Brighthouse Financial, Inc. (Brighthouse Financial) provides annuity and life insurance products in the U.S.
The company had over 2.2 million annuity contracts and insurance policies in force as of December 31, 2024. The company delivers its products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The company primarily transacts business through its insurance subsidiaries, Brighthouse Life Insurance Company, Brightho...
Brighthouse Financial, Inc. (Brighthouse Financial) provides annuity and life insurance products in the U.S.
The company had over 2.2 million annuity contracts and insurance policies in force as of December 31, 2024. The company delivers its products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The company primarily transacts business through its insurance subsidiaries, Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY (BHNY) and New England Life Insurance Company (NELICO).
Segments
The company operates through Annuities; Life; and Run-off segments.
Annuities segment
Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders' needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. In 2013, the company began a shift in its business mix towards fixed products with lower guaranteed minimum crediting rates and variable annuity products with less risky living benefits while simultaneously increasing its emphasis on index-linked annuity products. Since 2014, the company's new sales have primarily consisted of Shield Level Annuities (Shield and Shield Annuities) fixed annuities and variable annuities with simplified living benefits. The company has launched new products and refined existing products as it continues to strive to innovate in response to customer and distributor needs and market conditions.
Products
Shield Annuities
The company's flagship suite of Shield Annuities provides for the accumulation of retirement savings or other long-term investments and combines certain features found in both variable and fixed annuities. Shield Annuities are registered index-linked annuity contracts that provide the contract holder with the ability to participate in the appreciation of certain financial markets up to a stated level, while offering protection from a portion of declines. Rather than allocating purchase payments directly into the equity market, the contract holder has an opportunity to participate in the returns of a specified market index. Shield Annuities also offer account value and return of premium death benefits. In addition, newer versions of Shield Annuities may provide an opportunity for lifetime income through a guaranteed lifetime withdrawal benefit feature.
To protect it from premature withdrawals, the company imposes surrender charges, which are typically applicable during the early years of the annuity contract and decline over time. Surrender charges allow the company to recoup amounts it expended to initially market and sell such annuities.
Fixed Deferred Annuities
Fixed deferred annuities are single premium deferred annuity contracts that are designed for growth and to address asset accumulation needs. Purchase payments under fixed deferred annuity contracts are allocated to the company's general account and interest is credited based on rates it determines for fixed rate annuities or the performance of an index or indices for fixed index annuities (FIA), subject to specified guaranteed minimums. Credited interest rates are guaranteed for at least one year. The company's FIA offerings is an individual single premium deferred annuity contract, which provides for the potential accumulation of retirement savings, as well as an opportunity for lifetime income through an optional guaranteed lifetime withdrawal benefit rider.
To protect it from premature withdrawals, the company imposes surrender charges, which are typically applicable during the early years of the annuity contract and decline over time.
Income Annuities
Income annuities are annuity contracts under which the contract holder contributes a portion of their retirement assets in exchange for a steady stream of retirement income, lasting either for a specified period of time or the life of the annuitant. The company offers two types of income annuities: immediate income annuities, referred to as single premium immediate annuities (SPIA), and deferred income annuities (DIA). Both products provide guaranteed lifetime income that can be used to supplement other retirement income sources. SPIAs are single premium annuity products that provide a guaranteed level of income, beginning within 12 months from the contract issuance date, to the contract holder for a specified number of years or the duration of the life of the annuitant(s). DIAs differ from SPIAs in that DIAs require the contract holder to wait at least 15 months before income payments commence. SPIAs and DIAs are priced utilizing the annuitant’s age, gender and, in the case of DIAs, the deferral period. DIAs provide a pension-like stream of income payments after a specified deferral period.
Variable Annuities
The company issues variable annuity contracts that offer contract holders a tax-deferred basis for wealth accumulation and rights to receive a future stream of payments. The contract holder can choose to invest purchase payments in the separate account or, if available, the general account investment options under the contract. For the separate account options, the contract holder can elect among several subaccounts that invest in internally and externally managed investment portfolios. Unless the contract holder has elected to pay for guaranteed minimum living or death benefits, as discussed below, the contract holder bears the entire risk and receives all of the net returns resulting from the investment option(s) chosen. For the general account options, the company credits the contract's account value with the net purchase payment and credit interest to the contract holder at rates declared periodically, subject to a guaranteed minimum crediting rate.
GMxBs provide the contract holder with protection against the possibility that a downturn in the markets will reduce the certain specified benefits that can be claimed under the contract. Variable annuities may have more than one type of GMxB. The primary types of GMxBs are those that guarantee death benefits payable upon the death of a contract holder (guaranteed minimum death benefits, GMDB) and those that guarantee benefits payable while the contract holder or annuitant is alive (guaranteed minimum living benefits, GMLB, which include guaranteed minimum income benefits (GMIB), guaranteed minimum withdrawal benefits (GMWB) and guaranteed minimum accumulation benefits (GMAB))
The guaranteed benefit received by a contract holder pursuant to the GMxBs is calculated based on a notional amount known as the benefit base (Benefit Base). The calculation of the Benefit Base varies by benefit type and may differ in value from the contract holder’s account value.
Life segment
Life segment consists of insurance products, including term, universal, whole, and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis. While its in-force book reflects a broad range of life products, the company focuses on term life products and universal life products with index-linked benefits, concentrating on design and profitability over volume.
Products
Term Life
Term life products are designed to provide a fixed death benefit in exchange for a guaranteed level premium to be paid over a specified period of time. In 2020, the company launched a new term product with 10-, 20-, or 30-year level premium term options, which it plans to cease offering during the first half of 2025. The company also offers a one-year term option. Its term life products do not include any cash value, accumulation, or investment components. As a result, they are the company's most basic life insurance product offering and generally have lower premiums than other forms of life insurance. Term life products may allow the policyholder to continue coverage beyond the guaranteed level premium period, generally at an elevated cost. Some of the company's term life policies allow the policyholder to convert the policy during the conversion period to a permanent policy. Such conversion does not require additional medical or financial underwriting.
Whole Life
The company offers a non-participating conversion whole life product that is available for term and group conversions and to satisfy other contractual obligations. The company has a significant in-force book of both participating and non-participating whole life policies. Whole life products provide a guaranteed death benefit in exchange for a guaranteed level premium for a specified period of time in order to maintain coverage for the life of the insured. Whole life products also have guaranteed minimum cash surrender values. The company's in-force whole life products provide for participation in the returns generated by the business, delivered to the policyholder in the form of non-guaranteed dividend payments. The policyholder can elect to receive the dividends in cash or use them to increase the paid-up policy death benefit or pay the required premium. They can also be used for other purposes, including payment of loans and loan interest. The versatility of whole life allows it to be used for a variety of purposes beyond just the primary purpose of death benefit protection. With its in-force policies, the policyholder can withdraw or borrow against the policy (sometimes on a tax-favored basis).
Universal Life
The company has a significant in-force book of universal life policies and currently offers two universal life products with index-linked benefits. Universal life products typically provide a death benefit in return for the payment of specified annual policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be added to the cash value of the policy and credited with a stated interest rate. This structure gives policyholders flexibility in the amount and timing of premium payments, subject to tax guidelines. Consequently, universal life policies can be used in a variety of different ways. Brighthouse SmartCare, the company's index-linked universal life product launched in 2019, which it markets as a hybrid life insurance and long-term care policy, allows policyholders to pay for qualified long-term care expenses by accelerating a significant portion of the face amount of the policy over a period of time. After that period of time, the policyholder may continue to receive benefits up to their maximum monthly amount for up to four additional years. Brighthouse SmartGuard Plus, the company's index-linked universal life product offers a guaranteed distribution rider that ensures a minimum amount of distribution payments will always be payable, regardless of policy performance, through policy loans. With positive policy performance, the amount of guaranteed distribution payments available may increase over time.
Variable Life
The company has a significant in-force book of variable life policies but does not currently offer variable life policies. Variable life products operate similarly to universal life products, with the additional feature that the excess amount paid over policy charges can be directed by the policyholder into a variety of separate account investment options. In certain separate account investment options, the policyholder bears the entire risk of the investment results. The company collects specified fees for the management of the investment options in addition to the base policy charges. In some instances, these investment options are managed by third-party asset management firms. The policyholder’s cash value reflects the investment return of the selected investment options, net of management fees and insurance-related charges. With some products, by maintaining a certain premium level, policyholders may also have the advantage of various guarantees designed to protect the death benefit from adverse investment experience.
Run-off
Run-off segment consists of products that are no longer actively sold and are separately managed, including ULSG, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements.
Sales Distribution
The company distributes its annuity and life insurance products through multiple independent distribution channels and marketing arrangements with a geographically diverse network of over 400 distribution partners. The company has successfully built independent distribution relationships since 2001.
The company's annuity products are distributed through national and regional broker-dealers, banks, independent financial planners, independent marketing organizations, and other financial institutions and financial planners. The company's life insurance products are distributed through national and regional broker-dealers, general agencies, financial advisors, brokerage general agencies, banks, financial intermediaries, and online marketplaces.
Intellectual Property
The company has established a portfolio of trademarks in the U.S. that it considers important in the marketing of its products and services, including for the company's name, 'Brighthouse Financial', the company's logo design and taglines.
Regulation
The company's insurance subsidiaries and BRCD are regulated primarily at the state level, with some products and services also subject to federal regulation. In addition, BHF and its insurance subsidiaries are subject to regulation under the insurance holding company laws of various U.S. jurisdictions. Furthermore, some of the company's operations, products and services are subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA), consumer protection laws, securities, broker-dealer and investment advisor regulations, and environmental and unclaimed property laws and regulations.
Each of the company’s insurance subsidiaries is licensed and regulated in each U.S. jurisdiction where it conducts insurance business. Brighthouse Life Insurance Company is licensed to issue insurance products in all U.S. states (except New York), the District of Columbia, the Bahamas, Guam, Puerto Rico, the British Virgin Islands and the U.S. Virgin Islands. BHNY is only licensed to issue insurance products in New York, and NELICO is licensed to issue insurance products in all U.S. states and the District of Columbia. The primary regulator of an insurance company, however, is the insurance regulator in its state of domicile. The company’s insurance subsidiaries, Brighthouse Life Insurance Company, BHNY and NELICO, are domiciled in Delaware, New York and Massachusetts, respectively, and regulated by the Delaware Department of Insurance (the Delaware DOI), the New York State Department of Financial Services (NYDFS) and the Massachusetts Division of Insurance, respectively. In addition, BRCD, which provides reinsurance to its insurance subsidiaries, is domiciled in Delaware and regulated by the Delaware DOI.
State regulatory authorities, the Financial Industry Regulatory Authority, Inc. (FINRA), and the SEC have conducted investigations or inquiries relating to sales or administration of individual life insurance policies, annuities or other products by the company’s insurance subsidiaries.
As a result, the company and the third parties who distribute its products are subject to U.S. federal and state privacy laws and regulations, including the Health Insurance Portability and Accountability Act, as well as additional regulations.
In addition, the California Consumer Privacy Act of 2018 (the CCPA), which became effective in January 2020, affords California residents expanded privacy protections and control over the collection, use, and sharing of their personal information.
Some of the company's activities in offering and selling variable insurance products, as well as certain fixed interest rate or index-linked contracts, are subject to extensive regulation under the federal securities laws administered by the SEC or state securities laws. Federal and state securities laws and regulations treat variable insurance products and certain fixed interest rate or index-linked contracts as securities that must be registered with the SEC under the Securities Act of 1933, as amended (the Securities Act), and distributed through broker-dealers registered under the Securities Exchange Act of 1934, as amended (the Exchange Act). These registered broker-dealers are also FINRA members; therefore, sales of these registered products are also subject to the requirements of FINRA rules.
The company's subsidiary, Brighthouse Securities, LLC (Brighthouse Securities) is registered with the SEC as a broker-dealer and is approved as a member of, and subject to regulation by, FINRA. Brighthouse Securities is also registered as a broker-dealer in all applicable U.S. states. Its business is to serve as the principal underwriter and exclusive distributor of the registered products issued by its affiliates, and as the principal underwriter for the registered funds advised by its affiliated investment advisor, Brighthouse Advisers, and used to fund variable insurance products.
The company issues variable insurance products through separate accounts that are registered with the SEC as investment companies under the Investment Company Act of 1940, as amended (the Investment Company Act). Each registered separate account is generally divided into subaccounts, each of which invests in an underlying fund which is itself a registered investment company under the Investment Company Act. The company's subsidiary, Brighthouse Advisers is registered as an investment advisor with the SEC under the Investment Advisers Act of 1940, and its primary business is to serve as investment advisor to certain of the registered funds that underlie the company's variable annuity contracts and variable life insurance policies. Certain variable contract separate accounts sponsored by the company's insurance subsidiaries are exempt from registration under the Securities Act and the Investment Company Act but may be subject to other provisions of the federal securities laws.
Federal, state and other securities regulatory authorities, including the SEC and FINRA, may from time to time make inquiries and conduct examinations regarding the company's compliance with securities and other laws and regulations. The company e will cooperate with such inquiries and examinations and take corrective action when warranted.
Federal and state securities laws and regulations are primarily intended to ensure the integrity of the financial markets, to protect investors in the securities markets, and to protect investment advisory or brokerage clients, and generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to limit or restrict the conduct of business for failure to comply with such laws and regulations.
The company manufactures individual retirement annuities that are subject to the Internal Revenue Code of 1986, as amended (the 'Tax Code'), for third parties to sell to individuals. Also, a portion of its in-force life insurance products and annuity products are held by tax-qualified pension and retirement plans that are subject to ERISA or the Tax Code.
History
Brighthouse Financial, Inc. was founded in 1863. The company was incorporated in 2016.
