Note Offering and Other Recent Actions		131
Regulation and Supervision		131
Dividends		131
Repurchases of AIG Common Stock		132
Dividend Restrictions		132
Enterprise Risk Management		132
Overview		132
Regulatory Environment		133
Overview		133
Glossary		134
Acronyms		137

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ITEM 2 | Use of Non-GAAP Measures

Use of Non-GAAP Measures

Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “non-GAAP financial measures” under SEC rules and regulations. GAAP is the acronym for “generally accepted accounting principles” in the United States. The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies.

We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our business segments. We believe they also allow for more meaningful comparisons with our insurance competitors. When we use these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis in the Consolidated Results of Operations section of this MD&A.

Book value per common share, excluding accumulated other comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and deferred tax assets (DTA) (Adjusted book value per common share) is used to show the amount of our net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period including changes in fair value of AIG’s available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted book value per common share is derived by dividing total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted common shareholders’ equity), by total common shares outstanding.

Return on common equity – Adjusted after-tax income excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted return on common equity) is used to show the rate of return on common shareholders’ equity. We believe this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of our available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted return on common equity. Adjusted return on common equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted common shareholders’ equity.

Adjusted after-tax income attributable to AIG common shareholders is derived by excluding the tax effected adjusted pre-tax income (APTI) adjustments described below, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG:

 deferred income tax valuation allowance releases and charges;

 changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and

 net tax charge related to the enactment of the Tax Cuts and Jobs Act (the Tax Act).

Adjusted revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for our segments.

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ITEM 2 | Use of Non-GAAP Measures

Adjusted pre-tax income is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across our segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. APTI is a GAAP measure for our segments. Excluded items include the following:

 changes in fair value of securities used to hedge guaranteed living benefits;

 changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA), and deferred sales inducements (DSI) related to net realized gains and losses;

 changes in the fair value of equity securities;

 net investment income on Fortitude Re funds withheld assets;

 following deconsolidation of Fortitude Re, net realized gains and losses on Fortitude Re funds withheld assets;

 loss (gain) on extinguishment of debt;

 all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances);

 income or loss from discontinued operations;

 net loss reserve discount benefit (charge);

 pension expense related to lump sum payments to former employees;

 net gain or loss on divestitures;

 non-operating litigation reserves and settlements;

 restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization;

 the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain;

 integration and transaction costs associated with acquiring or divesting businesses;

 losses from the impairment of goodwill; and

 non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles.

 General Insurance

– Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.

– Accident year loss and accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results.

 Life and Retirement

– Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life-contingent payout annuities, as well as deposits received on universal life, investment-type annuity contracts, Federal Home Loan Bank (FHLB) funding agreements and mutual funds. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

Results from discontinued operations are excluded from all of these measures.

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ITEM 2 | Critical Accounting Estimates

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires the application of accounting policies that often involve a significant degree of judgment.

The accounting policies that we believe are most dependent on the application of estimates and assumptions, which are critical accounting estimates, are related to the determination of:

 loss reserves;

 future policy benefit reserves for life and accident and health insurance contracts;

 liabilities for guaranteed benefit features of variable annuity, fixed annuity and fixed index annuity products;

 embedded derivative liabilities for fixed index annuity and life products;

 estimated gross profits to value deferred acquisition costs and unearned revenue for investment-oriented products;

 reinsurance assets, including the allowance for credit losses and disputes;

 goodwill impairment;

 allowance for credit losses on certain investments, primarily on loans and available for sale fixed maturity securities;

 legal contingencies;

 fair value measurements of certain financial assets and financial liabilities; and

 income taxes, in particular the recoverability of our deferred tax asset and establishment of provisions for uncertain tax positions.

For a complete discussion of our critical accounting estimates, see Part II, Item 7. MD&A – Critical Accounting Estimates in the 2021 Annual Report.

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ITEM 2 | Executive Summary

Executive Summary

Overview

This overview of the MD&A highlights selected information and may not contain all of the information that is important to current or potential investors in our securities. You should read this Quarterly Report on Form 10-Q, together with the 2021 Annual Report, in their entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us.

Separation of Life and Retirement Business and Relationship with Blackstone

On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. On November 2, 2021, AIG and Blackstone completed the acquisition by Blackstone of a 9.9 percent equity stake in Corebridge Financial, Inc., formerly known as SAFG Retirement Services, Inc. (Corebridge), which is the holding company for AIG’s Life and Retirement business, for $2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. This resulted in a $629 million decrease to AIG’s shareholders’ equity in the fourth quarter of 2021. As part of the separation, most of AIG’s investment operations were transferred to Corebridge or its subsidiaries as of December 31, 2021, and AIG entered into a long-term asset management relationship with Blackstone to manage an initial $50 billion of Life and Retirement’s existing investment portfolio beginning in the fourth quarter of 2021, with that amount increasing by increments of $8.5 billion per year for five years beginning in the fourth quarter of 2022, for an aggregate of $92.5 billion. In addition, Blackstone designated one member of the Board of Directors of Corebridge, which currently consists of 11 directors. Pursuant to the definitive agreement, Blackstone will be required to hold its ownership interest in Corebridge following the completion of the separation of the Life and Retirement business, subject to exceptions permitting Blackstone to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the initial public offering of Corebridge (the IPO), with the transfer restrictions terminating in full on the fifth anniversary of the IPO. In the event that the IPO of Corebridge is not completed prior to November 2, 2023, Blackstone will have the right to require AIG to undertake the IPO, and in the event that the IPO has not been completed prior to November 2, 2024, Blackstone will have the right to exchange all or a portion of its ownership interest in Corebridge for shares of AIG’s common stock on the terms set forth in the definitive agreement. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the SEC.

For additional information regarding the debt issuance of Corebridge, see Note 16 to the Condensed Consolidated Financial Statements.

Our Investment Management Agreements with BlackRock

On March 28, 2022, we announced entry into a binding letter of intent with BlackRock pursuant to which certain of our insurance company subsidiaries would enter into separate investment management agreements with BlackRock (the BlackRock Arrangement). On April 28, 2022, certain of our insurance company subsidiaries entered into such investment management agreements, with the expectation that certain additional insurance company subsidiaries will enter into such investment management agreements over the coming months. Overall, we expect to transfer the management of up to $150 billion of our investment of liquid fixed income and certain private placement assets, including $90 billion of the Life and Retirement investment portfolio, over a period of 12 months in connection with the BlackRock Arrangement. The investment management agreements contain detailed investment guidelines and reporting requirements. These agreements also contain reasonable and customary representations and warranties, standard of care, expense reimbursement, liability, indemnity and other provisions. The investment management agreements continue unless terminated by either party on 45 days’ notice or by us immediately for cause. We continue to be responsible for our overall investment

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ITEM 2 | Executive Summary

portfolio, including decisions surrounding asset allocation, risk composition and investment strategy. There can be no assurance that all of such investment management agreements will be entered into as contemplated, or at all.

OPERATING STRUCTURE

AIG reports the results of its businesses through three segments – General Insurance, Life and Retirement and Other Operations. General Insurance consists of two operating segments – North America and International. Life and Retirement consists of four operating segments – Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. Other Operations is primarily comprised of corporate, our institutional asset management business and consolidation and eliminations.

Consistent with how we manage our business, our General Insurance North America operating segment primarily includes insurance businesses in the United States, Canada and Bermuda, and our global reinsurance business, AIG Re. Our General Insurance International operating segment includes regional insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China. International also includes the results of Talbot Holdings, Ltd. as well as AIG’s Global Specialty business.

For additional information on our business segments, see Note 3 to the Condensed Consolidated Financial Statements, and for information regarding the separation of Life and Retirement, see Note 1 to the Condensed Consolidated Financial Statements.

Business Segments


	General Insurance General Insurance is a leading provider of insurance products and services for commercial and personal insurance customers. It includes one of the world’s most far-reaching property casualty networks. General Insurance offers a broad range of products to customers through a diversified, multichannel distribution network. Customers value General Insurance’s strong capital position, extensive risk management and claims experience and its ability to be a market leader in critical lines of the insurance business.	Life and Retirement Life and Retirement is a unique franchise that brings together a broad portfolio of life insurance, retirement and institutional products offered through an extensive, multichannel distribution network. It holds long-standing, leading market positions in many of the markets it serves in the U.S. With its strong capital position, customer-focused service, breadth of product expertise and deep distribution relationships across multiple channels, Life and Retirement is well positioned to serve growing market needs.

	General Insurance includes the following major operating companies: National Union Fire Insurance Company of Pittsburgh, Pa. (National Union); American Home Assurance Company (American Home); Lexington Insurance Company (Lexington); AIG General Insurance Company, Ltd. (AIG Sonpo); AIG Asia Pacific Insurance, Pte, Ltd.; AIG Europe S.A.; American International Group UK Ltd.; Validus Reinsurance, Ltd. (Validus Re); Talbot Holdings Ltd. (Talbot); Western World Insurance Group, Inc. and Glatfelter Insurance Group (Glatfelter).	Life and Retirement includes the following major operating companies: American General Life Insurance Company (AGL); The Variable Annuity Life Insurance Company (VALIC); The United States Life Insurance Company in the City of New York (U.S. Life); Laya Healthcare Limited and AIG Life Limited.


	Other Operations Other Operations primarily consists of income from assets held by AIG Parent and other corporate subsidiaries, deferred tax assets related to tax attributes, corporate expenses and intercompany eliminations, our institutional asset management business and results of our consolidated investment entities, General Insurance portfolios in run-off as well as the historical results of our legacy insurance lines ceded to Fortitude Re.

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ITEM 2 | Executive Summary

Financial Performance Summary

Net Income (Loss) Attributable to AIG Common Shareholders

Three Months Ended March 31,

(in millions)

Chart 4

2022 and 2021 Comparison

Net income attributable to AIG common shareholders increased $384 million due to the following, on a pre-tax basis:

 an increase in Net realized gains on Fortitude Re funds withheld embedded derivative of $936 million driven by interest rate movements, partially offset by losses on Fortitude Re funds withheld assets of $140 million in 2022 compared to a gain of $173 million in 2021;

 an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $546 million, driven by a $1.0 billion increase in derivative and hedge activity and gains on variable annuity embedded derivatives, net of hedging partially offset by losses on sales of securities of $201 million and unfavorable movement in the allowance for credit losses on fixed maturity securities and loans of $164 million;

 higher underwriting income in General Insurance ($373 million) from higher premiums marked by changes in business mix along with strong rate improvement, focused risk selection and improved terms and conditions, and significantly lower catastrophe losses; and

 lower interest expense of $79 million primarily driven by interest savings resulting from redemptions and cash tender offers of $3.6 billion of debt completed during 2021 ($34 million) and interest savings from consolidated investment entities ($40 million).

The increase in Net income attributable to AIG common shareholders was partially offset by the following:

 lower net investment income ($420 million) primarily driven by lower returns on available for sale fixed maturity securities as a result of the higher interest rate environment (which led to lower call income) of $213 million and declines in fair value of fixed maturity securities of $217 million, where we elected the fair value option; and

 higher income attributable to noncontrolling interest ($342 million) driven by the sale of 9.9 percent interest of Corebridge to Blackstone in December 2021 ($354 million).

The $381 million increase in income tax expense was primarily attributable to higher income from continuing operations.

For further discussion see Consolidated Results of Operations.

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ITEM 2 | Executive Summary

Adjusted Pre-Tax Income (Loss)*

Three Months Ended March 31,

(in millions)

Chart 4

2022 and 2021 Comparison

Adjusted pre-tax income increased $258 million primarily due to higher underwriting income in General Insurance ($373 million) from higher premiums marked by changes in business mix along with strong rate improvement, focused risk selection and improved terms and conditions, significantly lower catastrophe losses, and net favorable prior year reserve development in 2022 compared to net adverse prior year reserve development in 2021.

Partially offset by lower net investment income ($193 million) primarily driven by lower returns on available for sale fixed maturity securities as a result of the higher interest rate environment (which led to lower call income) of $132 million and declines in fair value of fixed maturity securities of $92 million, where we elected the fair value option, partially offset by gains on other invested assets, primarily private equity funds, of $50 million and income on mortgage and other loans of $39 million.

* Non-GAAP measure – for reconciliation of Non-GAAP to GAAP measures see Consolidated Results of Operations.

General Operating and Other Expenses

Three Months Ended March 31,

(in millions)

Chart 1

2022 and 2021 Comparison

General operating and other expenses increased $93 million primarily due to increases in professional fees inclusive of transaction costs and other acquisition expenses.

General operating and other expenses in the three-months ended March 31, 2022 and 2021 included approximately $93 million and $74 million, respectively, of pre-tax restructuring and other costs which were primarily comprised of employee severance charges and other costs related to organizational simplification, operational efficiency, and business rationalization.

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ITEM 2 | Executive Summary

AIG’s Outlook – Industry and economic factors

Our business is affected by industry and economic factors such as interest rates, currency exchange rates, credit and equity market conditions, catastrophic claims events, regulation, tax policy, competition, and general economic, market and political conditions. We continued to operate under challenging market conditions in the first quarter of 2022, characterized by factors such as the impact of COVID-19 and the related governmental and societal responses, interest rate volatility, inflationary pressures, an uneven global economic recovery and global trade tensions. Responses by central banks and monetary authorities with respect to inflation, growth concerns and other macroeconomic factors have also affected global exchange rates and volatility.

Russia/Ukraine Conflict

The Russia/Ukraine conflict began in February 2022. The conflict has and may continue to have a significant impact on the global macroeconomic and geopolitical environments, including increased volatility in capital and commodity markets, rapid changes to regulatory conditions around the globe including the use of sanctions, operational challenges for multinational corporations, inflationary pressures and an increased risk of cybersecurity incidents.

The conflict is evolving and has the potential to adversely affect our business and results of operations from an investment, underwriting and operational perspective. While we believe we have taken appropriate actions to minimize related risk, we continue to monitor potential exposure and operational impacts, as well as any actual and potential claims activity. The ultimate impact will depend on future developments that are uncertain and cannot be predicted, including scope, severity and duration, the governmental, legislative and regulatory actions taken (including the application of sanctions), and court decisions, if any, rendered in response to those actions.

Impact of Changes in the Interest Rate Environment and Equity Markets

Key U.S. benchmark rates have continued to rise during the first quarter of 2022 as investors form opinions over elevated inflation measures, geopolitical risk, and the Board of Governors of the Federal Reserve System raising short term interest rates for the first time since 2018. As of March 31, 2022, increases in key rates have improved yields on new investments which are now closer to the runoff yield that we are experiencing on our existing portfolios. We actively manage our exposure to the interest rate environment through portfolio selection and asset-liability management, including spread management strategies for our investment-oriented products and economic hedging of interest rate risk from guarantee features in our variable and fixed index annuities, but we may not be able to fully mitigate our interest rate risk by matching exposure of our assets relative to our liabilities.

Equity Markets

Our financial results are impacted by the performance of equity markets. The impact of equity market returns, both increases and decreases, is reflected in our results almost immediately due to the impact on the fair values of equity exposed securities in our portfolio as well as separate account values in our Life and Retirement business. The reduction in separate account asset values impacts fee income as well as policyholder benefits and DAC on our variable annuity portfolio within the Life and Retirement segment. For instance, variable annuities earn fees based on the account value, which fluctuates with the equity markets as a significant amount of our separate account assets are invested in equity funds.

In Life and Retirement, hedging costs could also be significantly impacted by volatility in the equity markets as rebalancing and option costs are tied to the equity market volatility. These costs are mostly offset by rider fees that are tied to the level of the Chicago Board Options Exchange Volatility Index. As rebalancing and option costs increase or decrease, the rider fees will increase or decrease partially offsetting the hedging costs incurred.

Annuity Sales and Surrenders

The sustained low interest rate environment has a significant impact on the annuity industry. Low long-term interest rates put pressure on investment returns and customer facing rates, which may negatively affect sales of interest rate sensitive products and reduce future profits on certain existing fixed rate products. However, our disciplined pricing has helped to mitigate some of the pressure on investment spreads and remain competitive. Rapidly rising interest rates could create the potential for increased sales, but may also drive higher surrenders. Fixed annuities have surrender charge periods, generally in the three-to-seven year range. Fixed Index annuities have surrender charge periods, generally in the five-to-ten year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the reserves for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period. Changes in interest rates significantly impact the valuation of our liabilities for annuities with guaranteed living benefit features and the value of the related hedging portfolio.

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ITEM 2 | Executive Summary

Reinvestment and Spread Management

We actively monitor fixed income markets, including the level of interest rates, credit spreads and the shape of the yield curve. We also frequently review our interest rate assumptions and actively manage the crediting rates used for new and in-force business. Business strategies continue to evolve and attempt to maintain profitability of the overall business in light of the interest rate environment. A low interest rate environment puts margin pressure on pricing of new business and on existing products, due to the challenge of investing new money or recurring premiums and deposits, and reinvesting investment portfolio cash flows, in the low interest rate environment. In addition, there is investment risk associated with future premium receipts from certain in-force business. Specifically, the investment of these future premium receipts may be at a yield below that required to meet future policy liabilities.

The contractual provisions for renewal of crediting rates and guaranteed minimum crediting rates included in our products has reduced spreads in a sustained low interest rate environment and thus reduces future profitability.

For additional information on our investment and asset-liability management strategies see Investments.

For investment-oriented products, including universal life insurance, and variable, fixed and fixed index annuities, in our Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable, and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is done under contractual provisions that were designed to allow crediting rates to be reset at pre-established intervals in accordance with state and federal laws and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to mitigate the pressure on spreads from declining base yields, but our ability to lower crediting rates may be limited by the competitive environment, contractual minimum crediting rates, and provisions that allow rates to be reset only at pre-established intervals or under certain conditions. If and as interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.

Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 69 percent were crediting at the contractual minimum guaranteed interest rate as of March 31, 2022. The percentage of fixed account values of our annuity products that are currently crediting at rates above one percent were 57 percent and 58 percent as of March 31, 2022 and December 31, 2021, respectively. In the universal life products in our Life Insurance business, 67 percent of the account values were crediting at the contractual minimum guaranteed interest rate as of both March 31, 2022 and December 31, 2021. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning.

The following table presents fixed annuity and universal life account values of our Individual Retirement, Group Retirement and Life Insurance operating segments by contractual minimum guaranteed interest rate and current crediting rates, excluding balances ceded to Fortitude Re:

	Current Crediting Rates
March 31, 2022			1-50 Basis		More than 50
Contractual Minimum Guaranteed	At Contractual		Points Above		Basis Points
Interest Rate	Minimum		Minimum		Above Minimum
(in millions)	Guarantee		Guarantee		Guarantee			Total
Individual Retirement^*
<=1%	$	10,456	$	1,851	$	18,812	$	31,119
> 1% - 2%		4,428		27		1,678		6,133
> 2% - 3%		10,184		-		18		10,202
> 3% - 4%		8,045		40		6		8,091
> 4% - 5%		473		-		5		478
> 5% - 5.5%		34		-		4		38
Total Individual Retirement	$	33,620	$	1,918	$	20,523	$	56,061
Group Retirement^*
<=1%	$	3,850	$	1,683	$	4,591	$	10,124
> 1% - 2%		6,316		411		7		6,734
> 2% - 3%		14,648		-		-		14,648
> 3% - 4%		702		-		-		702
> 4% - 5%		6,955		-		-		6,955
> 5% - 5.5%		159		-		-		159
Total Group Retirement	$	32,630	$	2,094	$	4,598	$	39,322

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ITEM 2 | Executive Summary

Universal life insurance
<=1%	$	-	$	-	$	-	$	-
> 1% - 2%		104		24		355		483
> 2% - 3%		246		540		1,209		1,995
> 3% - 4%		1,388		207		186		1,781
> 4% - 5%		3,052		2		-		3,054
> 5% - 5.5%		228		-		-		228
Total universal life insurance	$	5,018	$	773	$	1,750	$	7,541
Total	$	71,268	$	4,785	$	26,871	$	102,924
Percentage of total		69	%	5	%	26	%	100	%

* Individual Retirement and Group Retirement amounts shown include fixed options within variable annuity products.

General Insurance

Our net investment income is significantly impacted by market interest rates as well as the deployment of asset allocation strategies to manage duration, enhance yield and interest rate risk. As interest rates increase, so too does our ability to reinvest future cash inflows from premiums, as well as sales and maturities of existing investments, at more favorable rates. For additional information on our investment and asset-liability management strategies see Investments.

The impact of low interest rates on our General Insurance segment reduces the benefit of investment income in our pricing. This leads to stronger requirements for underwriting profitability in all of our portfolios, particularly those for long-tail casualty business.

Although investing at lower interest rates puts pressure on our ability to adjust pricing to achieve profitability objectives, market conditions have been conducive to achieving our pricing targets. The pressure on pricing does not necessarily ease as interest rates rise, as the changes in interest rates are a lagging response to economic conditions of unemployment and inflation. We monitor these trends closely, particularly loss cost trend uncertainty, to ensure that not only our pricing, but also our loss reserving, assumptions are proactive to, and considerate of, current and future economic conditions.

For our General Insurance segment loss reserves, sustained low interest rates may unfavorably affect the statutory net loss reserve discount for workers’ compensation and its associated amortization.

Impact of Currency Volatility

Currency volatility remains acute. This volatility affected income for those businesses with substantial international operations. In particular, growth trends in net premiums written reported in U.S. dollars can differ significantly from those measured in original currencies. The net effect on underwriting results, however, is significantly mitigated, as both revenues and expenses are similarly affected.

These currencies may continue to fluctuate, in either direction, especially as a result of central bank responses to inflation, concerns regarding future economic growth and other macroeconomic factors, and such fluctuations will affect net premiums written growth trends reported in U.S. dollars, as well as financial statement line item comparability.

General Insurance businesses are transacted in most major foreign currencies. The following table presents the average of the quarterly weighted average exchange rates of the Major Currencies, which have the most significant impact on our businesses:

Three Months Ended March 31,			Percentage
Rate for 1 USD	2022	2021	Change
Currency:
GBP	0.74	0.73	1	%
EUR	0.88	0.82	7	%
JPY	114.62	104.29	10	%

Unless otherwise noted, references to the effects of foreign exchange in the General Insurance discussion of results of operations are with respect to movements in the Major Currencies included in the preceding table.

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ITEM 2 | Consolidated Results of Operations

Consolidated Results of Operations

The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three-month periods ended March 31, 2022 and 2021. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section.

For information regarding the Critical Accounting Estimates that affect our results of operations see Critical Accounting Estimates in this MD&A and Part II, Item 7. MD&A – Critical Accounting Estimates in the 2021 Annual Report.

The following table presents our consolidated results of operations and other key financial metrics:

Three Months Ended March 31,					Percentage
(in millions)		2022		2021	Change
Revenues:
Premiums	$	7,110	$	6,507	9	%
Policy fees		764		784	(3)
Net investment income:
Net investment income - excluding Fortitude Re funds withheld assets		2,946		3,171	(7)
Net investment income - Fortitude Re funds withheld assets		291		486	(40)
Total net investment income		3,237		3,657	(11)
Net realized gains (losses):
Net realized gains - excluding Fortitude Re funds withheld
assets and embedded derivative		1,241		695	79
Net realized gains (losses) on Fortitude Re funds withheld assets		(140)		173	NM
Net realized gains on Fortitude Re funds withheld embedded derivative		3,318		2,382	39
Total net realized gains		4,419		3,250	36
Other income		278		256	9
Total revenues		15,808		14,454	9
Benefits, losses and expenses:
Policyholder benefits and losses incurred		5,255		5,139	2
Interest credited to policyholder account balances		877		868	1
Amortization of deferred policy acquisition costs		1,437		1,304	10
General operating and other expenses		2,181		2,088	4
Interest expense		263		342	(23)
Gain on extinguishment of debt		-		(8)	NM
Net gain on divestitures		(40)		(7)	(471)
Total benefits, losses and expenses		9,973		9,726	3
Income from continuing operations before income tax expense		5,835		4,728	23
Income tax expense		1,179		798	48
Income from continuing operations		4,656		3,930	18
Income (loss) from discontinued operations, net of income taxes		-		-	NM
Net income		4,656		3,930	18
Less: Net income attributable to noncontrolling interests		396		54	NM
Net income attributable to AIG		4,260		3,876	10
Less: Dividends on preferred stock		7		7	-
Net income attributable to AIG common shareholders	$	4,253	$	3,869	10	%

	March 31,			December 31,
(in millions, except per common share data)		2022		2021
Balance sheet data:
Total assets	$	573,513	$	596,112
Long-term debt		23,572		23,741
Debt of consolidated investment entities		6,366		6,422
Total AIG shareholders’ equity		55,944		65,956
Book value per common share		69.30		79.97
Adjusted book value per common share		70.72		68.83

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ITEM 2 | Consolidated Results of Operations

The following table presents a reconciliation of Book value per common share to Adjusted book value per common share, which is a non-GAAP measure. For additional information see Use of Non-GAAP Measures.

		At March 31,		At December 31,
(in millions, except per common share data)		2022		2021
Total AIG shareholders' equity	$	55,944	$	65,956
Preferred equity		485		485
Total AIG common shareholders' equity		55,459		65,471
Less: Deferred tax assets		4,816		5,221
Less: Accumulated other comprehensive income (loss)		(5,900)		6,687
Add: Cumulative unrealized gains and losses related to
Fortitude Re funds withheld assets		48		2,791
Subtotal: AOCI plus cumulative unrealized gains and losses
related to Fortitude Re funds withheld assets		(5,948)		3,896
Adjusted common shareholders' equity	$	56,591	$	56,354

Total common shares outstanding		800.2		818.7
Book value per common share	$	69.30	$	79.97
Adjusted book value per common share		70.72		68.83

The following table presents a reconciliation of Return on common equity to Adjusted return on common equity, which is a non-GAAP measure. For additional information see Use of Non-GAAP Measures.

	Three Months Ended						Year Ended
	March 31,						December 31,
(dollars in millions)		2022			2021			2021
Actual or annualized net income (loss) attributable to AIG common shareholders	$	17,012		$	15,476		$	9,359
Actual or annualized adjusted after-tax income attributable
to AIG common shareholders		4,296			3,692			4,430

Average AIG common shareholders' equity	$	60,465		$	64,036		$	64,704
Less: Average DTA		5,019			7,723			7,025
Less: Average AOCI		394			9,989			9,096
Add: Average cumulative unrealized gains and losses related to
Fortitude Re funds withheld assets		1,420			3,452			3,200
Subtotal: AOCI plus cumulative unrealized gains and losses
related to Fortitude Re funds withheld assets		(1,026)			6,537			5,896
Average adjusted AIG common shareholders' equity	$	56,472		$	49,776		$	51,783
Return on common equity		28.1	%		24.2	%		14.5	%
Adjusted return on common equity		7.6	%		7.4	%		8.6	%

The following table presents a reconciliation of revenues to adjusted revenues:

Three Months Ended March 31,
(in millions)		2022		2021
Revenues	$	15,808	$	14,454
Changes in fair value of securities used to hedge guaranteed living benefits		(14)		(18)
Changes in the fair value of equity securities		27		(22)
Other (income) expense - net		7		6
Net investment income on Fortitude Re funds withheld assets		(291)		(486)
Net realized (gains) losses on Fortitude Re funds withheld assets		140		(173)
Net realized gains on Fortitude Re funds withheld embedded derivative		(3,318)		(2,382)
Net realized gains^*		(1,181)		(617)
Non-operating litigation reserves and settlements		(34)		-
Adjusted revenues	$	11,144	$	10,762

* Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.

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ITEM 2 | Consolidated Results of Operations

The following table presents a reconciliation of pre-tax income (loss)/net income (loss) attributable to AIG to adjusted pre-tax income (loss)/adjusted after-tax income (loss) attributable to AIG:

Three Months Ended March 31,	2022								2021
			Total Tax		Non-						Total Tax		Non-
			(Benefit)		controlling			After			(Benefit)		controlling			After
(in millions, except per common share data)	Pre-tax		Charge		Interests^(d)			Tax	Pre-tax		Charge		Interests^(d)			Tax
Pre-tax income/net income, including
noncontrolling interests	$	5,835	$	1,179	$	-	$	4,656	$	4,728	$	798	$	-		3,930
Noncontrolling interests						(396)		(396)						(54)		(54)
Pre-tax income/net income attributable to AIG	$	5,835	$	1,179	$	(396)	$	4,260	$	4,728	$	798	$	(54)	$	3,876
Dividends on preferred stock								7								7
Net income attributable to AIG common
shareholders							$	4,253							$	3,869
Changes in uncertain tax positions and other tax
adjustments^(a)				91		-		(91)				901		-		(901)
Deferred income tax valuation allowance
(releases) charges^(b)				6		-		(6)				(686)		-		686
Changes in fair value of securities used to hedge
guaranteed living benefits		(13)		(3)		-		(10)		(22)		(5)		-		(17)
Changes in benefit reserves and DAC, VOBA and
DSI related to net realized gains (losses)		273		57		-		216		203		43		-		160
Changes in the fair value of equity securities		27		6		-		21		(22)		(5)		-		(17)
(Gain) loss on extinguishment of debt		-		-		-		-		(8)		(2)		-		(6)
Net investment income on Fortitude Re funds
\withheld assets		(291)		(61)		-		(230)		(486)		(102)		-		(384)
Net realized (gains) losses on Fortitude Re funds withheld assets		140		29		-		111		(173)		(36)		-		(137)
Net realized gains on Fortitude Re funds withheld
embedded derivative		(3,318)		(697)		-		(2,621)		(2,382)		(499)		-		(1,883)
Net realized gains^(c)		(1,188)		(281)		-		(907)		(627)		(145)		-		(482)
Net gain on divestitures		(40)		(9)		-		(31)		(7)		(1)		-		(6)
Non-operating litigation reserves and settlements		(34)		(7)		-		(27)		-		-		-		-
Unfavorable (favorable) prior year development and
related amortization changes ceded under
retroactive reinsurance agreements		-		-		-		-		(19)		(4)		-		(15)
Net loss reserve discount benefit		(20)		(5)		-		(15)		(32)		(7)		-		(25)
Integration and transaction costs associated with
acquiring or divesting businesses		46		10		-		36		9		2		-		7
Restructuring and other costs		93		19		-		74		74		16		-		58
Non-recurring costs related to regulatory or
accounting changes		4		1		-		3		20		4		-		16
Noncontrolling interests^(d)						298		298						-		-
Adjusted pre-tax income/Adjusted after-tax
income attributable to AIG common
shareholders	$	1,514	$	335	$	(98)	$	1,074	$	1,256	$	272	$	(54)	$	923

Weighted average diluted shares outstanding								826.0								876.3
Income per common share attributable to
AIG common shareholders (diluted)							$	5.15							$	4.41
Adjusted after-tax income per common
share attributable to AIG common
shareholders (diluted)							$	1.30							$	1.05

(a) Three months ended March 31, 2021 includes the completion of audit activity by the Internal Revenue Service (IRS).

(b) Three months ended March 31, 2021 includes an increase in the valuation allowance against a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions.

(c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.

(d) For the three months ended March 31, 2022, noncontrolling interests include Blackstone’s 9.9 percent equity stake in Corebridge. Corebridge summarized financial information is presented below:

	2022
Three Months Ended March 31,			AIG Noncontrolling
(in millions)	Corebridge			Interest
Revenues	$	4,474	$	443
Expenses		3,707		367
Adjusted pre-tax income		767		76
Taxes on APTI		156		15
Adjusted after-tax income		611		61

Non-operating income		3,655		362
Taxes on non-operating income		702		69
Non-operating income - after-tax		2,953		293
Net income	$	3,564	$	354

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ITEM 2 | Consolidated Results of Operations

FIRST QUARTER Pre-tax income (LOSS) Comparison for 2022 and 2021

Pre-tax income of $5.8 billion in the three-month period ended March 31, 2022 compared to $4.7 billion in the same period in 2021.

For the main drivers impacting AIG’s results of operations, see Executive Summary – Financial Performance Summary – Net Income (Loss) Attributable to AIG Common Shareholders.

U.S. Tax law changes

The IRS has continued to issue new guidance in relation to the Tax Act enacted in 2017. Guidance has been issued covering provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries, foreign tax credits by which the U.S. mitigates double taxation of foreign operations, and other elements of tax law. Changes to this guidance, and other provisions of tax law, are expected in future periods. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of the Tax Act, possibly materially. Consistent with accounting guidance, we have made an accounting policy election to treat GILTI taxes as a period tax charge in the period the tax is incurred.

Repatriation Assumptions

For 2021, we consider our foreign earnings with respect to certain operations in Canada, South Africa, Japan, Latin America, Bermuda as well as the European, Asia Pacific and Middle East regions to be indefinitely reinvested. These earnings relate to ongoing operations and have been reinvested in active business operations. Deferred taxes, if necessary, have been provided on earnings of non-U.S. affiliates whose earnings are not indefinitely reinvested.

Interim Tax Calculation Method

Income Tax expense analysis

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For the three-month period ended March 31, 2021, the effective tax rate on income from continuing operations was 16.9 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax benefits associated with the release of reserves for uncertain tax positions, penalties and interest related to the recent completion of audit activity by the IRS, tax exempt income, and reclassifications from AOCI to income from continuing operations related to the disposal of available for sale securities. These tax benefits were partially offset by tax charges associated with the establishment of U.S. federal valuation allowance related to certain tax attribute carryforwards, the effect of foreign operations, excess tax charges related to share based compensation payments recorded through the income statement, state and local income taxes, and non-deductible transfer pricing charges. The effect of foreign operations is primarily related to income of our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation.

Business Segment Operations

Our business operations consist of General Insurance, Life and Retirement, and Other Operations.

General Insurance consists of two operating segments: North America and International. Life and Retirement consists of four operating segments: Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. Other Operations is primarily comprised of corporate, our institutional asset management business and consolidation and eliminations.

On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. For additional information on the separation of Life and Retirement, see Note 1 to the Condensed Consolidated Financial Statements.

The following table summarizes Adjusted pre-tax income (loss) from our business segment operations. See also Note 3 to the Condensed Consolidated Financial Statements.

Three Months Ended March 31,
(in millions)		2022		2021
General Insurance
North America - Underwriting income (loss)	$	256	$	(202)
International - Underwriting income		190		275
Net investment income		765		772
General Insurance		1,211		845
Life and Retirement
Individual Retirement		384		532
Group Retirement		225		307
Life Insurance		(9)		(40)
Institutional Markets		124		142
Life and Retirement		724		941
Other Operations
Other Operations before consolidation and eliminations		(288)		(354)
Consolidation and eliminations		(133)		(176)
Other Operations		(421)		(530)
Adjusted pre-tax income	$	1,514	$	1,256

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ITEM 2 | Business Segment Operations | General Insurance

General Insurance

General Insurance is managed by our geographic markets of North America and International. Our global presence is underpinned by our multinational capabilities to provide our Commercial Lines and Personal Insurance products within these geographic markets.

PRODUCTS AND DISTRIBUTION

North America consists of insurance businesses in the United States, Canada and Bermuda, and our global reinsurance business, AIG Re.	International consists of regional insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China. International also includes the results of Talbot Holdings, Ltd. as well as AIG’s Global Specialty business.
Property: Products include commercial and industrial property, including business interruption, as well as package insurance products and services that cover exposures to man-made and natural disasters. Liability: Products include general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty and crisis management insurance products. Casualty also includes risk-sharing and other customized structured programs for large corporate and multinational customers. Financial Lines: Products include professional liability insurance for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. Specialty: Products include marine, energy-related property insurance products, aviation, political risk, trade credit, trade finance and portfolio solutions, as well as our global reinsurance business AIG Re and Crop Risk Services which includes multi-peril and hail coverages. Accident & Health: Products include voluntary and sponsor-paid personal accident and supplemental health products for individuals, employees, associations and other organizations, as well as a broad range of travel insurance products and services for leisure and business travelers. Personal Lines: Products include personal auto and personal property in selected markets, comprehensive extended warranty, device protection insurance, home warranty and related services, and insurance for high net-worth individuals offered through AIG’s Private Client Group (PCG) in the U.S. that covers auto, homeowners, umbrella, yacht, fine art and collections.
General Insurance products in North America and International markets are distributed through various channels, including captive and independent agents, brokers, affinity partners, airlines and travel agents, and retailers. Our global platform enables writing multi-national and cross-border risks in both Commercial Lines and Personal Insurance.

BUSINESS STRATEGY

Profitable Growth: Build on our high-quality portfolio by focusing on targeted growth through continued underwriting discipline, improved retentions and new business development. Deploy capital efficiently to act opportunistically and achieve growth in profitable lines, geographies and customer segments, while taking a disciplined underwriting approach to exposure management, terms and conditions and rate change to achieve our risk/return hurdles. Continue to be open to inorganic growth opportunities in profitable markets and segments to expand our capabilities and footprint.

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Reinsurance Optimization: Strategically partner with reinsurers to effectively manage exposure to losses arising from frequency of large catastrophic events and severity from individual risk losses. We strive to optimize our reinsurance program to manage volatility and protect the balance sheet from tail events and unpredictable net losses in support of our profitable growth objectives.

Underwriting Excellence: Continue to enhance portfolio optimization through strength of underwriting framework and guidelines as well as clear communication of risk appetite and rate adequacy. Empower and increase accountability of the underwriter and continue to integrate underwriting, claims and actuarial to enable better decision making. Focus on enhancing risk selection, driving consistent underwriting best practices and building robust monitoring standards to improve underwriting results.

COMPETITION and challenges

General Insurance operates in a highly competitive industry against global, national and local insurers and reinsurers and underwriting syndicates in specific market areas and product types. Insurance companies compete through a combination of risk acceptance criteria, product pricing, service levels and terms and conditions. We serve our business and individual customers on a global basis – from the largest multinational corporations to local businesses and individuals. General Insurance seeks to differentiate itself in the markets where we participate by providing leading expertise and insight to clients, distribution partners and other stakeholders, delivering underwriting excellence and value-driven insurance solutions and providing high quality, tailored end-to-end support to stakeholders. In doing so, we leverage our world-class global franchise, multinational capabilities, balance sheet strength and financial flexibility.

Our challenges include:

• ensuring adequate business pricing given passage of time to reporting and settlement for insurance business, particularly with respect to long-tail Commercial Lines exposures;

• impact of social and economic inflation on claim frequency and severity; and

• volatility in claims arising from natural and man-made catastrophes and other aggregations of risk exposure.

OUTLOOK – INDUSTRY AND ECONOMIC FACTORS

Below is a discussion of the industry and economic factors impacting our operating segments:

The results of General Insurance for the three months ended March 31, 2022 reflect continued strong performance from our Commercial Lines portfolio and continued focus on execution of our portfolio management strategies within Personal Insurance. Across our North America and International Commercial Lines of business we have seen increased demand for our insurance products with continued positive rate change and improvement in terms and conditions. We continue to monitor inflationary impacts resulting from government stimulus in recent years, ongoing labor force and supply chain disruptions and rising commodity prices, among other factors, on rate adequacy and loss cost trends. Similarly, we are monitoring the responsive monetary policy actions taken or anticipated to be taken by central banks, to curb inflation and the corresponding impact on market interest rates.

General Insurance – North America

The North America business remains in a firm market with common drivers being higher industry-wide claims severity trends influenced by accelerating social and economic inflation, as well as increased loss frequency and severity (in part connected to climate change) of higher natural catastrophe losses in recent years. While market discipline continues to support price increases across most lines (outside of Workers’ Compensation), we are seeing capacity move back into the market in certain segments given the improved pricing levels. We have focused on retaining our best accounts which has led to improving retention across the portfolio. These retention rates are often coupled with an exposure limit management strategy to reduce volatility within the portfolio. We continue to proactively identify segment growth areas as market conditions warrant through effective portfolio management, while non-renewing unprofitable business.

Personal Insurance is seeing growth rebound as the economy recovers from the adverse impacts of COVID-19, particularly in the Travel market. However, this is partially offset by underwriting actions being taken within our high net worth business to better align pricing and exposures.

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General Insurance – International

We are continuing to pursue growth in our most profitable lines of business and diversify our portfolio across all regions by expanding key business lines (i.e. Financial Lines and Accident & Health) while remaining a market leader in key developed and developing markets. Overall, Commercial Lines continue to show continued positive rate change, particularly in our Financial Lines, Property, Energy and Marine portfolios and across international markets where market events or withdrawal of capability and capacity have favorably impacted pricing. We are maintaining our underwriting discipline, reducing gross and net limits where appropriate, increasing use of reinsurance to reduce volatility, as well as continuing our risk selection strategy to improve profitability.

Personal Insurance focuses on individual customers, as well as group and corporate clients. Although market competition within Personal Insurance has increased, we continue to benefit from the underwriting quality, portfolio diversity, and generally low volatility of the short-tailed risk in these business lines, although some product classes are exposed to catastrophe losses.

General INSURANCE RESULTS

Three Months Ended March 31,
(in millions)		2022		2021	Change
Underwriting results:
Net premiums written	$	6,633	$	6,479	2	%
Increase in unearned premiums		(377)		(613)	38
Net premiums earned		6,256		5,866	7
Losses and loss adjustment expenses incurred^(a)		3,809		3,848	(1)
Acquisition expenses:
Amortization of deferred policy acquisition costs		889		873	2
Other acquisition expenses		350		311	13
Total acquisition expenses		1,239		1,184	5
General operating expenses		762		761	-
Underwriting income		446		73	NM
Net investment income		765		772	(1)
Adjusted pre-tax income	$	1,211	$	845	43	%

Loss ratio^(a)	60.9	65.6	(4.7)
Acquisition ratio	19.8	20.2	(0.4)
General operating expense ratio	12.2	13.0	(0.8)
Expense ratio	32.0	33.2	(1.2)
Combined ratio^(a)	92.9	98.8	(5.9)
Adjustments for accident year loss ratio, as adjusted
and accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums	(4.5)	(7.3)	2.8
Prior year development, net of reinsurance and prior
year premiums	1.1	0.9	0.2
Accident year loss ratio, as adjusted	57.5	59.2	(1.7)
Accident year combined ratio, as adjusted	89.5	92.4	(2.9)

(a) Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.

The following table presents General Insurance net premiums written by operating segment, showing change on both reported and constant dollar basis:

Three Months Ended March 31,					Percentage Change in
(in millions)		2022		2021	U.S. dollars		Original Currency
North America	$	3,151	$	2,930	8	%	8	%
International		3,482		3,549	(2)		4
Total net premiums written	$	6,633	$	6,479	2	%	5	%

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The following tables present General Insurance accident year catastrophes^(a) by geography and number of events:

	# of			North
(in millions)	Events			America		International		Total
Three Months Ended March 31, 2022
Flooding, rainstorms and other	1		$	25	$	81	$	106
Windstorms and hailstorms	1			25		13		38
Winter storms	2			10		15		25
Earthquakes	1			-		20		20
Russia / Ukraine	N/A	^(b)		-		85		85
Reinstatement premiums				(1)		15		14
Total catastrophe-related charges	5		$	59	$	229	$	288
Three Months Ended March 31, 2021
Flooding, rainstorms and other	1		$	-	$	10	$	10
Windstorms and hailstorms	1			10		-		10
Winter storms	2			351		39		390
Earthquakes	1			-		12		12
Reinstatement premiums				6		6		12
Total catastrophe-related charges	5		$	367	$	67	$	434

(a) Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil unrest that exceed the $10 million threshold.

(b) As the Russia/Ukraine conflict continues to evolve the number of events is yet to be determined.

North america Results

Three Months Ended March 31,
(in millions)		2022		2021	Change
Underwriting results:
Net premiums written	$	3,151	$	2,930	8	%
Increase in unearned premiums		(362)		(542)	33
Net premiums earned		2,789		2,388	17
Losses and loss adjustment expenses incurred^(a)		1,732		1,902	(9)
Acquisition expenses:
Amortization of deferred policy acquisition costs		356		307	16
Other acquisition expenses		144		95	52
Total acquisition expenses		500		402	24
General operating expenses		301		286	5
Underwriting income (loss)	$	256	$	(202)	NM	%

Loss ratio^(a)	62.1	79.6	(17.5)
Acquisition ratio	17.9	16.8	1.1
General operating expense ratio	10.8	12.0	(1.2)
Expense ratio	28.7	28.8	(0.1)
Combined ratio^(a)	90.8	108.4	(17.6)
Adjustments for accident year loss ratio, as adjusted
and accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums	(2.1)	(15.2)	13.1
Prior year development, net of reinsurance and prior
year premiums	1.9	2.4	(0.5)
Accident year loss ratio, as adjusted	61.9	66.8	(4.9)
Accident year combined ratio, as adjusted	90.6	95.6	(5.0)

(a)Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.

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Business and Financial Highlights

North America Net Premiums Written

Three Months Ended March 31,

(in millions)

Chart 6

2022 and 2021 Comparison

Net premiums written increased by $221 million primarily due to:

 growth in Commercial Lines ($165 million), particularly within our Crop Risk Services driven by higher commodity prices; growth in Property, driven by continued positive rate change, higher renewal retentions and strong new business production partially offset by a decrease in Financial Lines due to volatility in capital markets and uncertain economic conditions; and

 growth in Personal Lines ($56 million), particularly within our Travel business driven by more robust demand in travel, partially offset by a decrease in PCG driven by underwriting actions taken to reduce aggregation risk, as well as lower production in Warranty.

North America Underwriting Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 3

2022 and 2021 Comparison

Underwriting income of $256 million in 2022 compared to an underwriting loss of $202 million in 2021 primarily reflected:

 significantly lower catastrophe losses (13.1 points or $308 million), notably as a result of winter storms in 2021;

 premium growth with improvement in the accident year loss ratio, as adjusted (4.9 points) primarily driven by changes in business mix along with continued positive rate change, focused risk selection and improved terms and conditions; and

 lower expense ratio of 0.1 points reflecting a lower general operating expense ratio (1.2 points) resulting from continued general expense discipline as we grow the portfolio, partially offset by a higher acquisition ratio (1.1 points) primarily driven by changes in business mix and reinsurance.

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North America Combined Ratios

Three Months Ended March 31,

Chart 4

2022 and 2021 Comparison

The decrease in the calendar year combined ratio of 17.6 points reflected a decrease in both the loss ratio (17.5 points) and the expense ratio (0.1 points).

The decrease in the loss ratio of 17.5 points reflected:

 significantly lower catastrophe losses (13.1 points), notably as a result of winter storms in 2021; and

The decrease in the expense ratio of 0.1 points reflected a lower general operating expense ratio (1.2 points) resulting from continued general expense discipline as we grow the portfolio, partially offset by a higher acquisition ratio (1.1 points) primarily driven by changes in business mix and reinsurance.

International Results

Three Months Ended March 31,
(in millions)		2022		2021	Change
Underwriting results:
Net premiums written	$	3,482	$	3,549	(2)	%
Increase in unearned premiums		(15)		(71)	79
Net premiums earned		3,467		3,478	-
Losses and loss adjustment expenses incurred		2,077		1,946	7
Acquisition expenses:
Amortization of deferred policy acquisition costs		533		566	(6)
Other acquisition expenses		206		216	(5)
Total acquisition expenses		739		782	(5)
General operating expenses		461		475	(3)
Underwriting income	$	190	$	275	(31)	%

Loss ratio	59.9	56.0	3.9
Acquisition ratio	21.3	22.5	(1.2)
General operating expense ratio	13.3	13.7	(0.4)
Expense ratio	34.6	36.2	(1.6)
Combined ratio	94.5	92.2	2.3
Adjustments for accident year loss ratio, as adjusted
and accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums	(6.4)	(1.9)	(4.5)
Prior year development, net of reinsurance and prior
year premiums	0.5	(0.1)	0.6
Accident year loss ratio, as adjusted	54.0	54.0	-
Accident year combined ratio, as adjusted	88.6	90.2	(1.6)

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Business and Financial Highlights

International Net Premiums Written

Three Months Ended March 31,

(in millions)

Chart 8

2022 and 2021 Comparison

Net premiums written, excluding the impact of foreign exchange, increased by $118 million due to growth across Commercial Lines ($190 million), notably in Financial Lines, Specialty and Property driven by continued positive rate change and strong new business production.

This increase was partially offset by lower production in Personal Insurance ($72 million) most notably in Warranty business, partially offset by growth in Accident and Health and a rebound in Travel businesses driven by increased consumer spending.

International Underwriting Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 5

2022 and 2021 Comparison

Underwriting income decreased by $85 million primarily due to higher catastrophe losses (4.5 points or $162 million).

The decrease in underwriting income was partially offset by:

 lower expense ratio 1.6 points reflected a lower acquisition ratio (1.2 points) primarily driven by business mix, improved commission terms and reinsurance program changes, as well as a lower general operating expense ratio (0.4 points), which reflects continued general expense discipline; and

 net favorable prior year reserve development in 2022 compared to net adverse prior year reserve development in 2021 (0.6 points or $22 million), primarily, due to favorable development across Personal Insurance and Commercial Property businesses, partially offset by favorable development in AIG Re business in prior period.

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International Combined Ratios

Three Months Ended March 31,

Chart 4

2022 and 2021 Comparison

The increase in the calendar year combined ratio of 2.3 points reflected a higher loss ratio (3.9 points) partially offset by a decrease in expense ratio (1.6 points).

The increase in the loss ratio by 3.9 points reflected:

 higher catastrophe losses (4.5 points); partially offset by

 net favorable prior year reserve development in 2022 compared to net adverse prior year reserve development in 2021 (0.6 points), primarily, due to favorable development across Personal Insurance.

The decrease in the expense ratio by 1.6 points reflected:

 lower acquisition ratio (1.2 points) primarily driven by business mix, improved commission terms and reinsurance program changes; and

 lower general operating expense ratio (0.4 points) resulting from continued general expense discipline.

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Life and Retirement

Life and Retirement consists of four operating segments: Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. We offer a broad portfolio of products in the U.S. through a multichannel distribution network and life and health products in the UK and Ireland.

PRODUCTS AND DISTRIBUTION
	Variable Annuities: Products include variable annuities that offer a combination of growth potential, death benefit features and income protection features. Variable annuities are distributed primarily through banks, wirehouses, and regional and independent broker-dealers. Fixed Index Annuities: Products include fixed index annuities that provide growth potential based in part on the performance of a market index as well as optional living guaranteed features that provide lifetime income protection. Fixed index annuities are distributed primarily through banks, broker-dealers, independent marketing organizations and independent insurance agents. Fixed Annuities: Products include single premium fixed annuities, immediate annuities and deferred income annuities. Certain fixed deferred annuity products offer optional income protection features. The fixed annuities product line maintains an industry-leading position in the U.S. bank distribution channel by designing products collaboratively with banks and offering an efficient and flexible administration platform. Retail Mutual Funds: Includes our mutual fund offerings and related administration and servicing operations. Retail Mutual Funds are distributed primarily through broker-dealers. On July 16, 2021, the Company sold certain assets of the AIG Retail Mutual Funds business. For additional information on the Sale of Certain Assets of the Retail Mutual Funds Business, see Executive Summary – Overview.
	Group Retirement: Products and services consist of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered to employer defined contribution plans and their participants, along with proprietary and non-proprietary annuities and advisory and brokerage products offered outside of plans. AIG Retirement Services offers its products and services through The Variable Annuity Life Insurance Company and its subsidiaries, VALIC Financial Advisors, Inc. and VALIC Retirement Services Company. AIG Retirement Services career financial advisors serve individual clients, including in-plan enrollment support and education, and comprehensive financial planning services.
	Life Insurance: In the U.S., products primarily include term life and universal life insurance distributed through independent marketing organizations, independent insurance agents, financial advisors and direct marketing. International operations primarily include the distribution of life and health products in the UK and Ireland.
	Institutional Markets: Products primarily include stable value wrap products, structured settlement and pension risk transfer annuities (direct and assumed reinsurance), corporate- and bank-owned life insurance, high net worth products and guaranteed investment contracts (GICs). Institutional Markets products are primarily distributed through specialized marketing and consulting firms and structured settlement brokers.

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FHLB Funding Agreements are issued through our Individual Retirement, Group Retirement and Institutional Markets operating segments. Funding agreements are issued by our U.S. Life and Retirement companies to FHLBs in their respective districts at fixed or floating rates over specified periods, which can be prepaid at our discretion. Proceeds are generally invested in fixed income securities and other suitable investments to generate spread income. These investment contracts do not have mortality or morbidity risk and are similar to GICs.

BUSINESS STRATEGY

Deliver client-centric solutions through our unique franchise by bringing together a broad portfolio of life insurance, retirement and institutional products offered through an extensive, multichannel distribution network. Life and Retirement focuses on ease of doing business, offering valuable solutions, and expanding and deepening its distribution relationships across multiple channels.

Position market leading businesses to serve growing needs by continually enhancing product solutions, service delivery and digital capabilities while using data and analytics in an innovative manner to improve customer experience.


	Individual Retirement will continue to capitalize on the opportunity to meet consumer demand for guaranteed income by maintaining innovative variable and fixed index annuity products, while also managing risk from guarantee features through risk-mitigating product design and well-developed economic hedging capabilities. Our fixed annuity products provide diversity in our annuity product suite by offering stable returns for retirement savings.			Group Retirement continues to enhance its technology platform to improve the customer experience for plan sponsors and individual participants. AIG Retirement Services’ self-service tools paired with its career financial advisors provide a compelling service platform. Group Retirement’s strategy also involves providing financial planning services for its clients and meeting their need for income in retirement. In this advisory role, Group Retirement’s clients may invest in assets in which AIG or a third-party is custodian.


	Life Insurance in the U.S. will continue to position itself for growth and changing market dynamics while continuing to execute strategies to enhance returns. Our focus is on materializing success from a multi-year effort of building state-of-the-art platforms and underwriting innovations, which are expected to bring process improvements and cost efficiencies. In the UK, AIG Life Insurance will continue to focus on growing the business organically and through potential acquisition opportunities.			Institutional Markets continues to grow its assets under management across multiple product lines, including stable value wrap, GICs and pension risk transfer annuities. Our growth strategy is opportunistic and allows us to pursue select transactions that meet our risk-adjusted return requirements.

Enhance Operational Effectiveness by simplifying processes and operating environments to increase competitiveness, improve service and product capabilities and facilitate delivery of our target customer experience. We continue to invest in technology to improve operating efficiency and ease of doing business for our distribution partners and customers. We believe that simplifying our operating models will enhance productivity and support further profitable growth.

Manage our Balance Sheet through a rigorous approach to our products and portfolio. We match our product design and high-quality investments with our asset and liability exposures to support our cash and liquidity needs under various operating scenarios.

Deliver Value Creation and Manage Capital by striving to deliver solid earnings and returns on capital through disciplined pricing, sustainable underwriting improvements, expense efficiency, and diversification of risk, while optimizing capital allocation and efficiency within insurance entities to enhance return on common equity.

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COMPETITION and challenges

Life and Retirement operates in the highly competitive insurance and financial services industry in the U.S. and select international markets, competing against various financial services companies, including banks and other life insurance and mutual fund companies. Competition is primarily based on product pricing and design, distribution, financial strength, customer service and ease of doing business.

Our business remains competitive due to its long-standing market leading positions, innovative products, distribution relationships across multiple channels, customer-focused service and strong financial ratings.

Our primary challenges include:

 a low interest rate environment and recent inflationary pressures, which makes it difficult to profitably price new products and puts margin pressure on existing business due to lower reinvestment yields;

 increased competition in our primary markets, including aggressive pricing of annuities by competitors, increased competition and consolidation of employer groups in the group retirement planning market, and competitors with different profitability targets in the pension risk transfer space as well as other product lines;

 increasingly complex new and proposed regulatory requirements, which have affected industry growth and costs; and

 upgrading our technology and underwriting processes while managing general operating expenses.

OUTLOOK–INDUSTRY AND ECONOMIC FACTORS

Below is a discussion of the industry and economic factors impacting our specific operating segments:

The worldwide health and economic impact of COVID-19 continues to evolve, influenced by the scope, severity and duration of the pandemic, including resurgences and variants of the virus as well as the distribution and effectiveness of vaccinations.

On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. On November 2, 2021, AIG and Blackstone completed the acquisition by Blackstone of a 9.9 percent equity stake in Corebridge, which is the holding company for AIG’s Life and Retirement business, for $2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. This resulted in a $629 million decrease to AIG’s shareholders’ equity in the fourth quarter of 2021. As part of the separation, most of AIG’s investment operations were transferred to Corebridge or its subsidiaries as of December 31, 2021, and AIG entered into a long-term asset management relationship with Blackstone to manage an initial $50 billion of Life and Retirement’s existing investment portfolio beginning in the fourth quarter of 2021, with that amount increasing by increments of $8.5 billion per year for five years beginning in the fourth quarter of 2022, for an aggregate of $92.5 billion. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the SEC.

On December 15, 2021, AIG and BREIT, a long-term, perpetual capital vehicle affiliated with Blackstone, completed the acquisition by BREIT of AIG’s interests in a U.S. affordable housing portfolio for $4.9 billion, in an all cash transaction, resulting in a pre-tax gain of $3.0 billion. The historical results of the U.S. affordable housing portfolio were reported in our Life and Retirement operating segments.

For additional information regarding the debt issuance of Corebridge, see Note 16 to the Condensed Consolidated Financial Statements.

For additional information on the separation of Life and Retirement please see Note 1 to the Condensed Consolidated Financial Statements and the 2021 Annual Report, Part I, Item 1A. Risk Factors – Business and Operations – “No assurances can be given that the separation of our Life and Retirement business will occur or as to the specific terms or timing thereof. In addition, the separation could cause the emergence or exacerbate the effects of other risks to which AIG is exposed.”

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Individual Retirement

Increasing life expectancy and reduced expectations for traditional retirement income from defined benefit programs and fixed income securities are leading Americans to seek additional financial security as they approach retirement. The strong demand for individual index and fixed deferred annuities with guaranteed income features has attracted increased competition in this product space. In response to the low interest rate environment that prevailed over the past several years we have developed guaranteed income benefits for variable, fixed index, and fixed deferred annuities with margins that are less sensitive to the level of interest rates.

Changes in the capital markets (interest rate environment, credit spreads, equity markets, volatility) can have a significant impact on sales, surrender rates, investment returns, guaranteed income features, and net investment spreads in the annuity industry.

Group Retirement

Group Retirement competes in the defined contribution market under the AIG Retirement Services brand. AIG Retirement Services is a leading retirement plan provider in the U.S. for K-12 schools and school districts, higher education, healthcare, government and other not-for-profit institutions. The defined contribution market is a highly efficient and competitive market that requires support for both plan sponsors and individual participants. To meet this challenge, AIG Retirement Services is investing in a client-focused technology platform to support improved compliance and self-service functionality. AIG Retirement Services’ model pairs self-service tools with its career financial advisors who provide individual plan participants with enrollment support and comprehensive financial planning services.

Changes in the interest rates, credit spreads and equity market environment can have a significant impact on investment returns, fee income, advisory and other income, guaranteed income features, and net investment spreads, and a moderate impact on sales and surrender rates.

Life Insurance

Consumers have a significant need for life insurance, whether it is used for income replacement for their surviving family, estate planning or wealth transfer. Additionally, consumers use life insurance to provide living benefits in case of chronic, critical or terminal illnesses, and to supplement retirement income.

In response to consumer needs and a low interest rate environment, our Life Insurance product portfolio will continue to promote products with less long-duration interest rate risk and mitigate exposure to products that have long-duration interest rate risk through sales levels and hedging strategies.

As life insurance ownership remains at historical lows in the U.S. and the UK, efforts to expand the reach and increase the affordability of life insurance are critical. The industry is investing in consumer-centric efforts to reduce traditional barriers to securing life protection by simplifying the sales and service experience. Digitally enabled processes and tools provide a fast, friendly and simple path to life insurance protection.

Institutional Markets

Institutional Markets serves a variety of needs for corporate clients. Demand is driven by a number of factors including the macroeconomic and regulatory environment. We expect to see continued growth in the pension risk transfer market (direct and assumed reinsurance) as corporate plan sponsors look to transfer asset or liability, longevity, administrative and operational risks associated with their defined benefit plans.

Changes in interest rates and credit spreads can have a significant impact on investment returns and net investment spreads, impacting organic growth opportunities.

For additional information on the impact of market interest rate movement on our Life and Retirement business see Executive Summary – AIG’s Outlook – Industry and Economic Factors – Impact of Changes in the Interest Rate Environment.

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ITEM 2 | Business Segment Operations | Life and Retirement

life and retirement RESULTS

Three Months Ended March 31,					Percentage
(in millions)		2022		2021	Change
Adjusted revenues:
Premiums	$	840	$	600	40	%
Policy fees		763		783	(3)
Net investment income		2,129		2,353	(10)
Advisory fee and other income		233		244	(5)
Total adjusted revenues		3,965		3,980	-
Benefits, losses and expenses:
Policyholder benefits and losses incurred		1,443		1,257	15
Interest credited to policyholder account balances		867		870	-
Amortization of deferred policy acquisition costs		280		225	24
Non deferrable insurance commissions		161		157	3
Advisory fee expenses		71		83	(14)
General operating expenses		413		413	-
Interest expense		6		34	(82)
Total benefits, losses and expenses		3,241		3,039	7
Adjusted pre-tax income	$	724	$	941	(23)	%

Our insurance companies generate significant revenues from investment activities. As a result, the operating segments in Life and Retirement are significantly impacted by variances in net investment income on the asset portfolios that support insurance liabilities and surplus.

For additional information on our investment strategy, asset-liability management process and invested asset composition see Investments.

Individual Retirement Results

Three Months Ended March 31,						Percentage
(in millions)		2022		2021		Change
Adjusted revenues:
Premiums	$	55	$	25		120	%
Policy fees		224		232		(3)
Net investment income		983		1,068		(8)
Advisory fee and other income		123		152		(19)
Total adjusted revenues		1,385		1,477		(6)
Benefits and expenses:
Policyholder benefits and losses incurred		139		116		20
Interest credited to policyholder account balances		442		426		4
Amortization of deferred policy acquisition costs		177		133		33
Non deferrable insurance commissions		92		88		5
Advisory fee expenses		37		52		(29)
General operating expenses		111		114		(3)
Interest expense		3		16		(81)
Total benefits, losses and expenses		1,001		945		6
Adjusted pre-tax income	$	384	$	532		(28)	%
Fixed annuities base net investment spread:
Base yield^*		3.76	%	3.99	%	(23)	bps
Cost of funds		2.58		2.62		(4)
Fixed annuities base net investment spread		1.18	%	1.37	%	(19)	bps
Variable and fixed index annuities base net investment spread:
Base yield^*		3.73	%	3.83	%	(10)	bps
Cost of funds		1.39		1.31		8
Variable and fixed index annuities base net investment spread		2.34	%	2.52	%	(18)	bps

* Includes returns from base portfolio including accretion and income (loss) from certain other invested assets.

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Business and Financial Highlights

Premiums and deposits increased $508 million primarily driven by improved fixed annuity sales, in the first quarter of 2022 compared to the same period in the prior year. Net flows improved in the first quarter of 2022 compared to the same period in the prior year primarily due to the higher sales, as well as lower annuity surrenders and withdrawals and no retail mutual fund net flows due to the sale and liquidation of the Retail Mutual Fund business in the third quarter of 2021 compared to outflows in the same period in the prior year.

Adjusted pre-tax income decreased $148 million in the first quarter of 2022 compared to the prior year primarily due to lower net investment income ($85 million). In addition, decreases in the equity markets and increases in interest rates resulted in lower variable annuity separate account assets that contributed to higher DAC amortization and policyholder benefits net of premiums ($37 million) compared to prior year, and lower policy and advisory fee income, net of advisory fee expenses ($22 million).

Individual Retirement Adjusted Pre-Tax Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 3

2022 and 2021 Comparison

Adjusted pre-tax income decreased $148 million primarily due to:

 lower net investment income ($85 million) primarily driven by lower yield enhancement income ($61 million) primarily due to lower call and tender income, as well as higher losses on securities for which the fair value option was elected, lower alternative investment income ($13 million) and lower base portfolio income ($11 million) driven by decreased reinvestment rates;

 higher DAC amortization and policyholder benefits net of premiums ($37 million) primarily due to lower variable annuity separate account returns; and

 lower policy and advisory fee income, net of advisory fee expenses ($22 million), primarily due to a decrease in variable annuity separate account assets driven by negative equity market performance.

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Individual Retirement GAAP Premiums, Premiums and Deposits, Surrenders and Net Flows

Premiums and deposits are a non-GAAP financial measure that includes, in addition to direct and assumed premiums, deposits received on investment-type annuity contracts, FHLB funding agreements and mutual funds under administration.

Net flows for annuity products in Individual Retirement represent premiums and deposits less death, surrender and other withdrawal benefits. Net flows for mutual funds represent deposits less withdrawals.

The following table presents a reconciliation of Individual Retirement GAAP premiums to premiums and deposits:

Three Months Ended March 31,
(in millions)		2022		2021
Premiums	$	55	$	25
Deposits		3,830		3,349
Other		(4)		(1)
Premiums and deposits	$	3,881	$	3,373

The following table presents surrenders as a percentage of average reserves:

Three Months Ended March 31,	2022		2021
Surrenders as a percentage of average reserves
Fixed annuities	6.7	%	7.1	%
Variable annuities	6.5		7.1
Fixed index annuities	4.0		4.8

The following table presents reserves for fixed annuities and variable and fixed index annuities by surrender charge category:

	March 31, 2022						December 31, 2021
		Fixed		Fixed Index		Variable		Fixed		Fixed Index		Variable
(in millions)		Annuities		Annuities		Annuities		Annuities		Annuities		Annuities
No surrender charge	$	26,122	$	1,635	$	31,810	$	26,419	$	2,009	$	34,030
Greater than 0% - 2%		2,356		1,449		9,642		2,091		1,681		10,926
Greater than 2% - 4%		2,302		3,878		8,230		2,424		4,195		9,884
Greater than 4%		17,034		23,515		13,173		16,443		22,489		13,219
Non-surrenderable		2,381		-		-		2,373		-		-
Total reserves	$	50,195	$	30,477	$	62,855	$	49,750	$	30,374	$	68,059

Individual Retirement annuities are typically subject to a three- to seven-year surrender charge period, depending on the product. For fixed annuities, the proportion of reserves subject to surrender charge at March 31, 2022 increased compared to December 31, 2021 primarily due to growth in business. The increase in the proportion of reserves with no surrender charge for variable annuities as of March 31, 2022 compared to December 31, 2021 was principally due to normal aging of business. The decrease in the proportion of reserves with no surrender charge for Fixed Index Annuities as of March 31, 2022 compared to December 31, 2021 was principally due to growth of business.

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A discussion of the significant variances in premiums and deposits and net flows for each product line follows:

Individual Retirement Premiums and Deposits (P&D) and Net Flows

Three Months Ended March 31,

(in millions)

Chart 5

* In 2021, Retail Mutual Fund premiums and deposits and net flows reflects customer activity of the funds that were transferred or liquidated in the third quarter of 2021.

2022 and 2021 Comparison

 Fixed Annuities Net flows turned positive and improved ($1.0 billion) over the prior year, primarily due to higher premiums and deposits ($931 million) due to more competitive pricing and higher interest rates, lower surrenders and withdrawals ($53 million) and lower death benefits ($29 million).

 Variable Annuities Variable annuity net flows deteriorated ($160 million) primarily due to lower premium and deposits ($250 million), partially offset by lower surrenders and withdrawals ($76 million) and lower death benefits ($14 million).

 Fixed Index Annuities Net flows decreased ($29 million) primarily due to lower premiums and deposits ($24 million) and higher death benefits ($9 million), partially offset by lower surrenders and withdrawals ($4 million).

 Retail Mutual Funds There were no flows in 2022 due to the Touchstone sale in the second quarter of 2021.

For additional information regarding the sale of certain assets of the AIG Life and Retirement Retail Mutual Funds business, see Note 1 to the Condensed Consolidated Financial Statements.

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Group Retirement Results

Three Months Ended March 31,						Percentage
(in millions)		2022		2021		Change
Adjusted revenues:
Premiums	$	8	$	4		100	%
Policy fees		124		124		-
Net investment income		527		600		(12)
Advisory fee and other income		85		78		9
Total adjusted revenues		744		806		(8)
Benefits and expenses:
Policyholder benefits and losses incurred		27		18		50
Interest credited to policyholder account balances		281		283		(1)
Amortization of deferred policy acquisition costs		30		16		88
Non deferrable insurance commissions		28		29		(3)
Advisory fee expenses		34		31		10
General operating expenses		117		113		4
Interest expense		2		9		(78)
Total benefits, losses and expenses		519		499		4
Adjusted pre-tax income (loss)	$	225	$	307		(27)	%
Base net investment spread:
Base yield*		3.88	%	4.10	%	(22)	bps
Cost of funds		2.58		2.62		(4)
Base net investment spread		1.30	%	1.48	%	(18)	bps

* Includes returns from base portfolio including accretion and income (loss) from certain other invested assets.

Business and Financial Highlights

Group Retirement is focused on implementing initiatives to grow its business. Premiums and deposits increased $70 million in the first quarter of 2022 compared to the same period in the prior year. Net flows remained negative but improved $74 million in the first quarter of 2022 compared to the same period in 2021.

Adjusted pre-tax income decreased $82 million in the first quarter of 2022 compared to the same period in the prior year primarily due to lower net investment income ($73 million) and higher DAC amortization and policyholder benefits mostly due to lower equity market performance ($23 million).

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Group Retirement Adjusted Pre-Tax Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 3

2022 and 2021 Comparison

Adjusted pre-tax income decreased $82 million primarily due to:

 lower net investment income ($73 million) primarily driven by lower yield enhancement income ($45 million) primarily due to lower call and tender income, lower base portfolio income net of interest credited ($20 million), and lower alternative investment income ($6 million); and

 higher DAC amortization and policyholder benefits mostly due to lower equity market performance ($23 million).

Partially offsetting these decreases was:

 higher net advisory fee income ($4 million) mostly due to increase in advisory assets under administration.

Group Retirement GAAP Premiums, Premiums and Deposits, Surrenders and Net Flows

Net flows for annuity products included in Group Retirement represent premiums and deposits less death, surrender and other withdrawal benefits. Net flows for mutual funds represent deposits less withdrawals. Client deposits into advisory and brokerage accounts less total client withdrawals from advisory and brokerage accounts, are not included in net flows, but do contribute to growth in assets under administration and advisory fee income.

The following table presents a reconciliation of Group Retirement GAAP premiums to premiums and deposits:

Three Months Ended March 31,
(in millions)		2022		2021
Premiums	$	8	$	4
Deposits		1,880		1,814
Premiums and deposits^(a)	$	1,888	$	1,818

(a) Excludes client deposits into advisory and brokerage accounts of $602 million and $532 million for the three months ended March 31, 2022 and 2021, respectively.

The following table presents Group Retirement surrenders as a percentage of average reserves and mutual funds under administration:

Three Months Ended March 31,	2022		2021
Surrenders as a percentage of average reserves and mutual funds	8.6	%	8.9	%

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The following table presents reserves for Group Retirement annuities by surrender charge category:

		March 31,			December 31,
(in millions)		2022	^(a)		2021	^(a)
No surrender charge^(b)	$	77,497		$	81,132
Greater than 0% - 2%		671			716
Greater than 2% - 4%		590			857
Greater than 4%		6,299			6,197
Non-surrenderable		769			810
Total reserves	$	85,826		$	89,712

(a) Excludes mutual fund assets under administration of $26.9 billion and $28.8 billion at March 31, 2022 and December 31, 2021, respectively.

(b) Group Retirement amounts in this category include general account reserves of approximately $4.6 billion and $4.7 billion at March 31, 2022 and December 31, 2021 respectively, which are subject to 20 percent annual withdrawal limitations at the participant level and general account reserves of $5.7 billion at both March 31, 2022 and December 31, 2021, which are subject to 20 percent annual withdrawal limitations at the plan level.

Group Retirement annuity deposits are typically subject to a five- to seven-year surrender charge period, depending on the product. At March 31, 2022, Group Retirement annuity reserves with no surrender charge decreased compared to December 31, 2021 primarily due to decline in assets under management from lower equity markets.

A discussion of the significant variances in premiums and deposits and net flows follows:

Group Retirement Premiums and Deposits and Net Flows

Three Months Ended March 31,

(in millions)

Chart 5

2022 and 2021 Comparison

Net flows remained negative but improved ($74 million) due to higher premiums and deposits ($70 million). In general, net outflows are concentrated in fixed annuity products with higher contractual guaranteed minimum crediting rates. Large plan acquisitions and surrenders also contributed to the period over period volatility, resulting in an improvement in net flows of $0.2 billion compared to the same period in the prior year.

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Life Insurance Results

Three Months Ended March 31,					Percentage
(in millions)		2022		2021	Change
Adjusted revenues:
Premiums	$	539	$	532	1	%
Policy fees		368		380	(3)
Net investment income		356		407	(13)
Other income		24		14	71
Total adjusted revenues		1,287		1,333	(3)
Benefits and expenses:
Policyholder benefits and losses incurred		938		1,004	(7)
Interest credited to policyholder account balances		85		88	(3)
Amortization of deferred policy acquisition costs		72		75	(4)
Non deferrable insurance commissions		34		33	3
General operating expenses		166		166	-
Interest expense		1		7	(86)
Total benefits, losses and expenses		1,296		1,373	(6)
Adjusted pre-tax loss	$	(9)	$	(40)	78	%

Business and Financial Highlights

Life Insurance is focused on selling profitable new products through strategic channels to enhance future returns. The adjusted pre-tax loss in the first quarter of 2022 decreased $31 million compared to the same period in the prior year primarily due to favorable premiums and policy fees, net of policyholder benefits ($61 million), partially offset by lower net investment income.

Life Insurance Adjusted Pre-Tax Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 3

2022 and 2021 Comparison

Adjusted pre-tax loss decreased $31 million primarily due to:

 higher premiums and policy fees, net of policyholder benefits ($61 million) primarily due to lower mortality.

Partially offsetting this increase was:

 lower net investment income ($51 million), primarily driven by lower yield enhancement income ($37 million) primarily due to lower call and tender income and lower base portfolio income ($8 million).

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Life Insurance GAAP Premiums and Premiums and Deposits

Premiums for Life Insurance represent amounts received on traditional life insurance policies, primarily term life and international life and health. Premiums increased $7 million in the three-month period ended March 31, 2022 compared to the same period in the prior year. Premiums and deposits for Life Insurance is a non-GAAP financial measure that includes direct and assumed premiums as well as deposits received on universal life insurance.

The following table presents a reconciliation of Life Insurance GAAP premiums to premiums and deposits:

Three Months Ended March 31,
(in millions)		2022		2021
Premiums	$	539	$	532
Deposits		397		397
Other^*		233		202
Premiums and deposits	$	1,169	$	1,131

* Other principally consists of adding back ceded premiums to reflect the gross premiums and deposits.

A discussion of the significant variances in premiums and deposits follows:

Life Insurance Premiums and Deposits

Three Months Ended March 31,

(in millions)

Chart 2

2022 and 2021 Comparison

Premiums and deposits increased $38 million primarily due to growth in international life premiums.

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Institutional markets Results

Three Months Ended March 31,					Percentage
(in millions)		2022		2021	Change
Adjusted revenues:
Premiums	$	238	$	39	NM	%
Policy fees		47		47	-
Net investment income		263		278	(5)
Other income		1		-	NM
Total adjusted revenues		549		364	51
Benefits and expenses:
Policyholder benefits and losses incurred		339		119	185
Interest credited to policyholder account balances		59		73	(19)
Amortization of deferred policy acquisition costs		1		1	-
Non deferrable insurance commissions		7		7	-
General operating expenses		19		20	(5)
Interest expense		-		2	NM
Total benefits, losses and expenses		425		222	91
Adjusted pre-tax income	$	124	$	142	(13)	%

Business and Financial Highlights

Institutional Markets is focused on opportunities to grow its portfolio while maintaining pricing discipline. Product distribution continues to be strong. Adjusted pre-tax income decreased $18 million in the three months ended March 31, 2022 compared to the prior year primarily due to lower net investment income driven by lower call and tender income ($15 million).

Institutional Markets Adjusted Pre-Tax Income (Loss)

Three Months Ended March 31,

(in millions)

Chart 3

2022 and 2021 Comparison

Adjusted pre-tax income decreased $18 million primarily due to:

 an increase in policyholder benefits and losses incurred (including interest accretion) primarily on new pension risk transfer business ($220 million); and

 lower net investment income ($15 million) primarily due to lower call and tender income.

Partially offsetting these decreases were:

 higher premiums primarily on new pension risk transfer business ($199 million); and

 lower interest credited to policyholder account balances ($14 million), primarily related to the GIC business.

AIG | First Quarter 2022 Form 10-Q 100

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ITEM 2 | Business Segment Operations | Life and Retirement

Institutional markets GAAP Premiums and Premiums and Deposits

Premiums for Institutional Markets primarily represent amounts received on pension risk transfer or structured settlement annuities with life contingencies. Premiums increased $199 million in the three-month period ended March 31, 2022 compared to the same period in the prior year primarily driven by the pension risk transfer business (direct and assumed reinsurance).

Premiums and deposits for Institutional Markets is a non-GAAP financial measure that includes direct and assumed premiums as well as deposits received on investment-type annuity contracts. Deposits primarily include GICs, FHLB funding agreements and structured settlement annuities with no life contingencies.

The following table presents a reconciliation of Institutional Markets GAAP premiums to premiums and deposits:

Three Months Ended March 31,
(in millions)		2022		2021
Premiums	$	238	$	39
Deposits		82		34
Other*		7		7
Premiums and deposits	$	327	$	80

* Other principally consists of adding back ceded premiums to reflect the gross premiums and deposits.

A discussion of the significant variances in premiums and deposits follows:

Institutional Markets Premiums and Deposits

Three Months Ended March 31,

(in millions)

Chart 2

2022 and 2021 Comparison

Premiums and deposits increased ($247 million) primarily due to higher premiums on new pension risk transfer business and deposits on structured settlement annuities.

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Other Operations

Other Operations Results

Three Months Ended March 31,					Percentage
(in millions)		2022		2021	Change
Adjusted revenues:
Premiums	$	30	$	52	(42)	%
Policy fees		-		-	NM
Net investment income:
Interest and dividends		63		50	26
Alternative investments		269		207	30
Other investment loss		(85)		(2)	NM
Investment expenses		(9)		(6)	(50)
Total net investment income		238		249	(4)
Other income		26		23	13
Total adjusted revenues		294		324	(9)
Benefits, losses and expenses:
Policyholder benefits and losses incurred		17		66	(74)
Interest credited to policyholder account balances		-		-	NM
Acquisition expenses:
Amortization of deferred policy acquisition costs		3		10	(70)
Other acquisition expenses		-		-	NM
Total acquisition expenses		3		10	(70)
General operating expenses:
Corporate and Other		265		241	10
Asset Management		22		35	(37)
Amortization of intangible assets		10		10	-
Total General operating expenses		297		286	4
Interest expense:
Corporate and Other		228		272	(16)
Asset Management^*		37		44	(16)
Total interest expense		265		316	(16)
Total benefits, losses and expenses		582		678	(14)
Adjusted pre-tax income (loss) before consolidation and
eliminations		(288)		(354)	19
Consolidation and eliminations		(133)		(176)	24
Adjusted pre-tax loss	$	(421)	$	(530)	21	%

Adjusted pre-tax income (loss) by activities:
Corporate and Other	$	(547)	$	(552)	1	%
Asset Management		259		198	31
Consolidation and eliminations		(133)		(176)	24
Adjusted pre-tax loss	$	(421)	$	(530)	21	%

* Interest – Asset Management primarily represents interest expense on consolidated investment entities of $36 million and $41 million in the three-month periods ended March 31, 2022 and 2021, respectively.

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ITEM 2 | Business Segment Operations | Other Operations

2022 AND 2021 COMPARISON

Adjusted pre-tax loss before consolidation and eliminations of $288 million in 2022 compared to $354 million in 2021, decreased $66 million, was primarily due to:

 lower underwriting loss attributable to decreased catastrophe losses and absence of unfavorable prior year development ($36 million in 2021) within Other Operations Run-Off, primarily Blackboard;

 lower corporate interest expense primarily driven by interest savings resulting from redemptions of $3.0 billion of debt in 2021 ($23 million) and interest savings from debt repurchases and cash tender offers in an aggregate amount of $646 million ($11 million); and

 lower net investment income driven by an increase in mark to market losses on CDO securities of $80 million and lower gains on fair value option assets and liabilities of $33 million partially offset by higher income associated with equity investments of $55 million and consolidated investment entities of $31 million.

Adjusted pre-tax loss on consolidation and eliminations of $133 million in 2022 compared to $176 million in 2021, a decrease of $43 million, was primarily due to the elimination of the insurance companies’ net investment income from their investment in the consolidated investment entities of $50 million.

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Investments

Overview

Our investment strategies are tailored to the specific business needs of each operating unit by targeting an asset allocation mix that supports estimated cash flows of our outstanding liabilities and provides diversification from an asset class, sector, issuer, and geographic perspective. The primary objectives are generation of investment income, preservation of capital, liquidity management and growth of surplus. The majority of assets backing our insurance liabilities consist of fixed maturity securities.

Over the past several quarters inflation has continued to remain elevated, which has led to the first increase in interest rates by the Board of Governors of the Federal Reserve System in several years. This has also led to a significant rise in interest rates across the yield curve as well as a widening of credit spreads.

INVESTMENT HIGHLIGHTS IN THE FIRST QUARTER OF 2022

 A significant rise in interest rates and widening of credit spreads resulted in a net unrealized loss movement in our available for sale fixed security portfolio of $20.2 billion during the first quarter of 2022. Our Net unrealized gain balance of $18.1 billion as of December 31, 2021 decreased to a net unrealized loss balance of $2.1 billion in our available for sale portfolio as of March 31, 2022.

 We continued to make investments in structured securities and other fixed maturity securities with favorable risk compared to return characteristics to improve yields and increase net investment income.

 We experienced a decrease in net investment income in the three-month period ended March 31, 2022 compared to the same period in the prior year due primarily to higher losses on assets for which we elected fair value option, losses in our hedge funds versus gains in the prior year, and lower income in our AFS fixed security portfolio primarily driven by lower call income and yield compression, which more than offset higher income in our private equity portfolio.

 Blended investment yields on new investments were lower than blended rates on investments that were sold, matured or called.

Investment Strategies

Investment strategies are assessed at the segment level and involve considerations that include local and general market conditions, duration and cash flow management, risk appetite and volatility constraints, rating agency and regulatory capital considerations, and tax and legal investment limitations.

Some of our key investment strategies are as follows:

 Our fundamental strategy across the portfolios is to seek investments with similar characteristics to the associated insurance liabilities to the extent practicable.

 AIG embeds Environmental, Social and Governance (ESG) considerations in its fundamental investment analysis of the companies or projects we invest in to ensure that they have sustainable earnings over the full term of our investment, as material, relevant and available. AIG considers internal and external factors and evaluates changes in consumer behavior, industry trends related to ESG factors as well as the ability of the management of companies to respond appropriately to these changes in order to maintain their competitive advantage.

 We seek to originate investments that offer enhanced yield through illiquidity premiums, such as private placements and commercial mortgage loans, which also add portfolio diversification. These assets typically afford credit protections through covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence given information access.

 Given our global presence, we have access to assets that provide diversification from local markets. To the extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities to earn higher risk adjusted returns compared to assets in the functional currency.

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 AIG Parent, included in Other Operations, actively manages its assets and liabilities, counterparties and duration. AIG Parent’s liquidity sources are held primarily in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities that can be readily monetized through sales or repurchase agreements. This strategy allows us to both diversify our sources of liquidity and reduce the cost of maintaining sufficient liquidity.

 Within the U.S., the Life and Retirement and General Insurance investments are generally split between reserve backing and surplus portfolios.

– Insurance reserves are backed by mainly investment grade fixed maturity securities that meet our duration, risk-return, tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk factors, including credit (public and private), commercial real estate and residential real estate regardless of whether such investments are bonds, loans, or structured products.

– Surplus investments seek to enhance portfolio returns and are generally comprised of a mix of fixed maturity investment grade and below investment grade securities and various alternative asset classes, including private equity, real estate equity, and hedge funds. Over the past few years, hedge fund investments have been reduced with more emphasis given to private equity, real estate and below investment grade credit.

 Outside of the U.S., fixed maturity securities held by insurance companies consist primarily of investment-grade securities generally denominated in the currencies of the countries in which we operate.

Asset Liability Management

The investment strategy within the General Insurance companies focuses on growth of surplus, maintenance of sufficient liquidity for unanticipated insurance claims, and preservation of capital. General Insurance invests primarily in fixed maturity securities issued by corporations, municipalities and other governmental agencies; structured securities collateralized by, among other assets, residential and commercial real estate; and commercial mortgage loans. Fixed maturity securities of the General Insurance companies’ North America operations have an average duration of 4.0 years. Fixed maturity securities of the General Insurance companies’ International operations have an average duration of 4.0 years.

While invested assets backing reserves of the General Insurance companies are primarily invested in conventional liquid fixed maturity securities, we have continued to allocate to asset classes that offer higher yields through structural and illiquidity premiums, particularly in our North America operations. In addition, we continue to invest in both fixed rate and floating rate asset-backed investments to manage our exposure to potential changes in interest rates and inflation. We seek to diversify the portfolio across asset classes, sectors and issuers to mitigate idiosyncratic portfolio risks.

In addition, a portion of the surplus of General Insurance is invested in a diversified portfolio of alternative investments that seek to balance liquidity, volatility and growth of surplus. There is a higher allocation to equity-oriented investments in General Insurance surplus relative to other AIG portfolios given the underlying inflation risks inherent in that business. Although these alternative investments are subject to periodic earnings fluctuations, they have historically achieved yields in excess of the fixed maturity portfolio yields and have provided added diversification to the broader portfolio.

The investment strategy of the Life and Retirement companies is to provide net investment income to back liabilities that result in stable distributable earnings and enhance portfolio value, subject to asset liability management, capital, liquidity and regulatory constraints.

The Life and Retirement companies use asset-liability management as a primary tool to monitor and manage risk in their businesses. The Life and Retirement companies maintain a diversified, high-to-medium quality portfolio of fixed maturity securities issued by corporations, municipalities and other governmental agencies; structured securities collateralized by, among other assets, residential and commercial real estate; and commercial mortgage loans that, to the extent practicable, match the duration characteristics of the liabilities. We seek to diversify the portfolio across asset classes, sectors, and issuers to mitigate idiosyncratic portfolio risks. The investment portfolio of each product line is tailored to the specific characteristics of its insurance liabilities, and as a result, duration varies between distinct portfolios. The interest rate environment has a direct impact on the asset-liability management profile of the businesses, and an extended low interest rate environment may result in a lengthening of liability durations from initial estimates, primarily due to lower lapses, which may require us to further extend the duration of the investment portfolio. A further lengthening of the portfolio will be assessed in the context of available market opportunities as longer duration markets may not provide similar diversification benefits as shorter duration markets.

Fixed maturity securities of the Life and Retirement companies’ domestic operations have an average duration of 8.4 years.

In addition, the Life and Retirement companies seek to enhance surplus portfolio returns through investments in a diversified portfolio of alternative investments. Although these alternative investments are subject to periodic earnings fluctuations, they have historically achieved returns in excess of the fixed maturity portfolio returns.

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NAIC Designations of Fixed Maturity Securities

The Securities Valuation Office (SVO) of the NAIC evaluates the investments of U.S. insurers for statutory reporting purposes and assigns fixed maturity securities to one of six categories called ‘NAIC Designations.’ In general, NAIC Designations of ‘1’ highest quality, or ‘2’ high quality, include fixed maturity securities considered investment grade, while NAIC Designations of ‘3’ through ‘6’ generally include fixed maturity securities referred to as below investment grade. NAIC Designations for non-agency residential mortgage backed securities (RMBS) and commercial mortgage backed securities (CMBS) are calculated using third party modeling results provided through the NAIC. These methodologies result in an improved NAIC Designation for such securities compared to the rating typically assigned by the three major rating agencies. The following tables summarize the ratings distribution of AIG subsidiaries’ fixed maturity security portfolio by NAIC Designation, and the distribution by composite AIG credit rating, which is generally based on ratings of the three major rating agencies. For fixed maturity securities where no NAIC Designation is assigned or able to be calculated using third-party data, the NAIC Designation category used in the first table below reflects an internal rating.

The NAIC Designations presented below do not reflect the added granularity to the designation categories adopted by the NAIC in 2020, which further subdivide each category of fixed maturity securities by appending letter modifiers to the numerical designations.

For a full description of the composite AIG credit ratings see – Credit Ratings below.

The following table presents the fixed maturity security portfolio categorized by NAIC Designation, at fair value:

March 31, 2022
(in millions)
																Total
						Total										Below
						Investment										Investment
NAIC Designation		1		2		Grade		3		4		5		6		Grade		Total
Other fixed maturity securities	$	101,922	$	81,158	$	183,080	$	8,032	$	8,872	$	1,007	$	197	$	18,108	$	201,188
Mortgage-backed, asset-backed and collateralized		55,237		5,914		61,151		136		91		11		1,210		1,448		62,599
Total^*	$	157,159	$	87,072	$	244,231	$	8,168	$	8,963	$	1,018	$	1,407	$	19,556	$	263,787

* Excludes $14 million of fixed maturity securities for which no NAIC Designation is available.

The following table presents the fixed maturity security portfolio categorized by composite AIG credit rating, at fair value:

March 31, 2022
(in millions)
														Total
						Total								Below
						Investment						CCC and		Investment
Composite AIG Credit Rating		AAA/AA/A		BBB		Grade		BB		B		Lower		Grade		Total
Other fixed maturity securities	$	105,908	$	76,736	$	182,644	$	8,218	$	7,667	$	2,659	$	18,544	$	201,188
Mortgage-backed, asset-backed and collateralized		48,004		6,421		54,425		440		467		7,267		8,174		62,599
Total^*	$	153,912	$	83,157	$	237,069	$	8,658	$	8,134	$	9,926	$	26,718	$	263,787

* Excludes $14 million of fixed maturity securities for which no NAIC Designation is available.

Credit Ratings

At March 31, 2022, approximately 88 percent of our fixed maturity securities were held by our domestic entities. Approximately 90 percent of these securities were rated investment grade by one or more of the principal rating agencies. Our investment decision process relies primarily on internally generated fundamental analysis and internal risk ratings. Third-party rating services’ ratings and opinions provide one source of independent perspective for consideration in the internal analysis.

Moody’s Investors Service Inc. (Moody’s), Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc. (S&P), or similar foreign rating services rate a significant portion of our foreign entities’ fixed maturity securities portfolio. Rating services are not available for some foreign-issued securities. Our Credit Risk Management department closely reviews the credit quality of the foreign portfolio’s non-rated fixed maturity securities. At March 31, 2022, approximately 94 percent of such investments were either rated investment grade or, on the basis of our internal analysis, were equivalent from a credit standpoint to securities rated investment grade. Approximately 26 percent of the foreign entities’ fixed maturity securities portfolio is comprised of sovereign fixed maturity securities supporting policy liabilities in the country of issuance.

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Composite AIG Credit Ratings

With respect to our fixed maturity securities, the credit ratings in the table below and in subsequent tables reflect: (i) a composite of the ratings of the three major rating agencies, or when agency ratings are not available, the NAIC designation assigned by the NAIC SVO (98 percent of total fixed maturity securities), or (ii) our internal ratings when these investments have not been rated by any of the major rating agencies or the NAIC. The “Non-rated” category in those tables consists of fixed maturity securities that have not been rated by any of the major rating agencies, the NAIC or us.

For information regarding credit risks associated with Investments see Part II, Item 7. MD&A – Enterprise Risk Management in the 2021 Annual Report.

The following table presents the composite AIG credit ratings of our fixed maturity securities calculated on the basis of their fair value:

	Available for Sale				Other				Total
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)		2022		2021		2022		2021		2022		2021
Rating:
Other fixed maturity
securities
AAA	$	15,026	$	15,578	$	1,695	$	1,756	$	16,721	$	17,334
AA		36,037		39,110		398		282		36,435		39,392
A		52,569		57,346		181		160		52,750		57,506
BBB		76,182		83,192		556		461		76,738		83,653
Below investment grade		16,778		17,795		383		314		17,161		18,109
Non-rated		1,398		1,638		-		-		1,398		1,638
Total	$	197,990	$	214,659	$	3,213	$	2,973	$	201,203	$	217,632
Mortgage-backed, asset-
backed and collateralized
AAA	$	25,481	$	27,144	$	175	$	232	$	25,656	$	27,376
AA		14,940		15,688		568		485		15,508		16,173
A		6,586		6,685		252		197		6,838		6,882
BBB		5,549		5,492		872		725		6,421		6,217
Below investment grade		6,662		7,508		1,318		1,462		7,980		8,970
Non-rated		11		26		184		204		195		230
Total	$	59,229	$	62,543	$	3,369	$	3,305	$	62,598	$	65,848
Total
AAA	$	40,507	$	42,722	$	1,870	$	1,988	$	42,377	$	44,710
AA		50,977		54,798		966		767		51,943		55,565
A		59,155		64,031		433		357		59,588		64,388
BBB		81,731		88,684		1,428		1,186		83,159		89,870
Below investment grade		23,440		25,303		1,701		1,776		25,141		27,079
Non-rated		1,409		1,664		184		204		1,593		1,868
Total	$	257,219	$	277,202	$	6,582	$	6,278	$	263,801	$	283,480

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Available-for-Sale Investments

The following table presents the fair value of our available-for-sale securities:

		Fair Value at		Fair Value at
		March 31,		December 31,
(in millions)		2022		2021
Bonds available for sale:
U.S. government and government sponsored entities	$	7,867	$	8,194
Obligations of states, municipalities and political subdivisions		13,513		14,527
Non-U.S. governments		14,982		16,330
Corporate debt		161,628		175,608
Mortgage-backed, asset-backed and collateralized:
RMBS		24,535		27,287
CMBS		15,100		15,809
CDO/ABS		19,594		19,447
Total mortgage-backed, asset-backed and collateralized		59,229		62,543
Total bonds available for sale^*	$	257,219	$	277,202

* At March 31, 2022 and December 31, 2021, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $24.8 billion and $27 billion, respectively.

The following table presents the fair value of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities:

	March 31,		December 31,
(in millions)		2022		2021
Canada	$	1,200	$	1,233
Japan		1,138		1,230
Germany		782		702
United Kingdom		741		1,031
France		680		731
Indonesia		589		634
Chile		474		511
Mexico		434		481
United Arab Emirates		429		484
Israel		426		515
Other		8,174		8,854
Total	$	15,067	$	16,406

The following table presents the fair value of our aggregate European credit exposures by major sector for our fixed maturity securities:

	March 31, 2022
						Non-					December 31,
				Financial		Financial		Structured				2021
(in millions)		Sovereign		Institution		Corporates		Products		Total		Total
Euro-Zone countries:
France	$	680	$	1,610	$	1,282	$	-	$	3,572	$	3,870
Germany		782		260		2,502		-		3,544		3,610
Netherlands		226		957		1,164		40		2,387		2,652
Ireland		10		78		450		1,289		1,827		1,958
Belgium		73		276		1,090		40		1,479		1,620
Luxembourg		20		515		348		-		883		880
Spain		29		352		443		-		824		888
Italy		21		99		464		-		584		636
Denmark		231		92		153		-		476		518
Finland		36		35		39		-		110		150
Other Euro-Zone		299		2		28		-		329		379
Total Euro-Zone	$	2,407	$	4,276	$	7,963	$	1,369	$	16,015	$	17,161

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Remainder of Europe:
United Kingdom	$	741	$	4,295	$	8,689	$	1,089	$	14,814	$	16,908
Switzerland		19		908		836		-		1,763		1,884
Norway		319		132		268		-		719		797
Sweden		145		223		109		-		477		537
Jersey (Channel Islands)		-		187		-		-		187		225
Russian Federation		42		1		43		-		86		359
Other - Remainder of Europe		64		39		88		-		191		261
Total - Remainder of Europe	$	1,330	$	5,785	$	10,033	$	1,089	$	18,237	$	20,971
Total	$	3,737	$	10,061	$	17,996	$	2,458	$	34,252	$	38,132

Investments in Municipal Bonds

At March 31, 2022, the U.S. municipal bond portfolio was composed primarily of essential service revenue bonds and high-quality tax-exempt bonds with 95 percent of the portfolio rated A or higher.

The following table presents the fair values of our available for sale U.S. municipal bond portfolio by state and municipal bond type:

	March 31, 2022
		State		Local				Total	December 31,
		General		General				Fair		2021
(in millions)		Obligation		Obligation		Revenue		Value		Total Fair Value
California	$	634	$	417	$	1,821	$	2,872	$	3,108
New York		16		207		2,230		2,453		2,765
Texas		48		506		788		1,342		1,416
Illinois		73		78		786		937		1,009
Massachusetts		275		21		311		607		666
Georgia		96		75		258		429		474
Florida		5		-		402		407		403
Ohio		8		-		395		403		488
Pennsylvania		36		2		338		376		397
Virginia		10		-		350		360		380
Washington		124		7		214		345		359
New Jersey		10		1		278		289		282
Washington, D.C.		10		-		267		277		293
All other states^(a)		329		169		1,918		2,416		2,487
Total^(b)(c)	$	1,674	$	1,483	$	10,356	$	13,513	$	14,527

(a) We did not have material credit exposure to the government of Puerto Rico.

(b) Excludes certain university and not-for-profit entities that issue their bonds in the corporate debt market. Includes industrial revenue bonds.

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Investments in Corporate Debt Securities

The following table presents the industry categories of our available for sale corporate debt securities:

		Fair Value at		Fair Value at
Industry Category		March 31,		December 31,
(in millions)		2022		2021
Financial institutions:
Money center/Global bank groups	$	9,535	$	10,053
Regional banks – other		419		434
Life insurance		2,711		3,094
Securities firms and other finance companies		393		350
Insurance non-life		6,130		6,795
Regional banks – North America		6,658		7,228
Other financial institutions		17,128		18,255
Utilities		21,931		24,180
Communications		10,606		11,510
Consumer noncyclical		22,021		24,411
Capital goods		8,114		8,668
Energy		12,490		13,506
Consumer cyclical		12,575		13,279
Basic		5,388		6,041
Other		25,529		27,804
Total^*	$	161,628	$	175,608

* At March 31, 2022 and December 31, 2021, approximately 90 percent and 90 percent, respectively, of these investments were rated investment grade.

Our investments in the energy category, as a percentage of total investments in available-for-sale fixed maturities, was 4.9 percent and 4.9 percent, at March 31, 2022 and December 31, 2021, respectively. While the energy investments are primarily investment grade and are actively managed, the category continues to experience volatility that could adversely affect credit quality and fair value.

Investments in RMBS

The following table presents AIG’s RMBS available for sale securities:

		Fair Value at		Fair Value at
		March 31,		December 31,
(in millions)		2022		2021
Agency RMBS	$	12,405	$	13,778
Alt-A RMBS		5,297		5,936
Subprime RMBS		2,199		2,329
Prime non-agency		2,411		3,058
Other housing related		2,223		2,186
Total RMBS^(a)(b)	$	24,535	$	27,287

(a) Includes approximately $5.5 billion and $6.1 billion at March 31, 2022 and December 31, 2021, respectively, of certain RMBS that had experienced deterioration in credit quality since their origination. For additional information on Purchased Credit Deteriorated Securities see Note 5 to the Condensed Consolidated Financial Statements.

(b) The weighted average expected life was six years at March 31, 2022 and five years at December 31, 2021.

Our underwriting practices for investing in RMBS, other asset-backed securities (ABS) and CDOs take into consideration the quality of the originator, the manager, the servicer, security credit ratings, underlying characteristics of the mortgages, borrower characteristics, and the level of credit enhancement in the transaction.

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Investments in CMBS

The following table presents our CMBS available for sale securities:

		Fair Value at		Fair Value at
		March 31,		December 31,
(in millions)		2022		2021
CMBS (traditional)	$	12,602	$	13,091
Agency		1,467		1,627
Other		1,031		1,091
Total	$	15,100	$	15,809

The fair value of CMBS holdings remained stable during the first quarter of 2022. The majority of our investments in CMBS are in tranches that contain substantial protection features through collateral subordination. The majority of CMBS holdings are traditional conduit transactions, broadly diversified across property types and geographical areas.

Investments in ABS/CDOs

The following table presents our ABS/CDO available for sale securities by collateral type:

		Fair value at		Fair value at
		March 31,		December 31,
(in millions)		2022		2021
Collateral Type:
ABS	$	10,577	$	10,532
Bank loans (collateralized loan obligation)		8,997		8,899
Other		20		16
Total	$	19,594	$	19,447

Unrealized Losses of Fixed Maturity Securities

The following table shows the aging of the unrealized losses of fixed maturity securities, the extent to which the fair value is less than amortized cost or cost, and the number of respective items in each category:

March 31, 2022		Less Than or Equal					Greater Than 20%					Greater Than 50%
		to 20% of Cost^(b)					to 50% of Cost^(b)					of Cost^(b)					Total
Aging^(a)			Unrealized					Unrealized					Unrealized					Unrealized
(dollars in millions)		Cost^(c)		Loss	Items^(e)		Cost^(c)		Loss	Items^(e)		Cost^(c)		Loss	Items^(e)		Cost^(c)		Loss^(d)	Items^(e)
Investment grade
bonds
0-6 months	$	110,517	$	5,952	15,443	$	1,072	$	244	74	$	9	$	8	5	$	111,598	$	6,204	15,522
7-11 months		12,729		1,208	2,752		377		85	25		-		-	-		13,106		1,293	2,777
12 months or more		12,409		1,382	2,091		1,503		354	163		1		1	1		13,913		1,737	2,255
Total	$	135,655	$	8,542	20,286	$	2,952	$	683	262	$	10	$	9	6	$	138,617	$	9,234	20,554
Below investment
grade bonds
0-6 months	$	9,870	$	314	4,024	$	74	$	18	13	$	8	$	6	19	$	9,952	$	338	4,056
7-11 months		1,960		114	839		54		13	31		1		1	-		2,015		128	870
12 months or more		2,851		141	856		593		172	85		58		39	14		3,502		352	955
Total	$	14,681	$	569	5,719	$	721	$	203	129	$	67	$	46	33	$	15,469	$	818	5,881
Total bonds
0-6 months	$	120,387	$	6,266	19,467	$	1,146	$	262	87	$	17	$	14	24	$	121,550	$	6,542	19,578
7-11 months		14,689		1,322	3,591		431		98	56		1		1	-		15,121		1,421	3,647
12 months or more		15,260		1,523	2,947		2,096		526	248		59		40	15		17,415		2,089	3,210
Total^(e)	$	150,336	$	9,111	26,005	$	3,673	$	886	391	$	77	$	55	39	$	154,086	$	10,052	26,435

(a) Represents the number of consecutive months that fair value has been less than cost by any amount.

(b) Represents the percentage by which fair value is less than cost.

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(d) The effect on Net income of unrealized losses after taxes will be mitigated upon realization because certain realized losses will result in current decreases in the amortization of certain DAC.

(e) Item count is by CUSIP by subsidiary.

The allowance for credit losses was $5 million for investment grade bonds and $186 million for below investment grade bonds as of March 31, 2022.

Commercial Mortgage Loans

At March 31, 2022, we had direct commercial mortgage loan exposure of $36.1 billion.

The following table presents the commercial mortgage loan exposure by location and class of loan based on amortized cost:

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial		Hotel			Others		Total	Total
March 31, 2022
State:
New York	89	$	1,652	$	4,325	$	466	$	432	$	104	$	-	$	6,979	19	%
California	63		814		1,284		236		660		758		13		3,765	10
New Jersey	50		2,125		83		461		240		11		32		2,952	8
Texas	48		692		1,100		155		187		143		-		2,277	6
Florida	59		508		120		366		213		391		-		1,598	5
Massachusetts	14		593		287		534		25		-		-		1,439	4
Illinois	22		553		627		3		47		-		21		1,251	4
Pennsylvania	22		78		144		474		75		24		-		795	2
Ohio	24		166		10		173		319		-		-		668	2
Washington D.C.	11		464		184		-		-		18		-		666	2
Other states	140		1,647		540		939		775		328		-		4,229	12
Foreign	98		4,468		1,308		1,329		1,581		444		354		9,484	26
Total^*	640	$	13,760	$	10,012	$	5,136	$	4,554	$	2,221	$	420	$	36,103	100	%

December 31, 2021
State:
New York	94	$	2,217	$	4,329	$	450	$	438	$	103	$	-	$	7,537	21	%
California	62		817		1,293		239		553		761		13		3,676	10
New Jersey	48		2,092		30		462		225		11		33		2,853	8
Texas	49		630		1,133		167		187		144		-		2,261	6
Florida	60		469		152		368		214		281		-		1,484	4
Massachusetts	13		534		290		537		24		-		-		1,385	4
Illinois	24		554		626		9		50		-		21		1,260	5
Pennsylvania	22		78		144		477		76		25		-		800	2
Washington, D.C.	11		455		184		-		-		18		-		657	2
Ohio	25		167		10		175		289		-		-		641	2
Other states	155		1,852		598		975		686		329		-		4,440	12
Foreign	86		4,402		1,341		998		1,116		449		365		8,671	24
Total^*	649	$	14,267	$	10,130	$	4,857	$	3,858	$	2,121	$	432	$	35,665	100	%

* Does not reflect allowance for credit losses.

For additional information on commercial mortgage loans, see Note 6 to the Consolidated Financial Statements in the 2021 Annual Report.

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ITEM 2 | Investments

Net Realized Gains and Losses

The following table presents the components of Net realized gains (losses):

Three Months Ended March 31,	2022						2021
	Excluding		Fortitude Re				Excluding		Fortitude Re
	Fortitude Re			Funds			Fortitude Re			Funds
	Funds		Withheld				Funds		Withheld
(in millions)	Withheld Assets		Assets			Total	Withheld Assets			Assets		Total
Sales of fixed maturity securities	$	(107)	$	(32)	$	(139)	$	94	$	295	$	389
Change in allowance for credit losses on fixed maturity
securities		(53)		(40)		(93)		51		2		53
Change in allowance for credit losses on loans		(19)		(8)		(27)		41		(5)		36
Foreign exchange transactions		(14)		(9)		(23)		(49)		(6)		(55)
Variable annuity embedded derivatives, net of related
hedges		506		-		506		89		-		89
All other derivatives and hedge accounting		939		(56)		883		351		(117)		234
Sales of alternative investments and real estate
investments		16		1		17		26		4		30
Other		(27)		4		(23)		92		-		92
Net realized gains (losses) – excluding Fortitude Re
funds withheld embedded derivative		1,241		(140)		1,101		695		173		868
Net realized gains on Fortitude Re
funds withheld embedded derivative		-		3,318		3,318		-		2,382		2,382
Net realized gains	$	1,241	$	3,178	$	4,419	$	695	$	2,555	$	3,250

Higher Net realized capital gains excluding Fortitude Re funds withheld assets in the three-month period ended March 31, 2022 compared to the same period in the prior year were due to higher derivative gains.

Variable annuity embedded derivatives, net of related hedges, reflected higher gains in the three-month period ended March 31, 2022 compared to the same period in the prior year. Fair value gains or losses in the hedging portfolio are typically not fully offset by increases or decreases in liabilities due to the non-performance or “own credit” risk adjustment used in the valuation of the variable annuities with GMWB embedded derivative, which are not hedged as part of our economic hedging program, and other risk margins used for valuation that cause the embedded derivatives to be less sensitive to changes in market rates than the hedge portfolio.

Net realized gains (losses) on Fortitude Re funds withheld assets primarily reflect changes in the valuation of the modified coinsurance and funds withheld assets. Increases in the valuation of these assets result in losses to AIG as the appreciation on the assets must under those reinsurance arrangements be transferred to Fortitude Re. Decreases in valuation of the assets result in gains to AIG as the depreciation on the assets under those reinsurance arrangements must be transferred to Fortitude Re. For additional information on the impact of the funds withheld arrangements with Fortitude Re see Note 7 to the Condensed Consolidated Financial Statements.

For additional information on market risk management related to these product features, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Life and Retirement Companies’ Key Risks – Variable Annuity, Fixed Index Annuity and Universal Life Risk Management and Hedging Programs in the 2021 Annual Report. For additional information on the economic hedging target and the impact to pre-tax income of this program, see Insurance Reserves – Life and Annuity Future Policy Benefits, Policyholder Contract Deposits and DAC – Variable Annuity Guaranteed Benefits and Hedging Results in this MD&A.

For additional information on our investment portfolio, see Note 5 to the Condensed Consolidated Financial Statements.

Change in Unrealized Gains and Losses on Investments

The change in net unrealized gains and losses on investments in the first quarter of 2022 was primarily attributable to decrease in the fair value of fixed maturity securities. For the first quarter of 2022, net unrealized losses related to fixed maturity securities were $20.2 billion due primarily to a significant increase in interest rates and widening of credit spreads.

The change in net unrealized gains and losses on investments in the first quarter of 2021 was primarily attributable to decreases in the fair value of fixed maturity securities. For the first quarter of 2021, net unrealized losses related to fixed maturity securities were $11.6 billion due primarily to an increase in interest rates.

For additional information on our investment portfolio, see Note 5 to the Condensed Consolidated Financial Statements.

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ITEM 2 | Insurance Reserves

Insurance Reserves

Liability for unpaid losses and loss adjustment expenses (Loss Reserves)

The following table presents the components of our gross and net loss reserves by segment and major lines of business^(a):

	March 31, 2022						December 31, 2021
	Net liability for		Reinsurance		Gross liability		Net liability for		Reinsurance		Gross liability
	unpaid losses		recoverable on		for unpaid		unpaid losses		recoverable on		for unpaid
	and loss		unpaid losses and		losses and		and loss		unpaid losses and		losses and
	adjustment		loss adjustment		loss adjustment		adjustment		loss adjustment		loss adjustment
(in millions)	expenses		expenses		expenses		expenses		expenses		expenses
General Insurance:
U.S. Workers' Compensation (net of discount)	$	3,262	$	5,140	$	8,402	$	3,282	$	5,216	$	8,498
U.S. Excess Casualty		3,813		4,090		7,903		3,850		4,195		8,045
U.S. Other Casualty		3,970		4,077		8,047		3,805		4,191		7,996
U.S. Financial Lines		5,432		1,795		7,227		5,356		1,893		7,249
U.S. Property and Special Risks		6,478		3,323		9,801		6,615		3,587		10,202
U.S. Personal Insurance		1,046		2,043		3,089		1,001		2,198		3,199
UK/Europe Casualty and Financial Lines		7,130		1,660		8,790		7,175		1,603		8,778
UK/Europe Property and Special Risks		2,707		1,460		4,167		2,631		1,492		4,123
UK/Europe and Japan Personal Insurance		1,987		624		2,611		1,962		608		2,570
Other product lines^(b)		6,010		5,408		11,418		5,815		5,468		11,283
Unallocated loss adjustment expenses^(b)		1,372		979		2,351		1,654		1,015		2,669
Total General Insurance		43,207		30,599		73,806		43,146		31,466		74,612
Other Operations Run-Off:
U.S. run-off long tail insurance lines
(net of discount)		170		3,418		3,588		164		3,434		3,598
Other run-off product lines		265		57		322		264		61		325
Blackboard U.S. Holdings, Inc.		202		133		335		217		138		355
Unallocated loss adjustment expenses		18		114		132		22		114		136
Total Other Operations Run-Off		655		3,722		4,377		667		3,747		4,414

Total	$	43,862	$	34,321	$	78,183	$	43,813	$	35,213	$	79,026

(a) Includes net loss reserve discount of $935 million and $876 million as of March 31, 2022 and December 31, 2021, respectively. For information regarding loss reserve discount see Note 10 to the Condensed Consolidated Financial Statements.

(b) Other product lines and Unallocated loss adjustment expenses includes Gross liability for unpaid losses and loss adjustment expense and Reinsurance recoverable on unpaid losses and loss adjustment expense for the Fortitude Re reinsurance of $3.4 billion and $3.5 billion as of March 31, 2022 and December 31, 2021, respectively.

Prior Year Development

The following table summarizes incurred (favorable) unfavorable prior year development net of reinsurance by segment:


(in millions)		2022		2021
General Insurance:
North America^*	$	(73)	$	(58)
International		(20)		2
Total General Insurance	$	(93)	$	(56)
Other Operations Run-Off		-		19
Total prior year favorable development	$	(93)	$	(37)

* Includes the amortization attributed to the deferred gain at inception from the National Indemnity Company (NICO) adverse development reinsurance agreement of $42 million and $52 million for the three-month periods ended March 31, 2022 and 2021, respectively. Consistent with our definition of APTI, the amount excludes the portion of (favorable)/unfavorable prior year reserve development for which we have ceded the risk under the NICO reinsurance agreements of $1 million for the three-month period ended March 31, 2021. Also excludes the related changes in amortization of the deferred gain, $20 million over that same period.

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ITEM 2 | Insurance Reserves

Net Loss Development

In the three-month period ended March 31, 2022, we recognized favorable prior year loss reserve development of $93 million. The key components of this development were:

North America

• Favorable development on U.S. Workers Compensation and short tail lines.

• Amortization benefit of $40 million related to the deferred gain on the adverse development cover.

International

 Favorable development in Japan personal lines.

In the three-month period ended March 31, 2021, we recognized favorable prior year loss reserve development of $37 million. The key components of this development were:

North America

 Favorable development on Property, Specialty and U.S. Workers Compensation, offset by unfavorable development on prior-year catastrophes.

 Amortization benefit of $49 million related to the deferred gain on the adverse development cover.

International

 Unfavorable development on prior year catastrophes, offset by favorable development in Property and Other Short Tailed lines.

 Amortization benefit of $3 million related to the deferred gain on the adverse development cover.

Other Operations

 Unfavorable development primarily attributed to the Blackboard insurance portfolio due to increased severity on reported claims.

The following tables summarize incurred (favorable) unfavorable prior year development net of reinsurance, by segment and major lines of business, and by accident year groupings:

Three Months Ended March 31, 2022
(in millions)		Total		2021		2020 & Prior
General Insurance North America:
U.S. Workers' Compensation	$	(57)	$	(1)	$	(56)
U.S. Excess Casualty		(10)		-		(10)
U.S. Other Casualty		(10)		1		(11)
U.S. Financial Lines		(7)		-		(7)
U.S. Property and Special Risks		29		(45)		74
U.S. Personal Insurance		(14)		(3)		(11)
Other Product Lines		(4)		(17)		13
Total General Insurance North America	$	(73)	$	(65)	$	(8)
General Insurance International:
UK/Europe Casualty and Financial Lines	$	5	$	(2)	$	7
UK/Europe Property and Special Risks		(12)		(20)		8
UK/Europe and Japan Personal Insurance		(14)		(14)		-
Other product lines		1		10		(9)
Total General Insurance International	$	(20)	$	(26)	$	6
Other Operations Run-Off		-		-		-
Total Prior Year (Favorable) Unfavorable Development	$	(93)	$	(91)	$	(2)

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ITEM 2 | Insurance Reserves

Three Months Ended March 31, 2021
(in millions)		Total		2020		2019 & Prior
General Insurance North America:
U.S. Workers' Compensation	$	(26)	$	2	$	(28)
U.S. Excess Casualty		(12)		-		(12)
U.S. Other Casualty		(2)		-		(2)
U.S. Financial Lines		(9)		-		(9)
U.S. Property and Special Risks		(2)		(14)		12
U.S. Personal Insurance		(4)		1		(5)
Other Product Lines		(3)		(2)		(1)
Total General Insurance North America	$	(58)	$	(13)	$	(45)
General Insurance International:
UK/Europe Casualty and Financial Lines	$	(4)	$	(3)	$	(1)
UK/Europe Property and Special Risks		3		9		(6)
UK/Europe and Japan Personal Insurance		(1)		(4)		3
Other product lines		4		11		(7)
Total General Insurance International	$	2	$	13	$	(11)
Other Operations Run-Off		19		(1)		20
Total Prior Year (Favorable) Unfavorable Development	$	(37)	$	(1)	$	(36)

We note that for certain categories of claims (e.g., construction defect claims and environmental claims) and for reinsurance recoverable, losses may sometimes be reclassified to an earlier or later accident year as more information about the date of occurrence becomes available to us.

Significant Reinsurance Agreements

In the first quarter of 2017, we entered into an adverse development reinsurance agreement with NICO, under which we transferred to NICO 80 percent of the reserve risk on substantially all of our U.S. Commercial long-tail exposures for accident years 2015 and prior. Under this agreement, we ceded to NICO 80 percent of the losses on subject business paid on or after January 1, 2016 in excess of $25 billion of net paid losses, up to an aggregate limit of $25 billion. We account for this transaction as retroactive reinsurance. This transaction resulted in a gain, which under GAAP retroactive reinsurance accounting is deferred and amortized into income over the settlement period. NICO created a collateral trust account as security for their claim payment obligations to us, into which they deposited the consideration paid under the agreement, and Berkshire Hathaway Inc. has provided a parental guarantee to secure NICO’s obligations under the agreement.

For a description of AIG’s catastrophe reinsurance protection for 2021, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – General Insurance Companies’ Key Risks – Natural Catastrophe Risk in the 2021 Annual Report.

The table below shows the calculation of the deferred gain on the adverse development reinsurance agreement as of March 31, 2022 and as of December 31, 2021, showing the effect of discounting of loss reserves and amortization of the deferred gain.

		March 31,		December 31,
(in millions)		2022		2021
Gross Covered Losses
Covered reserves before discount	$	14,075	$	14,398
Inception to date losses paid		27,346		27,023
Attachment point		(25,000)		(25,000)
Covered losses above attachment point	$	16,421	$	16,421

Deferred Gain Development
Covered losses above attachment ceded to NICO (80%)	$	13,137	$	13,137
Consideration paid including interest		(10,188)		(10,188)
Pre-tax deferred gain before discount and amortization		2,949		2,949
Discount on ceded losses^(a)		(914)		(953)
Pre-tax deferred gain before amortization		2,035		1,996
Inception to date amortization of deferred gain at inception		(1,139)		(1,097)
Inception to date amortization attributed to changes in deferred gain^(b)		(26)		(30)
Deferred gain liability reflected in AIG's balance sheet	$	870	$	869

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ITEM 2 | Insurance Reserves

(a) The accretion of discount and a reduction in effective interest rates is offset by changes in estimates of the amount and timing of future recoveries.

(b) Excluded from APTI.

The following table presents the rollforward of activity in the deferred gain from the adverse development reinsurance agreement:

Three Months Ended March 31,
(in millions)		2022		2021
Balance at beginning of year, net of discount	$	869	$	1,297
(Favorable) unfavorable prior year reserve development ceded to NICO^(a)		-		1
Amortization attributed to deferred gain at inception^(b)		(42)		(52)
Amortization attributed to changes in deferred gain^(c)		4		(3)
Changes in discount on ceded loss reserves		39		39
Balance at end of period, net of discount	$	870	$	1,282

(a)Prior year reserve development ceded to NICO under the retroactive reinsurance agreement is deferred under GAAP.

(b)Represents amortization of the deferred gain recognized in APTI.

(c)Excluded from APTI.

The lines of business subject to this agreement have been the source of the majority of the unfavorable prior year development over the past several years, though the overall prior year development has been favorable over the past three years. The agreement has resulted in lower capital charges for reserve risks at our U.S. insurance subsidiaries. In addition, net investment income declined as a result of lower invested assets.

Fortitude Re was established during the first quarter of 2018 in a series of reinsurance transactions related to our run-off operations. Those reinsurance transactions were designed to consolidate most of our Insurance run-off lines into a single legal entity. As of March 31, 2022, approximately $29.6 billion of reserves from our Life and Retirement Run-Off Lines and approximately $3.7 billion of reserves from our General Insurance Run-Off Lines related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re under these reinsurance transactions.

Of the Fortitude Re reinsurance agreements, the largest is the Amended and Restated Combination Coinsurance and Modified Coinsurance Agreement by and between our subsidiary AGL and Fortitude Re. Under this treaty, approximately $22.5 billion of AGL reserves as of March 31, 2022 were ceded to Fortitude Re representing a mix of life and annuity risks. Fortitude Re provides 100 percent reinsurance of the ceded risks. AGL retains the risk of collection of any third party reinsurance covering the ceded business. At effectiveness of the treaty, an amount equal to the aggregate ceded reserves was deposited by AGL into a modified coinsurance account of AGL to secure the obligations of Fortitude Re. Fortitude Re receives or makes quarterly payments that represent the net gain or loss under the treaty for the relevant quarter, including any net investment gain or loss on the assets in the modified coinsurance account. An AIG affiliate will serve as portfolio manager of assets in the modified coinsurance account for a minimum of three years after the June 2, 2020 closing of the Majority Interest Fortitude Sale.

Following receipt of all regulatory approvals and the satisfaction of other conditions, effective as of January 1, 2022, AIG sold to an affiliate of Fortitude Re all of the outstanding capital stock of two servicing companies that administer the Life and Retirement and General Insurance ceded business, and the ceding insurers entered into administrative services agreements pursuant to which AIG transferred administration of certain Life and Retirement and General Insurance ceded business to such companies.

For a summary of significant reinsurers see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Reinsurance Activities – Reinsurance Recoverable in the 2021 Annual Report.

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ITEM 2 | Insurance Reserves

LIFE AND ANNUITY FUTURE POLICY BENEFITS, POLICYHOLDER CONTRACT DEPOSITS and dac

The following section provides discussion of life and annuity future policy benefits, policyholder contract deposits and deferred policy acquisition costs.

Variable Annuity Guaranteed Benefits and Hedging Results

Our Individual Retirement and Group Retirement businesses offer variable annuity products with GMWB riders that provide guaranteed living benefit features. The liabilities for GMWB are accounted for as embedded derivatives measured at fair value. The fair value of the embedded derivatives may fluctuate significantly based on market interest rates, equity prices, credit spreads, market volatility, policyholder behavior and other factors.

In addition to risk-mitigating features in our variable annuity product design, we have an economic hedging program designed to manage market risk from GMWB, including exposures to changes in interest rates, equity prices, credit spreads and volatility. The hedging program utilizes derivative instruments, including but not limited to equity options, futures contracts and interest rate swap and swaption contracts, as well as fixed maturity securities with a fair value election.

For additional information on market risk management related to these product features see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Life and Retirement Companies’ Key Risks – Variable Annuity, Index Annuity and Universal Life Risk Management and Hedging Programs in the 2021 Annual Report.

Differences in Valuation of Embedded Derivatives and Economic Hedge Target

The variable annuity hedging program utilizes an economic hedge target, which represents an estimate of the underlying economic risks in our GMWB riders. The economic hedge target differs from the GAAP valuation of the GMWB embedded derivatives, creating volatility in our net income (loss) primarily due to the following:

 The economic hedge target includes 100 percent of rider fees in present value calculations; the GAAP valuation reflects only those fees attributed to the embedded derivative such that the initial value at contract issue equals zero;

 The economic hedge target uses best estimate actuarial assumptions and excludes explicit risk margins used for GAAP valuation, such as margins for policyholder behavior, mortality, and volatility; and

 The economic hedge target excludes the non-performance or “own credit” risk adjustment used in the GAAP valuation, which reflects a market participant’s view of our claims-paying ability by incorporating a different spread (the NPA spread) to the curve used to discount projected benefit cash flows. Because the discount rate includes the NPA spread and other explicit risk margins, the GAAP valuation has different sensitivities to movements in interest rates and other market factors, and to changes from actuarial assumption updates, than the economic hedge target. For additional information on our valuation methodology for embedded derivatives within policyholder contract deposits, see Note 4 to the Condensed Consolidated Financial Statements.

The market value of the hedge portfolio compared to the economic hedge target at any point in time may be different and is not expected to be fully offsetting. In addition to the derivatives held in conjunction with the variable annuity hedging program, the Life and Retirement companies have cash and invested assets available to cover future claims payable under these guarantees. The primary sources of difference between the change in the fair value of the hedging portfolio and the economic hedge target include:

 Basis risk due to the variance between expected and actual fund returns, which may be either positive or negative;

 Realized volatility versus implied volatility;

 Actual versus expected changes in the hedge target driven by assumptions not subject to hedging, particularly policyholder behavior; and

 Risk exposures that we have elected not to explicitly or fully hedge.

The following table presents a reconciliation between the fair value of the GAAP embedded derivatives and the value of our economic hedge target:

		March 31,		December 31,
(in millions)		2022		2021
Reconciliation of embedded derivatives and economic hedge target:
Embedded derivative liability	$	1,667	$	2,472
Exclude non-performance risk adjustment		(2,656)		(2,508)
Embedded derivative liability, excluding NPA		4,323		4,980
Adjustments for risk margins and differences in valuation		(2,189)		(2,172)
Economic hedge target liability	$	2,134	$	2,808

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ITEM 2 | Insurance Reserves

Impact on Pre-tax Income (Loss)

The impact on our pre-tax income (loss) of variable annuity guaranteed living benefits and related hedging results includes changes in the fair value of the GMWB embedded derivatives, and changes in the fair value of related derivative hedging instruments, both of which are recorded in Net realized gains (losses). Realized gains (losses), as well as net investment income from changes in the fair value of fixed maturity securities used in the hedging program, are excluded from adjusted pre-tax income of Individual Retirement and Group Retirement.

The change in the fair value of the embedded derivatives and the change in the value of the hedging portfolio are not expected to be fully offsetting, primarily due to the differences in valuation between the economic hedge target, the GAAP embedded derivatives and the fair value of the hedging portfolio, as discussed above. When corporate credit spreads widen, the change in the NPA spread generally reduces the fair value of the embedded derivative liabilities, resulting in a gain, and when corporate credit spreads narrow or tighten, the change in the NPA spread generally increases the fair value of the embedded derivative liabilities, resulting in a loss. In addition to changes driven by credit market-related movements in the NPA spread, the NPA balance also reflects changes in business activity and in the net amount at risk from the underlying guaranteed living benefits.

The following table presents the net increase (decrease) to consolidated pre-tax income (loss) from changes in the fair value of the GMWB embedded derivatives and related hedges, excluding related DAC amortization:

Three Months Ended March 31,
(in millions)		2022		2021
Change in fair value of embedded derivatives, excluding NPA	$	823	$	2,679
Change in fair value of variable annuity hedging portfolio:
Fixed maturity securities*		13		18
Interest rate derivative contracts		(730)		(1,404)
Equity derivative contracts		265		(390)
Change in fair value of variable annuity hedging portfolio		(452)		(1,776)
Change in fair value of embedded derivatives excluding NPA, net of hedging portfolio		371		903
Change in fair value of embedded derivatives due to NPA spread		524		(111)
Change in fair value of embedded derivatives due to change in NPA volume		(376)		(685)
Total change due to NPA		148		(796)
Net impact on pre-tax income (loss)	$	519	$	107

Impact to Condensed Consolidated Income Statement
Net investment income, net of related interest credited to policyholder account balances	$	13	$	18
Net realized gains (losses)		506		89
Net impact on pre-tax income (loss)	$	519	$	107

Net change in value of economic hedge target and related hedges
Net impact on economic gains (losses)	$	128	$	(190)

* The change in fair value of available-for-sale fixed maturity securities recognized as a component of other comprehensive income (loss) was a loss of $215 million for the three-month period ended March 31, 2022 due to higher interest rates. The change in fair value of available-for-sale fixed maturity securities recognized as a component of other comprehensive income (loss) was a loss of $216 million for the three-month periods ended March 31, 2021 due to higher interest rates.

The net impact on pre-tax income gain of $519 million from the GMWB embedded derivatives and related hedges in the three-month period ended March 31, 2022 was driven by a widening of the NPA credit spread and the impact of higher interest rates on the change in the fair value of embedded derivatives excluding NPA, net of the hedging portfolio. The net impact on pre-tax income of $107 million from the GMWB embedded derivatives and related hedges in the three-month period ended March 31, 2021 was driven by gains from higher equity markets, impact of higher interest rates on the change in the fair value of embedded derivatives excluding NPA, net of the hedging portfolio, offset by the tightening of NPA credit spreads.

The change in the fair value of the GMWB embedded derivatives, excluding NPA, in the three-month period ended March 31, 2022 reflected gains from increases in interest rates, offset by lower equity markets. The change in the fair value of the GMWB embedded derivatives, excluding NPA, in the three-month period ended March 31, 2021 reflected gains from increases in interest rates and gains from higher equity markets.

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ITEM 2 | Insurance Reserves

Fair value gains or losses in the hedging portfolio are typically not fully offset by increases or decreases in liabilities on a GAAP basis, due to the NPA and other risk margins used for GAAP valuation that cause the embedded derivatives to be less sensitive to changes in market rates than the hedge portfolio. On an economic basis, the changes in the fair value of the hedge portfolio were partially offset by the changes in the economic hedge target, as discussed below. In the three-month period ended March 31, 2022, we had a net mark to market gain of approximately $128 million from our hedging activities related to our economic hedge target primarily driven by widening credit spreads. In the three-month period ended March 31, 2021, we estimated a net mark to market loss of approximately $190 million from our hedging activities related to our economic hedge target primarily driven by tightening credit spreads.

Change in Economic Hedge Target

The decrease in the economic hedge target liability in the three-month period ended March 31, 2022 was primarily driven by higher interest rates and widening credit spreads, offset by lower equity markets. The decrease in the economic hedge target liability in the three-month period ended March 31, 2021 was primarily due to higher interest rates and higher equity markets, offset by tighter credit spreads.

Change in Fair Value of the Hedging Portfolio

The changes in the fair value of the economic hedge target and, to a lesser extent, the embedded derivative valuation under GAAP, were offset in part by the following changes in the fair value of the variable annuity hedging portfolio:

 Changes in the fair value of interest rate derivative contracts, which included swaps, swaptions and futures, resulted in losses driven by higher interest rates in the first quarter of 2022 and 2021.

 Changes in the fair value of equity derivative contracts, which included futures and options, resulted in gains in the first quarter of 2022 driven by the decline in the equity market compared to losses in the first quarter of 2021 due to higher equity markets.

 Changes in the fair value of fixed maturity securities, primarily corporate bonds, are used as a capital-efficient way to economically hedge interest rate and credit spread-related risk. The change in the fair value of the corporate bond hedging program in the three -month periods ended March 31, 2022 reflected losses due to increases in interest rates and widening credit spreads. The change in the fair value of the corporate bond hedging program in the three-month period ended March 31, 2021 reflected losses due to increases in interest rates, offset by tightening credit spreads.

DAC

The following table summarizes the major components of the changes in DAC, including VOBA, within the Life and Retirement companies:

Three Months Ended March 31,
(in millions)		2022		2021
Balance, beginning of year	$	8,086	$	7,316
Initial allowance upon the adoption of the current expected credit loss accounting standard		-		-
Acquisition costs deferred		247		249
Amortization expense:
Related to realized gains and losses		(266)		(194)
All other operating amortization		(280)		(225)
Increase (decrease) in DAC due to foreign exchange		(21)		6
Change related to unrealized depreciation (appreciation) of investments		2,501		1,304
Balance, end of period^(a)	$	10,267	$	8,456

(a) DAC balance excluding the amount related to unrealized depreciation (appreciation) of investments was $10.1 billion and $10.3 billion at March 31, 2022 and 2021, respectively.

DAC and Reserves Related to Unrealized Appreciation of Investments

DAC and Reserves for universal life insurance and investment-oriented products are adjusted at each balance sheet date to reflect the change in DAC, unearned revenue, and benefit reserves with an offset to Other comprehensive income (loss) (OCI) as if securities available for sale had been sold at their stated aggregate fair value and the proceeds reinvested at current yields (changes related to unrealized appreciation (depreciation) of investments). Similarly, for long-duration traditional products, significant unrealized appreciation of investments in a sustained low interest rate environment may cause additional future policy benefit liabilities with an offset to OCI to be recorded.

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ITEM 2 | Insurance Reserves

Changes related to unrealized appreciation (depreciation) of investments related to DAC and unearned revenue generally move in the opposite direction of the change in unrealized appreciation of the available for sale securities portfolio, reducing the reported DAC and unearned revenue balance when market interest rates decline. Conversely, changes related to unrealized appreciation (depreciation) of investments related to benefit reserves generally move in the same direction as the change in unrealized appreciation of the available for sale securities portfolio, increasing reported future policy benefit liabilities balance when market interest rates decline.

Market conditions in the three-month period ended March 31, 2022 drove a $17 billion decrease in the unrealized appreciation of the available for sale fixed maturity securities portfolio held to support the Life and Retirement businesses at March 31, 2022 compared to December 31, 2021. At March 31, 2022, the changes related to unrealized appreciation (depreciation) of investments reflected increases in amortized balances including DAC and unearned revenue reserves, while accrued liabilities such as policyholder benefit liabilities decreased $1.3 billion from December 31, 2021.

Reserves

The following table presents a rollforward of insurance reserves by operating segments for Life and Retirement, including future policy benefits, policyholder contract deposits, other policyholder funds, and separate account liabilities, as well as Retail Mutual Funds and Group Retirement mutual fund assets under administration:

Three Months Ended March 31,
(in millions)		2022		2021
Individual Retirement
Balance at beginning of period, gross	$	148,492	$	148,837
Premiums and deposits		3,881		3,373
Surrenders and withdrawals		(2,205)		(3,111)
Death and other contract benefits		(802)		(836)
Subtotal		149,366		148,263
Change in fair value of underlying assets and reserve accretion, net of policy fees		(5,488)		(243)
Cost of funds^(a)		428		414
Other reserve changes		(472)		(324)
Balance at end of period		143,834		148,110
Reinsurance ceded		(307)		(313)
Total Individual Retirement insurance reserves and mutual fund assets	$	143,527	$	147,797
Group Retirement
Balance at beginning of period, gross	$	118,492	$	110,651
Premiums and deposits		1,888		1,818
Surrenders and withdrawals		(2,473)		(2,484)
Death and other contract benefits		(234)		(227)
Subtotal		117,673		109,758
Change in fair value of underlying assets and reserve accretion, net of policy fees		(5,112)		2,843
Cost of funds^(a)		278		280
Other reserve changes		(66)		(149)
Balance at end of period		112,773		112,732
Reinsurance ceded		-		-
Total Group Retirement insurance reserves and mutual fund assets	$	112,773	$	112,732
Life Insurance
Balance at beginning of period, gross	$	28,415	$	27,998
Premiums and deposits		1,057		1,029
Surrenders and withdrawals		(155)		(144)
Death and other contract benefits		(143)		(173)
Subtotal		29,174		28,710
Change in fair value of underlying assets and reserve accretion, net of policy fees		(334)		(208)
Cost of funds^(a)		85		88
Other reserve changes		(1,415)		(1,001)
Balance at end of period		27,510		27,589
Reinsurance ceded		(1,561)		(1,461)
Total Life Insurance reserves	$	25,949	$	26,128

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Institutional Markets
Balance at beginning of period, gross	$	30,264	$	27,342
Premiums and deposits		327		80
Surrenders and withdrawals		(16)		(312)
Death and other contract benefits		(274)		(208)
Subtotal		30,301		26,902
Change in fair value of underlying assets and reserve accretion, net of policy fees		(83)		165
Cost of funds^(a)		59		73
Other reserve changes		(124)		(327)
Balance at end of period		30,153		26,813
Reinsurance ceded		(45)		(46)
Total Institutional Markets reserves	$	30,108	$	26,767
Total insurance reserves and mutual fund assets
Balance at beginning of period, gross	$	325,663	$	314,828
Premiums and deposits		7,153		6,300
Surrenders and withdrawals		(4,849)		(6,051)
Death and other contract benefits		(1,453)		(1,444)
Subtotal		326,514		313,633
Change in fair value of underlying assets and reserve accretion, net of policy fees		(11,017)		2,557
Cost of funds^(a)		850		855
Other reserve changes		(2,077)		(1,801)
Balance at end of period, excluding Fortitude Re reserves		314,270		315,244
Fortitude Re reserves^(b)		27,647		28,300
Balance at end of period, including Fortitude Re reserves		341,917		343,544
Fortitude Re reinsurance ceded^(b)		(27,647)		(28,300)
Reinsurance ceded		(1,913)		(1,820)
Total insurance reserves and mutual fund assets	$	312,357	$	313,424

(a) Excludes amortization of deferred sales inducements.

(b) Includes amounts related to policies where AIG has partially ceded to other reinsurers and Fortitude Re.

Insurance reserves and Group Retirement mutual fund assets under administration, were comprised of the following balances:

		March 31,		December 31,
(in millions)		2022		2021
Future policy benefits	$	56,492	$	57,749
Policyholder contract deposits		156,607		156,844
Other policyholder funds^(a)		1,021		833
Separate account liabilities		100,850		109,111
Total insurance reserves		314,970		324,537
Mutual fund assets		26,947		28,780
Total insurance reserves and mutual fund assets	$	341,917	$	353,317

(a) Excludes unearned revenue liability.

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Liquidity and Capital Resources

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet our payment obligations. It is defined as cash and unencumbered assets that can be monetized in a short period of time at a reasonable cost. We endeavor to manage our liquidity prudently through various risk committees, policies and procedures, and a stress testing and liquidity risk framework established by our Treasury group with oversight by Enterprise Risk Management (ERM). Our liquidity risk framework is designed to manage liquidity at both AIG Parent and its subsidiaries to meet our financial obligations for a minimum of six months under a liquidity stress scenario.

For additional information, see Part II, Item 7. MD&A – Enterprise Risk Management – Risk Appetite, Limits, Identification and Measurement and Part II, Item 7. MD&A – Enterprise Risk Management – Liquidity Risk Management in the 2021 Annual Report.

Capital refers to the long-term financial resources available to support the operation of our businesses, fund business growth, and cover financial and operational needs that arise from adverse circumstances. Our primary source of ongoing capital generation is derived from the profitability of our insurance subsidiaries. We must comply with numerous constraints on our minimum capital positions. These constraints drive the requirements for capital adequacy at AIG and the individual businesses and are based on internally-defined risk tolerances, regulatory requirements, rating agency and creditor expectations and business needs. Actual capital levels are monitored on a regular basis, and using ERM’s stress testing methodology, we evaluate the capital impact of potential macroeconomic, financial and insurance stresses in relation to the relevant capital constraints of both AIG and our insurance subsidiaries.

We believe that we have sufficient liquidity and capital resources to satisfy future requirements and meet our obligations to policyholders, customers, creditors and debt-holders, including those arising from reasonably foreseeable contingencies or events.

Nevertheless, some circumstances may cause our cash or capital needs to exceed projected liquidity or readily deployable capital resources. Additional collateral calls, deterioration in investment portfolios or reserve strengthening affecting statutory surplus, higher surrenders of annuities and other policies, downgrades in credit ratings, catastrophic losses or fluctuations in the capital markets generally may result in significant additional cash or capital needs and loss of sources of liquidity and capital. Other potential events that could cause a liquidity strain include an economic collapse of a nation or region significant to our operations, nationalization, catastrophic terrorist acts, pandemics or other events causing economic or political upheaval. In addition, regulatory and other legal restrictions could limit our ability to transfer funds freely, either to or from our subsidiaries.

For information regarding risks associated with COVID-19, see the 2021 Annual Report, Part I, Item 1A. Risk Factors – Market Conditions – “COVID-19 has adversely affected, and is expected to continue to adversely affect, our global business, results of operations, financial condition and liquidity, and its ultimate impact will depend on future developments that are uncertain and cannot be predicted.”

Depending on market conditions, regulatory and rating agency considerations and other factors, we may take various liability and capital management actions. Liability management actions may include, but are not limited to, repurchasing or redeeming outstanding debt, issuing new debt or engaging in debt exchange offers. Capital management actions may include, but are not limited to, issuing preferred stock, paying dividends to our shareholders on the AIG Common Stock, par value $2.50 per share (AIG Common Stock), paying dividends to the holders of our Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock), and repurchases of AIG Common Stock.

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LIQUIDITY AND CAPITAL RESOURCES HIGHLIGHTS

Sources

Liquidity to AIG Parent from Subsidiaries^(a)

During the three-month period ended March 31, 2022, our General Insurance companies distributed cash and fixed maturity securities of $511 million, and our Life and Retirement companies distributed $935 million of cash to AIG Parent or applicable intermediate holding companies.

Uses

General Borrowings^(b)

During the three-month period ended March 31, 2022, no debt categorized as general borrowings matured, was repaid or redeemed.

We made interest payments on our general borrowings totaling $205 million during the three-month period ended March 31, 2022 including interest payments made by AIG Parent on AIG Parent-issued debt instruments of $181 million.

Dividends

During the three-month period ended March 31, 2022:

 We made a quarterly cash dividend payment of $365.625 per share on AIG’s Series A Preferred Stock totaling $7 million.

 We made a quarterly cash dividend payment of $0.32 per share on AIG Common Stock totaling $258 million.

 Corebridge made a cash dividend payment of $29 million in the aggregate to Blackstone.

Repurchases of Common Stock^(c)

During the three-month period ended March 31, 2022, AIG Parent repurchased approximately 23 million shares of AIG Common Stock, for an aggregate purchase price of approximately $1.4 billion.

(a) As of May 4, 2022, Corebridge repaid approximately $6.5 billion of the $8.3 billion promissory note issued by Corebridge to AIG Parent in November 2021.

(b) In April 2022, we repurchased, through cash tender offers, approximately $6.8 billion aggregate principal amount of certain notes and debentures issued or guaranteed by AIG for an aggregate purchase price of approximately $7.1 billion. On April 8, 2022, we announced that we will redeem all of our outstanding 1.500% Notes due 2023 (the 2023 Notes) on May 10, 2022 for a redemption price as determined in accordance with the indenture governing the 2023 Notes, plus accrued and unpaid interest. As of April 8, 2022, €750 million aggregate principal amount of the 2023 Notes were outstanding.

(c) Pursuant to a Securities Exchange Act of 1934 (the Exchange Act) Rule 10b5-1 repurchase plan that expires on May 20, 2022 (the Current 10b5-1 Plan), from April 1, 2022 to April 29, 2022, we repurchased approximately 10 million shares of AIG Common Stock for an aggregate purchase price of approximately $598 million. On May 3, 2022, the Board of Directors authorized the repurchase of $6.5 billion of AIG Common Stock (inclusive of the approximately $1.5 billion of expected remaining authorization upon expiration of the Current 10b5-1 Plan as of May 20, 2022).

Analysis of Sources and Uses of Cash

Operating Cash Flow Activities

Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. The ability of insurance companies to generate positive cash flow is affected by the frequency and severity of losses under their insurance policies, policy retention rates, effective management of our investment portfolio and operating expense discipline.

Interest payments totaled $243 million and $255 million in the three-month period ended March 31, 2022 and 2021. Excluding interest payments, AIG had operating cash inflows of $300 million in the three-month period ended March 31, 2022 compared to operating cash inflows of $895 million in the same period in the prior year.

Investing Cash Flow Activities

Net cash provided by investing activities in the three-month period ended March 31, 2022 was $853 million compared to net cash provided by investing activities of $1.5 billion in the same period in the prior year.

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Financing Cash Flow Activities

Net cash used in financing activities in the three-month period ended March 31, 2022 reflected:

• approximately $258 million in the aggregate to pay a dividend of $0.32 per share on AIG Common Stock.

• approximately $7 million in the aggregate to pay a dividend of $365.625 per share on AIG’s Series A Preferred Stock;

• approximately $29 million in the aggregate paid by Corebridge in the form of a cash dividend to Blackstone;

• approximately $1.4 billion to repurchase approximately 23 million shares of AIG Common Stock;

• approximately $4 million in net outflows from the issuance and repayment of long-term debt; and

• approximately $40 million in net outflows from the issuance and repayment of debt of consolidated investment entities.

Net cash used in financing activities in the three-month period ended March 31, 2021 reflected:

• approximately $276 million in the aggregate to pay a dividend of $0.32 per share on AIG Common Stock;

• approximately $7 million in the aggregate to pay a dividend of $365.625 per share on AIG’s Series A Preferred Stock;

• approximately $362 million in the aggregate to repurchase approximately 8 million shares of AIG Common Stock;

• approximately $92 million inflow from warrants exercised on approximately 2 million shares of AIG Common Stock;

• approximately $1.5 billion in net outflows from the issuance and repayment of long-term debt; and

• approximately $405 million in net outflows from the issuance and repayment of debt of consolidated investment entities.

Liquidity and Capital Resources of AIG Parent and Subsidiaries

AIG Parent

As of March 31, 2022, AIG Parent and applicable intermediate holding companies had approximately $13.6 billion in liquidity sources. AIG Parent’s liquidity sources are primarily held in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities and also include a committed, revolving syndicated credit facility. Fixed maturity securities primarily include U.S. government and government sponsored entity securities, U.S. agency mortgage-backed securities, corporate and municipal bonds and certain other highly rated securities. AIG Parent actively manages its assets and liabilities in terms of products, counterparties and duration. Based upon an assessment of funding needs, the liquidity sources can be readily monetized through sales or repurchase agreements or contributed as admitted assets to regulated insurance companies. AIG Parent liquidity is monitored through the use of various internal liquidity risk measures. AIG Parent’s primary sources of liquidity are dividends, distributions, loans and other payments from subsidiaries and credit facilities. AIG Parent’s primary uses of liquidity are for debt service, capital and liability management, and operating expenses.

We believe that we have sufficient liquidity and capital resources to satisfy our reasonably foreseeable future requirements and meet our obligations to our creditors, debt-holders and insurance company subsidiaries. We expect to access the debt and preferred equity markets from time to time to meet funding requirements as needed.

We utilize our capital resources to support our businesses, with the majority of capital allocated to our insurance operations. Should we have or generate more capital than is needed to support our business strategies (including organic growth or acquisition opportunities) or mitigate risks inherent to our business, we may develop plans to distribute such capital to shareholders via dividends or AIG Common Stock repurchase authorizations or deploy such capital towards liability management.

In the normal course, it is expected that a portion of the capital released by our insurance companies, by our other operations or through the utilization of AIG’s deferred tax assets may be available to support our business strategies, for distribution to shareholders or for liability management.

In developing plans to distribute capital, AIG considers a number of factors, including, but not limited to: AIG’s business and strategic plans, expectations for capital generation and utilization, AIG’s funding capacity and capital resources in comparison to internal benchmarks, as well as rating agency expectations, regulatory requirements, bank creditor covenants and internal stress tests for capital.

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The following table presents AIG Parent and applicable intermediate holding companies liquidity sources:

	As of		As of
(in millions)	March 31, 2022		December 31, 2021
Cash and short-term investments^(a)	$	2,584	$	4,334
Unencumbered fixed maturity securities^(b)		6,498		6,357
Total AIG Parent liquidity		9,082		10,691
Available capacity under committed, syndicated credit facility^(c)		4,500		4,500
Total AIG Parent liquidity sources	$	13,582	$	15,191

(a) Cash and short-term investments include agreements in which securities are purchased by us under agreements to resell totaling $528 million and $1.9 billion as of March 31, 2022 and December 31, 2021, respectively.

(b) Unencumbered securities consist of publicly traded, investment grade rated fixed maturity securities. Fixed maturity securities primarily include U.S. government and government sponsored entity securities, U.S. agency mortgage-backed securities, corporate and municipal bonds and certain other highly rated securities.

Insurance Companies

We expect that our insurance companies will be able to continue to satisfy reasonably foreseeable future liquidity requirements and meet their obligations, including those arising from reasonably foreseeable contingencies or events, through cash from operations and, to the extent necessary, monetization of invested assets. Our insurance companies’ liquidity resources are primarily held in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities.

Each of our material insurance companies’ liquidity is monitored through various internal liquidity risk measures. The primary sources of liquidity are premiums, fees, reinsurance recoverables and investment income and maturities. The primary uses of liquidity are paid losses, reinsurance payments, benefit claims, surrenders, withdrawals, interest payments, dividends, expenses, investment purchases and collateral requirements.

Our insurance companies may require additional funding to meet capital or liquidity needs under certain circumstances. For example, large catastrophes may require us to provide additional support to the affected operations of our General Insurance companies, and a shift in interest rates may require us to provide support to the affected operations of our Life and Retirement companies.

Downgrades in our credit ratings could put pressure on the insurer financial strength ratings of our subsidiaries, which could result in non-renewals or cancellations by policyholders and adversely affect a subsidiary’s ability to meet its own obligations. Increases in market interest rates may adversely affect the financial strength ratings of our subsidiaries, as rating agency capital models may reduce the amount of available capital relative to required capital.

Management believes that because of the size and liquidity of our Life and Retirement companies’ investment portfolios, normal deviations from projected claim or surrender experience would not create significant liquidity risk. Furthermore, our Life and Retirement companies’ products contain certain features that mitigate surrender risk, including surrender charges. However, in times of extreme capital markets disruption or as a result of fluctuations in the capital markets generally, liquidity needs could outpace resources.

As part of their risk management framework, our insurance companies continue to evaluate and, where appropriate, pursue strategies and programs to improve their liquidity position and facilitate their ability to maintain a fully invested asset portfolio.

Certain of our U.S. insurance companies are members of the FHLBs in their respective districts. Borrowings from FHLBs are used to supplement liquidity or for other uses deemed appropriate by management. Our U.S. General Insurance companies had no outstanding borrowings from FHLBs at both March 31, 2022 and December 31, 2021. Our U.S. Life and Retirement companies had $3.6 billion which were due to FHLBs in their respective districts at both March 31, 2022 and December 31, 2021, under funding agreements issued through our Individual Retirement, Group Retirement and Institutional Markets operating segments, which were reported in Policyholder contract deposits. Proceeds from funding agreements are generally invested in fixed income securities and other investments intended to generate spread income. These investment contracts do not have mortality or morbidity risk and are similar to GICs. In addition, our U.S. Life and Retirement companies had no outstanding borrowings in the form of cash advances from FHLBs at both March 31, 2022 and December 31, 2021.

Certain of our U.S. Life and Retirement companies have programs, which began in 2012, that lend securities from their investment portfolio to supplement liquidity or for other uses as deemed appropriate by management. Under these programs, these U.S. Life and Retirement companies lend securities to financial institutions and receive cash as collateral equal to 102 percent of the fair value of the loaned securities. Cash collateral received is invested in short-term investments or partially used for short-term liquidity purposes. Additionally, the aggregate amount of securities that a Life and Retirement company is able to lend under its program at any time is limited to five percent of its general account statutory-basis admitted assets. Our U.S. Life and Retirement companies had $3.0 billion

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and $3.3 billion of securities subject to these agreements at March 31, 2022 and December 31, 2021, respectively, and $3.2 billion and $3.4 billion of liabilities to borrowers for collateral received at March 31, 2022 and December 31, 2021, respectively.

AIG generally manages capital between AIG Parent and our insurance companies through internal, Board-approved policies and limits, as well as management standards. In addition, AIG Parent has unconditional capital maintenance agreements in place with certain subsidiaries. Nevertheless, regulatory and other legal restrictions could limit our ability to transfer capital freely, either to or from our subsidiaries.

AIG Parent and/or certain subsidiaries are parties to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time in support of our insurance companies. These letters of credit are subject to reimbursement by AIG Parent and/or certain subsidiaries in the event of a drawdown of these letters of credit. Letters of credit issued in support of the General Insurance companies totaled approximately $4.3 billion at March 31, 2022. Letters of credit issued in support of the Life and Retirement companies totaled approximately $357 million at March 31, 2022.

In the three-month period ended March 31, 2022, our General Insurance companies collectively paid to AIG Parent or applicable intermediate holding companies a total of approximately $500 million in dividends in the form of cash and fixed maturity securities and $11 million in tax sharing payments in the form of cash. The fixed maturity securities primarily included U.S. treasuries and securities issued by U.S. agencies.

In the three-month period ended March 31, 2022, our Life and Retirement companies collectively paid to AIG Parent or applicable intermediate holding companies a total of approximately $421 million in dividends in the form of cash and $514 million in tax sharing payments in the form of cash. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the initial public offering of Corebridge. As of May 4, 2022, Corebridge repaid approximately $6.5 billion of the $8.3 billion promissory note.

Tax Matters

As previously disclosed, in October 2020, the Southern District of New York dismissed the case for the 1997 tax year related to the disallowance of foreign tax credits associated with cross border financing transactions based upon the settlement reached between AIG and the government. The settlement concluded our ongoing dispute related to the disallowance of foreign tax credits associated with cross border financing transactions. In March 2022, the parties agreed on the interest owed on the settlement for the years 1997 to 2006, which did not result in a material change to the previously recorded amounts and which concluded this matter.

For additional information regarding this matter, see Note 15 to the Condensed Consolidated Financial Statements.

Credit Facilities

We maintain a committed, revolving syndicated credit facility (the Facility) as a potential source of liquidity for general corporate purposes. The Facility provides for aggregate commitments by the bank syndicate to provide unsecured revolving loans and/or standby letters of credit of up to $4.5 billion without any limits on the type of borrowings and is scheduled to expire in November 2026.

As of March 31, 2022, a total of $4.5 billion remains available under the Facility. Our ability to utilize the Facility is not contingent on our credit ratings. However, our ability to utilize the Facility is conditioned on the satisfaction of certain legal, operating, administrative and financial covenants and other requirements contained in the Facility. These include covenants relating to our maintenance of a specified total consolidated net worth and total consolidated debt to total consolidated capitalization. Failure to satisfy these and other requirements contained in the Facility would restrict our access to the Facility and could have a material adverse effect on our financial condition, results of operations and liquidity. We expect to utilize the Facility from time to time, and may use the proceeds for general corporate purposes.

The 18-Month DDTL Facility and 3-Year DDTL Facility provided Corebridge with committed delayed draw term loan facilities in the aggregate principal amount of $6 billion and $3 billion, respectively. On April 6, 2022, in connection with the issuance of certain senior unsecured notes of Corebridge, (i) the commitments under the 18-Month DDTL Facility were terminated in full and (ii) the commitments under the 3-Year DDTL Facility were reduced from $3.0 billion to $2.5 billion. The ability to borrow under the 3-Year DDTL Facility is subject to, among other conditions, Corebridge’s confirmation to the administrative agent that an initial public offering of Corebridge is expected to be consummated within five business days following such borrowing. Commitments under the 3-Year DDTL Facility will remain available for borrowing until December 30, 2022, subject to the terms and conditions thereof.

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As of May 3, 2022, a total of $2.5 billion remained available under the 3-Year DDTL Facility.

For information regarding the debt issuance of Corebridge, see Note 16 to the Condensed Consolidated Financial Statements.

Contractual Obligations

As of March 31, 2022, there have been no material changes in our contractual obligations from December 31, 2021, a description of which may be found in Part II, Item 7. MD&A – Liquidity and Capital Resources – Contractual Obligations in the 2021 Annual Report.

Off-Balance Sheet Arrangements and Commercial Commitments

As of March 31, 2022, there have been no material changes in our off-balance sheet arrangements and commercial commitments from December 31, 2021, a description of which may be found in Part II, Item 7. MD&A – Liquidity and Capital Resources – Off-Balance Sheet Arrangements and Commercial Commitments in the 2021 Annual Report.

Debt

AIG expects to service and repay general borrowings through maturing investments and dispositions of invested assets, future cash flows from operations, cash flows generated from invested assets, future debt or preferred stock issuances and other financing arrangements. AIG borrowings supported by assets of AIG include GIAs that are supported by cash and investments held by AIG Parent, certain non-insurance subsidiaries and amounts posted to third parties as collateral for the repayment of those obligations. Total debt includes debt of consolidated investments not guaranteed by AIG.

For additional information on GIAs and associated collateral posted, see Note 5 to the Condensed Consolidated Financial Statements.

The following table provides the rollforward of AIG’s total debt outstanding:

		Balance at				Maturities		Effect of					Balance at
Three Months Ended March 31, 2022		December 31,				and		Foreign		Other		March 31,
(in millions)		2021	Issuances		Repayments			Exchange		Changes			2022
Debt issued or guaranteed by AIG:
AIG general borrowings:
Notes and bonds payable	$	19,633	$	-	$	-	$	(77)	$	(73)	^(e)	$	19,483
Junior subordinated debt		1,164		-		-		(5)		-			1,159
AIG Japan Holdings Kabushiki Kaisha		333		-		-		(5)		-			328
AIGLH notes and bonds payable		199		-		-		-		1			200
AIGLH junior subordinated debt		227		-		-		-		-			227
Validus notes and bonds payable		293		-		-		-		(1)			292
Total AIG general borrowings		21,849		-		-		(87)		(73)			21,689
AIG borrowings supported by assets:^(a)
AIG notes and bonds payable		-		-		-		-		81	^(e)		81
Series AIGFP matched notes and bonds payable		18		-		-		-		-			18
GIAs, at fair value		1,803		11		(10)		-		(81)	^(b)		1,723
Notes and bonds payable, at fair value		68		-		(2)		-		(7)	^(b)		59
Total AIG borrowings supported by assets		1,889		11		(12)		-		(7)			1,881
Total debt issued or guaranteed by AIG		23,738		11		(12)		(87)		(80)			23,570
Other subsidiaries' notes, bonds, loans and
mortgages payable - not guaranteed by AIG		3		-		(1)		-		-			2
Total long-term debt		23,741		11		(13)		(87)		(80)			23,572

Debt of consolidated investment entities - not
guaranteed by AIG^(c)		6,422		697		(737)		(14)		(2)	^(d)		6,366

(a) AIG Parent guarantees all such debt, except for Series AIGFP matched notes and bonds payable and AIG notes and bonds payable, which are direct obligations of AIG Parent. Collateral posted to third parties were $1.4 billion at both March 31, 2022 and December 31, 2021. This collateral primarily consists of securities of the U.S. government and government sponsored entities and generally cannot be repledged or resold by the counterparties.

(b) Primarily represents adjustments to the fair value of debt.

(c) Includes debt of consolidated investment entities related to real estate investments of $1.9 billion and other securitization vehicles of $4.5 billion at both March 31, 2022 and December 31, 2021.

(d) Includes the effect of consolidating previously unconsolidated partnerships.

(e) Includes reclassifications of debt between AIG general borrowings and AIG borrowings supported by assets.

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ITEM 2 | Liquidity and Capital Resources

On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. In addition, in April 2022, AIG repurchased, through cash tender offers, approximately $6.8 billion aggregate principal amount of certain notes and debentures issued or guaranteed by AIG, and announced that it will redeem €750 million aggregate principal amount of its 1.500% Notes due 2023 on May 10, 2022. The net impact of the aforementioned transactions is expected to be the reduction of debt categorized as general borrowings of approximately $1.1 billion.

Debt Maturities

The following table summarizes maturing long-term debt at March 31, 2022 of AIG for the next four quarters:

		Second		Third		Fourth		First
		Quarter		Quarter		Quarter		Quarter
(in millions)		2022		2022		2022		2023		Total
AIG general borrowings	$	-	$	-	$	17	$	-	$	17
AIG borrowings supported by assets		17		19		13		5		54
Other subsidiaries' notes, bonds, loans and mortgages payable		-		-		1		-		1
Total	$	17	$	19	$	31	$	5	$	72

The following table presents maturities of long-term debt (including unamortized original issue discount, hedge accounting valuation adjustments and fair value adjustments, when applicable):

March 31, 2022			Remainder		Year Ending
(in millions)		Total		of 2022		2023		2024		2025		2026		2027	Thereafter
Debt issued or guaranteed by AIG:
AIG general borrowings:
Notes and bonds payable	$	19,483	$	17	$	1,510	$	999	$	2,741	$	1,534	$	1,103	$	11,579
Junior subordinated debt		1,159		-		-		-		-		-		-		1,159
AIG Japan Holdings Kabushiki Kaisha		328		-		215		-		113		-		-		-
AIGLH notes and bonds payable		200		-		-		-		101		-		-		99
AIGLH junior subordinated debt		227		-		-		-		-		-		-		227
Validus notes and bonds payable		292		-		-		-		-		-		-		292
Total AIG general borrowings		21,689		17		1,725		999		2,955		1,534		1,103		13,356
AIG borrowings supported by assets:
AIG notes and bonds payable		81		-		62		-		12		7		-		-
Series AIGFP matched notes and
bonds payable		18		-		-		-		-		-		-		18
GIAs, at fair value		1,723		49		122		141		548		96		63		704
Notes and bonds payable, at fair value		59		-		-		-		-		-		-		59
Total AIG borrowings supported by assets		1,881		49		184		141		560		103		63		781
Total debt issued or guaranteed by AIG		23,570		66		1,909		1,140		3,515		1,637		1,166		14,137
Debt not guaranteed by AIG:
Other subsidiaries notes, bonds, loans
and mortgages payable		2		1		1		-		-		-		-		-
Total debt not guaranteed by AIG		2		1		1		-		-		-		-		-
Total^*	$	23,572	$	67	$	1,910	$	1,140	$	3,515	$	1,637	$	1,166	$	14,137

* Does not reflect $6.4 billion of notes issued by consolidated investment entities, for which recourse is limited to the assets of the respective investment entities and for which there is no recourse to the general credit of AIG.

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ITEM 2 | Liquidity and Capital Resources

Credit Ratings

Credit ratings estimate a company’s ability to meet its obligations and may directly affect the cost and availability of financing to that company. The following table presents the credit ratings of AIG and certain of its subsidiaries as of the date of this filing. Figures in parentheses indicate the relative ranking of the ratings within the agency’s rating categories; that ranking refers only to the major rating category and not to the modifiers assigned by the rating agencies.

	Short-Term Debt		Senior Long-Term Debt
	Moody’s	S&P	Moody’s^(a)	S&P^(b)	Fitch^(c)
American International Group, Inc.	P-2 (2nd of 4)	A-2 (2nd of 5)	Baa 2 (4th of 9) /	BBB+ (4th of 9) /	BBB+ (4th of 9) /
			Stable	Negative	Stable
AIG Financial Products Corp.^(d)	P-2	A-2	Baa 2 (4th of 9) /	BBB+ /
			Stable	Negative
Corebridge Financial, Inc.			Baa 2 (4th of 9) /	BBB+ (4th of 9) /	BBB+ (4th of 9) /
			Stable	Stable	Stable

(a) Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories.

(b) S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

(c) Fitch Ratings Inc. (Fitch) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

(d) AIG guarantees all obligations of AIG Financial Products Corp.

These credit ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances. Ratings may also be withdrawn at our request. For a discussion of rating agency actions in response to AIG’s separation of its Life and Retirement business from AIG, see – Rating Agency Actions Related to Corebridge Senior Note Offering and Other Recent Actions below.

We are party to some agreements that contain “ratings triggers.” Depending on the ratings maintained by one or more rating agencies, these triggers could result in (i) the termination or limitation of credit availability or a requirement for accelerated repayment, (ii) the termination of business contracts or (iii) a requirement to post collateral for the benefit of counterparties.

In the event of a downgrade of AIG’s long-term senior debt ratings, AIG Financial Products Corp. and related subsidiaries (collectively AIGFP) and certain other AIG entities would be required to post additional collateral under some derivative and other transactions, or certain of the counterparties of AIGFP or of such other AIG entities would be permitted to terminate such transactions early.

The actual amount of collateral that we would be required to post to counterparties in the event of such downgrades, or the aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors prevailing at the time of the downgrade.

For information regarding the effects of downgrades in our credit ratings see Note 9 to the Condensed Consolidated Financial Statements and Part I, Item 1A. Risk Factors – Liquidity, Capital and Credit – “A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance or reinsurance companies could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity” in the 2021 Annual Report.

FINANCIAL STRENGTH Ratings

Financial Strength ratings estimate an insurance company’s ability to pay its obligations under an insurance policy. The following table presents the ratings of our significant insurance subsidiaries as of the date of this filing.

	A.M. Best	S&P	Fitch	Moody’s
National Union Fire Insurance Company of Pittsburgh, Pa.	A	A+	A	A2
Lexington Insurance Company	A	A+	A	A2
American Home Assurance Company	A	A+	A	A2
American General Life Insurance Company	A	A+	A+	A2
The Variable Annuity Life Insurance Company	A	A+	A+	A2
United States Life Insurance Company in the City of New York	A	A+	A+	A2
AIG Europe S.A.	NR	A+	NR	A2
American International Group UK Ltd.	A	A+	NR	A2
AIG General Insurance Co. Ltd.	NR	A+	NR	NR
Validus Reinsurance, Ltd.	A	A+	NR	A2

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ITEM 2 | Liquidity and Capital Resources

These financial strength ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances.

For information regarding the effects of downgrades in our financial strength ratings see Note 9 to the Condensed Consolidated Financial Statements and Part I, Item 1A. Risk Factors – Liquidity, Capital and Credit – “A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance or reinsurance companies could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity” in the 2021 Annual Report.

Rating Agency Actions RELATED TO COREBRIDGE SENIOR NOTE OFFERING AND other RECENT ACTIONS

 On March 29, 2022, Moody’s affirmed ratings on Corebridge entities and revised the outlook from Negative to Stable. On March 31, 2022, Moody’s assigned a Baa2 rating to the senior debt of Corebridge.

 On March 29, 2022, S&P affirmed the ratings of AIG and subsidiaries and revised the outlook on AIG and General Insurance from CreditWatch Negative to Negative. On March 29, 2022, S&P affirmed the ratings of Corebridge and revised the outlook from CreditWatch Developing to Stable. On March 31, 2022, S&P assigned a rating of BBB+ to the senior debt of Corebridge.

 On March 4, 2022, Fitch affirmed the ratings of AIG and subsidiaries and revised the outlook on General Insurance from Stable to Positive and revised the outlook for AIG senior debt from Rating Watch Negative to Stable. On March 31, 2022, Fitch assigned a rating of BBB+ to the senior debt of Corebridge.

 On October 7, 2021, A.M. Best affirmed all of the financial strength and issuer credit ratings of AIG and subsidiaries with Stable outlooks.

For additional information regarding the debt issuance of Corebridge, see Note 16 to the Condensed Consolidated Financial Statements.

Regulation and Supervision

For a discussion of our regulation and supervision by different regulatory authorities in the United States and abroad, including with respect to our liquidity and capital resources see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation in the 2021 Annual Report, and Regulatory Environment below in this MD&A.

Dividends

The following table presents declaration date, record date, payment date and dividends paid per common share on AIG Common Stock in the three months ended March 31, 2022:

				Dividends Paid
Declaration Date	Record Date	Payment Date		Per Common Share
February 16, 2022	March 17, 2022	March 31, 2022	$	0.32

On May 3, 2022, our Board of Directors declared a cash dividend on AIG Common Stock of $0.32 per share, payable on June 30, 2022 to shareholders of record on June 16, 2022.

			Dividends Paid
Declaration Date	Record Date	Payment Date		Per Preferred Share		Per Depositary Share
February 16, 2022	February 28, 2022	March 15, 2022	$	365.625	$	0.365625

On May 3, 2022, our Board of Directors declared a cash dividend on AIG’s Series A Preferred Stock of $365.625 per share, payable on June 15, 2022 to holders of record on May 31, 2022.

The payment of any future dividends will be at the discretion of our Board of Directors and will depend on various factors, as discussed further in Note 12 to the Condensed Consolidated Financial Statements.

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ITEM 2 | Liquidity and Capital Resources

Repurchases of AIG Common Stock

Our Board of Directors has authorized the repurchase of shares of AIG Common Stock through a series of actions. During the three-month period ended March 31, 2022, AIG Parent repurchased approximately 23 million shares of AIG Common Stock for an aggregate purchase price of $1.4 billion. Pursuant to an Exchange Act Rule 10b5-1 repurchase plan that expires on May 20, 2022 (the Current 10b5-1 Plan), from April 1, 2022 to April 29, 2022, we repurchased approximately $598 million of additional shares of AIG Common Stock. On May 3, 2022, the Board of Directors authorized the repurchase of $6.5 billion of AIG Common Stock (inclusive of the approximately $1.5 billion of expected remaining authorization upon expiration of the Current 10b5-1 Plan as of May 20, 2022).

Dividend Restrictions

Payments of dividends to AIG by its insurance subsidiaries are subject to certain restrictions imposed by regulatory authorities.

For information regarding restrictions on payments of dividends by our subsidiaries see Note 18 to the Consolidated Financial Statements in the 2021 Annual Report.

Enterprise Risk Management

Risk management includes the identification and measurement of various forms of risk, the establishment of risk thresholds and the creation of processes intended to maintain risks within these thresholds while optimizing returns. We consider risk management an integral part of managing our core businesses and a key element of our approach to corporate governance.

Overview

We have an integrated process for managing risks throughout our organization in accordance with our firm-wide risk appetite. Our Board of Directors has oversight responsibility for the management of risk. Our Enterprise Risk Management Department supervises and integrates the risk management functions in each of our business units, providing senior management with a consolidated view of AIG’s major risk positions. Within each business unit, senior leaders and executives approve targeted risk tolerances within the framework provided by ERM. ERM supports our businesses and management by embedding risk management in our key day-to-day business processes and in identifying, assessing, quantifying, monitoring, reporting, and mitigating the risks taken by our businesses and AIG overall. Nevertheless, our risk management efforts may not always be successful and material adverse effects on our business, results of operations, cash flows, liquidity or financial condition may occur.

AIG employs a Three Lines of Defense model. AIG’s business leaders assume full accountability for the risks and controls in their operating units, and ERM performs a review, challenge and oversight function. The third line consists of our Internal Audit Group that provides independent assurance for AIG’s Board of Directors.

For additional information on AIG’s risk management program, see Part II, Item 7. MD&A ─ Enterprise Risk Management in the 2021 Annual Report.

As of March 31, 2022, there have been no material changes in our economic exposure to market risk from December 31, 2021, a description of which may be found in Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk in the 2021 Annual Report. See Part I, Item 1A. Risk Factors in the 2021 Annual Report on how difficult conditions in the financial markets and the economy generally may materially adversely affect our business and results of our operations.

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ITEM 2 | Regulatory Environment

Regulatory Environment

Overview

Our operations around the world are subject to regulation by many different types of regulatory authorities, including insurance, securities, derivatives, investment advisory and thrift regulators in the United States and abroad. The insurance and financial services industries are generally subject to close regulatory scrutiny and supervision.

Our insurance subsidiaries are subject to regulation and supervision by the states and jurisdictions in which they do business. We expect that the domestic and international regulations applicable to us and our regulated entities will continue to evolve for the foreseeable future.

For information regarding sanctions related to the Russia/Ukraine conflict, see Executive Summary – Overview.

For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation in the 2021 Annual Report.

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Glossary

Accident year The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid.

Accident year combined ratio, as adjusted (Accident year combined ratio, ex-CAT) The combined ratio excluding catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting.

Accident year loss ratio, as adjusted (Accident year loss ratio, ex-CAT) The loss ratio excluding catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting.

Acquisition ratio Acquisition costs divided by net premiums earned. Acquisition costs are those costs incurred to acquire new and renewal insurance contracts and also include the amortization of VOBA and DAC. Acquisition costs vary with sales and include, but are not limited to, commissions, premium taxes, direct marketing costs and certain costs of personnel engaged in sales support activities such as underwriting.

Additional premium represents a premium on an insurance policy over and above the initial premium imposed at the beginning of the policy. An additional premium may be assessed if the insured’s risk is found to have increased significantly.

Assets under administration include assets under management and Retail Mutual Funds and Group Retirement mutual fund assets that we sell or administer.

Assets under management include assets in the general and separate accounts of our subsidiaries that support liabilities and surplus related to our life and annuity insurance products and the notional value of stable value wrap contracts.

Attritional losses are losses recorded in the current accident year, which are not catastrophe losses.

Base spread Net investment income excluding income from alternative investments and other enhancements, less interest credited excluding amortization of deferred sales inducements.

Base yield Net investment income excluding income from alternative investments and other enhancements, as a percentage of average base invested asset portfolio, which excludes alternative investments, other bond securities and certain other investments for which the fair value option has been elected.

Casualty insurance Insurance that is primarily associated with the losses caused by injuries to third persons, i.e., not the insured, and the legal liability imposed on the insured as a result.

Combined ratio Sum of the loss ratio and the acquisition and general operating expense ratios.

CSA Credit Support Annex A legal document generally associated with an ISDA Master Agreement that provides for collateral postings which could vary depending on ratings and threshold levels.

Credit Valuation Adjustment (CVA)/Non-Performance Risk Adjustment (NPA) The CVA/NPA adjusts the valuation of derivatives to account for nonperformance risk of our counterparty with respect to all net derivative assets positions. Also, the CVA/NPA reflects the fair value movement in AIGFP's asset portfolio that is attributable to credit movements only, without the impact of other market factors such as interest rates and foreign exchange rates. Finally, the CVA/NPA also accounts for our own credit risk in the fair value measurement of all derivative net liability positions and liabilities where AIG has elected the fair value option, when appropriate.

DAC Deferred Policy Acquisition Costs Deferred costs that are incremental and directly related to the successful acquisition of new business or renewal of existing business.

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Glossary

DAC Related to Unrealized Appreciation (Depreciation) of Investments An adjustment to DAC and Reserves for investment-oriented products, equal to the change in DAC and unearned revenue amortization that would have been recorded if fixed maturity securities available for sale at fair value had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. An adjustment to benefit reserves for investment-oriented products is also recognized to reflect the application of the benefit ratio to the accumulated assessments that would have been recorded if fixed maturity securities available for sale at fair value had been sold at their stated aggregate fair value and the proceeds reinvested at current yields.

For long-duration traditional products, significant unrealized appreciation of investments in a sustained low interest rate environment may cause additional future policy benefit liabilities to be recorded.

Deferred gain on retroactive reinsurance Retroactive reinsurance is a reinsurance contract in which an assuming entity agrees to reimburse a ceding entity for liabilities incurred as a result of past insurable events. If the amount of premium paid by the ceding reinsurer is less than the related ceded loss reserves, the resulting gain is deferred and amortized over the settlement period of the reserves. Any related development on the ceded loss reserves recoverable under the contract would increase the deferred gain if unfavorable, or decrease the deferred gain if favorable.

DSI Deferred Sales Inducements Represents enhanced crediting rates or bonus payments to contract holders on certain annuity and investment contract products that meet the criteria to be deferred and amortized over the life of the contract.

Expense ratio Sum of acquisition expenses and general operating expenses, divided by net premiums earned.

General operating expense ratio General operating expenses divided by net premiums earned. General operating expenses are those costs that are generally attributed to the support infrastructure of the organization and include but are not limited to personnel costs, projects and bad debt expenses. General operating expenses exclude losses and loss adjustment expenses incurred, acquisition expenses, and investment expenses.

GIC/GIA Guaranteed Investment Contract/Guaranteed Investment Agreement A contract whereby the seller provides a guaranteed repayment of principal and a fixed or floating interest rate for a predetermined period of time.

IBNR Incurred But Not Reported Estimates of claims that have been incurred but not reported to us.

ISDA Master Agreement An agreement between two counterparties, which may have multiple derivative transactions with each other governed by such agreement, that generally provides for the net settlement of all or a specified group of these derivative transactions, as well as pledged collateral, through a single payment, in a single currency, in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions.

LAE Loss Adjustment Expenses The expenses directly attributed to settling and paying claims of insureds and include, but are not limited to, legal fees, adjuster’s fees and the portion of general expenses allocated to claim settlement costs.

Loan-to-value ratio Principal amount of loan amount divided by appraised value of collateral securing the loan.

Loss ratio Losses and loss adjustment expenses incurred divided by net premiums earned.

Loss reserve development The increase or decrease in incurred losses and loss adjustment expenses related to prior years as a result of the re-estimation of loss reserves at successive valuation dates for a given group of claims.

Loss reserves Liability for unpaid losses and loss adjustment expenses. The estimated ultimate cost of settling claims relating to insured events that have occurred on or before the balance sheet date, whether or not reported to the insurer at that date.

Master netting agreement An agreement between two counterparties who have multiple derivative contracts with each other that provides for the net settlement of all contracts covered by such agreement, as well as pledged collateral, through a single payment, in a single currency, in the event of default on or upon termination of any one such contract.

Natural catastrophe losses are generally weather or seismic events having a net impact on AIG in excess of $10 million each and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold.

Net premiums written represent the sales of an insurer, adjusted for reinsurance premiums assumed and ceded, during a given period. Net premiums earned are the revenue of an insurer for covering risk during a given period. Net premiums written are a measure of performance for a sales period, while net premiums earned are a measure of performance for a coverage period.

Noncontrolling interests The portion of equity ownership in a consolidated subsidiary not attributable to the controlling parent company.

Policy fees An amount added to a policy premium, or deducted from a policy cash value or contract holder account, to reflect the cost of issuing a policy, establishing the required records, sending premium notices and other related expenses.

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Glossary

Pool A reinsurance arrangement whereby all of the underwriting results of the pool members are combined and then shared by each member in accordance with its pool participation percentage.

Premiums and deposits – Life and Retirement includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life-contingent payout annuities, as well as deposits received on universal life, investment-type annuity contracts, FHLB funding agreements and mutual funds.

Prior year development See Loss reserve development.

RBC Risk-Based Capital A formula designed to measure the adequacy of an insurer’s statutory surplus compared to the risks inherent in its business.

Reinstatement premiums Additional premiums payable to reinsurers or receivable from insurers to restore coverage limits that have been reduced or exhausted as a result of reinsured losses under certain excess of loss reinsurance contracts.

Reinsurance The practice whereby one insurer, the reinsurer, in consideration of a premium paid to that insurer, agrees to indemnify another insurer, the ceding company, for part or all of the liability of the ceding company under one or more policies or contracts of insurance which it has issued.

Retroactive reinsurance See Deferred gain on retroactive reinsurance.

Return premium represents amounts given back to the insured in the case of a cancellation, an adjustment to the rate or an overpayment of an advance premium.

Solvency II Legislation in the European Union which reforms the insurance industry’s solvency framework, including minimum capital and solvency requirements, governance requirements, risk management and public reporting standards. The Solvency II Directive (2009/138/EEC) was adopted on November 25, 2009 and became effective on January 1, 2016.

Subrogation The amount of recovery for claims we have paid our policyholders, generally from a negligent third party or such party’s insurer.

Surrender charge A charge levied against an investor for the early withdrawal of funds from a life insurance or annuity contract, or for the cancellation of the agreement.

Surrender rate represents annualized surrenders and withdrawals as a percentage of average reserves and Group Retirement mutual fund assets under administration.

Unearned premium reserve Liabilities established by insurers and reinsurers to reflect unearned premiums, which are usually refundable to policyholders if an insurance or reinsurance contract is canceled prior to expiration of the contract term.

VOBA Value of Business Acquired Present value of projected future gross profits from in-force policies of acquired businesses.

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Acronyms

A&H Accident and Health Insurance	GMDB Guaranteed Minimum Death Benefits
ABS Asset-Backed Securities	GMWB Guaranteed Minimum Withdrawal Benefits
APTI Adjusted pre-tax income	ISDA International Swaps and Derivatives Association, Inc.
AUM Assets Under Management	Moody's Moody's Investors’ Service Inc.
CDO Collateralized Debt Obligations	NAIC National Association of Insurance Commissioners
CDS Credit Default Swap	NM Not Meaningful
CMA Capital Maintenance Agreement	ORR Obligor Risk Ratings
CMBS Commercial Mortgage-Backed Securities	OTC Over-the-Counter
EGPs Estimated Gross Profits	OTTI Other-Than-Temporary Impairment
FASB Financial Accounting Standards Board	RMBS Residential Mortgage-Backed Securities
FRBNY Federal Reserve Bank of New York	S&P Standard & Poor’s Financial Services LLC
GAAP Accounting Principles Generally Accepted in the United	SEC Securities and Exchange Commission
States of America	URR Unearned Revenue Reserve
GIA Guaranteed Investment Agreements	VIE Variable Interest Entity

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ITEM 3 | Quantitative and Qualitative Disclosures About Market Risk

Included in Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Enterprise Risk Management.

ITEM 4 | Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by American International Group, Inc. (AIG) management, with the participation of AIG’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2022. Based on this evaluation, AIG’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2022.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that have occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

AIG | First Quarter 2022 Form 10-Q 138

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Part II – Other Information

ITEM 1 | Legal Proceedings

For a discussion of legal proceedings see Note 11 to the Condensed Consolidated Financial Statements, which is incorporated herein by reference.

ITEM 1A | Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in the 2021 Annual Report.

ITEM 2 | Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases made by or on behalf of AIG or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934 (the Exchange Act)) of AIG Common Stock during the three months ended March 31, 2022:

	Total Number		Average	Total Number of Shares	Approximate Dollar Value of Shares
	of Shares		Price Paid	Purchased as Part of Publicly	that May Yet Be Purchased Under the
Period	Repurchased		per Share	Announced Plans or Programs	Plans or Programs (in millions)
January 1 – 31	6,137,986	$	58.67	6,137,986		$	3,583
February 1 – 28	5,813,896		61.14	5,813,896			3,227
March 1 – 31	11,421,622		60.18	11,421,622			2,540
Total	23,373,504	$	60.02	23,373,504		$	2,540

During the three-month period ended March 31, 2022, AIG Parent repurchased approximately 23 million shares of AIG common stock, par value $2.50 per share (AIG Common Stock) for an aggregate purchase price of $1.4 billion.

As of March 31, 2022, approximately $2.5 billion remained under the then-existing share repurchase authorization. Pursuant to an Exchange Act Rule 10b5-1 repurchase plan that expires on May 20, 2022 (the Current 10b5-1 Plan), from April 1, 2022 to April 29, 2022, we repurchased approximately 10 million shares of AIG Common Stock for an aggregate purchase price of approximately $598 million. On May 3, 2022, the Board of Directors authorized the repurchase of $6.5 billion of AIG Common Stock (inclusive of the approximately $1.5 billion of expected remaining authorization upon expiration of the Current 10b5-1 Plan as of May 20, 2022).

Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise. Certain of our share repurchases have been and may from time to time be effected through Exchange Act Rule 10b5-1 repurchase plans. The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. The repurchase of AIG Common Stock is also subject to the terms of AIG’s Series A 5.85% Non-Cumulative Preferred Stock (Series A Preferred Stock), pursuant to which AIG may not (other than in limited circumstances) purchase, redeem or otherwise acquire AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.

ITEM 4 | Mine Safety Disclosures

Not applicable.

139 AIG | First Quarter 2022 Form 10-Q

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ITEM 6 | Exhibits

Exhibit Index

Exhibit Number	Description	Location
4	(1) Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee.	Incorporated by reference to Exhibit 4.1 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(2) First Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 3.500% Senior Notes due 2025 (2025 Notes).	Incorporated by reference to Exhibit 4.2 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(3) Second Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 3.650% Senior Notes due 2027 (2027 Notes).	Incorporated by reference to Exhibit 4.3 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(4) Third Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 3.850% Senior Notes due 2029 (2029 Notes).	Incorporated by reference to Exhibit 4.4 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(5) Fourth Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 3.900% Senior Notes due 2032 (2032 Notes).	Incorporated by reference to Exhibit 4.5 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(6) Fifth Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 4.350% Senior Notes due 2042 (2042 Notes).	Incorporated by reference to Exhibit 4.6 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(7) Sixth Supplemental Indenture, dated April 5, 2022, between Corebridge Financial, Inc. and The Bank of New York Mellon, as Trustee, relating to the 4.400% Senior Notes due 2052 (2052 Notes).	Incorporated by reference to Exhibit 4.7 to AIG’s Current Report on Form 8-K, filed with the SEC on April 7, 2022 (File No. 1-8787).
	(8) Form of the 2025 Notes (included in Exhibit 4.2)
	(9) Form of the 2027 Notes (included in Exhibit 4.3)
	(10) Form of the 2029 Notes (included in Exhibit 4.4)
	(11) Form of the 2032 Notes (included in Exhibit 4.5)
	(12) Form of the 2042 Notes (included in Exhibit 4.6)
	(13) Form of the 2052 Notes (included in Exhibit 4.7)
10	(1) 18-Month Delayed Draw Term Agreement, dated as of February 25, 2022, among SAFG Retirement Services, Inc., as borrower, the lenders party thereto and the administrative agent party thereto.	Filed herewith.
	(2) 3-Year Delayed Draw Term Agreement, dated as of February 25, 2022, among SAFG Retirement Services, Inc., as borrower, the lenders party thereto and the administrative agent party thereto.	Filed herewith.
	(3) AIG Long-Term Incentive Plan (as amended and restated March 2022)	Filed herewith.
	(4) Form of Long-Term Incentive Award Agreement (as of March 2022)	Filed herewith.
22	Guaranteed Securities	None.
31	Rule 13a-14(a)/15d-14(a) Certifications	Filed herewith.
32	Section 1350 Certifications**	Filed herewith.
101	Interactive data files pursuant to Rule 405 of Regulation S-T formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, (ii) the Condensed Consolidated Statements of Income (Loss) for the three months ended March 31, 2022 and 2021, (iii) the Condensed Consolidated Statements of Equity for the three months ended March 31, 2022 and 2021, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021, (v) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021 and (vi) the Notes to the Condensed Consolidated Financial Statements	Filed herewith.
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)	Filed herewith.

*This exhibit is a management contract or compensatory arrangement.

**This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

AIG | First Quarter 2022 Form 10-Q 140

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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.

	AMERICAN INTERNATIONAL GROUP, INC.
	(Registrant)
	/S/ SHANE FITZSIMONS
	Shane Fitzsimons
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)




	/S/ KATHLEEN CARBONE
	Kathleen Carbone
	Vice President and
	Chief Accounting Officer
	(Principal Accounting Officer)

Dated: May 5, 2022

141 AIG | First Quarter 2022 Form 10-Q

Exhibit 10.1

Execution Version

18-MONTH DELAYED DRAW TERM LOAN AGREEMENT

dated as of

February 25, 2022

among

SAFG RETIREMENT SERVICES, INC.

The Lenders Party Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.,

BOFA SECURITIES, INC.,

CITIBANK, N.A.,

MORGAN STANLEY SENIOR FUNDING, INC.,

and

GOLDMAN SACHS BANK USA

as Joint Lead Arrangers and Joint Bookrunners

BOFA SECURITIES, INC.,

CITIBANK, N.A.,

MORGAN STANLEY SENIOR FUNDING, INC.,

and

GOLDMAN SACHS BANK USA

as Syndication Agents

TABLE OF CONTENTS


		Page

ARTICLE I DEFINITIONS		1

SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Terms Generally	28
SECTION 1.03.	Accounting Terms and Determinations	28
SECTION 1.04.	Interest Rates; Benchmark Notification	29

ARTICLE II THE CREDITS		29

SECTION 2.01.	Term Loan	29
SECTION 2.02.	Loans and Borrowings	29
SECTION 2.03.	Requests for Borrowings	30
SECTION 2.04.	Funding of Borrowings	31
SECTION 2.05.	Interest Elections	31
SECTION 2.06.	Termination and Reduction of Commitments	32
SECTION 2.07.	Repayment of Loans; Evidence of Debt	33
SECTION 2.08.	Prepayment of Loans	34
SECTION 2.09.	Fees	36
SECTION 2.10.	Interest	37
SECTION 2.11.	Alternate Rate of Interest	37
SECTION 2.12.	Increased Costs	40
SECTION 2.13.	Break Funding Payments	41
SECTION 2.14.	Taxes	42
SECTION 2.15.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	45
SECTION 2.16.	Mitigation Obligations; Replacement of Lenders	47
SECTION 2.17.	[Reserved]	48
SECTION 2.18.	Defaulting Lenders	48

ARTICLE III REPRESENTATIONS AND WARRANTIES		48

SECTION 3.01.	Organization; Powers	48
SECTION 3.02.	Authorization; Enforceability	48
SECTION 3.03.	Governmental Authorizations	49
SECTION 3.04.	No Contravention	49
SECTION 3.05.	Financial Statements; No Material Adverse Effect	49
SECTION 3.06.	Litigation and Environmental Matters	49
SECTION 3.07.	Compliance with Laws	50
SECTION 3.08.	No Default	50
SECTION 3.09.	Investment Company Status	50
SECTION 3.10.	Taxes.	50
SECTION 3.11.	ERISA	51
SECTION 3.12.	Disclosure	51
SECTION 3.13.	Margin Regulations	52
SECTION 3.14.	Anti-Corruption Laws and Sanctions	52


ARTICLE IV CONDITIONS		52

SECTION 4.01.	Closing Date	52
SECTION 4.02.	Each Credit Event	53

ARTICLE V AFFIRMATIVE COVENANTS		54

SECTION 5.01.	Financial Statements and Other Information	54
SECTION 5.02.	Notices of Material Events	56
SECTION 5.03.	Existence; Conduct of Business	56
SECTION 5.04.	Payment of Taxes	56
SECTION 5.05.	Maintenance of Properties	56
SECTION 5.06.	Books and Records	57
SECTION 5.07.	Inspection Rights	57
SECTION 5.08.	Compliance with Laws	57
SECTION 5.09.	Insurance	57
SECTION 5.10.	Use of Proceeds	58

ARTICLE VI NEGATIVE COVENANTS		58

SECTION 6.01.	Liens	58
SECTION 6.02.	Fundamental Changes	60
SECTION 6.03.	Lines of Business	60
SECTION 6.04.	Financial Covenants.	60
SECTION 6.05.	Use of Proceeds in Compliance with Sanctions Laws.	60

ARTICLE VII EVENTS OF DEFAULT		61

ARTICLE VIII AGENTS		63

SECTION 8.01.	Administrative Agent	63
SECTION 8.02.	Certain ERISA Matters	66

ARTICLE IX MISCELLANEOUS		68

SECTION 9.01.	Notices	68
SECTION 9.02.	Waivers; Amendments	68
SECTION 9.03.	Expenses; Limitation of Liability; Indemnity, Etc.	69
SECTION 9.04.	Successors and Assigns	71
SECTION 9.05.	Survival	75
SECTION 9.06.	Counterparts; Integration; Effectiveness	75
SECTION 9.07.	Severability	76
SECTION 9.08.	Payments Set Aside	77
SECTION 9.09.	Right of Setoff	77
SECTION 9.10.	Governing Law; Jurisdiction; Consent to Service of Process	77
SECTION 9.11.	WAIVER OF JURY TRIAL	78
SECTION 9.12.	Headings	78
SECTION 9.13.	Confidentiality	79
SECTION 9.14.	USA PATRIOT Act	80
SECTION 9.15.	No Advisory or Fiduciary Relationships	80


SECTION 9.16.			[Reserved]	81
SECTION 9.17.			Acknowledgement and Consent to Bail-In of EEA Financial Institutions	81

SCHEDULES

SCHEDULE 2.01		Commitments
SCHEDULE 9.01		Notice Information

EXHIBITS

EXHIBIT A	Form of Assignment and Assumption
EXHIBIT B	Form of Promissory Note
EXHIBIT C	Forms of U.S. Tax Certificates

iii

18-MONTH DELAYED DRAW TERM LOAN AGREEMENT, dated as of February 25, 2022 among SAFG RETIREMENT SERVICES, INC., a Delaware corporation (the “Company”), as borrower, the LENDERS party hereto from time to time, and JPMORGAN CHASE BANK, N.A., as Administrative Agent (this “Agreement”).

The Company has requested that the Lenders make, in one or more installments, term loans to the Company, in an aggregate principal amount not exceeding $6,000,000,000, and the Lenders are prepared to make such term loans upon the terms and conditions hereof. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.Defined Terms.

As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted Daily Simple SOFR” means an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) the Credit Spread Adjustment that would be applicable to a Term Benchmark Loan; provided that if Adjusted Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Adjusted Term SOFR Rate” means, for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1.00%) equal to (a) the Term SOFR Rate for such Interest Period plus (b) the applicable Credit Spread Adjustment; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Administrative Agent” means JPMorgan, in its capacity as administrative agent for the Lenders hereunder.

“Administrative Agent’s Office” means the Administrative Agent’s address as set forth on Schedule 9.01, or such other address as the Administrative Agent may from time to time notify the Company and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Affiliate” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agents” means each of the Administrative Agent and the Syndication Agents.

“Agreement Value” means, for each Swap Contract, on any date of determination, the maximum aggregate amount (giving effect to any netting agreements and netting amounts arising out of intercompany Swap Contracts) that the Company or any Subsidiary would be required to pay if such Swap Contract were terminated on such date.

“Alternate Base Rate” means, for any day, a rate per annum (which shall not be less than zero) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 0.50% and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that for the purpose of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to ‎Section 2.11 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to ‎Section 2.11(b)), then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1%, such rate shall be deemed to be 1% for purposes of this Agreement.

“Ancillary Document” has the meaning assigned to such term in Section 9.06(b).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable Percentage” means, with respect to any Lender at any time, the percentage of the Term Loan Facility represented by (a) at any time during the Availability Period, the sum of such Lender’s (i) undrawn Commitment at such time plus (ii) the principal amount of such Lender’s Loan, and (b) thereafter, the principal amount of such Lender’s Loan at such time, provided that in the case of Section 2.18 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the total principal amount of the Loan (and undrawn Commitments, if any) (disregarding the principal amount of any Defaulting Lender’s portion of the Loan and undrawn Commitment) represented by such Lender’s portion of the principal amount of the Loans (and undrawn Commitments, if any).

“Applicable Rate” means, for any day, with respect to any Term Benchmark Loan or ABR Loan, or with respect to the commitment fees payable pursuant to Section 2.09(a), as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Term SOFR Spread” or “Commitment Fee Rate”, respectively, based upon the Index Debt Rating by Moody’s and S&P, respectively, applicable on such date:

Index Debt Ratings	ABR Spread	Term SOFR Spread	Commitment Fee Rate
Category 1 > A / A2	0.000%	0.750%	0.080%
Category 2 A- / A3	0.000%	0.875%	0.090%
Category 3 BBB+ / Baa1	0.000%	1.000%	0.100%
Category 4 BBB / Baa2	0.125%	1.125%	0.125%
Category 5 <BBB- / Baa3 or unrated	0.250%	1.250%	0.175%

If Index Debt Ratings are not available on the Closing Date, the Applicable Rate shall be deemed to be in Category 3 above until the Ratings Outside Date. Following the Ratings Outside Date, (a) if either Ratings Agency shall not have issued an Index Debt Rating (other than by reason of the circumstances referred to in the second to last sentence of this paragraph), then such Ratings Agency shall be deemed to have established a rating in Category 5 above, (b) if the Index Debt Rating established or deemed to have been established by the two Ratings Agencies shall fall within different ratings levels, the Applicable Rate shall be based on the higher of the two ratings, unless one of the two ratings is two or more ratings levels lower than the other, in which case the Applicable Rate shall be determined by the reference to the rating level one level below the higher of the two ratings (and, for this purpose, a rating level shall be the comparable rating level for the Moody’s rating and the S&P’s rating (i.e., ratings of A-/A3 are the same rating level)), and (c) if any rating shall be changed (other than as a result of a change in the rating system of the applicable Ratings Agency), such change shall be effective as of the date on which it is first announced by the applicable Ratings Agency. Each change in the applicable margins and commitment fee rates shall apply to all outstanding Loans and commitment fees, as applicable, accruing during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of any Ratings Agency shall change, or if either Ratings Agency shall cease to be in the business of rating corporate debt obligations, the Company and the relevant Lenders shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system or the unavailability of ratings from such Ratings Agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation. At any time an Event of Default has occurred and is continuing, the Applicable Rate shall be deemed to be in Category 5 above.

“Approved Electronic Platform” means IntraLinks™, DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the Administrative Agent to be its electronic transmission system.

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender as assignor and an assignee (with the consent of each Person whose consent is required by Section 9.04(b)), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Closing Date to the earlier of (x) the Availability Termination Date (including such date) and (y) termination of all of the Commitments pursuant to Section 2.06, Article VII or otherwise in accordance with this Agreement (excluding such date (unless such termination is a result of the Availability Termination Date)).

“Availability Termination Date” means the earlier to occur of (i) December 30, 2022 and (ii) the IPO Effective Date.

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (e) of Section 2.11.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Benchmark” means, initially, with respect to any Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark Transition Event, and the related Benchmark Replacement Date have occurred with respect to the Term SOFR Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of ‎Section 2.11.

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

(1)the Adjusted Daily Simple SOFR;

(2)the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment;

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1)in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2)in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

(1)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with ‎Section 2.11 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with ‎Section 2.11.

“Board” means the Board of Governors of the Federal Reserve System of the United States.

“Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect.

“Borrowing Request” means a request by the Company for a Borrowing in accordance with Section 2.03.

“Business Day” means, any day (other than a Saturday or a Sunday) on which banks are open for business in New York City or Chicago; provided that in relation to Loans bearing interest based on the Daily Simple SOFR and any interest rate settings, fundings, disbursements, settlements or payments of any such Loan, or any other dealings of such Loan, any such day that is only an U.S. Government Securities Business Day.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Control” shall be deemed to have occurred if any “person” or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date hereof) other than RemainCo and/or any wholly-owned subsidiaries of RemainCo, shall own, directly or indirectly, beneficially or of record, shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Company.

“Change in Law” means (a) the adoption of any Law after the date of this Agreement, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.12(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder issued in connection therewith or in implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Closing Date” has the meaning assigned to such term in Section 4.01.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment” means, with respect to each Lender, its obligation to make the Loan to the Company pursuant to Section 2.01 in an aggregate principal amount over all installments thereof not to exceed the amount set forth opposite such Lender’s name on Schedule I hereto (reflecting the Commitments on the date hereof) or in the Assignment and Assumption or other instrument executed and delivered hereunder pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be reduced or renewed from time to time pursuant to this Agreement, including, without limitation, reductions pursuant to Sections 2.01 and 2.06 and renewals pursuant to Section 2.08(c). The aggregate amount of the Lenders’ Commitments is $6,000,000,000 as of the date hereof. The Commitments of the Lenders are several and not joint and no Lender shall be responsible for any other Lender’s failure to make the Loan hereunder.

“Commitment Date” means February 14, 2022.

“Commitment Letter” means that certain SAFG Retirement Services, Inc. Senior Unsecured Delayed Draw Term Loan Facilities Commitment Letter, dated as of the Commitment Date, by the Joint Lead Arrangers, and accepted and agreed to by the Company.

“Company” has the meaning given to it in the preamble hereto.

“Compensation Period” has the meaning assigned to such term in Section 2.04(b).

“Consolidated Net Worth” means, at any date, the total shareholders’ equity of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from “Consolidated Net Worth” (a) accumulated other comprehensive income (or loss) (adjusted for the Fortitude Re Adjustment Amount) and (b) all noncontrolling interests (as determined in accordance with the Statement of Financial Accounting Standards No. 160, entitled “Noncontrolling Interests in Consolidated Financial Statements”).

“Consolidated Total Capitalization” means, at any date, the sum of (a) Consolidated Total Debt plus (b) without duplication of any amount of Hybrid Securities included in the determination of Consolidated Total Debt, the aggregate amount of Hybrid Securities plus (c) Consolidated Net Worth.

“Consolidated Total Debt” means, at any date, without duplication, the sum of (a) the aggregate amount of all Indebtedness of the Company and its Subsidiaries (excluding all Operating Indebtedness and Hybrid Securities of the Company and its Subsidiaries) plus (b) the aggregate amount of Hybrid Securities in excess of 15% of Consolidated Total Capitalization, in each case, determined on a consolidated basis in accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Credit Exposure” means, with respect to any Lender at any time, the aggregate principal amount at such time of its outstanding Loans.

“Credit Spread Adjustment” means a rate per annum equal to 0.10%.

“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Company.

“Deconsolidation” means the date on which RemainCo shall (i) beneficially own, directly or indirectly, shares representing 50% or less of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Company and (ii) is no longer required to consolidate the financial results of the Company in its consolidated financial statements.

“Default” means any event or condition which constitutes an Event of Default or which, upon notice, lapse of time or both, would constitute an Event of Default.

“Default Rate” means a rate per annum equal to 2.00% plus the Alternate Base Rate as in effect from time to time plus the Applicable Rate applicable to ABR Loans; provided that, with respect to principal of any Term Benchmark Loan that shall become due (whether at stated maturity, by acceleration, by prepayment or otherwise) on a day other than the last day of the Interest Period therefor, the “Default Rate” shall be a rate per annum equal to, for the period from and including such due date to but excluding the last day of such Interest Period, 2.00% plus the interest rate for such Term Benchmark Loan as provided in Section 2.10(b) and, thereafter, the rate provided for above in this definition.

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to the Administrative Agent or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, (x) such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied or (y) such failure has been satisfied, (b) has notified the Company or the Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, acting in good faith, to confirm in writing in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt by the Administrative Agent of such confirmation) or (d) has become the subject of a Bankruptcy Event or Bail-In Action.

“Designated Subsidiaries” means, without duplication, (a) any Subsidiary that has total assets in excess of 10% (or, solely for purposes of Section 6.01, 20%) of the consolidated total assets of the Company and its Subsidiaries (based upon and as of the date of delivery of the most recent consolidated balance sheet of the Company furnished pursuant to Section 3.05(a) or 5.01) and (b) any Subsidiary formed or organized after the date hereof that owns, directly or indirectly, greater than 10% (or, solely for purposes of the Section 6.01, 20%) of the Equity Interests in any other Designated Subsidiary, in each case, as measured as of the last day of the most recent fiscal quarter for which financial statements of the Company and its consolidated subsidiaries are available.

“Disclosed Matters” means any matter disclosed in the Draft Registration Statement.

“Disclosed Tax Matters” means any matters relating to taxes set forth or accounted for in the “Federal Income Taxes” or “Income Taxes” notes, as applicable, in the Draft Registration Statement.

“Dollars” or “$” refers to lawful money of the United States.

“Draft Registration Statement” means the draft registration statement confidentially submitted by the Company to the SEC on December 21, 2021 and January 27, 2022, and delivered to the Administrative Agent and the Joint Lead Arrangers on January 25, 2022 and February 1, 2022, respectively (in each case, without giving effect to any amendments thereto).

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

“Environmental Laws” means all federal, state, local, municipal and foreign Laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, injunctions, permits, directives, orders (including consent orders), and legally binding requirements of any Governmental Authority, in each case concerning the protection of the environment, natural resources, human health and safety as it relates to any Hazardous Materials or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling, disposal or handling of, or the arrangement for such activities with respect to, Hazardous Materials, in each case not relating to or arising out of the insurance or reinsurance activities of the Company or the Subsidiaries.

“Environmental Liability” means all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of (a) actual or alleged compliance or noncompliance with any Environmental Law, (b) the generation, manufacture, processing, distribution, use, handling, transport, storage, treatment, recycling or disposal of, or the arrangement for such activities with respect to, any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which a liability or obligation is assumed or imposed with respect to any of the foregoing. Liabilities of the type described above arising out of the obligation of any Insurance Subsidiary with respect to its insurance operations shall not constitute “Environmental Liabilities” hereunder.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

“Equivalent Financing” means credit facilities or other forms of bank financing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the determination that any Plan is in “at-risk status” (within the meaning of Section 430 of the Code and Section 303 of ERISA), (d) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (e) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Company or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (f) the receipt by the Company or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) the requirement that a Plan provide a security pursuant to Section 436(f)(i) of the Code, (h) the receipt by the Company or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Company or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA, (i) the Company or any of the Subsidiaries engaging in a non-exempt “prohibited transaction” with respect to a plan for which the Company or any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Company or any such Subsidiary could otherwise be liable, (j) any other event or condition with respect to a Plan or Multiemployer Plan that would reasonably be expected to result in liability of the Company or any Subsidiary under Title IV of ERISA or (k) any Foreign Benefit Event.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Proceeds” has the meaning assigned to such term in Section 2.08(b)(ii).

“Excluded Taxes” means, with respect to any payment made by the Company, any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by gross or net income (however denominated), franchise Taxes, revenue Taxes and branch profits Taxes and taxes in lieu thereof (including value-added or similar Taxes), in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) Taxes attributable to such Recipient’s failure or inability to comply with Section 2.14(f); (c) U.S. Federal withholding Taxes from a Law in effect on the date on which (i) such Recipient acquires directly or indirectly its applicable ownership interest in the Loans or Commitments (other than a Recipient acquiring its applicable ownership interest pursuant to Section 2.16(b)) or (ii) such Recipient changes its lending office, except in each case to the extent that, pursuant to Section 2.14, amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a Recipient with respect to its applicable ownership interest in the Loans or Commitments or to such Recipient immediately before it changed its lending office and (d) any U.S. federal withholding Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the Code, any current or future regulations or official governmental interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation or rules adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“Federal Funds Effective Rate” means, for any day, the rate per annum calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer, deputy treasurer or controller of the Company.

“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR, as applicable. For the avoidance of doubt the initial Floor for each of Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR shall be zero.

“Foreign Benefit Event” means, with respect to any Foreign Pension Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable Law or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make the required contributions or payments, under any applicable Law, on or before the due date for such contributions or payments, (c) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign Pension Plan or to appoint a trustee or similar official to administer any such Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension Plan, (d) the incurrence of any liability by the Company or any Subsidiary under applicable Law on account of the complete or partial termination of such Foreign Pension Plan or the complete or partial withdrawal of any participating employer therein or (e) the occurrence of any transaction that is prohibited under any applicable Law and that would reasonably be expected to result in the incurrence of any liability by the Company or any of the Subsidiaries, or the imposition on the Company or any of the Subsidiaries of any fine, excise tax or penalty resulting from any noncompliance with any applicable Law.

“Foreign Pension Plan” means any benefit plan maintained outside of the U.S. primarily for the benefit of employees working outside the U.S. that under applicable Law is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained exclusively by a Governmental Authority.

“Fortitude Re Adjustment Amount” means, at any date, the amount (if any) of cumulative unrealized gains and losses relating to Fortitude Re’s Funds Withheld Assets (as such term is used in the Company’s most recent financial statement delivered in accordance with Section 5.01) as included in accumulated other comprehensive income (or loss).

“Fund” means any investment vehicle managed by the Company or an Affiliate of the Company and created in the ordinary course of the Company’s asset management business or tax credit investment business for the purpose of selling and/or holding, directly or indirectly, Equity Interests in such investment vehicle to third parties.

“GAAP” means United States generally accepted accounting principles applied on a consistent basis.

“GIC” means a guaranteed investment contract or funding agreement or other similar agreement issued by the Company or any of its Subsidiaries that guarantees to a counterparty a rate of return on the invested capital over the life of such contract or agreement.

“Governmental Authority” means any federal, state, local, municipal or foreign court or governmental agency, authority, instrumentality, regulatory body (including any board of insurance, insurance department or insurance commissioner), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment of such Indebtedness or other obligation or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.

“Hazardous Materials” means any pollutant, contaminant, waste or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, including petroleum, its derivatives, by-products and other hydrocarbons, coal ash, radon gas, asbestos, asbestos-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorohydrocarbons, and any substance, waste or material regulated under any Environmental Law.

“Hybrid Securities” means any junior subordinated debt or trust preferred securities issued by the Company or any of its Subsidiaries that received hybrid equity treatment from S&P and Moody’s at issuance.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed (provided that, for purposes of this clause (e), if such Person has not assumed or otherwise become personally liable for any such Indebtedness, the amount of the Indebtedness of such Person in connection therewith shall be limited to the lesser of (i) the fair market value of such property and (ii) the amount of Indebtedness secured by such Lien), (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations of such Person as an account party in respect of letters of credit and (i) all obligations of such Person in respect of bankers’ acceptances. Indebtedness shall not include: (i) any obligation of any Person to make any payment, hold funds or securities or to segregate funds or securities for the benefit of one or more third parties pursuant to any surety or fidelity bond, any insurance or reinsurance contract or program, any distribution agreement, any program administrator agreement, managing general agency agreement, third party administrator agreement, claims services agreement or similar insurance services agreement, or any annuity contract, variable annuity contract, life insurance policy, variable life insurance policy or other similar agreement or instrument (including GICs and financial guarantees), including any policyholder account, arising in the ordinary course of any such Person’s business; (ii) all other liabilities (or guarantees thereof) of any Person arising in the ordinary course of any such Person’s business as an insurance company, reinsurance company (including GICs), agency, producer or claims services company or as a provider of financial or investment services (including GICs); (iii) obligations of any Person under Swap Contracts; (iv) obligations of any Person under or arising out of any employee benefit plan, employment contract or other similar arrangement; (v) obligations of any Person under any severance or termination of employment agreement or plan; (vi) utilizing proceeds from the disposition of properties (or interests therein) generating tax credits to secure guarantee obligations to third party investors in tax credit Funds, or providing guarantees to third-party investors in tax credit Funds to protect against recapture of previously-allocated tax credits occurring after the disposition of such properties (or interests therein); or (vii) Indebtedness of Subsidiaries that are held for sale (and accounted for as such under GAAP) as of the date hereof. The Indebtedness of any Person shall include the Indebtedness of any partnership (other than Indebtedness that is nonrecourse to such Person) in which such Person is a general partner.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by the Company under any Loan Document and (b) Other Taxes. For avoidance of doubt, Indemnified Taxes does not include Taxes imposed by applicable Law on a distribution or similar payment made by a Lender to a Person that is an owner of such Lender with respect to its ownership interest in such Lender and distributions and similar payments made by such owners to their owner.

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the Company that is not guaranteed by any other Person or subject to any other credit enhancement.

“Index Debt Rating” means, as of any date of determination, the rating as determined by S&P or Moody’s of the Index Debt.

“Insurance Subsidiary” means any Subsidiary that is required to be licensed as an insurer or reinsurer.

“Interest Election Request” means a request by the Company to convert or continue a Borrowing in accordance with Section 2.05.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and the Maturity Date and (b) with respect to any Term Benchmark Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Term Benchmark Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, and the Maturity Date.

“Interest Period” means, with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability for the Term SOFR Rate applicable to the relevant Loan or Commitment), as the Company may elect; provided, that:

(i)if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii)any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period; and

(iii)no tenor that has been removed from this definition pursuant to Section 2.11(e) shall be available for specification in such Borrowing Request or Interest Election Request.

For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“IPO” means the initial underwritten public offering of shares of common stock of the Company consummated on terms substantially consistent with the Draft Registration Statement or otherwise reasonably satisfactory to the Joint Lead Arrangers (it being understood and agreed that any amendment to the Draft Registration Statement shall be deemed satisfactory to the Joint Lead Arrangers so long as such amendment is not materially adverse to the Lenders).

“IPO Effective Date” means the date on which the IPO is consummated.

“IRS” means the United States Internal Revenue Service.

“Joint Lead Arrangers” means the Joint Lead Arrangers and Joint Bookrunners listed on the cover page of this Agreement.

“JPMorgan” means JPMorgan Chase Bank, N.A or one or more of its affiliates.

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Limited Recourse Real Estate Indebtedness” means Indebtedness of any Subsidiary of the Company secured by Liens on any of its real property (including investments in real property) and certain personal property related thereto; provided that (i) the recourse of the holder of such Indebtedness (whether direct or indirect and whether contingent or otherwise) under the instrument creating such Liens or providing for such Indebtedness shall be limited to such real property and personal property relating thereto; and (ii) such holder may not under the instrument creating such Lien or providing for such Indebtedness collect by levy of execution or otherwise against property of such Subsidiary (other than such real property and personal property relating thereto directly securing such Indebtedness) if such Subsidiary fails to pay such Indebtedness when due and such holder obtains a judgment with respect thereto, except for recourse obligations that are customary in “non-recourse” real estate transactions.

“Loan Documents” means, collectively, this Agreement and the promissory notes (if any) executed and delivered pursuant to Section 2.07(e).

“Loan” and “Loans” means the term loan made by each Lender to the Company pursuant to Section 2.01, which may be made in multiple installments as more particularly set forth in Section 2.01 (or, if context so requires, the aggregate term loan made by all of the Lenders).

“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X of the Board.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, property or financial condition of the Company and its Subsidiaries taken as a whole or (b) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder.

“Material Indebtedness” means Indebtedness (other than the Loans and any Limited Recourse Real Estate Indebtedness), or obligations in respect of one or more Swap Contracts, of any one or more of the Company and its Subsidiaries in an aggregate principal amount exceeding $375,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Company or any Subsidiary in respect of any Swap Contract at any time shall be the Agreement Value of such Swap Contract at such time.

“Maturity Date” means (x) December 30, 2022, if the IPO Effective Date has not occurred on or prior to such date, or (y) otherwise, August 25, 2023.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Proceeds” means, with respect to any Prepayment Event, the aggregate cash proceeds received in respect of such Prepayment Event, net of all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates of the Company) in connection therewith.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the “Overnight Bank Funding Rate” in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Company arising under any Loan Document or otherwise with respect to any Loans (including with respect to principal, interest, fees and other amounts payable by the Company thereunder), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Company or any Affiliate thereof of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization naming such Person as the debtor in such case, proceeding or action, regardless of whether such interest and fees are allowed claims in such proceeding.

“Operating Indebtedness” of any Person means, at any date, without duplication, any Indebtedness of such Person (a) in respect of AXXX, XXX and other similar life reserve requirements, (b) incurred in connection with repurchase agreements, securities lending and dollar roll transactions, (c) to the extent the proceeds of which are used directly or indirectly (including for the purpose of funding portfolios that are used to fund trusts in order) to support AXXX, XXX and other similar life reserves, (d) to the extent the proceeds of which are used to fund discrete assets or pools of assets (and related hedge instruments and capital) that are at least notionally segregated from other assets and have sufficient cash flow to pay principal and interest thereof, with insignificant risk of other assets of such Person being called upon to make such principal and interest payments, (e) in respect of the Company’s “Debt of Consolidated Investment Entities”, (f) consisting of loans and other obligations owing to Federal Home Loan Banks or (g) that is otherwise treated as “operating indebtedness” and excluded from financial leverage by each of the Ratings Agencies in its evaluation of such Person.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection solely arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, or sold or assigned an interest in any Loan Document).

“Other Taxes” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes or Taxes imposed with respect to an assignment or participation.

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Payment” has the meaning assigned to it in Section 8.01(j).

“Payment Notice” has the meaning assigned to it in Section 8.01(j).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Encumbrances” means (a) Liens for taxes, assessments and governmental charges not yet due or that are being contested in good faith by appropriate proceedings; (b) bankers’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings; (c) pledges and deposits made in compliance with workmen’s compensation, unemployment insurance and other social security Laws; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) zoning restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Company; and (f) Liens arising in the ordinary course of business on operating accounts (including deposit accounts and any related securities accounts) maintained by the Company, including bankers’ Liens and rights of setoff arising in connection therewith; provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Person” means any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 307 of ERISA, and in respect of which the Company or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prepayment Date” has the meaning given to such term in Section 2.08(b)(ii).

“Prepayment Event” means, the issuance or incurrence by the Company or any of its Subsidiaries (or subsidiaries that the Company will ultimately own following the consummation of the Reorganization Transactions) of any the following, after the Commitment Date:

(a)Indebtedness for borrowed money, including without limitation, the Senior Notes and/or any Equivalent Financing issued or incurred in lieu of the Senior Notes (in whole or in part), but excluding (i) Operating Indebtedness, (ii) intercompany obligations between or among the Company and/or its Subsidiaries, (iii) the Revolving Credit Facility, (iv) the 3-Year DDTL Loans, (v) Hybrid Securities and/or any Equivalent Financing issued or incurred in lieu of any Hybrid Securities (in whole or in part), (vi) Capital Lease Obligations, (vii) Purchase Money Obligations and equipment financings, (viii) letter of credit facilities, (ix) bilateral working capital facilities, (x) overdraft facilities, and (xi) prior to the Deconsolidation, working capital facilities provided by RemainCo and/or its subsidiaries in the ordinary course of business); and/or

(b)Hybrid Securities and/or any Equivalent Financing issued or incurred in lieu of any Hybrid Securities (in whole or in part).

“Prepayment Notice” has the meaning given to such term in Section 2.08(b)(i).

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

“Proceeding” means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

“Purchase Money Obligations” means any Indebtedness issued or incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (including Equity Interests), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Equity Interests of any Person owning such property or assets, or otherwise.

“Ratings Agency” means, individually or collectively, S&P and/or Moody’s, as the context may require.

“Ratings Outside Date” means the earlier to occur of (x) the date that Index Debt Ratings become available and (y) the date that is 120 days after the Closing Date.

“Recipient” means, as applicable, (a) the Administrative Agent and (b) any Lender (and, in the case of a Lender that is classified as a partnership for U.S. Federal tax purposes, a Person treated as a beneficial owner thereof for U.S. Federal tax purposes).

“Reference Time” with respect to any setting of the then-current Benchmark means if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two Business Days preceding the date of such setting, (2) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting or (3) if such Benchmark is neither the Term SOFR Rate nor Daily Simple SOFR, the time determined by the Administrative Agent in its reasonable discretion.

“Register” has the meaning assigned to such term in Section 9.04(b)(iv).

“Regulation T” means Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, attorneys, accountants and other professional advisors of such Person and of such Person’s Affiliates.

“Release” means any release, spill, emission, leaking, dumping, pumping, emptying, escaping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within, at, to, under, from or upon any building, structure, facility or fixture.

“Relevant Governmental Body” means, the Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Board and/or the NYFRB or, in each case, any successor thereto.

“RemainCo” means American International Group, Inc., a Delaware corporation.

“Reorganization Transactions” means a series of planned transactions intended to separate the life and retirement business of RemainCo and transfer such business to the Company and its subsidiaries, as described in sections “The Reorganization Transactions” and “Recapitalization” of the Draft Registration Statement.

“Required Lenders” means, at any time, Lenders having Credit Exposures and unused Commitments representing more than 50% of the sum of the total Credit Exposures and unused Commitments at such time; provided that the Credit Exposures and unused Commitments of any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means any executive officer or Financial Officer of the Company and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement.

“Revolving Credit Facility” means one or more (or a series) of revolving credit facilities with an aggregate commitment not to exceed $2,500,000,000 arranged by JPMorgan for the Company.

“S&P” means Standard & Poor’s Financial Services LLC.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any comprehensive sanctions program that extends beyond any list of Sanctioned Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, Her Majesty’s Treasury of the United Kingdom or the European Union, which as of the date of this Agreement would be the so - called Donetsk People’s Republic, the so- called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria.

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, Her Majesty’s Treasury of the United Kingdom or the European Union, (b) any Person located, organized or resident in, or the government of, a Sanctioned Country or the Government of Venezuela or (c) any Person owned or controlled by any such Person described in clause (a) or (b).

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom or (c) the Australian Department of Foreign Affairs and Trade. For the avoidance of doubt, the term “sanctions” shall not include any withholding tax under FATCA.

“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting practices prescribed or permitted by the insurance commissioner (or other similar authority) in the domicile of such Insurance Subsidiary for the preparation of annual statements and other financial reports of such Insurance Subsidiary, which are applicable to the circumstances as of the date of filing of such statement or report.

“SEC” means the Securities and Exchange Commission, or any regulatory body that succeeds to the functions thereof.

“Securities Transactions” means (a) securities lending arrangements, (b) repurchase and reverse repurchase arrangements with respect to securities and financial instruments and (c) other similar arrangements.

“Senior Notes” means senior unsecured debt securities issued by the Company or any of its Subsidiaries following the Commitment Date.

“SOFR” means a rate equal to the “Secured Overnight Financing Rate” as administered by the Federal Reserve Bank of New York (or a successor administrator).

“Specified Permitted Lender” means any Person identified as a permitted assignee pursuant to the Syndication Plan.

“subsidiary” means, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the ordinary voting power or more than 50% of the general partnership or managing limited liability company interests (as applicable) are, at the time any determination is being made, owned, Controlled or held directly or indirectly by such parent; provided that no Fund shall be a “subsidiary” for the purpose hereof.

“Subsidiary” means any direct or indirect subsidiary of the Company.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement; provided that Swap Contracts shall not include (i) any right, option, warrant or other award made under an employee benefit plan, employment contract or other similar arrangement or (ii) any right, warrant or option or other convertible or exchangeable security or other instrument issued by the Company or any Subsidiary or Affiliate of the Company or any Subsidiary for capital raising purposes.

“Syndication Agent” means the Syndication Agent listed on the cover page of this Agreement.

“Syndication Plan” means that certain Syndication Plan, dated February 14, 2022 (as amended or otherwise modified from time to time with the consent of the Company), among the Joint Lead Arrangers and the Company.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Term Benchmark” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate.

“Term Loan Facility” means (a) at any time during the Availability Period, the sum of (i) the aggregate amount of Commitments at such time and (ii) the aggregate outstanding principal amount of the Loans of all Lenders at such time and (b) thereafter, the aggregate outstanding principal amount of the Loans of all Lenders at such time.

“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.

“Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period.

“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum equal to the forward-looking term rate based on SOFR as published by the CME Term SOFR Administrator. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.

“Transactions” means the execution, delivery and performance by the Company of the Loan Documents, the borrowing of Loans and the use of the proceeds thereof.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted Term SOFR Rate or the Alternate Base Rate.

“UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“U.S.” or “United States” means the United States of America.

“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned to such term in Section 2.14(f)(ii)(D)(2).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” means the Company and the Administrative Agent.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

“3-Year DDTL Credit Agreement” means that certain 3-Year Delayed Draw Term Loan Agreement, dated as of the date hereof (as amended or otherwise modified from time to time), between the Company, as borrower, the Lenders party thereto from time to time, and JPMorgan, as administrative agent for the lenders thereto.

“3-Year DDTL Loans” means those “Loans” as defined in and borrowed pursuant to the 3-Year DDTL Credit Agreement.

SECTION 1.02.Terms Generally.

(a)The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such Law and any reference to any Law or regulation shall, unless otherwise specified, refer to such Law or regulation as from time to time amended, supplemented or otherwise modified, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.03.Accounting Terms and Determinations.

Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Company notifies the Administrative Agent that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Company that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding anything herein to the contrary, whether a lease constitutes a capital lease or an operating lease shall be determined based on GAAP without giving effect to any treatment of leases under Accounting Standards Codification 842 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect).

SECTION 1.04.Interest Rates; Benchmark Notification.

The interest rate on a Loan may be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 2.11(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Company. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Company, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

ARTICLE II

THE CREDITS

SECTION 2.01.Term Loan.

At any time, and from time to time, during the Availability Period each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make a Loan in one or more installments in Dollars to the Company pursuant to this Section 2.01 in an aggregate principal amount not to exceed such Lender’s Commitment, which Commitment shall, subject to Section 2.08(c), be permanently and irrevocably reduced on a dollar for dollar basis in an amount equal to the principal amount of each installment of the Loan made under this Agreement by such Lender on the date such installment is made. Subject to Section 2.08(c), the Loan under this Agreement may not be reborrowed once prepaid or repaid.

SECTION 2.02.Loans and Borrowings.

(a)Obligations of Lenders. Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)Type of Loans. Subject to Section 2.11, each Borrowing shall be comprised entirely of ABR Loans or Term Benchmark Loans as the Company may request in accordance herewith. Each Lender at its option may make any Term Benchmark Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Company to repay such Loan in accordance with the terms of this Agreement.

(c)Minimum Amounts; Limitation on Number of Borrowings. At the commencement of the Interest Period for any Term Benchmark Borrowing, such Borrowing shall be in an aggregate amount of $10,000,000 or a larger multiple of $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount equal to $10,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of ten Term Benchmark Borrowings outstanding.

(d)Limitations on Lengths of Interest Periods. Notwithstanding any other provision of this Agreement, the Company shall not be entitled to request, or to elect to convert to or continue as a Term Benchmark Borrowing, any Borrowing if the Interest Period requested therefor would end after the Maturity Date.

SECTION 2.03.Requests for Borrowings.

With respect to each borrowing of an installment of the Loan, the Company shall give the Administrative Agent a Borrowing Request by telephone or in writing (a) in the case of a Term Benchmark Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and, in the case of telephonic Borrowing Requests, shall be confirmed promptly (but, in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing) by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Company. Each such Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)the aggregate amount of the requested Borrowing;

(ii)the date of such Borrowing, which shall be a Business Day;

(iii)whether such Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

(iv)in the case of a Term Benchmark Borrowing, the Interest Period therefor, which shall be a period contemplated by the definition of the term “Interest Period”.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Term Benchmark Borrowing, then the Company shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section (but, in the case of an ABR Borrowing, not later than 11:30 a.m., New York City time, on the date of the requested Borrowing, provided that the Administrative Agent shall have received a written Borrowing Request for such Borrowing not later than 10:00 a.m., New York City time, on such date), the Administrative Agent shall advise each relevant Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04.Funding of Borrowings.

(a)Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon (or, in the case of an ABR Borrowing, 2:00 p.m.), New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Company by crediting the amounts so received within two hours of receipt from the Lenders, in like funds, to an account of the Company maintained with the Administrative Agent in New York City and designated by the Company in the applicable Borrowing Request.

(b)Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Company a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Administrative Agent (the “Compensation Period”), at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Company, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitments or to prejudice any rights which the Administrative Agent, any Lender or the Company may have against any other Lender as a result of any default by such Lender hereunder.

SECTION 2.05.Interest Elections.

(a)Elections by the Company for Borrowings. Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Term Benchmark Borrowing, shall have the Interest Period specified in such Borrowing Request. Thereafter, the Company may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Term Benchmark Borrowing, may elect the Interest Period therefor, all as provided in this Section. The Company may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans constituting such Borrowing, and the Loans constituting each such portion shall be considered a separate Borrowing.

(b)Notice of Elections. To make an election pursuant to this Section, the Company shall notify the Administrative Agent of such election by telephone or in writing by the time that a Borrowing Request would be required under Section 2.03 if the Company were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and, in the case of telephonic Interest Election Requests shall be confirmed promptly by hand delivery, electronic delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Company.

(c)Information in Interest Election Requests. Each Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) of this paragraph shall be specified for each resulting Borrowing);

(ii)the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)whether the resulting Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

(iv)if the resulting Borrowing is a Term Benchmark Borrowing, the Interest Period therefor after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Term Benchmark Borrowing but does not specify an Interest Period, then the Company shall be deemed to have selected an Interest Period of one month’s duration.

(d)Notice by Administrative Agent to Lenders. Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)Failure to Elect; Events of Default. If the Company fails to deliver a timely Interest Election Request with respect to a Term Benchmark Borrowing prior to the end of the Interest Period therefor, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Company, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Term Benchmark Borrowing and (ii) unless repaid, each Term Benchmark Borrowing shall automatically be converted to an ABR Borrowing at the end of the Interest Period therefor.

SECTION 2.06.Termination and Reduction of Commitments.

(a)Scheduled Termination. Subject to Section 2.08(c), the Commitments shall be automatically and permanently reduced on a dollar for dollar basis by an amount equal to the principal amount of each Borrowing under this Agreement on the date of such Borrowing. Unless previously terminated or reduced to zero, any outstanding Commitments shall be automatically and permanently reduced to zero and terminated at the end of the Availability Termination Date. For the avoidance of doubt, subject to Section 2.08(c), the Commitments shall automatically and permanently terminate upon being reduced to zero.

(b)Voluntary Termination or Reduction. During the Availability Period, the Company may at any time terminate the Commitments or from time to time reduce the Commitments; provided that each reduction of the Commitments shall be in an amount that is $10,000,000 or a larger multiple of $1,000,000. Notwithstanding the termination of the Commitments, this Agreement shall not terminate, and the obligations of the Company under this Agreement shall continue in full force and effect until such time as all principal of or accrued interest on the Loans and all fees and other amounts payable under this Agreement or any other Loan Document have been paid in full.

(c)Notice of Voluntary Termination or Reduction. The Company shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least two Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Company pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Company may state that such notice is conditioned upon occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.07.Repayment of Loans; Evidence of Debt.

(a)Repayment. Each Loan shall mature, and the Company hereby unconditionally promises to pay the unpaid principal of each Loan (together with accrued interest thereon and all other amounts then payable under this Agreement) on the Maturity Date.

(b)Maintenance of Loan Accounts by Lenders. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Company to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender by the Company from time to time hereunder.

(c)Maintenance of Loan Accounts by Administrative Agent. The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Company to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof.

(d)Effect of Entries. The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Company to repay the Loans in accordance with the terms of this Agreement. In the event of any conflict between the records of the Administrative Agent and the records of a Lender, the records of the Administrative Agent shall control absent manifest error.

(e)Promissory Notes. Any Lender may request that Loans made by it to the Company be evidenced by a promissory note. In such event, the Company shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) substantially in the form of Exhibit C or any other form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.08.Prepayment of Loans.

(a)Optional Prepayments.

(i)The Company shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to the requirements of paragraph (b) of this Section 2.08 and Section 2.13.

(ii)The Company shall notify the Administrative Agent by telephone (confirmed by telecopy) or in writing of any prepayment under paragraph (a) of this Section 2.08: (1) in the case of prepayment of any Term Benchmark Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment (which shall be a Business Day) or (2) in the case of prepayment of any ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of prepayment (which shall be a Business Day). Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, a notice of prepayment may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the relevant Lenders of the contents thereof. Each partial optional prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.10, together with amounts, if any, payable pursuant to Section 2.13.

(b)Mandatory Prepayment Events.

(i)The Company shall, prior to 10:00 a.m., New York City time, not less than three Business Days (or such shorter time as the Administrative Agent may agree in its sole discretion) prior to the occurrence of any Prepayment Event (regardless of whether the Net Proceeds thereof would be required to be applied to prepay the Loans or the 3-Year DDTL Loans or reduce Commitments hereunder or commitments in respect of the 3-Year DDTL Loans), deliver a notice (the “Prepayment Notice”) thereof to the Administrative Agent, which shall set forth the (i) aggregate proceeds from such Prepayment Event, (ii) the Net Proceeds therefrom, and (iii) the amount of any Loans, 3-Year DDTL Loans, or any interest in respect of the Loans or 3-Year DDTL Loans to be paid, and/or the undrawn portion of any Commitments or commitments in respect of the 3-Year DDTL Loans expected to be permanently reduced and terminated in connection therewith, in each case, in accordance with Section 2.08(b)(ii) below (and any elections the Company may make in respect thereof). Any prepayments made under this Section 2.08(b) shall be subject to the requirements of Section 2.13.

(ii)In the event and on each occasion that any Net Proceeds from any Prepayment Event, when taken together with the aggregate Net Proceeds of all other Prepayment Events that have occurred prior thereto, exceeds $500,000,000 (any such excess Net Proceeds, “Excess Proceeds”), the Company shall, on or before the date (the “Prepayment Date”) that is the third (3^rd) Business Day following the receipt of such Excess Proceeds:

(I)with respect to any Prepayment Event described in clause (a) of the definition thereof, apply the relevant Excess Proceeds in accordance with clause (A) below, unless the Company makes an election in the Prepayment Notice to apply such Excess Proceeds in accordance with clause (B) below, in which case, the Company shall apply such Excess Proceeds in accordance with clause (B) below; and

(II)with respect to any Prepayment Event described in clause (b) of the definition thereof, apply the relevant Excess Proceeds in accordance with clause (B) below;

(A)without duplication (1) first, to ratably prepay (x) any principal amount of Loans and (y) any accrued but unpaid interest on the Loans, in each case, outstanding on the relevant Prepayment Date, on a dollar-for-dollar basis, (2) second, the then-undrawn portion of the Commitments shall be permanently and irrevocably reduced (or terminated, as applicable) on a dollar-for-dollar basis to the extent of any remaining Excess Proceeds not applied pursuant to clause (A)(1) above (it being understood that any Excess Proceeds counted towards reducing Commitments under this clause (A)(2) shall not be reused in clause (A)(3) below), and (3) third, without duplication, to the extent of any remaining Excess Proceeds not applied pursuant to clauses (A)(1) or (A)(2) above, in accordance with Section 2.08(b)(ii)(B) of the 3-Year DDTL Credit Agreement; and

(B)without duplication (1) first, in accordance with Section 2.08(b)(ii)(A) in the 3-Year DDTL Credit Agreement, (2) second, to ratably prepay (x) any principal amount of Loans and (y) any accrued but unpaid interest on the Loans, in each case, outstanding on the relevant Prepayment Date, on a dollar-for-dollar basis to the extent of any remaining Excess Proceeds not applied pursuant to clause (B)(1) above, and (3) third, the then-undrawn portion of the Commitments shall be permanently and irrevocably reduced (or terminated, as applicable) on a dollar-for-dollar basis to the extent of any remaining Excess Proceeds not applied pursuant to clauses (B)(1) or (B)(2) above.

(c)Mandatory Prepayment for Delayed IPO. If the IPO Effective Date has not occurred on or prior to the date that is five (5) Business Days (or up to and including ten (10) Business Days with the consent of the Administrative Agent, or such longer period exceeding ten (10) Business Days with the consent of each of the Joint Lead Arrangers) after any Borrowing made in anticipation thereof, the Company shall prepay the outstanding principal amount of any outstanding Loans (along with any accrued and unpaid interest thereon) within five (5) Business Days following such date; provided that, upon such prepayment, the aggregate Commitments of the Lenders shall be increased by the principal amount of Loans prepaid pursuant to this Section 2.08(c), pro rata among the Lenders in accordance with their respective Applicable Percentages, and such Commitments shall be available to the Company for re-borrowing pursuant to Section 2.01. Any prepayments made under this Section 2.08(c) shall be subject to the requirements of Section 2.13.

SECTION 2.09.Fees.

(a)Commitment Fees. The Company agrees to pay to the Administrative Agent for account of each Lender a commitment fee, which shall accrue at a rate per annum equal to the Applicable Rate on the daily undrawn amount of the Commitment of such Lender during the period from and including the day that is 120 days after the Closing Date to but excluding the date on which the Commitments are reduced to zero and terminated. Accrued commitment fees shall be due and payable quarterly in arrears on the day that is fifteen (15) days (or if such day is not a Business Day, the preceding Business Day) after the last day of each March, June, September and December, commencing with the first such date to occur after the 120th day after the Closing Date, and on the date on which the Commitments are terminated and reduced to zero and any such fees accruing after such date shall be payable on demand.

(b)Administrative Agent Fees. The Company agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Company and the Administrative Agent.

(c)Payment of Fees; Computation of Fees. All fees payable hereunder shall be paid on the dates due, in Dollars and immediately available funds, to the Administrative Agent for distribution, as applicable, to the Person or Persons entitled thereto. Fees paid shall not be refundable under any circumstances. All fees payable under paragraph (a) of this Section shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

SECTION 2.10.Interest.

(a)ABR Loans. The Loans constituting each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.

(b)Term SOFR Loans. The Loans constituting each Term Benchmark Borrowing shall bear interest at a rate per annum equal to the Adjusted Term SOFR Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)Default Interest. If any amount of principal of any Loan, interest or any other amount payable by the Company under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Without duplication of amounts payable under the preceding sentence, while any Event of Default pursuant to clause (g) or (h) of Article VII exists and, upon request by the Required Lenders, while any other Event of Default exists, the Company shall pay interest on the principal amount of all outstanding Loans made to the Company at a rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(d)Payment of Interest. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the Maturity Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Term Benchmark Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(e)Computation. All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted Term SOFR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.11.Alternate Rate of Interest.

(a)Subject to clauses (b), (c), (d), (e) and (f) of this ‎Section 2.11, if:

(i)the Administrative Agent determines (which determination shall be conclusive absent manifest error) (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Term SOFR Rate (including because the Term SOFR Reference Rate is not available or published on a current basis), for such Interest Period or (B) at any time, that adequate and reasonable means do not exist for ascertaining the applicable Adjusted Daily Simple SOFR or the Daily Simple SOFR; or

(ii)the Administrative Agent is advised by the Required Lenders that (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the Adjusted Term SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period or (B) at any time, Adjusted Daily Simple SOFR will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing;

then the Administrative Agent shall give notice thereof to the Company and the Lenders by telephone, telecopy or electronic mail as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Company and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Company delivers a new Interest Election Request in accordance with the terms of Section 2.05 or a new Borrowing Request in accordance with the terms of Section 2.03, any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Term Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Borrowing shall instead be deemed to be an Interest Election Request or a Borrowing Request, as applicable, for (x) a Borrowing for Loans that bear interest at the Adjusted Daily Simple SOFR plus the Applicable Rate applicable to a Term Benchmark Loan, so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.11(a)(i) or (ii) above or (y) an ABR Borrowing if the Adjusted Daily Simple SOFR also is the subject of Section 2.11(a)(i) or (ii) above; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan is outstanding on the date of the Company’s receipt of the notice from the Administrative Agent referred to in this ‎Section 2.11(a) with respect to Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR applicable to such Term Benchmark Loan, then until (x) the Administrative Agent notifies the Company and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Company delivers a new Interest Election Request in accordance with the terms of Section 2.05 or a new Borrowing Request in accordance with the terms of Section 2.03, (1) any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute (x) a Loan bearing interest at the Adjusted Daily Simple SOFR plus the Applicable Rate applicable to a Term Benchmark Loan, so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.11(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple SOFR also is the subject of Section 2.11(a)(i) or (ii) above, on such day.

(b)Notwithstanding anything to the contrary herein or in any other Loan Document (and any Swap Contract shall be deemed not to be a “Loan Document” for purposes of this ‎Section 2.11), if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(c)Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(d)The Administrative Agent will promptly notify the Company and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this ‎Section 2.11, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this ‎Section 2.11.

(e)Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)Upon the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Company may revoke any request for a Term Benchmark Borrowing of, conversion to or continuation of Term Benchmark Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Company will be deemed to have converted any request for a Term Benchmark Borrowing into a request for a Borrowing of or conversion to (A) a Borrowing for Loans that bear interest at the Adjusted Daily Simple SOFR plus the Applicable Rate applicable to a Term Benchmark Loan, so long as the Adjusted Daily Simple SOFR is not the subject of a Benchmark Transition Event or (B) an ABR Borrowing if the Adjusted Daily Simple SOFR is the subject of a Benchmark Transition Event. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. Furthermore, if any Term Benchmark Loan is outstanding on the date of the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR applicable to such Term Benchmark Loan, then until such time as a Benchmark Replacement is implemented pursuant to this ‎Section 2.11, any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, (x) a Loan bearing interest at the Adjusted Daily Simple SOFR plus the Applicable Rate applicable to a Term Benchmark Loan, so long as the Adjusted Daily Simple SOFR is not the subject of a Benchmark Transition Event or (y) an ABR Loan if the Adjusted Daily Simple SOFR is the subject of a Benchmark Transition Event, on such day.

SECTION 2.12.Increased Costs.

(a)Increased Costs Generally. If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, deposit insurance charge or similar requirement against assets of, deposits with or for account of, or credit extended by, any Lender;

(ii)impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Term Benchmark Loans made by such Lender; or

(iii)subject any Recipient to any Taxes (other than (A) Taxes under FATCA, (B) Indemnified Taxes, (C) Other Connection Taxes on gross or net income, profits, franchise or revenues or taxes in lieu thereof (including value-added or similar Taxes) and (D) Taxes described in clauses (b) through (c) of the definition of Excluded Taxes) on its Loans (including principal amount thereof), Commitments or other obligations hereunder, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lenders or such other Recipient of making or maintaining any Term Benchmark Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then the Company will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)Capital Requirements. If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity, as applicable), then from time to time the Company will pay to such Lender in Dollars such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)Certificates from Lenders. A certificate of a Lender setting forth the amount or amounts in Dollars necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Company and shall be conclusive absent manifest error. The Company shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Company shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.13.Break Funding Payments.

In the event of (a) the payment of any principal of any Term Benchmark Loan on a day other than the last day of an Interest Period or the relevant Interest Payment Date therefor (including as a result of an Event of Default), (b) the conversion of any Term Benchmark Loan other than on the last day of an Interest Period or the relevant Interest Payment Date therefor, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.08(a)(ii) and is revoked in accordance therewith), or (d) the assignment of any Term Benchmark Loan other than on the last day of an Interest Period therefor as a result of a request by the Company pursuant to Section 2.16, then, in any such event, the Company shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Term Benchmark Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period or the relevant Interest Payment Date, as applicable, for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period or comparable monthly period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted Term SOFR Rate for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an Affiliate of such Lender) for deposits from other banks in the Term SOFR Rate market at the commencement of such period. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Company and shall be conclusive absent manifest error. The Company shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.14.Taxes.

(a)Withholding of Taxes; Gross-Up. Each payment by the Company under any Loan Document shall be made without deduction or withholding for any Taxes, unless such withholding is required by applicable Law (which, for purposes of this Section, shall include FATCA). If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to deduct or withhold Taxes, then such Withholding Agent may so deduct or withhold and shall timely pay the full amount of deducted or withheld Taxes to the relevant Governmental Authority in accordance with applicable Law. If such Taxes are Indemnified Taxes, then the amount payable by the Company shall be increased as necessary so that, net of such deduction or withholding (including such deduction or withholding applicable to additional amounts payable under this Section), the applicable Recipient receives the amount it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by the Company. The Company shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

(c)Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes by the Company to a Governmental Authority, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)Indemnification by the Company. The Company shall indemnify each Recipient for any Indemnified Taxes that are paid or payable by such Recipient in connection with any Loan Document (including amounts payable under this Section 2.14(d)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.14(d) shall be paid within 10 days after the Recipient delivers to the Company a certificate stating the amount of any Indemnified Taxes so payable by such Recipient and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so payable absent manifest error. Such Recipient shall deliver a copy of such certificate to the Administrative Agent. In the case of any Lender making a claim under this Section 2.14(d) on behalf of any of its beneficial owners, an indemnity payment under this Section 2.14(d) shall be due only to the extent that such Lender is able to establish that, with respect to the applicable Indemnified Taxes, such beneficial owners supplied to the applicable Persons such properly completed and executed documentation necessary to claim any applicable exemption from, or reduction of, such Indemnified Taxes.

(e)Indemnification by Lenders. Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that the Company has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Company to do so) and the Company for any Excluded Taxes, in each case attributable to such Lender that are paid or payable by the Administrative Agent or the Company (as applicable) in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes or Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.14(e) shall be paid within 10 days after the Administrative Agent or the Company (as applicable) delivers to the applicable Lender a certificate stating the amount of Taxes or Excluded Taxes so paid or payable by the Administrative Agent or the Company (as applicable). Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)Status of Lenders. (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Company and the Administrative Agent, at the time such Lender becomes a Lender hereunder or at times prescribed by Law or reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation prescribed by Law or reasonably requested by the Company or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding, unless a Change in Law prevents such Lender from legally being able to complete, execute or deliver such form. In addition, any Lender, if requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by Law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Upon the reasonable request of the Company or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.14(f). If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify the Company and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(ii)Without limiting the generality of the foregoing, if the Company is a U.S. Person, any Lender with respect to the Company shall, if it is legally eligible to do so, deliver to the Company and the Administrative Agent (in such number of originals reasonably requested by the Company and the Administrative Agent), on or prior to the date on which such Lender becomes a party hereto, duly completed and executed originals of whichever of the following is applicable:

(A)in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN or W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty, (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty and (3) with respect to FATCA, IRS Form W-8BEN or W-8BEN-E (as applicable) establishing an exemption from withholding tax;

(C)in the case of a Non-U.S. Lender for whom payments under the Loan Documents constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN or W-8BEN-E (as applicable) (which shall also establish an exemption from withholding tax under FATCA) and (2) a certificate substantially in the applicable form attached as part of Exhibit D (a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E)in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided, however, that if such Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F)any other form prescribed by Law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Company or the Administrative Agent to determine the amount of Tax (if any) required by Law to be withheld.

(iii)If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by Law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g)Treatment of Certain Refunds. If any Lender or the Administrative Agent reasonably determines that it has received a refund, in cash or applied as an offset against other cash tax liability, of any Taxes as to which it has been indemnified pursuant to this Section (including additional amounts paid pursuant to this Section), such indemnified party shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnifying party pursuant to the previous sentence (plus, for the avoidance of doubt, any interest imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.14(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.14(g) to the extent such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.14(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

SECTION 2.15.Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)Payments by the Company. The Company shall make each payment required to be made by it hereunder (whether of principal, interest, or fees, or under Section 2.12, 2.13 or 2.14, or otherwise) prior to 1:00 p.m., New York City time, on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Administrative Agent’s Office, except that payments pursuant to Sections 2.12, 2.13, 2.14 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder (including commitment fees, payments required under Section 2.07, and payments required under Section 2.08) shall be made in Dollars.

(b)Application of Insufficient Payments. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)Sharing of Payments by Lenders. If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or interest thereon resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon then due than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Company pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Company or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Company consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Company rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Company in the amount of such participation.

(d)Presumptions of Payment. Unless the Administrative Agent shall have received notice (which notice shall be effective upon receipt) from the Company prior to the date on which any payment is due to the Administrative Agent for account of the Lenders hereunder that the Company will not make such payment, the Administrative Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Company has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the NYFRB Rate.

(e)Certain Deductions by the Administrative Agent. If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b), 2.15(d) or 9.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

SECTION 2.16.Mitigation Obligations; Replacement of Lenders.

(a)Designation of a Different Lending Office. If any Lender requests compensation under Section 2.12, or if the Company is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)Replacement of Lenders. If (i) any Lender requests compensation under Section 2.12, (ii) the Company is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to Section 2.14 or (iii) any Lender becomes a Defaulting Lender, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse, all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) such assignment shall be effected in accordance with and subject to the restrictions contained in Section 9.04 and such assignee (if not a Lender) shall have been approved by the Administrative Agent (which approval shall not unreasonably be withheld, conditioned or delayed), (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans owing to it, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts), (C) with respect to an assignment as a result of clause (iii) above, the assignment fee shall be paid to the Administrative Agent by the Company and (D) in the case of any such assignment resulting from a claim for compensation under Section 2.12 or payments required to be made pursuant to Section 2.14, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.

SECTION 2.17.[Reserved].

SECTION 2.18.Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)such Defaulting Lender shall not be entitled to receive any commitment fee pursuant to Section 2.09(a) for any period during which it is a Defaulting Lender (and the Company shall not be required to pay any such fee that would otherwise have been required to have been paid to such Defaulting Lender); and

(b)the Commitments and Credit Exposures of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); except that (i) the Commitments of any Defaulting Lender may not be increased or extended without the consent of such Lender and (ii) any waiver, amendment or other modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Lenders that:

SECTION 3.01.Organization; Powers.

Each of the Company and its Designated Subsidiaries (a) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization, (b) has all requisite power and authority to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c) above, to the extent that failure to do so would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.02.Authorization; Enforceability.

The execution, delivery and performance by the Company of each Loan Document to which it is a party have been duly authorized by all necessary corporate or other organizational action. Each Loan Document to which the Company is a party has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03.Governmental Authorizations.

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Company of this Agreement or any other Loan Document, except (i) such as have been obtained or made and are in full force and effect and (ii) to the extent that failure to obtain such approval, consent, exemption or authorization, to take such other action, or to make such notice or filing would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.04.No Contravention.

The execution, delivery and performance by the Company of each Loan Document to which the Company is a party do not and will not (a) contravene the terms of any of the Company’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which the Company is a party or affecting the Company or the properties of the Company or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Company or its property is subject; or (c) violate any Law, except, in the case of clauses (b) and (c) above, to the extent such violations or defaults, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.05.Financial Statements; No Material Adverse Effect.

(a)Financial Statements. The Company has heretofore furnished to the Lenders in the Draft Registration Statement its consolidated balance sheet and statements of income, equity and cash flows (i) as of and for the fiscal year ended December 31, 2020, reported on by PricewaterhouseCoopers LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended September 30, 2021 certified by the Company’s chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)No Material Adverse Effect. Since December 31, 2020, there has been no event, development or circumstance that has had or would reasonably be expected to result in a Material Adverse Effect except for Disclosed Matters.

SECTION 3.06.Litigation and Environmental Matters.

(a)Actions, Suits and Proceedings. Except for Disclosed Matters and Disclosed Tax Matters, there are no actions, suits, proceedings, claims, disputes or investigations pending or, to the knowledge of the Company, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Company or any of its Designated Subsidiaries or against any of their properties or revenues that (i) either individually or in the aggregate, if determined adversely, would reasonably be expected to result in a Material Adverse Effect or (ii) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or thereby.

(b)Environmental Matters. Except with respect to any other matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, neither the Company nor any of its Designated Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any claim with respect to any Environmental Liability or (iv) knows of any conditions or circumstances that would reasonably be expected to result in any Environmental Liability.

(c)Change in Disclosed Matters. Since the date of the Draft Registration Statement, there has been no change in the status of Disclosed Matters and since the date of the Draft Registration Statement, there has been no change in Disclosed Tax Matters that, individually or in the aggregate, has resulted in, or would reasonably be expected to result in, a Material Adverse Effect.

SECTION 3.07.Compliance with Laws.

Each of the Company and its Designated Subsidiaries is in compliance with all Laws (including applicable Anti-Corruption Laws, applicable Sanctions and any Environmental Laws) and orders of any Governmental Authority applicable to it or its property, except (i) where the necessity of compliance therewith is contested in good faith by appropriate proceedings or (ii) where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08.No Default.

Neither the Company nor any of its Designated Subsidiaries is in default under or with respect to any Contractual Obligation that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

SECTION 3.09.Investment Company Status.

The Company is not and, after application of the proceeds of the Loans, will not be an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.10.Taxes.

Except for Disclosed Tax Matters, each of the Company and its Designated Subsidiaries has timely filed or caused to be filed all Federal income tax returns and all other material tax returns and reports required to have been filed and has paid or caused to be paid all taxes required to have been paid by it, except (a) taxes for which such Person has set aside on its books adequate reserves with respect thereto in accordance with GAAP or SAP, as applicable, or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.11.ERISA.

(a)Each of the Company and its ERISA Affiliates is in compliance with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder as they relate to each Plan, except to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, would reasonably be expected to result in a Material Adverse Effect. The present value of all benefit liabilities of all underfunded Plans (determined based on the projected benefit obligation with respect to such underfunded Plans based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation dates applicable thereto, exceed the fair market value of the assets of all such underfunded Plans by an amount that would reasonably be expected to result in a Material Adverse Effect if any such Plan were voluntarily terminated.

(b)Each Foreign Pension Plan is in compliance with all requirements of Law applicable thereto and the respective requirements of the governing documents for such plan, except to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect. With respect to each Foreign Pension Plan, none of the Company, its Affiliates or any of their respective directors, officers, employees or agents has engaged in a transaction that would subject the Company or any Subsidiary, directly or indirectly, to a tax or civil penalty that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. The aggregate unfunded liabilities with respect to such Foreign Pension Plans would not reasonably be expected to result in a Material Adverse Effect. The present value of the aggregate accumulated benefit liabilities of all such Foreign Pension Plans (based on those assumptions used to fund each such Foreign Pension Plan) did not, as of the last annual valuation date applicable thereto, exceed the fair market value of the assets held in trust under all such Foreign Pension Plans by an amount that would reasonably be expected to result in a Material Adverse Effect if any such Plan were voluntarily terminated.

SECTION 3.12.Disclosure.

None of the reports, financial statements, certificates or other written information furnished by or on behalf of the Company to the Administrative Agent or any Lender in connection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading as of the date made; provided that, with respect to projected or pro forma financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time furnished (it being understood that such projections and forecasts are subject to uncertainties and contingencies and no assurances can be given that such projections or forecasts will be realized).

SECTION 3.13.Margin Regulations.

The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any Loan hereunder will be used to buy or carry any Margin Stock. Following the application of the proceeds of each Borrowing, not more than 25% of the value of the assets of the Company shall consist of Margin Stock.

SECTION 3.14.Anti-Corruption Laws and Sanctions.

The Company has implemented and maintains in effect policies and procedures designed to ensure compliance in all material respects by the Company, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions. None of (a) the Company, any Subsidiary, any of their respective directors or officers or, to the knowledge of the Company or such Subsidiary, any of their employees, or (b) to the knowledge of the Company or such Subsidiary, any agent of the Company or any Subsidiary that will act in any capacity in connection with the credit facility established hereby, is a Sanctioned Person.

ARTICLE IV

CONDITIONS

SECTION 4.01.Closing Date.

The obligations of the Lenders to make Loans hereunder shall not become effective until the date (the “Closing Date”) on which each of the following conditions shall be satisfied to the reasonable satisfaction of the Administrative Agent (or waived in accordance with Section 9.02):

(a)Executed Counterparts of this Agreement. The Administrative Agent shall have received from each of the Company, the Lenders (including any Person that shall become a Lender hereunder as of the Closing Date) and the Administrative Agent a counterpart of this Agreement signed on behalf of such party (or written evidence reasonably satisfactory to the Administrative Agent, which may include telecopy or electronic transmission of a signed signature page to this Agreement, that such party has signed a counterpart of this Agreement).

(b)Corporate Documents; Incumbency Certificates. The Administrative Agent shall have received such documents and certificates as the Administrative Agent may reasonably request relating to the organization, existence and good standing of the Company, the authorization of the Transactions and any other legal matters relating to the Company, the Loan Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent.

(c)Officer’s Certificate. Each of the conditions set forth in paragraphs (a) and (b) of Section 4.02 (but without regard to the second parenthetical clause set forth in Section 4.02(a)) shall be satisfied as of the Closing Date, and the Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Responsible Officer, confirming compliance with such conditions.

(d)Opinion of Counsel to Company. The Administrative Agent shall have received one or more customary written opinions (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of counsel to the Company (which may include the general counsel or other internal counsel of the Company), in form and substance reasonably satisfactory to the Administrative Agent (and the Company hereby instructs such counsel to deliver such opinion(s)).

(e)Draft Registration Statement. The Administrative Agent shall have received the Draft Registration Statement and any amendments thereto submitted to the SEC prior to the Closing Date.

(f)Fees and Expenses. The Company shall have paid to the Administrative Agent for the account of the respective person or persons entitled thereto all such fees and expenses as it shall have agreed in writing to pay to the Agents, the Lenders and the Joint Lead Arrangers in connection herewith (including the reasonable fees and expenses of Cleary Gottlieb Steen & Hamilton LLP, special New York counsel to the Administrative Agent) that are due and payable on or prior to the Closing Date (and, with respect to such expenses, for which invoices have been presented to the Company at least two Business Days prior to the Closing Date).

(g)Other Documents. The Administrative Agent shall have received such other documents as are customary for transactions of this type as the Administrative Agent may reasonably request.

The Administrative Agent shall notify the Company and the Lenders of the Closing Date, and such notice shall be conclusive and binding.

SECTION 4.02.Each Credit Event.

The obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions (in addition to the concurrent or prior satisfaction of the conditions under Section 4.01 on the Closing Date):

(a)(i) with respect to any Borrowing on or prior to the IPO Effective Date, the representations and warranties of the Company set forth in this Agreement and the other Loan Documents or (ii) with respect to any Borrowing following the IPO Effective Date, the representations and warranties of the Company set forth in this Agreement and the other Loan Documents, other than those representations and warranties contained in Section 3.05(b) (but only as to clause (a) of the definition of “Material Adverse Effect”) and Section 3.06(a) and (c) (but solely to the extent such matters affecting the truth and accuracy of such representation and warranty has been disclosed to the Administrative Agent), in each case under clauses (i) and (ii) of this Section 4.02(a), shall be true and correct in all material respects (or, in the case of any such representations and warranties qualified by materiality, in all respects) on and as of the date of such Borrowing (or if any such representation or warranty is expressly stated to have been made as of a specified date, as of such specified date);

(b)at the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be continuing; and

(c)the IPO Effective Date shall have occurred or the Company shall have confirmed to the Administrative Agent in writing that the IPO Effective Date is expected to occur within five (5) Business Days following such Borrowing (which period may be extended to up to ten (10) Business Days following such Borrowing with the consent of the Administrative Agent or a longer period as agreed by each of the Joint Lead Arrangers).

Each Borrowing shall be deemed to constitute a representation and warranty by the Company on the date thereof as to the matters specified in clauses (a), (b) and (c) of the preceding sentence.

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Company covenants and agrees with the Lenders that:

SECTION 5.01.Financial Statements and Other Information.

The Company will furnish to the Administrative Agent (which shall promptly provide to each Lender):

(a)within 90 days after the end of each fiscal year of the Company, the audited consolidated balance sheets and related audited consolidated statements of operations, stockholders’ equity and cash flows of the Company and its Subsidiaries, in each case as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing in an audit report to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP;

(b)within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, the unaudited consolidated balance sheets and related unaudited statements of operations, stockholders’ equity and cash flows of the Company and its Subsidiaries, in each case as of the end of and for such fiscal quarter, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous fiscal year, in each case certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes;

(c)(I) concurrently with any delivery of financial statements under paragraph (a) or (b) above, a certificate of a Financial Officer in form reasonably satisfactory to the Administrative Agent (i) certifying that no Default has occurred or, if such a Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (ii) setting forth computations in reasonable detail demonstrating compliance with the covenants contained in Section 6.04 and (II) concurrently with any delivery of financial statements under paragraph (a) above, a certificate of a Financial Officer in form reasonably satisfactory to the Administrative Agent specifying any changes to the list of Designated Subsidiaries as of the last day of the fiscal period to which such financial statements relate;

(d)promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or any U.S. national securities exchange, or distributed to its shareholders generally, as the case may be;

(e)promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Designated Subsidiary (including information required to comply with “know your customer” or similar identification requirements of any Lender), or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request; and

(f)promptly, any amendments to the Draft Registration Statement submitted by the Company to the SEC.

Documents required to be delivered pursuant to Section 5.01(a), (b) or (d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically by posting on an Internet website, and, if so delivered, shall be deemed to have been furnished by the Company to the Administrative Agent (and by the Administrative Agent to the Lenders) on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) or (ii) on which such documents are posted on the Company’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access without charge (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (A) the Company shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to the Company to deliver such paper copies and (B) the Company shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents delivered pursuant to Section 5.01(a) or (b). The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

SECTION 5.02.Notices of Material Events.

The Company will furnish to the Administrative Agent (which shall promptly provide to each Lender) the following, in each case, following the Company’s knowledge thereof:

(a)prompt written notice of any occurrence of any Default;

(b)prompt written notice of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect; or

(c)within 5 days of any such change or notice, written notice of any change in the Company’s Index Debt Ratings from S&P and Moody’s, or any notice from either such agency indicating its cessation of, or its intent to cease, rating the Company’s debt.

Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer setting forth the details of the event or development requiring such notice and, in the case of clause (a) or (b), any action taken or proposed to be taken with respect thereto.

SECTION 5.03.Existence; Conduct of Business.

The Company will do or cause to be done all things necessary to preserve, renew and keep in full force and effect (a) its legal existence and (b) the rights, licenses, permits, privileges and franchises material to the conduct of its business, other than, in the case of clause (b), the loss of which would not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.04.Payment of Taxes.

The Company will, and will cause each of its Designated Subsidiaries to, pay, before the same shall become delinquent or in default, its Tax liabilities, that, if not paid, would reasonably be expected to result in a Material Adverse Effect, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company or such Designated Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or SAP, as applicable, or (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect; provided that, for avoidance of doubt an obligation shall be considered to be delinquent or in default for purposes of this Section only if there has first been a notice and demand therefor (as defined in Section 6303 of the Code and similar provisions of Law) by a tax authority.

SECTION 5.05.Maintenance of Properties.

The Company will, and will cause each of its Designated Subsidiaries to, keep and maintain all property material to the conduct of its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and renewals and replacements thereof, except, in each case, to the extent that failure to do so would not be reasonably expected to result in a Material Adverse Effect.

SECTION 5.06.Books and Records.

The Company will, and will cause each of its Designated Subsidiaries to, maintain proper books of record and account, in which full, true and correct entries in all material respects in conformity with GAAP (or applicable local standards) or SAP, as applicable, consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company or such Designated Subsidiary, as the case may be.

SECTION 5.07.Inspection Rights.

The Company will, and will cause each of its Designated Subsidiaries to, permit any representatives designated by any Agent and/or any Joint Lead Arranger and (at any time a Default exists) any representatives reasonably designated by any Lender, upon reasonable prior notice and at reasonable times during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and other records reasonably requested (other than information subject to confidentiality restrictions, insurance records and customer-related information), and to discuss its affairs, finances and condition with its officers and independent accountants; provided that such inspections shall be limited to once per fiscal year of the Company, unless an Event of Default shall have occurred and be continuing. The Company shall pay the reasonable costs and expenses of any such visit or inspection, but only if a Default exists at the time thereof or is discovered as a result thereof (provided that the Company shall have no responsibility for any such costs and expenses under any other circumstance).

SECTION 5.08.Compliance with Laws.

The Company will, and will cause each of its Designated Subsidiaries to, comply with all Laws and orders of any Governmental Authority applicable to it or its property (including applicable Anti-Corruption Laws, applicable Sanctions and Environmental Laws), and in connection therewith, the Company will maintain in effect and enforce policies and procedures designed to ensure compliance in all material respects by the Company, its Designated Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions, except in each case where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.09.Insurance.

The Company will, and will cause each of its Designated Subsidiaries to, maintain with financially sound and reputable insurance companies insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons, all as determined in good faith by the Company.

SECTION 5.10.Use of Proceeds.

The proceeds of the Loans will be used for general corporate purposes of the Company and its Subsidiaries not in contravention of any Law or any Loan Document, which may include repayment of loans from RemainCo.

ARTICLE VI

NEGATIVE COVENANTS

SECTION 6.01.Liens.

The Company will not create, incur, assume or permit to exist any Lien on (i) any property or asset now owned or hereafter acquired by it or (ii) any Equity Interests of any of the Company’s Designated Subsidiaries, except in each case:

(a)Liens on any property or assets of the Company existing on the Closing Date;

(b)Liens on any property or assets of any Person existing at the time such Person is merged or consolidated with or into the Company, and not created in contemplation of such event;

(c)any Lien existing on any property or assets prior to the acquisition thereof by the Company; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition, (ii) such Lien does not apply to any other property or assets of the Company (other than improvements, accessions, proceeds or distributions in respect of the acquired property or assets) and (iii) such Lien secures only those obligations that it secures on the date of such acquisition;

(d)Liens on any property or assets acquired, constructed or improved by the Company; provided that (i) such Liens and the Indebtedness (including Capital Lease Obligations) secured thereby are incurred prior to or within 360 days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such property or assets and (iii) such Liens shall not apply to any other property or assets of the Company (provided that individual financings provided by one lender may be cross-collateralized to other financings provided by such lender (and its Affiliates));

(e)Permitted Encumbrances;

(f)judgment Liens securing judgments not constituting an Event of Default under Article VII;

(g)Liens arising in connection with Swap Contracts not entered into for speculative purposes;

(h)Liens on securities owned by the Company which are pledged to any Federal Home Loan Bank or other government sponsored entity to secure advances and extensions of credit made to the Company in the ordinary course of business by any Federal Home Loan Bank or by any other government sponsored entity in connection with programs that are generally available to similarly situated companies in the insurance or financial services industry;

(i)Liens arising out of deposits of cash or securities into collateral trusts or reinsurance trusts with ceding companies, insurance regulators or as otherwise incurred in the ordinary course of business of the Company;

(j)Liens on any real property and personal property relating thereto securing Limited Recourse Real Estate Indebtedness of the Company;

(k)Liens not otherwise permitted by this Section arising in the ordinary course of the business of the Company that do not secure any Indebtedness;

(l)Liens arising out of Securities Transactions entered into in the ordinary course of business;

(m)Liens on, or sales or transfers of, securitized assets (including notes, bonds and other securities or accounts receivable) in connection with securitizations of such assets; provided that no such Lien shall extend to or cover any property or assets other than the assets subject to such securitization (including the proceeds of the foregoing), related rights under the securitization documents and any other assets that are customarily pledged in connection with such securitization;

(n)Liens securing obligations in respect of letters of credit issued on behalf of any Insurance Subsidiary for insurance regulatory or reinsurance purposes;

(o)Liens securing obligations in connection with ordinary course operation of the affordable housing business of the Company and its Subsidiaries;

(p)[reserved];

(q)[reserved];

(r)Liens incurred pursuant to the Loan Documents;

(s)Liens securing Operating Indebtedness;

(t)Liens on any assets as security required by applicable Law as a condition to the transaction of any business;

(u)Liens securing Indebtedness not otherwise permitted by this Section; provided that the aggregate principal amount of the Indebtedness secured by such Liens shall not exceed the greater of (i) $1,500,000,000 and (ii) 5% of Consolidated Net Worth at any one time outstanding; and

(v)any extension, renewal or replacement of the foregoing; provided that the Liens permitted hereunder shall not be expanded to cover any additional Indebtedness or assets (other than a substitution of like assets and improvements, accessions, proceeds or distributions in respect of such assets) unless such additional Indebtedness or assets would have been permitted in connection with the original creation, incurrence or assumption of such Lien.

SECTION 6.02.Fundamental Changes.

The Company will not merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that the Company may merge into or consolidate with any other Person, or any Person may merge into or consolidate with the Company, so long as (i) the Company is the surviving person in such transaction and (ii) before and after giving effect to such merger or consolidation, no Default has occurred and is continuing.

SECTION 6.03.Lines of Business.

The Company will not, nor will it cause or permit any of its Designated Subsidiaries to, engage to any material extent in any business other than the businesses of the type conducted by the Company and its Designated Subsidiaries on the date hereof or to be conducted following the IPO as described in the Draft Registration Statement and business activities reasonably related, incidental or complementary thereto (including any new insurance and reinsurance businesses by any Insurance Subsidiary).

SECTION 6.04.Financial Covenants.

(a)Consolidated Net Worth. The Company will not permit Consolidated Net Worth, as of the last day of any fiscal quarter, to be less than $11.73 billion.

(b)Consolidated Total Debt to Consolidated Total Capitalization. The Company will not permit Consolidated Total Debt as of the last day of any fiscal quarter to exceed 40% of Consolidated Total Capitalization as of the last day of such fiscal quarter.

SECTION 6.05.Use of Proceeds in Compliance with Sanctions Laws.

The Company will not request any Borrowing, and the Company shall not, and shall procure that its Subsidiaries and its or their respective directors, officers and employees shall not, use or otherwise make available, directly or indirectly, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the funding, financing or facilitating of any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

ARTICLE VII

EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur:

(a)the Company shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration or otherwise;

(b)the Company shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) due under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five or more Business Days;

(c)any representation or warranty made or deemed made by or on behalf of the Company in or in connection with any Loan Document or any amendment or modification thereof, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Loan Document or any amendment or modification hereof or thereof, shall prove to have been incorrect in any material respect when made, deemed made or furnished;

(d)(i) the Company shall fail to observe or perform any covenant, condition or agreement contained in Sections 5.03 (solely with respect to the existence of the Company) and 5.10 and in Article VI; (ii) the Company shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a) or (b) and such failure shall continue unremedied for a period of five or more Business Days; or (iii) the Company shall fail to observe or perform any covenant, condition or agreement contained in Section 5.07 and such failure shall continue unremedied for a period of five or more Business Days after notice thereof from the Administrative Agent to the Company (given at the request of any Lender);

(e)The Company shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article) and such failure shall continue unremedied for a period of 30 or more days after written notice thereof from the Administrative Agent to the Company;

(f)(i) the Company or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness (other than Indebtedness owed to the Company by any of its Subsidiaries), when and as the same shall become due and payable (beyond any applicable grace period expressly set forth in the governing documents or if the governing documents do not contain a grace period, two days after the Company or such Subsidiary is given written notice of such failure); or (ii) any event or condition occurs that results in any Material Indebtedness (other than Indebtedness owed to the Company by any of its Subsidiaries) becoming due prior to its scheduled maturity; provided that this subclause (ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(g)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any Designated Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Designated Subsidiary or for a substantial part of the assets of the Company or any Designated Subsidiary, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered;

(h)the Company or any Designated Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Designated Subsidiary or for a substantial part of the assets of the Company or any Designated Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;

(i)one or more judgments shall be rendered against the Company and/or its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company or any Subsidiary to enforce any such judgment, and such judgment and/or judgments either is or are, as applicable, for (i) the payment of money in an aggregate amount in excess of $375,000,000 (or its equivalent in any other currency) or (ii) injunctive relief and would reasonably be expected to result in a Material Adverse Effect;

(j)an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect; or

(i)there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to the Company described in clause (g) or (h) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Company, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately; and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Company accrued hereunder, shall become due and payable immediately, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, anything contained herein to the contrary notwithstanding; and in case of any event with respect to the Company described in clause (g) or (h) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Company accrued hereunder, shall automatically become due and payable, in each case, without further act of the Administrative Agent or any Lender and without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, anything contained herein to the contrary notwithstanding.

ARTICLE VIII

AGENTS

SECTION 8.01.Administrative Agent.

(a)Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

(b)Any Person serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not such Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with, the Company or any Subsidiary or other Affiliate thereof as if it were not such Agent hereunder.

(c)No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (i) no Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (ii) no Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise in writing by the Required Lenders and (iii) except as expressly set forth herein and in the other Loan Documents, no Agent shall have any duty to disclose, or be liable for the failure to disclose, any information relating to the Company or any of its Subsidiaries that is communicated to or obtained by the Person serving as such Agent or any of its Affiliates in any capacity. No Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent by the Company or a Lender, and no Agent shall be responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (2) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, (4) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (5) the satisfaction of any condition set forth in Article IV or elsewhere herein or therein, other than (in the case of the Administrative Agent) to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(d)Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(e)Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by such Agent. Each Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent.

(f)Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Company. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor Administrative Agent. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank, in each case with a combined capital and surplus of at least $500,000,000. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

(g)Each Lender acknowledges that it has, independently and without reliance upon any Agent, any arranger of this credit facility or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent, any arranger of this credit facility or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(h)In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Company) shall be entitled and empowered, by intervention in such proceeding or otherwise: (i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Agents and their respective agents and counsel and all other amounts due the Lenders and the Agents under Sections 2.04 and 9.03) allowed in such judicial proceeding; and (ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Agent to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Agents, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Agents under Sections 2.04 and 9.03. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any other Agent any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any other Agent or to authorize the Administrative Agent to vote in respect of the claim of any Lender or any other Agent in any such proceeding.

(i)Notwithstanding anything to the contrary contained herein, the Joint Lead Arrangers and the Syndication Agents named on the cover page of this Agreement shall not have any duties or liabilities under this Agreement (except in their capacity, if any, as Lenders).

(j)(i) Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 8.01(j) shall be conclusive, absent manifest error.

(ii)Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(iii)The Company hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Company.

(iv)Each party’s obligations under this Section 8.01(j) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.

SECTION 8.02.Certain ERISA Matters.

(a)Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Company, that at least one of the following is and will be true:

(i)such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement,

(ii)the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,

(iii)(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or

(iv)such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Company, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

ARTICLE IX

MISCELLANEOUS

SECTION 9.01.Notices.

(a)Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) of this Section), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, to the applicable address or telecopier number for the applicable Person in Schedule 9.01. Notices pursuant to this paragraph (a) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopy shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through Approved Electronic Platforms, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b)Electronic Communications. Notices and other communications to the Company and the Lenders hereunder may be delivered or furnished by Approved Electronic Platforms, in each case, pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c)Change of Address, Etc. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02.Waivers; Amendments.

(a)No Deemed Waivers; Remedies Cumulative. No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Company therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)Amendments. Subject to Section 2.11(b) and (c), neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Company and the Required Lenders or by the Company and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall:

(i)increase any Commitment of any Lender without the written consent of such Lender;

(ii)reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly and adversely affected thereby (provided that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Company to pay interest at the Default Rate);

(iii)postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly and adversely affected thereby;

(iv)change Section 2.06(c) or 2.15(b) or (c) in a manner that would alter the ratable reduction of Commitments or the pro rata sharing of payments required thereby, without the written consent of each Lender; or

(v)change any of the provisions of this Section or the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

and provided further that no such agreement shall (A) amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder or amend, modify or waive any provision of Section 2.18 without the prior written consent of the Administrative Agent or (B) amend, modify or otherwise affect the rights or duties of any other Agent hereunder without the prior written consent of such other Agent.

SECTION 9.03.Expenses; Limitation of Liability; Indemnity, Etc.

(a)Costs and Expenses. The Company agrees to pay or reimburse (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Joint Lead Arrangers and their respective Affiliates, including the reasonable fees, charges and disbursements of one firm of outside counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated); and (ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent and/or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including in connection with any workout, restructuring or negotiations in respect of such Loans. This Section shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(b)Limitation of Liability. To the extent permitted by applicable law (i) the Company shall not assert, and the Company hereby waives, any claim against the Administrative Agent, any Joint Lead Arranger, any Syndication Agent, and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a “Lender-Related Person”) for any Liabilities arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet) except in the case of this clause (i) to the extent such Liabilities are found by a final, non-appealable judgment of a court of competent jurisdiction to arise from the gross negligence, bad faith or willful misconduct of such Lender-Related Person or its Related Parties and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof; provided that, nothing in this Section 9.03(b) shall relieve the Company of any obligation it may have to indemnify an Indemnitee, as provided in Section 9.03(c), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

(c)Indemnification by Company. The Company agrees to indemnify the Administrative Agent, each Joint Lead Arranger and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all Liabilities and related expenses (including without limitation, the reasonable and documented out-of-pocket fees, disbursements and other charges of a single primary counsel for the Indemnitees and, if reasonably necessary, a single local counsel in each relevant material jurisdiction, unless there exists a perceived or actual conflict of interest among Indemnitees (as reasonably determined by such Indemnitee), in which case such expenses shall include the reasonable and documented out-of-pocket fees and disbursements of one additional counsel in each relevant material jurisdiction and, if reasonably necessary, of one regulatory counsel, to each group of similarly affected Indemnitees) incurred by any Indemnitee or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use or intended use of the proceeds therefrom, (iii) the enforcement of this Agreement, (iv) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, or (v) any actual or prospective Proceeding relating to any of the foregoing, whether or not such Proceeding is brought by the Company or its equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) result from a claim not involving an act or omission of the Company and that is brought against by an Indemnitee against another Indemnitee (other than against the Administrative Agent, the Syndication Agent, or any Joint Lead Arranger in their capacities as such). This Section 9.03(c) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

(d)Reimbursement by Lenders. To the extent that the Company fails to pay any amount required to be paid by it to the Administrative Agent or any of its Related Parties (each, an “Agent-Related Person”) under paragraph (a), (b) or (c) of this Section, each Lender severally agrees to pay to such Agent-Related Person such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or Liability or related expense, as the case may be, was incurred by or asserted against such Agent-Related Person in its capacity as such.

(e)Payments. All amounts due under this Section 9.03 shall be payable not later than ten Business Days after demand therefor.

(f)Survival. The agreements in this Section 9.03 shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations.

SECTION 9.04.Successors and Assigns.

(a)Assignments Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Company without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties each of the Administrative Agent, the Lenders and the Joint Lead Arrangers) any legal or equitable right, remedy or claim under or by reason of this Agreement or the other Loan Documents.

(b)Assignments by Lenders. (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (each such consent not to be unreasonably withheld or delayed) of:

(A)the Company; provided that no consent of the Company shall be required for an assignment (I) to a Lender, an Affiliate of a Lender or an Approved Fund, (II) to any Specified Permitted Lender or (III) if an Event of Default has occurred and is continuing, any other assignee; and provided, further, that the Company shall be deemed to have consented to any such assignment requiring its consent under this clause (A) unless it shall object thereto by written notice to the Administrative Agent within 15 Business Days after having received written notice thereof; and

(B)the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund.

(ii)Assignments shall be subject to the following conditions:

(A)except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s applicable Commitment, the amount of such Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Company (except if an Event of Default has occurred and is continuing) and the Administrative Agent otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed);

(B)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(C)the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500;

(D)the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Company and its Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable Laws, including Federal and state securities Laws; and

(E)no such assignment shall be made to (I) the Company or any of the Company’s Affiliates or Subsidiaries, (II) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this subclause (II), or (III) a natural person or a corporation, limited liability company, trust or other entity owned, operated or established for the primary benefit of a natural person and/or family members or relatives of such person.

(iii)Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.12, 2.13, 2.14 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv)Maintenance of Register by Administrative Agent. The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Company, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and the principal amount (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Company, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)Effectiveness of Assignments. Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(b), 2.15(e) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)Participations. Any Lender may, without the consent of the Company or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged; (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the Company, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Company agrees that each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) shall be subject to the requirements and limitations therein, including the requirements under Section 2.14(f) (it being understood that the documentation required under Section 2.14(f) shall be delivered to the participating Lender); (B) agrees to be subject to the provisions of Sections 2.15 and 2.16 as if it were an assignee under paragraph (b) of this Section; and (C) shall not be entitled to receive any greater payment under Section 2.12 or 2.14, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.15(d) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitment, Loan, promissory note or other obligations under any Loan Document) except if additional payments under Sections 2.12 and 2.14 are requested with respect to such Participant and except to the extent that such disclosure is necessary to establish that such Commitment, Loan, promissory note or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or to the extent required to establish an exemption or withholding under FATCA. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(d)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank or other central bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

SECTION 9.05.Survival.

All representations and warranties made by the Company herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement, the making by the Lenders of any Loans, regardless of any investigation made by or on behalf of any Lender and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Commitments have not expired or been terminated. The provisions of Sections 2.12, 2.13, 2.14 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, any assignment of rights by, or replacement of, a Lender, the expiration or termination of the Commitments, the repayment, satisfaction or discharge of all Obligations under the Loan Documents, the invalidity or unenforceability of any term or provision of any Loan Document or any investigation made by or on behalf of any Lender.

SECTION 9.06.Counterparts; Integration; Effectiveness.

(a)This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof (except for any provisions in the Commitment Letter, including without limitation any syndication provisions and the “Clear Market Undertakings” (as defined in the Commitment Letter) that expressly survive pursuant to and to the extent provided by the terms of the Commitment Letter). Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (1) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Company without further verification thereof and without any obligation to review the appearance or form of any such Electronic signature and (2) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Company hereby (a) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, and the Company, Electronic Signatures transmitted by telecopy, emailed pdf or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (b) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (c) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (d) waives any claim against any Lender-Related Person for any Liabilities arising solely from the Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of the Company to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

SECTION 9.07.Severability.

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 9.08.Payments Set Aside.

To the extent that any payment by or on behalf of the Company is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Federal, state or foreign bankruptcy, insolvency, receivership or similar Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

SECTION 9.09.Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender and its Affiliates are authorized at any time and from time to time, to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender and its Affiliates to or for the credit or the account of the Company against any and all of the obligations of the Company hereunder and under the other Loan Documents, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender agrees to notify the Company and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 9.10.Governing Law; Jurisdiction; Consent to Service of Process.

(a)Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)Submission to Jurisdiction. The Company hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court for the Southern District of New York sitting in the Borough of Manhattan (or if such court lacks subject matter jurisdiction, the Supreme Court of the State of New York sitting in the Borough of Manhattan), and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, any other Loan Document or the transactions relating hereto and thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such Federal (to the extent permitted by Law) or New York State Court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Company or its properties in the courts of any jurisdiction.

(c)Waiver of Venue. The Company hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)Service of Process. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

SECTION 9.11.WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.12.Headings.

Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.13.Confidentiality.

Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this paragraph, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Company and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (1) any rating agency in connection with rating the Company or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein, (h) with the consent of the Company or (i) to the extent such Information (1) becomes publicly available other than as a result of a breach of this paragraph or (2) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Company. In the event that the Administrative Agent or any Lender becomes legally compelled to disclose any confidential Information pursuant to clause (c) of this Section, the Administrative Agent or such Lender shall, to the extent permitted by Law, give prompt written notice of that fact to the Company prior to the disclosure, and in the event that the Company shall advise the Administrative Agent or such Lender that it will seek an appropriate remedy to prevent or limit such disclosure, the Administrative Agent or such Lender, as applicable, shall cooperate reasonably (at the expense of the Company) with the Company in seeking such remedy. For the purposes of this Section, “Information” means all information received from the Company relating to the Company, its Subsidiaries or their business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Company and other than information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that, in the case of written information received from the Company after the date hereof, such information is clearly identified at or prior to the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE COMPANY OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE COMPANY AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 9.14.USA PATRIOT Act.

Each Lender hereby notifies the Company that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), such Lender may be required to obtain, verify and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow such Lender to identify the Company in accordance with said Act.

SECTION 9.15.No Advisory or Fiduciary Relationships.

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Company acknowledges and agrees that: (a) (i) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Lenders and the Joint Lead Arrangers are arm’s-length commercial transactions between the Company and its Affiliates, on the one hand, and the Administrative Agent, the Lenders and the Joint Lead Arrangers, on the other hand, (ii) the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Company is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) the Administrative Agent, the Lenders and the Joint Lead Arrangers each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Company or any of its Affiliates, or any other Person and (ii) none of the Administrative Agent, the Lenders and the Joint Lead Arrangers has any obligation to the Company or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) the Administrative Agent, the Lenders and the Joint Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and its Affiliates, and none of the Administrative Agent, the Lenders and Joint Lead Arrangers has any obligation to disclose any of such interests to the Company or its Affiliates. To the fullest extent permitted by Law, the Company hereby waives and releases any claims that it may have against the Administrative Agent, the Lenders and the Joint Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.16.[Reserved].

SECTION 9.17.Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

	SAFG RETIREMENT SERVICES, INC.


	By	/s/ Justin Caulfield
		Name: Justin Caulfield
		Title: Vice President and Treasurer

[Signature Page to 18-Month DDTL Agreement]

	LENDERS


	JPMORGAN CHASE BANK, N.A.,
	individually and as Administrative Agent

	By	/s/ Sarah Tarantino
		Name: Sarah Tarantino
		Title: Vice President

[Signature Page to 18-Month DDTL Agreement]

	BANK OF AMERICA, N.A.,


	By	/s/ Chris Choi
		Name: Chris Choi
		Title: Managing Director

[Signature Page to 18-Month DDTL Agreement]

	CITIBANK, N.A.


	By	/s/ Maureen P. Maroney
		Name: Maureen P. Maroney
		Title: Vice President


	CITICORP NORTH AMERICA, INC.


	By	/s/ Maureen P. Maroney
		Name: Maureen P. Maroney
		Title: Vice President

[Signature Page to 18-Month DDTL Agreement]

	MORGAN STANLEY SENIOR FUNDING, INC.


	By	/s/ Mrinalini MacDonough
		Name: Mrinalini MacDonough
		Title: Authorized Signatory

[Signature Page to 18-Month DDTL Agreement]

	GOLDMAN SACHS BANK USA


	By	/s/ Robert Ehudin
		Name: Robert Ehudin
		Title: Authorized Signatory

[Signature Page to 18-Month DDTL Agreement]

SCHEDULE 2.01

Commitments

INTENTIONALLY OMITTED

SCHEDULE 9.01

Notice Information

I. Company:

SAFG Retirement Services, Inc.
1271 Avenue of the Americas, Floor 11
New York, New York 10022-1304
Attention: Justin Caulfield, Treasurer
Fax No.: 888-223-2971
Telephone No.: 212-770-2867
with a copy to: Jeffrey Lanning

with a copy (which shall not constitute notice) to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention: Ari Blaut
Fax No.: 212-291-9219
Telephone No.: 212-558-1656

II. Administrative Agent:

JPMorgan Chase Bank, N.A.
383 Madison Ave.
New York, NY 10179
Attention: Christopher Draper, Andrew Weyant
Email: christopher.draper@chase.com; andrew.weyant@chase.com
Telephone No.: 302-542-6266; 302-552-0714

With a copy (which shall not constitute notice) to:

Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York NY 10006
Attention: Amy R. Shapiro, Duane McLaughlin
Email: ashapiro@cgsh.com; dmclaughlin@cgsh.com
Telephone No.: 212-225-2076; 212-225-2106

III. Lenders

Initially, as provided in the relevant Lender’s Administrative Questionnaire

EXHIBIT A

[FORM OF ASSIGNMENT AND ASSUMPTION]

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.


1.	Assignor:


2.	Assignee:
		[and is an [Affiliate][Approved Fund] of [identify Lender]]¹

3.	Company:	SAFG Retirement Services, Inc., as borrower

4.	Administrative Agent:	JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement

¹	Select as applicable.

5.	Credit Agreement:	The Term Loan Agreement dated as of February 25, 2022 among SAFG Retirement Services, Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

6.	Assigned Interest:

Assignor	Assignee	Aggregate Amount of Commitment/ Loans/ for all Lenders	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/ Loans
●	●	$	$	%
●	●	$	$	%
●	●	$	$	%

Effective Date: _________, 202_ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	ASSIGNOR

	[NAME OF ASSIGNOR]


	By:
		Title:
	ASSIGNEE

	[NAME OF ASSIGNEE]


	By:
		Title:

[Consented to and]² Accepted:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By
	Title:


[Consented to:]³

SAFG RETIREMENT SERVICES, INC.

By
	Title:

²	To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

³	To be added only if the consent of the Company is required by the terms of the Credit Agreement.

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.Representations and Warranties.

1.1Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements, if any, under the Credit Agreement including Section 9.04(b) thereof (subject to such consents, if any, as may be required under such Section 9.04(b)), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, any arranger or any other Lender and their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest and (vii) if it is a Non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any arranger, the Assignor or any other Lender and their Related Parties, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

3.General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT C

[Form of Promissory Note]

PROMISSORY NOTE

$ [ ]

[ ], 202[ ]

New York, New York

FOR VALUE RECEIVED, SAFG RETIREMENT SERVICES, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to [NAME OF LENDER] (the “Lender”), at such of the offices of JPMorgan Chase Bank, N.A. as shall be notified to the Borrower from time to time, the principal sum of $ [________] (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by the Lender to the Borrower under the Credit Agreement), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement.

The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the Loans made by the Lender to the Borrower.

This Note evidences Loans made by the Lender to the Borrower under the Term Loan Agreement dated as of February 25, 2022 (as modified and supplemented and in effect from time to time, the “Credit Agreement”) among the Borrower, the lenders party thereto (including the Lender) and JPMorgan Chase Bank, N.A., as Administrative Agent. Terms used but not defined in this Note have the respective meanings assigned to them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

Except as permitted by Section 9.04 of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

This Note shall be governed by, and construed in accordance with, the law of the State of New York.

	SAFG RETIREMENT SERVICES, INC.

	By
		Name:
		Title:

SCHEDULE OF LOANS

This Note evidences Loans made, continued or converted under the within-described Credit Agreement to the Company, on the dates, in the principal amounts, of the Types, bearing interest at the rates and having Interest Periods (if applicable) of the durations set forth below, subject to the continuations, conversions and payments and prepayments of principal set forth below:

Date

Principal
Amount of
Loan

Type
of
Loan

Interest
Rate

Duration of
Interest Period
(if any)

Amount Paid,
Prepaid, Continued
or Converted

Notation
Made by

EXHIBIT D

FORMs OF U.S. TAX CERTIFICATES

[See Attached Forms]

Exhibit D-1

[FORM OF U.S. TAX CERTIFICATE]

(For Non-U.S. Lenders That Are Not Partnerships

For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Term Loan Agreement dated as of February 25, 2022 (as modified and supplemented and in effect from time to time, the “Credit Agreement”) among SAFG Retirement Services, Inc. (the “Company”), the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent thereunder (the “Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Company with a certificate of its non-U.S. person status on United States Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Company and the Administrative Agent and (2) the undersigned shall have at all times furnished the Company and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF LENDER]

By:
	Name:
	Title:

Date: , 201

Exhibit D-2

[FORM OF U.S. TAX CERTIFICATE]

(For Non-U.S. Lenders That Are Partnerships

For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to the Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Company with United States Internal Revenue Service Form W-8IMY accompanied by a United States Internal Revenue Service Form W-8BEN or W-8BEN-N (as applicable) from each of its partners/members claiming the portfolio interest exemption and exemption from FATCA withholding. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Company and the Administrative Agent and (2) the undersigned shall have at all times furnished the Company and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF LENDER]

By:
	Name:
	Title:

Date: , 201

Exhibit D-3

[FORM OF U.S. TAX CERTIFICATE]

(For Non-U.S. Participants That Are Not Partnerships

For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on United States Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF PARTICIPANT]

By:
	Name:
	Title:

Date: , 201

EXHIBIT D-4

[FORM OF U.S. TAX CERTIFICATE]

(For Non-U.S. Participants That Are Partnerships

For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with United States Internal Revenue Service Form W-8IMY accompanied by a United States Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) from each of its partners/members claiming the portfolio interest exemption and exemption from FATCA withholding. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF PARTICIPANT]


By:
	Name:
	Title:

Date: , 201

U.S. Tax Certificate

Exhibit 10.2

Execution Version

3-YEAR DELAYED DRAW TERM LOAN AGREEMENT

dated as of

February 25, 2022

among

SAFG RETIREMENT SERVICES, INC.

The Lenders Party Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.,

BOFA SECURITIES, INC.,

CITIBANK, N.A.,

MORGAN STANLEY SENIOR FUNDING, INC.,

and

GOLDMAN SACHS BANK USA

as Joint Lead Arrangers and Joint Bookrunners

BOFA SECURITIES, INC.,

CITIBANK, N.A.,

MORGAN STANLEY SENIOR FUNDING, INC.,

and

GOLDMAN SACHS BANK USA

as Syndication Agents

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS		1
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Terms Generally	28
SECTION 1.03.	Accounting Terms and Determinations	28
SECTION 1.04.	Interest Rates; Benchmark Notification	29

ARTICLE II THE CREDITS		29
SECTION 2.01.	Term Loan	29
SECTION 2.02.	Loans and Borrowings	29
SECTION 2.03.	Requests for Borrowings	30
SECTION 2.04.	Funding of Borrowings	31
SECTION 2.05.	Interest Elections	31
SECTION 2.06.	Termination and Reduction of Commitments	32
SECTION 2.07.	Repayment of Loans; Evidence of Debt	33
SECTION 2.08.	Prepayment of Loans	34
SECTION 2.09.	Fees	36
SECTION 2.10.	Interest	37
SECTION 2.11.	Alternate Rate of Interest	37
SECTION 2.12.	Increased Costs	40
SECTION 2.13.	Break Funding Payments	41
SECTION 2.14.	Taxes	42
SECTION 2.15.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	45
SECTION 2.16.	Mitigation Obligations; Replacement of Lenders	47
SECTION 2.17.	[Reserved]	48
SECTION 2.18.	Defaulting Lenders	48

ARTICLE III REPRESENTATIONS AND WARRANTIES		48
SECTION 3.01.	Organization; Powers	48
SECTION 3.02.	Authorization; Enforceability	48
SECTION 3.03.	Governmental Authorizations	49
SECTION 3.04.	No Contravention	49
SECTION 3.05.	Financial Statements; No Material Adverse Effect	49
SECTION 3.06.	Litigation and Environmental Matters	49
SECTION 3.07.	Compliance with Laws	50
SECTION 3.08.	No Default	50
SECTION 3.09.	Investment Company Status	50
SECTION 3.10.	Taxes.	50
SECTION 3.11.	ERISA	51
SECTION 3.12.	Disclosure	51
SECTION 3.13.	Margin Regulations	52
SECTION 3.14.	Anti-Corruption Laws and Sanctions	52


ARTICLE IV CONDITIONS		52
SECTION 4.01.	Closing Date	52
SECTION 4.02.	Each Credit Event	53

ARTICLE V AFFIRMATIVE COVENANTS		54
SECTION 5.01.	Financial Statements and Other Information	54
SECTION 5.02.	Notices of Material Events	56
SECTION 5.03.	Existence; Conduct of Business	56
SECTION 5.04.	Payment of Taxes	56
SECTION 5.05.	Maintenance of Properties	56
SECTION 5.06.	Books and Records	57
SECTION 5.07.	Inspection Rights	57
SECTION 5.08.	Compliance with Laws	57
SECTION 5.09.	Insurance	57
SECTION 5.10.	Use of Proceeds	58

ARTICLE VI NEGATIVE COVENANTS		58
SECTION 6.01.	Liens	58
SECTION 6.02.	Fundamental Changes	60
SECTION 6.03.	Lines of Business	60
SECTION 6.04.	Financial Covenants.	60
SECTION 6.05.	Use of Proceeds in Compliance with Sanctions Laws.	60

ARTICLE VII EVENTS OF DEFAULT		61

ARTICLE VIII AGENTS		63
SECTION 8.01.	Administrative Agent	63
SECTION 8.02.	Certain ERISA Matters	66

ARTICLE IX MISCELLANEOUS		68
SECTION 9.01.	Notices	68
SECTION 9.02.	Waivers; Amendments	68
SECTION 9.03.	Expenses; Limitation of Liability; Indemnity, Etc.	69
SECTION 9.04.	Successors and Assigns	71
SECTION 9.05.	Survival	75
SECTION 9.06.	Counterparts; Integration; Effectiveness	75
SECTION 9.07.	Severability	76
SECTION 9.08.	Payments Set Aside	77
SECTION 9.09.	Right of Setoff	77
SECTION 9.10.	Governing Law; Jurisdiction; Consent to Service of Process	77
SECTION 9.11.	WAIVER OF JURY TRIAL	78
SECTION 9.12.	Headings	78
SECTION 9.13.	Confidentiality	79
SECTION 9.14.	USA PATRIOT Act	80
SECTION 9.15.	No Advisory or Fiduciary Relationships	80


SECTION 9.16.	[Reserved]	81
SECTION 9.17.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	81

SCHEDULES

SCHEDULE 2.01Commitments

SCHEDULE 9.01Notice Information

EXHIBITS

EXHIBIT AForm of Assignment and Assumption

EXHIBIT BForm of Promissory Note

EXHIBIT CForms of U.S. Tax Certificates

iii

3-YEAR DELAYED DRAW TERM LOAN AGREEMENT, dated as of February 25, 2022 among SAFG RETIREMENT SERVICES, INC., a Delaware corporation (the “Company”), as borrower, the LENDERS party hereto from time to time, and JPMORGAN CHASE BANK, N.A., as Administrative Agent (this “Agreement”).

The Company has requested that the Lenders make, in one or more installments, term loans to the Company, in an aggregate principal amount not exceeding $3,000,000,000, and the Lenders are prepared to make such term loans upon the terms and conditions hereof. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.Defined Terms.

As used in this Agreement, the following terms have the meanings specified below:

“Administrative Agent” means JPMorgan, in its capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Agents” means each of the Administrative Agent and the Syndication Agents.

“Ancillary Document” has the meaning assigned to such term in Section 9.06(b).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time concerning or relating to bribery or corruption.

Index Debt Ratings	ABR Spread	Term SOFR Spread	Commitment Fee Rate
Category 1 > A / A2	0.000%	0.750%	0.080%
Category 2 A- / A3	0.000%	0.875%	0.090%
Category 3 BBB+ / Baa1	0.000%	1.000%	0.100%
Category 4 BBB / Baa2	0.125%	1.125%	0.125%
Category 5 <BBB- / Baa3 or unrated	0.250%	1.250%	0.175%

“Approved Electronic Platform” means IntraLinks™, DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the Administrative Agent to be its electronic transmission system.

“Availability Termination Date” means the December 30, 2022.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

(1)the Adjusted Daily Simple SOFR;

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

“Board” means the Board of Governors of the Federal Reserve System of the United States.

“Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect.

“Borrowing Request” means a request by the Company for a Borrowing in accordance with Section 2.03.

“Closing Date” has the meaning assigned to such term in Section 4.01.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment” means, with respect to each Lender, its obligation to make the Loan to the Company pursuant to Section 2.01 in an aggregate principal amount over all installments thereof not to exceed the amount set forth opposite such Lender’s name on Schedule I hereto (reflecting the Commitments on the date hereof) or in the Assignment and Assumption or other instrument executed and delivered hereunder pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be reduced or renewed from time to time pursuant to this Agreement, including, without limitation, reductions pursuant to Sections 2.01 and 2.06 and renewals pursuant to Section 2.08(c). The aggregate amount of the Lenders’ Commitments is $3,000,000,000 as of the date hereof. The Commitments of the Lenders are several and not joint and no Lender shall be responsible for any other Lender’s failure to make the Loan hereunder.