Separate Account Five of Talcott Resolution Life & Annuity Insurance Co.

04/17/2026 | Press release | Distributed by Public on 04/17/2026 08:57

Financial Statements by Insurance Company (Form N-VPFS)

Report of Independent Registered Public Accounting Firm






To the Contract Owners of
Separate Account Five of Talcott Resolution Life and Annuity Insurance Company and the
Board of Directors of Talcott Resolution Life and Annuity Insurance Company

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statements of assets and liabilities of each of the Sub-Accounts of Separate Account Five of Talcott Resolution Life and Annuity Insurance Company (the "Account") listed in Note 1 (collectively, the "Sub-Accounts"), as of December 31, 2025, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes . In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Sub-Accounts as of December 31, 2025, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Account's management. Our responsibility is to express an opinion on the Account's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Account's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2025, by correspondence with the Account's custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion.





/s/ Deloitte & Touche LLP

Hartford, Connecticut

April 16, 2026

We have served as the auditor of Separate Account Five of Talcott Resolution Life and Annuity Insurance Company since 2002.
SA-1
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Fidelity® VIP Government Money Market Portfolio (Service Class) Putnam VT George Putnam Balanced Fund (Class IA) Hartford Balanced HLS Fund (Class IA) Hartford Capital Appreciation HLS Fund (Class IA) Hartford Disciplined Equity HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 5,669,193 57,377 1,023,065 902,870 342,781
Cost $ 5,669,193 $ 681,283 $ 27,617,270 $ 42,297,315 $ 5,825,401
Fair Value $ 5,669,193 $ 982,292 $ 29,955,338 $ 48,059,795 $ 7,949,096
Due from Sponsor Company 777,638 - - - -
Receivable for fund shares sold - - - 310,808 -
Total assets 6,446,831 982,292 29,955,338 48,370,603 7,949,096
Liabilities:
Due to Sponsor Company - - - 310,808 -
Payable for fund shares purchased 777,638 - - - -
Total liabilities 777,638 - - 310,808 -
Net assets:
For contract liabilities $ 5,669,193 $ 982,292 $ 29,955,338 $ 48,059,795 $ 7,949,096
Deferred contracts in the accumulation period:
Units owned by participants # 467,519 18,433 2,578,680 1,549,841 749,765
Contract liability $ 5,669,193 $ 982,292 $ 29,955,338 $ 48,059,795 $ 7,949,096
# Rounded units
The accompanying notes are an integral part of these financial statements.
SA-2
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Hartford Dividend and Growth HLS Fund (Class IA) Hartford Healthcare HLS Fund (Class IA) Hartford International Opportunities HLS Fund (Class IA) Hartford MidCap HLS Fund (Class IA) Hartford Small Company HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 1,116,745 104,657 249,467 406,365 267,774
Cost $ 23,976,401 $ 1,989,581 $ 3,563,970 $ 11,938,188 $ 4,908,607
Fair Value $ 25,539,968 $ 1,868,134 $ 5,131,526 $ 9,427,674 $ 5,339,405
Due from Sponsor Company - - - - -
Receivable for fund shares sold 403,747 - - - -
Total assets 25,943,715 1,868,134 5,131,526 9,427,674 5,339,405
Liabilities:
Due to Sponsor Company 403,747 - - - -
Payable for fund shares purchased - - - - -
Total liabilities 403,747 - - - -
Net assets:
For contract liabilities $ 25,539,968 $ 1,868,134 $ 5,131,526 $ 9,427,674 $ 5,339,405
Deferred contracts in the accumulation period:
Units owned by participants # 1,006,014 125,811 657,075 478,156 421,763
Contract liability $ 25,539,968 $ 1,868,134 $ 5,131,526 $ 9,427,674 $ 5,339,405
# Rounded units
The accompanying notes are an integral part of these financial statements.
SA-3
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Hartford Stock HLS Fund (Class IA) Hartford Total Return Bond HLS Fund (Class IA) Hartford Ultrashort Bond HLS Fund (Class IA) Invesco V.I. American Value Fund (Series I) Invesco V.I. Diversified Dividend Fund (Series I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 266,729 597,129 323,192 13,644 20,829
Cost $ 18,500,557 $ 6,416,975 $ 3,277,446 $ 210,056 $ 427,156
Fair Value $ 24,893,796 $ 5,726,470 $ 3,338,573 $ 247,637 $ 566,975
Due from Sponsor Company - - - - -
Receivable for fund shares sold 65,697 - - - -
Total assets 24,959,493 5,726,470 3,338,573 247,637 566,975
Liabilities:
Due to Sponsor Company 65,697 - - - -
Payable for fund shares purchased - - - - -
Total liabilities 65,697 - - - -
Net assets:
For contract liabilities $ 24,893,796 $ 5,726,470 $ 3,338,573 $ 247,637 $ 566,975
Deferred contracts in the accumulation period:
Units owned by participants # 1,478,488 1,301,574 1,576,941 2,209 13,377
Contract liability $ 24,893,796 $ 5,726,470 $ 3,338,573 $ 247,637 $ 566,975
# Rounded units
The accompanying notes are an integral part of these financial statements.
SA-4
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) Invesco V.I. Equity and Income Fund (Series I) Invesco V.I. Growth and Income Fund (Series I) Invesco V.I. High Yield Fund (Series I) Putnam VT Mortgage Securities Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 29,772 4,157 9,149 7,790 43,515
Cost $ 594,479 $ 69,428 $ 174,646 $ 39,100 $ 390,108
Fair Value $ 854,761 $ 75,951 $ 195,158 $ 36,924 $ 271,096
Due from Sponsor Company - - - - -
Receivable for fund shares sold - - - - -
Total assets 854,761 75,951 195,158 36,924 271,096
Liabilities:
Due to Sponsor Company - - - - -
Payable for fund shares purchased - - - - -
Total liabilities - - - - -
Net assets:
For contract liabilities $ 854,761 $ 75,951 $ 195,158 $ 36,924 $ 271,096
Deferred contracts in the accumulation period:
Units owned by participants # 5,764 2,224 2,447 1,896 10,155
Contract liability $ 854,761 $ 75,951 $ 195,158 $ 36,924 $ 271,096
# Rounded units
The accompanying notes are an integral part of these financial statements.
SA-5
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Putnam VT Diversified Income Fund (Class IA) Putnam VT Large Cap Value Fund (Class IA) Putnam VT Global Asset Allocation Fund (Class IA) Putnam VT Focused International Equity Fund (Class IA) Putnam VT Global Health Care Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 168,939 364,928 122,753 137,330 22,326
Cost $ 1,105,871 $ 8,844,421 $ 2,061,862 $ 2,164,257 $ 330,238
Fair Value $ 790,633 $ 13,257,824 $ 2,389,999 $ 2,669,698 $ 399,415
Due from Sponsor Company - - - - -
Receivable for fund shares sold - - - - -
Total assets 790,633 13,257,824 2,389,999 2,669,698 399,415
Liabilities:
Due to Sponsor Company - - - - -
Payable for fund shares purchased - - - - -
Total liabilities - - - - -
Net assets:
For contract liabilities $ 790,633 $ 13,257,824 $ 2,389,999 $ 2,669,698 $ 399,415
Deferred contracts in the accumulation period:
Units owned by participants # 17,522 133,281 23,686 31,662 4,860
Contract liability $ 790,633 $ 13,257,824 $ 2,389,999 $ 2,669,698 $ 399,415
# Rounded units


The accompanying notes are an integral part of these financial statements.
SA-6
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Putnam VT Large Cap Growth Fund (Class IA) Putnam VT High Yield Fund (Class IA) Putnam VT Income Fund (Class IA) Putnam VT International Equity Fund (Class IA) Putnam VT Emerging Markets Equity Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 620,163 115,606 148,227 28,952 22,858
Cost $ 6,383,152 $ 910,816 $ 1,637,873 $ 396,155 $ 331,867
Fair Value $ 11,473,012 $ 671,671 $ 1,230,280 $ 582,221 $ 592,484
Due from Sponsor Company - - - - -
Receivable for fund shares sold - - - - -
Total assets 11,473,012 671,671 1,230,280 582,221 592,484
Liabilities:
Due to Sponsor Company - - - - -
Payable for fund shares purchased - - - - -
Total liabilities - - - - -
Net assets:
For contract liabilities $ 11,473,012 $ 671,671 $ 1,230,280 $ 582,221 $ 592,484
Deferred contracts in the accumulation period:
Units owned by participants # 222,713 9,975 28,822 8,888 12,126
Contract liability $ 11,473,012 $ 671,671 $ 1,230,280 $ 582,221 $ 592,484
# Rounded units
The accompanying notes are an integral part of these financial statements.
SA-7
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Putnam VT International Value Fund (Class IA) Putnam VT Core Equity Fund (Class IA) Putnam VT Government Money Market Fund (Class IA) Putnam VT Sustainable Leaders Fund (Class IA) Putnam VT Research Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 21,784 56,929 1,119,198 151,759 10,237
Cost $ 252,959 $ 949,786 $ 1,119,198 $ 4,688,970 $ 253,087
Fair Value $ 351,159 $ 1,345,805 $ 1,119,198 $ 7,396,715 $ 488,624
Due from Sponsor Company - - - - -
Receivable for fund shares sold - - - - -
Total assets 351,159 1,345,805 1,119,198 7,396,715 488,624
Liabilities:
Due to Sponsor Company - - - - -
Payable for fund shares purchased - - - - -
Total liabilities - - - - -
Net assets:
For contract liabilities $ 351,159 $ 1,345,805 $ 1,119,198 $ 7,396,715 $ 488,624
Deferred contracts in the accumulation period:
Units owned by participants # 5,730 16,424 545,091 38,667 4,311
Contract liability $ 351,159 $ 1,345,805 $ 1,119,198 $ 7,396,715 $ 488,624
# Rounded units


The accompanying notes are an integral part of these financial statements.
SA-8
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

Putnam VT Small Cap Value Fund (Class IA) Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) Morgan Stanley VIF Growth Portfolio (Class I) PSF PGIM Government Money Market Portfolio (Class I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
Investments:
Number of shares 44,213 10,180 565 64,464 67,667
Cost $ 530,395 $ 58,241 $ 6,906 $ 1,409,069 $ 676,673
Fair Value $ 490,764 $ 55,075 $ 9,925 $ 1,712,177 $ 676,673
Due from Sponsor Company - - - - -
Receivable for fund shares sold - - - - -
Total assets 490,764 55,075 9,925 1,712,177 676,673
Liabilities:
Due to Sponsor Company - - - - -
Payable for fund shares purchased - - - - -
Total liabilities - - - - -
Net assets:
For contract liabilities $ 490,764 $ 55,075 $ 9,925 $ 1,712,177 $ 676,673
Deferred contracts in the accumulation period:
Units owned by participants # 4,474 1,134 262 21,249 55,738
Contract liability $ 490,764 $ 55,075 $ 9,925 $ 1,712,177 $ 676,673
# Rounded units

The accompanying notes are an integral part of these financial statements.
SA-9
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Assets and Liabilities
December 31, 2025

BlackRock S&P 500 Index V.I. Fund (Class I)
Sub-Account
Assets:
Investments:
Number of shares 220,695
Cost $ 5,867,472
Fair Value $ 8,516,632
Due from Sponsor Company -
Receivable for fund shares sold -
Total assets 8,516,632
Liabilities:
Due to Sponsor Company -
Payable for fund shares purchased -
Total liabilities -
Net assets:
For contract liabilities $ 8,516,632
Deferred contracts in the accumulation period:
Units owned by participants # 298,377
Contract liability $ 8,516,632
# Rounded units


The accompanying notes are an integral part of these financial statements.
SA-10
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Fidelity® VIP Government Money Market Portfolio (Service Class) Putnam VT George Putnam Balanced Fund (Class IA) Hartford Balanced HLS Fund (Class IA) Hartford Capital Appreciation HLS Fund (Class IA) Hartford Disciplined Equity HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 206,855 $ 15,691 $ 567,544 $ 304,045 $ 31,811
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions - 21,592 457,228 906,134 618,468
Net realized gain distributions - 35,634 2,777,122 5,549,186 773,505
Change in unrealized appreciation (depreciation) - 51,832 (389,290) (701,103) (373,274)
Net gain (loss) on investments - 109,058 2,845,060 5,754,217 1,018,699
Net increase (decrease) in net assets resulting from operations $ 206,855 $ 124,749 $ 3,412,604 $ 6,058,262 $ 1,050,510

















The accompanying notes are an integral part of these financial statements.
SA-11
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Hartford Dividend and Growth HLS Fund (Class IA) Hartford Healthcare HLS Fund (Class IA) Hartford International Opportunities HLS Fund (Class IA) Hartford MidCap HLS Fund (Class IA) Hartford Small Company HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 391,172 $ 12,380 $ 83,456 $ - $ 21,718
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 398,345 (26,089) 259,609 (132,736) (1,210)
Net realized gain distributions 3,951,267 80,320 39,341 1,836,296 -
Change in unrealized appreciation (depreciation) (662,157) 190,647 947,567 (1,742,169) 601,649
Net gain (loss) on investments 3,687,455 244,878 1,246,517 (38,609) 600,439
Net increase (decrease) in net assets resulting from operations $ 4,078,627 $ 257,258 $ 1,329,973 $ (38,609) $ 622,157

















The accompanying notes are an integral part of these financial statements.
SA-12
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Hartford Stock HLS Fund (Class IA) Hartford Total Return Bond HLS Fund (Class IA) Hartford Ultrashort Bond HLS Fund (Class IA) Invesco V.I. American Value Fund (Series I) Invesco V.I. Diversified Dividend Fund (Series I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 293,907 $ 321,569 $ 168,387 $ 1,030 $ 9,943
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 1,156,314 (143,839) 39,504 614 96,742
Net realized gain distributions 3,341,779 - - 34,361 47,543
Change in unrealized appreciation (depreciation) (2,863,686) 241,194 (50,552) 7,188 (41,799)
Net gain (loss) on investments 1,634,407 97,355 (11,048) 42,163 102,486
Net increase (decrease) in net assets resulting from operations $ 1,928,314 $ 418,924 $ 157,339 $ 43,193 $ 112,429
















The accompanying notes are an integral part of these financial statements.
SA-13
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) Invesco V.I. Equity and Income Fund (Series I) Invesco V.I. Growth and Income Fund (Series I) Invesco V.I. High Yield Fund (Series I) Putnam VT Mortgage Securities Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 13,068 $ 1,520 $ 2,674 $ 2,538 $ 22,939
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 4,599 97 291 (21) (5,065)
Net realized gain distributions 63,857 3,860 14,129 - -
Change in unrealized appreciation (depreciation) 4,496 3,207 9,440 (347) 5,452
Net gain (loss) on investments 72,952 7,164 23,860 (368) 387
Net increase (decrease) in net assets resulting from operations $ 86,020 $ 8,684 $ 26,534 $ 2,170 $ 23,326

















The accompanying notes are an integral part of these financial statements.
SA-14
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Putnam VT Diversified Income Fund (Class IA) Putnam VT Large Cap Value Fund (Class IA) Putnam VT Global Asset Allocation Fund (Class IA) Putnam VT Focused International Equity Fund (Class IA) Putnam VT Global Health Care Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 48,266 $ 205,451 $ 54,085 $ 79,513 $ -
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions (8,488) 373,041 6,935 7,095 4,921
Net realized gain distributions - 858,822 260,389 - 25,348
Change in unrealized appreciation (depreciation) 25,765 890,208 (13,318) 652,308 26,248
Net gain (loss) on investments 17,277 2,122,071 254,006 659,403 56,517
Net increase (decrease) in net assets resulting from operations $ 65,543 $ 2,327,522 $ 308,091 $ 738,916 $ 56,517



















The accompanying notes are an integral part of these financial statements.
SA-15
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Putnam VT Large Cap Growth Fund (Class IA) Putnam VT High Yield Fund (Class IA) Putnam VT Income Fund (Class IA) Putnam VT International Equity Fund (Class IA) Putnam VT Emerging Markets Equity Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ - $ 44,950 $ 59,925 $ 1,257 $ 4,619
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 420,546 (61,555) (21,819) 12,984 10,915
Net realized gain distributions 964,240 - - 32,949 -
Change in unrealized appreciation (depreciation) 115,651 73,815 48,933 122,934 141,924
Net gain (loss) on investments 1,500,437 12,260 27,114 168,867 152,839
Net increase (decrease) in net assets resulting from operations $ 1,500,437 $ 57,210 $ 87,039 $ 170,124 $ 157,458
















The accompanying notes are an integral part of these financial statements.
SA-16
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Putnam VT International Value Fund (Class IA) Putnam VT Core Equity Fund (Class IA) Putnam VT Government Money Market Fund (Class IA) Putnam VT Sustainable Leaders Fund (Class IA) Putnam VT Research Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 4,327 $ 7,593 $ 57,605 $ 59,608 $ 3,485
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 1,351 4,979 - 193,079 12,361
Net realized gain distributions 2,652 100,113 - 765,491 27,568
Change in unrealized appreciation (depreciation) 83,984 84,339 - (284,447) 32,589
Net gain (loss) on investments 87,987 189,431 - 674,123 72,518
Net increase (decrease) in net assets resulting from operations $ 92,314 $ 197,024 $ 57,605 $ 733,731 $ 76,003



















The accompanying notes are an integral part of these financial statements.
SA-17
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

Putnam VT Small Cap Value Fund (Class IA) Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) Morgan Stanley VIF Growth Portfolio (Class I) PSF PGIM Government Money Market Portfolio (Class I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income:
Dividends $ 4,261 $ 7,375 $ 35 $ - $ 28,289
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions (2,250) (58) 27 153,091 -
Net realized gain distributions 41,418 - 288 - -
Change in unrealized appreciation (depreciation) (18,085) 55 2,126 497,445 -
Net gain (loss) on investments 21,083 (3) 2,441 650,536 -
Net increase (decrease) in net assets resulting from operations $ 25,344 $ 7,372 $ 2,476 $ 650,536 $ 28,289
























The accompanying notes are an integral part of these financial statements.
SA-18
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Operations
For the Period Ended December 31, 2025

BlackRock S&P 500 Index V.I. Fund (Class I)
Sub-Account
Investment Income:
Dividends $ 91,728
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 599,584
Net realized gain distributions 463,859
Change in unrealized appreciation (depreciation) 223,660
Net gain (loss) on investments 1,287,103
Net increase (decrease) in net assets resulting from operations $ 1,378,831



















The accompanying notes are an integral part of these financial statements.
SA-19
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Fidelity® VIP Government Money Market Portfolio (Service Class) Putnam VT George Putnam Balanced Fund (Class IA) Hartford Balanced HLS Fund (Class IA) Hartford Capital Appreciation HLS Fund (Class IA) Hartford Disciplined Equity HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 206,855 $ 15,691 $ 567,544 $ 304,045 $ 31,811
Net realized gain (loss) on security transactions - 21,592 457,228 906,134 618,468
Net realized gain distributions - 35,634 2,777,122 5,549,186 773,505
Change in unrealized appreciation (depreciation) - 51,832 (389,290) (701,103) (373,274)
Net increase (decrease) in net assets resulting from operations 206,855 124,749 3,412,604 6,058,262 1,050,510
Unit transactions:
Purchases - - 363 2,595 -
Net transfers 345,834 (67,525) 274,865 57,525 (1,853)
Surrenders for benefit payments and fees (67,848) - (436,317) (1,112,712) (186,763)
Other transactions - - (68) (79) 26
Death benefits - - (3,098,228) (4,804,525) (1,586,494)
Net loan activity (2,639) (12,487) (17,613) (24,260) 16,282
Cost of insurance and other fees (37,949) (16,366) (446,132) (710,682) (111,348)
Net increase (decrease) in net assets resulting from unit transactions 237,398 (96,378) (3,723,130) (6,592,138) (1,870,150)
Net increase (decrease) in net assets 444,253 28,371 (310,526) (533,876) (819,640)
Net assets:
Beginning of period 5,224,940 953,921 30,265,864 48,593,671 8,768,736
End of period $ 5,669,193 $ 982,292 $ 29,955,338 $ 48,059,795 $ 7,949,096

The accompanying notes are an integral part of these financial statements.
SA-20
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Hartford Dividend and Growth HLS Fund (Class IA) Hartford Healthcare HLS Fund (Class IA) Hartford International Opportunities HLS Fund (Class IA) Hartford MidCap HLS Fund (Class IA) Hartford Small Company HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 391,172 $ 12,380 $ 83,456 $ - $ 21,718
Net realized gain (loss) on security transactions 398,345 (26,089) 259,609 (132,736) (1,210)
Net realized gain distributions 3,951,267 80,320 39,341 1,836,296 -
Change in unrealized appreciation (depreciation) (662,157) 190,647 947,567 (1,742,169) 601,649
Net increase (decrease) in net assets resulting from operations 4,078,627 257,258 1,329,973 (38,609) 622,157
Unit transactions:
Purchases 113 - 113 583 -
Net transfers (662,969) (49,049) 14,097 (196,853) (17,907)
Surrenders for benefit payments and fees (280,978) (19,908) (149,977) (73,133) (68,283)
Other transactions 53 - 51 - (26)
Death benefits (2,949,431) (47,741) (809,613) (441,494) (119,784)
Net loan activity (3,362) (77) 13,820 5,540 (16,614)
Cost of insurance and other fees (374,933) (14,400) (76,319) (142,392) (74,365)
Net increase (decrease) in net assets resulting from unit transactions (4,271,507) (131,175) (1,007,828) (847,749) (296,979)
Net increase (decrease) in net assets (192,880) 126,083 322,145 (886,358) 325,178
Net assets:
Beginning of period 25,732,848 1,742,051 4,809,381 10,314,032 5,014,227
End of period $ 25,539,968 $ 1,868,134 $ 5,131,526 $ 9,427,674 $ 5,339,405
The accompanying notes are an integral part of these financial statements.
SA-21
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Hartford Stock HLS Fund (Class IA) Hartford Total Return Bond HLS Fund (Class IA) Hartford Ultrashort Bond HLS Fund (Class IA) Invesco V.I. American Value Fund (Series I) Invesco V.I. Diversified Dividend Fund (Series I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 293,907 $ 321,569 $ 168,387 $ 1,030 $ 9,943
Net realized gain (loss) on security transactions 1,156,314 (143,839) 39,504 614 96,742
Net realized gain distributions 3,341,779 - - 34,361 47,543
Change in unrealized appreciation (depreciation) (2,863,686) 241,194 (50,552) 7,188 (41,799)
Net increase (decrease) in net assets resulting from operations 1,928,314 418,924 157,339 43,193 112,429
Unit transactions:
Purchases 1,415 - - - -
Net transfers 201,937 42,863 (2,419) (1) 106,387
Surrenders for benefit payments and fees (574,955) (18,769) (94,770) - -
Other transactions (49) 53 228 - -
Death benefits (2,638,595) (698,582) (433,381) - (429,140)
Net loan activity (1,579) (2,530) (1,597) - (186)
Cost of insurance and other fees (380,927) (87,913) (53,314) (3,951) (10,849)
Net increase (decrease) in net assets resulting from unit transactions (3,392,753) (764,878) (585,253) (3,952) (333,788)
Net increase (decrease) in net assets (1,464,439) (345,954) (427,914) 39,241 (221,359)
Net assets:
Beginning of period 26,358,235 6,072,424 3,766,487 208,396 788,334
End of period $ 24,893,796 $ 5,726,470 $ 3,338,573 $ 247,637 $ 566,975
The accompanying notes are an integral part of these financial statements.
SA-22
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) Invesco V.I. Equity and Income Fund (Series I) Invesco V.I. Growth and Income Fund (Series I) Invesco V.I. High Yield Fund (Series I) Putnam VT Mortgage Securities Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 13,068 $ 1,520 $ 2,674 $ 2,538 $ 22,939
Net realized gain (loss) on security transactions 4,599 97 291 (21) (5,065)
Net realized gain distributions 63,857 3,860 14,129 - -
Change in unrealized appreciation (depreciation) 4,496 3,207 9,440 (347) 5,452
Net increase (decrease) in net assets resulting from operations 86,020 8,684 26,534 2,170 23,326
Unit transactions:
Purchases - - - - -
Net transfers - - (1) 12,047 (5,671)
Surrenders for benefit payments and fees - - - - -
Other transactions - - - - -
Death benefits - - - - -
Net loan activity - - - - (73)
Cost of insurance and other fees (13,518) (1,193) (2,980) (476) (4,506)
Net increase (decrease) in net assets resulting from unit transactions (13,518) (1,193) (2,981) 11,571 (10,250)
Net increase (decrease) in net assets 72,502 7,491 23,553 13,741 13,076
Net assets:
Beginning of period 782,259 68,460 171,605 23,183 258,020
End of period $ 854,761 $ 75,951 $ 195,158 $ 36,924 $ 271,096
The accompanying notes are an integral part of these financial statements.
SA-23
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Putnam VT Diversified Income Fund (Class IA) Putnam VT Large Cap Value Fund (Class IA) Putnam VT Global Asset Allocation Fund (Class IA) Putnam VT Focused International Equity Fund (Class IA) Putnam VT Global Health Care Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 48,266 $ 205,451 $ 54,085 $ 79,513 $ -
Net realized gain (loss) on security transactions (8,488) 373,041 6,935 7,095 4,921
Net realized gain distributions - 858,822 260,389 - 25,348
Change in unrealized appreciation (depreciation) 25,765 890,208 (13,318) 652,308 26,248
Net increase (decrease) in net assets resulting from operations 65,543 2,327,522 308,091 738,916 56,517
Unit transactions:
Purchases - 21 16 - -
Net transfers 9,718 67,152 9,270 (39,061) (1,405)
Surrenders for benefit payments and fees - (30,485) - (10,684) -
Other transactions - - - - -
Death benefits (10,528) (1,277,192) (29,000) (130,375) (25,465)
Net loan activity (87) (10,097) (30) (317) (39)
Cost of insurance and other fees (13,216) (222,897) (39,137) (41,119) (6,724)
Net increase (decrease) in net assets resulting from unit transactions (14,113) (1,473,498) (58,881) (221,556) (33,633)
Net increase (decrease) in net assets 51,430 854,024 249,210 517,360 22,884
Net assets:
Beginning of period 739,203 12,403,800 2,140,789 2,152,338 376,531
End of period $ 790,633 $ 13,257,824 $ 2,389,999 $ 2,669,698 $ 399,415



The accompanying notes are an integral part of these financial statements.
SA-24
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Putnam VT Large Cap Growth Fund (Class IA) Putnam VT High Yield Fund (Class IA) Putnam VT Income Fund (Class IA) Putnam VT International Equity Fund (Class IA) Putnam VT Emerging Markets Equity Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ - $ 44,950 $ 59,925 $ 1,257 $ 4,619
Net realized gain (loss) on security transactions 420,546 (61,555) (21,819) 12,984 10,915
Net realized gain distributions 964,240 - - 32,949 -
Change in unrealized appreciation (depreciation) 115,651 73,815 48,933 122,934 141,924
Net increase (decrease) in net assets resulting from operations 1,500,437 57,210 87,039 170,124 157,458
Unit transactions:
Purchases 6 - 52 - -
Net transfers 125,357 1,745 2,332 (42,302) (1)
Surrenders for benefit payments and fees (147,716) - - - (18,755)
Other transactions (25) - - - -
Death benefits (794,683) (102,480) (38,318) (1,640) -
Net loan activity 13,445 (5,267) (3,916) (96) (31)
Cost of insurance and other fees (190,770) (12,191) (20,589) (9,423) (8,584)
Net increase (decrease) in net assets resulting from unit transactions (994,386) (118,193) (60,439) (53,461) (27,371)
Net increase (decrease) in net assets 506,051 (60,983) 26,600 116,663 130,087
Net assets:
Beginning of period 10,966,961 732,654 1,203,680 465,558 462,397
End of period $ 11,473,012 $ 671,671 $ 1,230,280 $ 582,221 $ 592,484
The accompanying notes are an integral part of these financial statements.
SA-25
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Putnam VT International Value Fund (Class IA) Putnam VT Core Equity Fund (Class IA) Putnam VT Government Money Market Fund (Class IA) Putnam VT Sustainable Leaders Fund (Class IA) Putnam VT Research Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 4,327 $ 7,593 $ 57,605 $ 59,608 $ 3,485
Net realized gain (loss) on security transactions 1,351 4,979 - 193,079 12,361
Net realized gain distributions 2,652 100,113 - 765,491 27,568
Change in unrealized appreciation (depreciation) 83,984 84,339 - (284,447) 32,589
Net increase (decrease) in net assets resulting from operations 92,314 197,024 57,605 733,731 76,003
Unit transactions:
Purchases - 6 - 22 6
Net transfers (74) 53,445 (306,253) 199,714 (23,398)
Surrenders for benefit payments and fees - - (5,691) (70,713) -
Other transactions - - 106 - -
Death benefits (2,514) (17,485) (57,438) (443,298) -
Net loan activity (34) (283) (55,900) (876) -
Cost of insurance and other fees (5,321) (20,688) (20,219) (121,293) (6,766)
Net increase (decrease) in net assets resulting from unit transactions (7,943) 14,995 (445,395) (436,444) (30,158)
Net increase (decrease) in net assets 84,371 212,019 (387,790) 297,287 45,845
Net assets:
Beginning of period 266,788 1,133,786 1,506,988 7,099,428 442,779
End of period $ 351,159 $ 1,345,805 $ 1,119,198 $ 7,396,715 $ 488,624


The accompanying notes are an integral part of these financial statements.
SA-26
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
Putnam VT Small Cap Value Fund (Class IA) Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) Morgan Stanley VIF Growth Portfolio (Class I) PSF PGIM Government Money Market Portfolio (Class I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 4,261 $ 7,375 $ 35 $ - $ 28,289
Net realized gain (loss) on security transactions (2,250) (58) 27 153,091 -
Net realized gain distributions 41,418 - 288 - -
Change in unrealized appreciation (depreciation) (18,085) 55 2,126 497,445 -
Net increase (decrease) in net assets resulting from operations 25,344 7,372 2,476 650,536 28,289
Unit transactions:
Purchases - - - - -
Net transfers 3,286 - - 39,601 (148,240)
Surrenders for benefit payments and fees - - - - -
Other transactions - - - - -
Death benefits - - - (632,249) (16,778)
Net loan activity (60) - - - -
Cost of insurance and other fees (8,235) (872) (132) (27,502) (12,018)
Net increase (decrease) in net assets resulting from unit transactions (5,009) (872) (132) (620,150) (177,036)
Net increase (decrease) in net assets 20,335 6,500 2,344 30,386 (148,747)
Net assets:
Beginning of period 470,429 48,575 7,581 1,681,791 825,420
End of period $ 490,764 $ 55,075 $ 9,925 $ 1,712,177 $ 676,673




The accompanying notes are an integral part of these financial statements.
SA-27
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2025
BlackRock S&P 500 Index V.I. Fund (Class I)
Sub-Account
Operations:
Net investment income (loss) $ 91,728
Net realized gain (loss) on security transactions 599,584
Net realized gain distributions 463,859
Change in unrealized appreciation (depreciation) 223,660
Net increase (decrease) in net assets resulting from operations 1,378,831
Unit transactions:
Purchases 250
Net transfers (156,412)
Surrenders for benefit payments and fees (203,675)
Other transactions -
Death benefits (1,224,593)
Net loan activity 1,681
Cost of insurance and other fees (120,792)
Net increase (decrease) in net assets resulting from unit transactions (1,703,541)
Net increase (decrease) in net assets (324,710)
Net assets:
Beginning of period 8,841,342
End of period $ 8,516,632






The accompanying notes are an integral part of these financial statements.
SA-28
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Fidelity® VIP Government Money Market Portfolio (Service Class) Putnam VT George Putnam Balanced Fund (Class IA) Hartford Balanced HLS Fund (Class IA) Hartford Capital Appreciation HLS Fund (Class IA) Hartford Disciplined Equity HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 263,331 $ 13,002 $ 593,697 $ 368,231 $ 50,648
Net realized gain (loss) on security transactions - 21,434 681,267 736,896 537,803
Net realized gain distributions - - 2,062,540 1,994,751 369,357
Change in unrealized appreciation (depreciation) - 115,212 32,502 6,132,572 1,021,398
Net increase (decrease) in net assets resulting from operations 263,331 149,648 3,370,006 9,232,450 1,979,206
Unit transactions:
Purchases - - 300 1,465 -
Net transfers 1,312,477 (455) (146,862) (1,039,387) (113,053)
Surrenders for benefit payments and fees (258,346) - (712,453) (1,361,995) (81,789)
Other transactions (52) - 114 (1) 24
Death benefits (321,872) (67,556) (3,650,229) (2,929,090) (1,374,655)
Net loan activity (4,103) - (10,787) (112,472) (333)
Cost of insurance and other fees (36,839) (16,506) (485,764) (742,499) (123,577)
Net increase (decrease) in net assets resulting from unit transactions 691,265 (84,517) (5,005,681) (6,183,979) (1,693,383)
Net increase (decrease) in net assets 954,596 65,131 (1,635,675) 3,048,471 285,823
Net assets:
Beginning of period 4,270,344 888,790 31,901,539 45,545,200 8,482,913
End of period $ 5,224,940 $ 953,921 $ 30,265,864 $ 48,593,671 $ 8,768,736

The accompanying notes are an integral part of these financial statements.
SA-29
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Hartford Dividend and Growth HLS Fund (Class IA) Hartford Healthcare HLS Fund (Class IA) Hartford International Opportunities HLS Fund (Class IA) Hartford MidCap HLS Fund (Class IA) Hartford Small Company HLS Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 495,869 $ 1,904 $ 80,073 $ - $ -
Net realized gain (loss) on security transactions 664,015 (25,421) 166,966 (156,059) (72,183)
Net realized gain distributions 1,789,732 12,124 - 247,132 -
Change in unrealized appreciation (depreciation) 276,075 32,933 201,875 580,921 656,688
Net increase (decrease) in net assets resulting from operations 3,225,691 21,540 448,914 671,994 584,505
Unit transactions:
Purchases 134 - 225 262 -
Net transfers 2,886 (22,507) (242,956) (292,048) (31,230)
Surrenders for benefit payments and fees (587,678) (1) (108,302) (48,304) (1,169)
Other transactions 11 - (53) 26 26
Death benefits (3,610,598) (184,704) (587,714) (1,200,775) (646,216)
Net loan activity (33,311) (85) (5,705) (1,476) (22,414)
Cost of insurance and other fees (404,981) (29,663) (81,871) (153,396) (76,863)
Net increase (decrease) in net assets resulting from unit transactions (4,633,537) (236,960) (1,026,376) (1,695,711) (777,866)
Net increase (decrease) in net assets (1,407,846) (215,420) (577,462) (1,023,717) (193,361)
Net assets:
Beginning of period 27,140,694 1,957,471 5,386,843 11,337,749 5,207,588
End of period $ 25,732,848 $ 1,742,051 $ 4,809,381 $ 10,314,032 $ 5,014,227



The accompanying notes are an integral part of these financial statements.
SA-30
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Hartford Stock HLS Fund (Class IA) Hartford Total Return Bond HLS Fund (Class IA) Hartford Ultrashort Bond HLS Fund (Class IA) Invesco V.I. American Value Fund (Series I) Invesco V.I. Diversified Dividend Fund (Series I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 431,458 $ 226,821 $ 161,178 $ 1,903 $ 16,523
Net realized gain (loss) on security transactions 1,081,625 (290,068) 23,750 (356) 49,207
Net realized gain distributions 797,421 - - 4,412 35,169
Change in unrealized appreciation (depreciation) (37,562) 213,052 9,396 43,672 12,385
Net increase (decrease) in net assets resulting from operations 2,272,942 149,805 194,324 49,631 113,284
Unit transactions:
Purchases 1,240 - 7,000 - -
Net transfers (341,441) 216,775 242,892 (636) (112,716)
Surrenders for benefit payments and fees (348,507) (257,356) (97,427) - -
Other transactions 2 (56) (75) - -
Death benefits (1,475,352) (1,010,794) (602,882) (15,241) (72,771)
Net loan activity (13,914) (2,045) (1,768) - -
Cost of insurance and other fees (410,717) (93,244) (56,728) (3,449) (12,267)
Net increase (decrease) in net assets resulting from unit transactions (2,588,689) (1,146,720) (508,988) (19,326) (197,754)
Net increase (decrease) in net assets (315,747) (996,915) (314,664) 30,305 (84,470)
Net assets:
Beginning of period 26,673,982 7,069,339 4,081,151 178,091 872,804
End of period $ 26,358,235 $ 6,072,424 $ 3,766,487 $ 208,396 $ 788,334



The accompanying notes are an integral part of these financial statements.
SA-31
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) Invesco V.I. Equity and Income Fund (Series I) Invesco V.I. Growth and Income Fund (Series I) Invesco V.I. High Yield Fund (Series I) Putnam VT Mortgage Securities Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 12,280 $ 1,207 $ 2,439 $ 1,291 $ 22,836
Net realized gain (loss) on security transactions 24,488 62 3,356 (23) (45,409)
Net realized gain distributions 18,569 2,590 10,470 - -
Change in unrealized appreciation (depreciation) 35,187 3,623 10,702 407 38,033
Net increase (decrease) in net assets resulting from operations 90,524 7,482 26,967 1,675 15,460
Unit transactions:
Purchases - - - - -
Net transfers 1,538 - (202) - (52)
Surrenders for benefit payments and fees (5,957) - - - (16,223)
Other transactions - - - - -
Death benefits (62,792) - (60,027) - (68,062)
Net loan activity - - - - (69)
Cost of insurance and other fees (12,921) (1,111) (2,967) (325) (4,970)
Net increase (decrease) in net assets resulting from unit transactions (80,132) (1,111) (63,196) (325) (89,376)
Net increase (decrease) in net assets 10,392 6,371 (36,229) 1,350 (73,916)
Net assets:
Beginning of period 771,867 62,089 207,834 21,833 331,936
End of period $ 782,259 $ 68,460 $ 171,605 $ 23,183 $ 258,020




The accompanying notes are an integral part of these financial statements.
SA-32
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Putnam VT Diversified Income Fund (Class IA) Putnam VT Large Cap Value Fund (Class IA) Putnam VT Global Asset Allocation Fund (Class IA) Putnam VT Focused International Equity Fund (Class IA) Putnam VT Global Health Care Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 51,201 $ 162,630 $ 49,607 $ 42,770 $ 2,775
Net realized gain (loss) on security transactions (72,696) 571,610 19,747 (28,336) 9,979
Net realized gain distributions - 558,414 - - 17,108
Change in unrealized appreciation (depreciation) 66,554 921,242 249,707 72,472 (18,538)
Net increase (decrease) in net assets resulting from operations 45,059 2,213,896 319,061 86,906 11,324
Unit transactions:
Purchases - 1,094 100 1,480 -
Net transfers 30,050 69,604 (7,886) (88,134) (1,550)
Surrenders for benefit payments and fees - (141,090) (12,905) (10,715) -
Other transactions - - - - -
Death benefits (161,015) (1,984,782) (137,534) (280,718) (36,499)
Net loan activity (88) 39,222 115 119 (41)
Cost of insurance and other fees (13,427) (228,367) (36,869) (39,623) (7,380)
Net increase (decrease) in net assets resulting from unit transactions (144,480) (2,244,319) (194,979) (417,591) (45,470)
Net increase (decrease) in net assets (99,421) (30,423) 124,082 (330,685) (34,146)
Net assets:
Beginning of period 838,624 12,434,223 2,016,707 2,483,023 410,677
End of period $ 739,203 $ 12,403,800 $ 2,140,789 $ 2,152,338 $ 376,531
The accompanying notes are an integral part of these financial statements.
SA-33
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Putnam VT Large Cap Growth Fund (Class IA) Putnam VT High Yield Fund (Class IA) Putnam VT Income Fund (Class IA) Putnam VT International Equity Fund (Class IA) Putnam VT Emerging Markets Equity Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 9,279 $ 46,625 $ 72,038 $ 11,515 $ 7,119
Net realized gain (loss) on security transactions 727,253 (54,508) (41,674) 6,635 3,051
Net realized gain distributions 408,895 - - - -
Change in unrealized appreciation (depreciation) 1,814,368 67,267 3,972 (2,374) 54,209
Net increase (decrease) in net assets resulting from operations 2,959,795 59,384 34,336 15,776 64,379
Unit transactions:
Purchases 541 650 600 - -
Net transfers (356,858) (652) 81 10,437 99,032
Surrenders for benefit payments and fees (54,232) - (14,812) (4,642) (5,416)
Other transactions 25 - - - -
Death benefits (1,327,804) (98,320) (79,474) (37,042) (101,457)
Net loan activity 38,384 (189) (14) (190) (29)
Cost of insurance and other fees (183,340) (13,588) (21,790) (8,723) (7,337)
Net increase (decrease) in net assets resulting from unit transactions (1,883,284) (112,099) (115,409) (40,160) (15,207)
Net increase (decrease) in net assets 1,076,511 (52,715) (81,073) (24,384) 49,172
Net assets:
Beginning of period 9,890,450 785,369 1,284,753 489,942 413,225
End of period $ 10,966,961 $ 732,654 $ 1,203,680 $ 465,558 $ 462,397


The accompanying notes are an integral part of these financial statements.
SA-34
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Putnam VT International Value Fund (Class IA) Putnam VT Core Equity Fund (Class IA) Putnam VT Government Money Market Fund (Class IA) Putnam VT Sustainable Leaders Fund (Class IA) Putnam VT Research Fund (Class IA)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 6,919 $ 9,769 $ 88,832 $ 27,799 $ 2,416
Net realized gain (loss) on security transactions 467 62,777 - 527,027 11,910
Net realized gain distributions 752 66,205 - 45,813 2,597
Change in unrealized appreciation (depreciation) 5,717 145,209 - 917,336 79,818
Net increase (decrease) in net assets resulting from operations 13,855 283,960 88,832 1,517,975 96,741
Unit transactions:
Purchases - - 200 750 -
Net transfers - (18,425) (971,988) 1,122,796 (16)
Surrenders for benefit payments and fees (10,335) (1) (164,690) (130,168) (22,106)
Other transactions - - 53 - -
Death benefits - (185,344) (404,229) (2,233,553) (1,282)
Net loan activity (31) (273) (769) (719) -
Cost of insurance and other fees (4,593) (20,304) (20,785) (127,266) (6,339)
Net increase (decrease) in net assets resulting from unit transactions (14,959) (224,347) (1,562,208) (1,368,160) (29,743)
Net increase (decrease) in net assets (1,104) 59,613 (1,473,376) 149,815 66,998
Net assets:
Beginning of period 267,892 1,074,173 2,980,364 6,949,613 375,781
End of period $ 266,788 $ 1,133,786 $ 1,506,988 $ 7,099,428 $ 442,779


The accompanying notes are an integral part of these financial statements.
SA-35
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

Putnam VT Small Cap Value Fund (Class IA) Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) Morgan Stanley VIF Growth Portfolio (Class I) PSF PGIM Government Money Market Portfolio (Class I)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss) $ 5,303 $ 4,792 $ 104 $ - $ 33,564
Net realized gain (loss) on security transactions (3,015) (6,863) 557 (67,810) -
Net realized gain distributions 20,628 - - - -
Change in unrealized appreciation (depreciation) 5,752 9,158 31 613,230 -
Net increase (decrease) in net assets resulting from operations 28,668 7,087 692 545,420 33,564
Unit transactions:
Purchases - - - - -
Net transfers (666) (2,136) (279) (7,992) 162,829
Surrenders for benefit payments and fees (22,500) - - (3,659) (384)
Other transactions - - - - -
Death benefits (8,277) - (6,278) (65,648) (9,854)
Net loan activity (123) - - (40,000) -
Cost of insurance and other fees (8,259) (797) (132) (17,469) (11,643)
Net increase (decrease) in net assets resulting from unit transactions (39,825) (2,933) (6,689) (134,768) 140,948
Net increase (decrease) in net assets (11,157) 4,154 (5,997) 410,652 174,512
Net assets:
Beginning of period 481,586 44,421 13,578 1,271,139 650,908
End of period $ 470,429 $ 48,575 $ 7,581 $ 1,681,791 $ 825,420



The accompanying notes are an integral part of these financial statements.
SA-36
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Statements of Changes in Net Assets
For the Period Ended December 31, 2024

BlackRock S&P 500 Index V.I. Fund (Class I)
Sub-Account
Operations:
Net investment income (loss) $ 107,697
Net realized gain (loss) on security transactions 257,595
Net realized gain distributions 358,535
Change in unrealized appreciation (depreciation) 1,114,700
Net increase (decrease) in net assets resulting from operations 1,838,527
Unit transactions:
Purchases 75
Net transfers 135,004
Surrenders for benefit payments and fees (58,707)
Other transactions 25
Death benefits (503,672)
Net loan activity 49
Cost of insurance and other fees (122,988)
Net increase (decrease) in net assets resulting from unit transactions (550,214)
Net increase (decrease) in net assets 1,288,313
Net assets:
Beginning of period 7,553,029
End of period $ 8,841,342

The accompanying notes are an integral part of these financial statements.
SA-37
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
1. Organization:


Separate Account Five (the "Account") is a separate investment account established by Talcott Resolution Life and Annuity Insurance Company (the "Sponsor Company") and is registered with the Securities and Exchange Commission ("SEC") as a unit investment trust under the Investment Company Act of 1940, as amended. Both the Sponsor Company and the Account are subject to supervision and regulation by the Department of Insurance of the State of Connecticut and the SEC. The contract owners of the Sponsor Company direct their deposits into various investment options (the "Sub-Accounts") within the Account. The Sponsor Company is indirectly owned by Talcott Resolution Life, Inc.

On June 30, 2021, the Account's indirect owner, Hopmeadow Holdings GP LLC, completed the sale of the Sponsor Company (the "Sixth Street Acquisition") through the merger of an affiliate of Sixth Street, a global investment firm. Sixth Street obtained 100% control of Talcott Resolution Life, Inc. and its life and annuity operating subsidiaries including the Account. This transaction does not impact the contracts of the Account or the accounting of the Account.

In 2025, the Account was comprised of the following Sub-Accounts:
Fidelity® VIP Government Money Market Portfolio (Service Class)
Putnam VT George Putnam Balanced Fund (Class IA)
Hartford Balanced HLS Fund (Class IA)
Hartford Capital Appreciation HLS Fund (Class IA)
Hartford Disciplined Equity HLS Fund (Class IA)
Hartford Dividend and Growth HLS Fund (Class IA)
Hartford Healthcare HLS Fund (Class IA)
Hartford International Opportunities HLS Fund (Class IA)
Hartford MidCap HLS Fund (Class IA)
Hartford Small Company HLS Fund (Class IA)
Hartford Stock HLS Fund (Class IA)
Hartford Total Return Bond HLS Fund (Class IA)
Hartford Ultrashort Bond HLS Fund (Class IA)
Invesco V.I. American Value Fund (Series I)
Invesco V.I. Diversified Dividend Fund (Series I)
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I)
Invesco V.I. Equity and Income Fund (Series I)
Invesco V.I. Growth and Income Fund (Series I)
Invesco V.I. High Yield Fund (Series I)
Putnam VT Mortgage Securities Fund (Class IA)
Putnam VT Diversified Income Fund (Class IA)
Putnam VT Large Cap Value Fund (Class IA)
Putnam VT Global Asset Allocation Fund (Class IA)
Putnam VT Focused International Equity Fund (Class IA)
Putnam VT Global Health Care Fund (Class IA)
Putnam VT Large Cap Growth Fund (Class IA)
Putnam VT High Yield Fund (Class IA)
Putnam VT Income Fund (Class IA)
Putnam VT International Equity Fund (Class IA)
Putnam VT Emerging Markets Equity Fund (Class IA)
SA-38
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
1. Organization (continued):

Putnam VT International Value Fund (Class IA)
Putnam VT Core Equity Fund (Class IA)
Putnam VT Government Money Market Fund (Class IA)
Putnam VT Sustainable Leaders Fund (Class IA)
Putnam VT Research Fund (Class IA)
Putnam VT Small Cap Value Fund (Class IA)
Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I)
Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I)
Morgan Stanley VIF Growth Portfolio (Class I)
PSF PGIM Government Money Market Portfolio (Class I)
BlackRock S&P 500 Index V.I. Fund (Class I)
The Sub-Accounts are invested in mutual funds (the "Funds") of the same name. The Account may invest in one or more share classes of a fund. A contract owner's unitized performance correlates with the share class associated with the contract owner's product.

If a fund is subject to a merger by the fund manager, the Sub-Account invested in the surviving fund acquires the net assets of the Sub-Account associated with the merging fund on the date disclosed. These amounts are recorded at fair value and are reflected in the Statements of Changes in Net Assets as a net transfer and purchases and sales in Note 4. There were no mergers during the period ended December 31, 2025.

Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from the Sponsor Company's other assets and liabilities and are not chargeable with liabilities arising out of any other business the Sponsor Company may conduct.

2. Significant Accounting Policies:

The Account is an investment company and, accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies, which is part of accounting principles generally accepted in the United States of America ("U.S. GAAP").

The following is a summary of significant accounting policies of the Account, which are in accordance with U.S. GAAP:

a) Security Transactions - Security transactions are recorded on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sales of securities are computed using the average cost method. Dividend income is either accrued daily or as of the ex-dividend date depending on the Funds and are reinvested in additional shares of the Funds. Net realized gain distributions are accrued as of the ex-dividend date and are reinvested in additional shares of the Funds. Net realized gain distributions represent those dividends from the Funds, which are characterized as capital gains under tax regulations.

b) Unit Transactions - Unit transactions are executed based on the unit values calculated at the close of the business day.

c) Federal Income Taxes - The operations of the Account form a part of, and are taxed with, the total operations of the Sponsor Company, which is taxed as an insurance company under the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Sponsor Company does not expect to incur federal income taxes on the earnings of the Account to the extent the earnings are credited to the contract owners. Based on this, no charge is being made currently to the Account for federal income taxes. The Sponsor Company will review periodically the status of this policy. In the event of changes in the tax law, a charge may be made in future years for any federal income taxes that would be attributable to the contracts.
SA-39
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
2. Significant Accounting Policies (continued):


d) Use of Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of increases and decreases in net assets resulting from operations during the period. Actual results could differ from those estimates. The most significant estimates contained within the financial statements are the fair value measurements.

e) Mortality Risk - The mortality risk is fully borne by the Sponsor Company. In the event of a death, any contractual payments due in excess of the contract owner account value are the obligation of the Sponsor Company. The transfer of the existing contract owner account value is included in 'Death benefits' on the accompanying Statements of Changes in Net Assets.

f) Fair Value Measurements - The Sub-Accounts' investments are carried at fair value in the Account's financial statements. The investments in shares of the Funds are valued at the December 31, 2025 closing net asset value as determined by the appropriate fund manager. For financial instruments that are carried at fair value, a hierarchy is used to place the instruments into three broad levels (Levels 1, 2 and 3) by prioritizing the inputs in the valuation techniques used to measure fair value.

Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets that the Account can access at the measurement date. Level 1 investments include mutual funds.

Level 2: Observable inputs, other than unadjusted quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities.

Level 3: Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Because Level 3 fair values, by their nature, contain unobservable market inputs, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.

In certain cases, the inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

As of December 31, 2025, the Sub-Accounts invest in mutual funds that are carried at fair value and represent Level 1 investments under the fair value hierarchy levels. There were no Level 2 or Level 3 investments in the Sub-Accounts.

g) Accounting for Uncertain Tax Positions - The statute of limitations is closed through the 2020 tax year with the exception of net operating loss ("NOL") carryforwards utilized in open tax years and the Sponsor Company is not currently under examination for any open years. Management evaluates whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required at December 31, 2025.

h) Segment Reporting - The Management Committee of The Sponsor Company evaluates third-party funds and determines the selection of funds to offer within the product offering. All funds are sourced from third party asset managers which employ a governance structure to oversee fund strategy and performance, all of which is an element contemplated in the Separate Account Management Committee's determination of fund offerings. Accordingly, the Management Committee, acts as the Account's chief operating decision maker ("CODM") assessing performance and making decisions about the product offering allocation. The CODM has determined that each Sub-Account acts as an operating segment based on the fact that the CODM monitors the operating results of the fund as a whole and that the fund's long-term strategic asset allocation is pre-determined in accordance with the terms of its prospectus, based on a defined investment strategy which is executed by the fund's portfolio managers as a team. The financial information provided to and reviewed by the CODM is consistent with that presented within the fund's Portfolio of Investments, Statement of Changes in Net Assets and Financial Highlights.
SA-40
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
3. Administration of the Account and Related Charges:


Each Sub-Account is charged certain fees, according to contract terms, as follows:

a) Cost of Insurance - In accordance with terms of the contracts, the Sponsor Company makes deductions for costs of insurance charges ("COI"), which relate to the death benefit component of the contract. The COI is calculated based on several factors including age, gender, risk class, timing of premium payments, investment performance of the Sub-Account, the death benefit amount, fees and charges assessed and outstanding policy loans. Because a contract's account value and death benefit may vary from month to month, the cost of insurance charge may also vary. These charges are deducted through the redemption of units from applicable contract owners' accounts and are included on the accompanying Statements of Changes in Net Assets.

b) Mortality and Expense Risk Charges - The Sponsor Company, as an issuer of variable life contracts, assesses mortality and expense risk charges for which it receives a maximum annual fee of 0.90% of the Sub-Account's average daily net assets. These expenses are deducted through the redemption of units from applicable contract owners' accounts and are reflected in 'Cost of insurance and other fees' on the accompanying Statements of Changes in Net Assets.

c) Tax Expense Charges - If applicable, the Sponsor Company will make deductions up to a maximum fee of 4.00% of the contract's average daily net assets to meet premium tax requirements. An additional tax charge based on a percentage of the Sub-Account's average daily net assets may be assessed on partial withdrawals or surrenders. These charges are deducted through the redemption of units from applicable contract owners' accounts and are reflected in 'Surrenders for benefit payments and fees' on the accompanying Statements of Changes in Net Assets.

d) Administrative Charges - The Sponsor Company provides administrative services to the Account and receives a maximum annual fee of 0.40% of the Sub-Account's average daily net assets. These charges are deducted through the redemption of units from applicable contract owners' accounts and are reflected in 'Cost of insurance and other fees' on the accompanying Statements of Changes in Net Assets.

e) Annual Maintenance Fees - An annual maintenance fee up to a maximum of $30 may be charged. These fees are deducted through the redemption of units from applicable contract owners' accounts and are reflected in 'Cost of insurance and other fees' on the accompanying Statements of Changes in Net Assets.

f) Transactions with Related Parties - There were no transactions with related parties during the period ended December 31, 2025.











SA-41
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
4. Purchases and Sales of Investments:

The cost of purchases and proceeds from sales of investments, excluding distributions received and reinvested, for the period ended December 31, 2025 were as follows:
Sub-Account Purchases at Cost Proceeds from Sales
Fidelity® VIP Government Money Market Portfolio (Service Class) $ 17,867,406 $ 17,630,008
Putnam VT George Putnam Balanced Fund (Class IA) - 96,378
Hartford Balanced HLS Fund (Class IA) 597,730 4,320,860
Hartford Capital Appreciation HLS Fund (Class IA) 732,701 7,324,838
Hartford Disciplined Equity HLS Fund (Class IA) 361,907 2,232,057
Hartford Dividend and Growth HLS Fund (Class IA) 392,201 4,663,709
Hartford Healthcare HLS Fund (Class IA) 986 132,162
Hartford International Opportunities HLS Fund (Class IA) 146,318 1,154,148
Hartford MidCap HLS Fund (Class IA) 61,546 909,295
Hartford Small Company HLS Fund (Class IA) 9,863 306,841
Hartford Stock HLS Fund (Class IA) 395,802 3,788,556
Hartford Total Return Bond HLS Fund (Class IA) 352,886 1,117,764
Hartford Ultrashort Bond HLS Fund (Class IA) 547,625 1,132,878
Invesco V.I. American Value Fund (Series I) - 3,952
Invesco V.I. Diversified Dividend Fund (Series I) - 333,788
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) - 13,519
Invesco V.I. Equity and Income Fund (Series I) - 1,193
Invesco V.I. Growth and Income Fund (Series I) - 2,981
Invesco V.I. High Yield Fund (Series I) 12,047 475
Putnam VT Mortgage Securities Fund (Class IA) - 10,250
Putnam VT Diversified Income Fund (Class IA) 5,000 19,112
Putnam VT Large Cap Value Fund (Class IA) 81,977 1,555,474
Putnam VT Global Asset Allocation Fund (Class IA) 8 58,888
Putnam VT Focused International Equity Fund (Class IA) 42,377 263,933
Putnam VT Global Health Care Fund (Class IA) - 33,631
Putnam VT Large Cap Growth Fund (Class IA) 11,748 1,006,133
Putnam VT High Yield Fund (Class IA) 25,317 143,510
Putnam VT Income Fund (Class IA) 20 60,458
Putnam VT International Equity Fund (Class IA) 3,814 57,275
Putnam VT Emerging Markets Equity Fund (Class IA) - 27,371
Putnam VT International Value Fund (Class IA) - 7,944
Putnam VT Core Equity Fund (Class IA) 35,961 20,967
Putnam VT Government Money Market Fund (Class IA) 2,636,656 3,082,051
Putnam VT Sustainable Leaders Fund (Class IA) 126,499 562,943
Putnam VT Research Fund (Class IA) - 30,158
Putnam VT Small Cap Value Fund (Class IA) 9,286 14,297
Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) - 872
Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) - 133
Morgan Stanley VIF Growth Portfolio (Class I) 27,690 647,840
SA-42
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
4. Purchases and Sales of Investments (continued):

Sub-Account Purchases at Cost Proceeds from Sales
PSF PGIM Government Money Market Portfolio (Class I) $ 130,759 $ 307,796
BlackRock S&P 500 Index V.I. Fund (Class I) 208,249 1,911,789

5. Changes in Units Outstanding:

The changes in units outstanding for the period ended December 31, 2025 were as follows:
Sub-Account
Units Issued
Units Redeemed
Net Increase (Decrease)
Fidelity® VIP Government Money Market Portfolio (Service Class) 1,502,906 1,483,637 19,269
Putnam VT George Putnam Balanced Fund (Class IA) - 2,029 (2,029)
Hartford Balanced HLS Fund (Class IA) 55,187 398,086 (342,899)
Hartford Capital Appreciation HLS Fund (Class IA) 24,346 256,603 (232,257)
Hartford Disciplined Equity HLS Fund (Class IA) 35,549 231,308 (195,759)
Hartford Dividend and Growth HLS Fund (Class IA) 17,069 201,913 (184,844)
Hartford Healthcare HLS Fund (Class IA) 83 10,474 (10,391)
Hartford International Opportunities HLS Fund (Class IA) 22,867 168,891 (146,024)
Hartford MidCap HLS Fund (Class IA) 3,061 46,033 (42,972)
Hartford Small Company HLS Fund (Class IA) 884 26,532 (25,648)
Hartford Stock HLS Fund (Class IA) 24,231 235,907 (211,676)
Hartford Total Return Bond HLS Fund (Class IA) 80,490 259,836 (179,346)
Hartford Ultrashort Bond HLS Fund (Class IA) 263,039 545,422 (282,383)
Invesco V.I. American Value Fund (Series I) - 40 (40)
Invesco V.I. Diversified Dividend Fund (Series I) - 8,150 (8,150)
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) - 96 (96)
Invesco V.I. Equity and Income Fund (Series I) - 38 (38)
Invesco V.I. Growth and Income Fund (Series I) - 41 (41)
Invesco V.I. High Yield Fund (Series I) 651 26 625
Putnam VT Mortgage Securities Fund (Class IA) - 401 (401)
Putnam VT Diversified Income Fund (Class IA) 116 440 (324)
Putnam VT Large Cap Value Fund (Class IA) 942 18,124 (17,182)
Putnam VT Global Asset Allocation Fund (Class IA) - 646 (646)
Putnam VT Focused International Equity Fund (Class IA) 587 3,832 (3,245)
Putnam VT Global Health Care Fund (Class IA) - 424 (424)
Putnam VT Large Cap Growth Fund (Class IA) 246 21,461 (21,215)
Putnam VT High Yield Fund (Class IA) 401 2,271 (1,870)
Putnam VT Income Fund (Class IA) - 1,477 (1,477)
Putnam VT International Equity Fund (Class IA) 77 997 (920)
Putnam VT Emerging Markets Equity Fund (Class IA) - 601 (601)
Putnam VT International Value Fund (Class IA) - 150 (150)
Putnam VT Core Equity Fund (Class IA) 506 286 220
Putnam VT Government Money Market Fund (Class IA) 1,314,032 1,531,880 (217,848)
Putnam VT Sustainable Leaders Fund (Class IA) 745 3,270 (2,525)
SA-43
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
5. Changes in Units Outstanding (continued):

Sub-Account
Units Issued
Units Redeemed
Net Increase (Decrease)
Putnam VT Research Fund (Class IA) - 305 (305)
Putnam VT Small Cap Value Fund (Class IA) 92 141 (49)
Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) - 20 (20)
Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) - 4 (4)
Morgan Stanley VIF Growth Portfolio (Class I) 384 7,461 (7,077)
PSF PGIM Government Money Market Portfolio (Class I) 10,824 25,827 (15,003)
BlackRock S&P 500 Index V.I. Fund (Class I) 7,460 73,729 (66,269)

The changes in units outstanding for the period ended December 31, 2024 were as follows:
Sub-Account
Units Issued
Units Redeemed
Net Increase (Decrease)
Fidelity® VIP Government Money Market Portfolio (Service Class) 1,593,038 1,529,459 63,579
Putnam VT George Putnam Balanced Fund (Class IA) - 1,833 (1,833)
Hartford Balanced HLS Fund (Class IA) 55,377 558,610 (503,233)
Hartford Capital Appreciation HLS Fund (Class IA) 16,443 258,601 (242,158)
Hartford Disciplined Equity HLS Fund (Class IA) 44,224 245,457 (201,233)
Hartford Dividend and Growth HLS Fund (Class IA) 43,990 268,255 (224,265)
Hartford Healthcare HLS Fund (Class IA) 2,335 19,769 (17,434)
Hartford International Opportunities HLS Fund (Class IA) 30,105 202,055 (171,950)
Hartford MidCap HLS Fund (Class IA) 11,082 98,761 (87,679)
Hartford Small Company HLS Fund (Class IA) 3,539 76,566 (73,027)
Hartford Stock HLS Fund (Class IA) 21,506 191,317 (169,811)
Hartford Total Return Bond HLS Fund (Class IA) 175,682 458,891 (283,209)
Hartford Ultrashort Bond HLS Fund (Class IA) 64,170 324,297 (260,127)
Invesco V.I. American Value Fund (Series I) - 258 (258)
Invesco V.I. Diversified Dividend Fund (Series I) - 5,457 (5,457)
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I) - 657 (657)
Invesco V.I. Equity and Income Fund (Series I) - 38 (38)
Invesco V.I. Growth and Income Fund (Series I) - 1,007 (1,007)
Invesco V.I. High Yield Fund (Series I) - 18 (18)
Putnam VT Mortgage Securities Fund (Class IA) - 3,722 (3,722)
Putnam VT Diversified Income Fund (Class IA) - 3,633 (3,633)
Putnam VT Large Cap Value Fund (Class IA) 236 29,956 (29,720)
Putnam VT Global Asset Allocation Fund (Class IA) - 2,403 (2,403)
Putnam VT Focused International Equity Fund (Class IA) 167 6,993 (6,826)
Putnam VT Global Health Care Fund (Class IA) - 577 (577)
Putnam VT Large Cap Growth Fund (Class IA) 1,184 51,389 (50,205)
Putnam VT High Yield Fund (Class IA) 9 1,901 (1,892)
Putnam VT Income Fund (Class IA) 15 2,883 (2,868)
Putnam VT International Equity Fund (Class IA) 95 943 (848)
Putnam VT Emerging Markets Equity Fund (Class IA) - 455 (455)
Putnam VT International Value Fund (Class IA) - 346 (346)
SA-44
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
5. Changes in Units Outstanding (continued):

Sub-Account
Units Issued
Units Redeemed
Net Increase (Decrease)
Putnam VT Core Equity Fund (Class IA) 461 3,804 (3,343)
Putnam VT Government Money Market Fund (Class IA) 2,916,967 3,737,138 (820,171)
Putnam VT Sustainable Leaders Fund (Class IA) 49 8,588 (8,539)
Putnam VT Research Fund (Class IA) - 344 (344)
Putnam VT Small Cap Value Fund (Class IA) - 407 (407)
Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I) 3,880 3,900 (20)
Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I) - 248 (248)
Morgan Stanley VIF Growth Portfolio (Class I) - 3,059 (3,059)
PSF PGIM Government Money Market Portfolio (Class I) 28,305 16,146 12,159
BlackRock S&P 500 Index V.I. Fund (Class I) 19,411 43,639 (24,228)

6. Financial Highlights:

The following is a summary of units outstanding, unit fair values, net assets, expense ratios, investment income ratios, and total return ratios for each of the periods presented for each Sub-Account that had outstanding units as of and for the period ended December 31, 2025. The ranges presented are calculated using the results of only the contracts with the highest and lowest expense ratios. A specific unit value or ratio may be outside of the range presented in this table due to the initial assigned unit values, combined with varying performance and/or length of time since inception of the presented expense ratios. Investment income and total return ratios are calculated for the period the Sub-Account is active, while the expense ratio is annualized.

SA-45
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding #
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
Fidelity® VIP Government Money Market Portfolio (Service Class)
2025 467,519 $ 12.13 to $ 12.13 $ 5,669,193 - % to - % 3.96% to 3.96% 4.03% to 4.03%
2024 448,250 11.66 to 11.66 5,224,940 - to - 4.89 to 4.89 5.00 to 5.00
2023 384,671 11.10 to 11.10 4,270,344 - to - 4.69 to 4.69 4.79 to 4.79
2022 427,728 10.59 to 10.59 4,531,206 - to - 1.49 to 1.49 1.36 to 1.36
2021 611,886 10.45 to 10.45 6,395,200 - to - 0.01 to 0.01 0.01 to 0.01
Putnam VT George Putnam Balanced Fund (Class IA)
2025 18,433 53.29 to 53.29 982,292 - to - 1.66 to 1.66 14.31 to 14.31
2024 20,462 46.62 to 46.62 953,921 - to - 1.36 to 1.36 16.94 to 16.94
2023 22,295 39.86 to 39.86 888,790 - to - 1.47 to 1.47 20.26 to 20.26
2022 26,152 33.15 to 33.15 866,869 - to - 1.17 to 1.17 (15.82) to (15.82)
2021 30,704 39.38 to 39.38 1,208,993 - to - 1.03 to 1.03 14.28 to 14.28
Hartford Balanced HLS Fund (Class IA)
2025 2,578,680 11.62 to 11.62 29,955,338 - to - 1.92 to 1.92 12.14 to 12.14
2024 2,921,579 10.36 to 10.36 30,265,864 - to - 1.89 to 1.89 11.21 to 11.21
2023 3,424,812 9.31 to 9.31 31,901,539 - to - 1.82 to 1.82 14.78 to 14.78
2022 4,004,687 8.12 to 8.12 32,499,877 - to - 1.73 to 1.73 (13.42) to (13.42)
2021 4,682,276 9.37 to 9.37 43,891,043 - to - 0.98 to 0.98 19.64 to 19.64
Hartford Capital Appreciation HLS Fund (Class IA)
2025 1,549,841 31.01 to 31.01 48,059,795 - to - 0.65 to 0.65 13.72 to 13.72
2024 1,782,098 27.27 to 27.27 48,593,671 - to - 0.76 to 0.76 21.19 to 21.19
2023 2,024,256 22.50 to 22.50 45,545,200 - to - 0.84 to 0.84 20.00 to 20.00
2022 2,373,844 18.75 to 18.75 44,509,129 - to - 0.90 to 0.90 (15.30) to (15.30)
2021 2,752,639 22.14 to 22.14 60,933,171 - to - 0.46 to 0.46 14.76 to 14.76
Hartford Disciplined Equity HLS Fund (Class IA)
2025 749,765 10.60 to 10.60 7,949,096 - to - 0.40 to 0.40 14.32 to 14.32
2024 945,524 9.27 to 9.27 8,768,736 - to - 0.58 to 0.58 25.37 to 25.37
2023 1,146,757 7.40 to 7.40 8,482,913 - to - 0.79 to 0.79 21.24 to 21.24
2022 1,391,565 6.10 to 6.10 8,490,120 - to - 0.94 to 0.94 (18.96) to (18.96)
2021 1,671,082 7.53 to 7.53 12,580,592 - to - 0.54 to 0.54 25.52 to 25.52
Hartford Dividend and Growth HLS Fund (Class IA)
2025 1,006,014 25.39 to 25.39 25,539,968 - to - 1.56 to 1.56 17.49 to 17.49
2024 1,190,858 21.61 to 21.61 25,732,848 - to - 1.85 to 1.85 12.67 to 12.67
2023 1,415,123 19.18 to 19.18 27,140,694 - to - 1.51 to 1.51 14.18 to 14.18
2022 1,641,541 16.80 to 16.80 27,574,325 - to - 1.64 to 1.64 (8.93) to (8.93)
2021 1,865,352 18.45 to 18.45 34,407,911 - to - 1.25 to 1.25 32.00 to 32.00
Hartford Healthcare HLS Fund (Class IA)
2025 125,811 14.85 to 14.85 1,868,134 - to - 0.74 to 0.74 16.09 to 16.09
2024 136,202 12.79 to 12.79 1,742,051 - to - 0.10 to 0.10 0.39 to 0.39
2023 153,636 12.74 to 12.74 1,957,471 - to - 0.48 to 0.48 4.11 to 4.11
2022 177,054 12.24 to 12.24 2,166,857 - to - - to - (11.24) to (11.24)
2021 232,784 13.79 to 13.79 3,209,547 - to - 0.22 to 0.22 10.01 to 10.01
Hartford International Opportunities HLS Fund (Class IA)
2025 657,075 7.81 to 7.81 5,131,526 - to - 1.66 to 1.66 30.41 to 30.41
2024 803,099 5.99 to 5.99 4,809,381 - to - 1.51 to 1.51 8.40 to 8.40
2023 975,049 5.52 to 5.52 5,386,843 - to - 1.18 to 1.18 11.72 to 11.72
2022 1,051,813 4.95 to 4.95 5,201,518 - to - 1.60 to 1.60 (18.14) to (18.14)
2021 1,259,043 6.04 to 6.04 7,606,392 - to - 1.01 to 1.01 7.82 to 7.82
SA-46
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding #
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
Hartford MidCap HLS Fund (Class IA)
2025 478,156 $ 19.72 to $ 19.72 $ 9,427,674 - % to - % -% to -% (0.38)% to (0.38)%
2024 521,128 19.79 to 19.79 10,314,032 - to - - to - 6.28 to 6.28
2023 608,807 18.62 to 18.62 11,337,749 - to - 0.04 to 0.04 14.87 to 14.87
2022 705,577 16.21 to 16.21 11,438,512 - to - 0.89 to 0.89 (24.30) to (24.30)
2021 811,777 21.42 to 21.42 17,385,108 - to - - to - 9.91 to 9.91
Hartford Small Company HLS Fund (Class IA)
2025 421,763 12.66 to 12.66 5,339,405 - to - 0.44 to 0.44 12.96 to 12.96
2024 447,411 11.21 to 11.21 5,014,227 - to - - to - 12.00 to 12.00
2023 520,438 10.01 to 10.01 5,207,588 - to - - to - 16.74 to 16.74
2022 576,056 8.57 to 8.57 4,937,570 - to - - to - (30.94) to (30.94)
2021 672,450 12.41 to 12.41 8,345,587 - to - - to - 1.56 to 1.56
Hartford Stock HLS Fund (Class IA)
2025 1,478,488 16.84 to 16.84 24,893,796 - to - 1.16 to 1.16 7.97 to 7.97
2024 1,690,164 15.60 to 15.60 26,358,235 - to - 1.58 to 1.58 8.74 to 8.74
2023 1,859,975 14.34 to 14.34 26,673,982 - to - 1.29 to 1.29 7.72 to 7.72
2022 2,094,346 13.31 to 13.31 27,883,457 - to - 1.56 to 1.56 (5.14) to (5.14)
2021 2,428,791 14.03 to 14.03 34,087,132 - to - 1.18 to 1.18 24.98 to 24.98
Hartford Total Return Bond HLS Fund (Class IA)
2025 1,301,574 4.40 to 4.40 5,726,470 - to - 5.43 to 5.43 7.30 to 7.30
2024 1,480,920 4.10 to 4.10 6,072,424 - to - 3.54 to 3.54 2.33 to 2.33
2023 1,764,129 4.01 to 4.01 7,069,339 - to - 3.42 to 3.42 6.97 to 6.97
2022 1,889,824 3.75 to 3.75 7,079,641 - to - 2.90 to 2.90 (14.21) to (14.21)
2021 2,293,979 4.37 to 4.37 10,017,485 - to - 2.40 to 2.40 (0.95) to (0.95)
Hartford Ultrashort Bond HLS Fund (Class IA)
2025 1,576,941 2.12 to 2.12 3,338,573 - to - 4.70 to 4.70 4.51 to 4.51
2024 1,859,324 2.03 to 2.03 3,766,487 - to - 4.20 to 4.20 5.20 to 5.20
2023 2,119,451 1.93 to 1.93 4,081,151 - to - 1.28 to 1.28 5.18 to 5.18
2022 2,528,575 1.83 to 1.83 4,629,063 - to - 0.22 to 0.22 (0.17) to (0.17)
2021 3,078,190 1.83 to 1.83 5,644,817 - to - 0.76 to 0.76 (0.19) to (0.19)
Invesco V.I. American Value Fund (Series I)
2025 2,209 112.10 to 112.10 247,637 - to - 0.47 to 0.47 21.00 to 21.00
2024 2,249 92.64 to 92.64 208,396 - to - 1.01 to 1.01 30.41 to 30.41
2023 2,507 71.04 to 71.04 178,091 - to - 0.65 to 0.65 15.60 to 15.60
2022 2,554 61.45 to 61.45 156,954 - to - 0.72 to 0.72 (2.61) to (2.61)
2021 3,161 63.10 to 63.10 199,453 - to - 0.45 to 0.45 27.95 to 27.95
Invesco V.I. Diversified Dividend Fund (Series I)
2025 13,377 42.38 to 42.38 566,975 - to - 1.31 to 1.31 15.74 to 15.74
2024 21,527 36.62 to 36.62 788,334 - to - 1.90 to 1.90 13.22 to 13.22
2023 26,984 32.35 to 32.35 872,804 - to - 1.97 to 1.97 9.04 to 9.04
2022 29,915 29.66 to 29.66 887,359 - to - 1.87 to 1.87 (1.68) to (1.68)
2021 31,357 30.17 to 30.17 946,032 - to - 2.15 to 2.15 18.89 to 18.89
Invesco V.I. Equally-Weighted S&P 500 Fund (Series I)
2025 5,764 148.30 to 148.30 854,761 - to - 1.61 to 1.61 11.10 to 11.10
2024 5,860 133.49 to 133.49 782,259 - to - 1.58 to 1.58 12.70 to 12.70
2023 6,517 118.44 to 118.44 771,867 - to - 1.39 to 1.39 13.71 to 13.71
2022 6,627 104.16 to 104.16 690,277 - to - 0.65 to 0.65 (11.81) to (11.81)
2021 17,927 118.10 to 118.10 2,117,191 - to - 1.19 to 1.19 29.17 to 29.17
SA-47
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding #
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
Invesco V.I. Equity and Income Fund (Series I)
2025 2,224 $ 34.14 to $ 34.14 $ 75,951 - % to - % 2.13% to 2.13% 12.81% to 12.81%
2024 2,262 30.27 to 30.27 68,460 - to - 1.82 to 1.82 12.12 to 12.12
2023 2,300 27.00 to 27.00 62,089 - to - 1.59 to 1.59 10.56 to 10.56
2022 3,584 24.42 to 24.42 87,528 - to - 1.75 to 1.75 (7.51) to (7.51)
2021 3,649 26.40 to 26.40 96,328 - to - 1.87 to 1.87 18.65 to 18.65
Invesco V.I. Growth and Income Fund (Series I)
2025 2,447 79.74 to 79.74 195,158 - to - 1.49 to 1.49 15.62 to 15.62
2024 2,488 68.97 to 68.97 171,605 - to - 1.36 to 1.36 16.00 to 16.00
2023 3,495 59.46 to 59.46 207,834 - to - 1.64 to 1.64 12.66 to 12.66
2022 3,556 52.78 to 52.78 187,698 - to - 1.35 to 1.35 (5.75) to (5.75)
2021 5,021 56.00 to 56.00 281,158 - to - 1.57 to 1.57 28.51 to 28.51
Invesco V.I. High Yield Fund (Series I)
2025 1,896 19.47 to 19.47 36,924 - to - 8.12 to 8.12 6.73 to 6.73
2024 1,271 18.25 to 18.25 23,183 - to - 5.74 to 5.74 7.73 to 7.73
2023 1,289 16.94 to 16.94 21,833 - to - 5.31 to 5.31 10.17 to 10.17
2022 1,308 15.37 to 15.37 20,106 - to - 4.68 to 4.68 (9.55) to (9.55)
2021 1,327 17.00 to 17.00 22,554 - to - 4.77 to 4.77 4.38 to 4.38
Putnam VT Mortgage Securities Fund (Class IA)
2025 10,155 26.70 to 26.70 271,096 - to - 8.62 to 8.62 9.22 to 9.22
2024 10,556 24.44 to 24.44 258,020 - to - 7.66 to 7.66 5.14 to 5.14
2023 14,278 23.25 to 23.25 331,936 - to - 15.92 to 15.92 5.44 to 5.44
2022 14,358 22.05 to 22.05 316,573 - to - 9.27 to 9.27 (9.82) to (9.82)
2021 15,000 24.45 to 24.45 366,775 - to - - to - (3.43) to (3.43)
Putnam VT Diversified Income Fund (Class IA)
2025 17,522 45.12 to 45.12 790,633 - to - 6.28 to 6.28 8.94 to 8.94
2024 17,846 41.42 to 41.42 739,203 - to - 6.59 to 6.59 6.09 to 6.09
2023 21,479 39.04 to 39.04 838,624 - to - 6.30 to 6.30 5.01 to 5.01
2022 22,278 37.18 to 37.18 828,335 - to - 7.32 to 7.32 (2.06) to (2.06)
2021 27,382 37.97 to 37.97 1,039,564 - to - 0.93 to 0.93 (6.73) to (6.73)
Putnam VT Large Cap Value Fund (Class IA)
2025 133,281 99.47 to 99.47 13,257,824 - to - 1.65 to 1.65 20.66 to 20.66
2024 150,463 82.44 to 82.44 12,403,800 - to - 1.29 to 1.29 19.46 to 19.46
2023 180,183 69.01 to 69.01 12,434,223 - to - 2.26 to 2.26 15.92 to 15.92
2022 216,400 59.53 to 59.53 12,882,427 - to - 1.75 to 1.75 (2.87) to (2.87)
2021 248,366 61.29 to 61.29 15,221,908 - to - 1.39 to 1.39 27.62 to 27.62
Putnam VT Global Asset Allocation Fund (Class IA)
2025 23,686 100.91 to 100.91 2,389,999 - to - 2.42 to 2.42 14.69 to 14.69
2024 24,332 87.98 to 87.98 2,140,789 - to - 2.37 to 2.37 16.63 to 16.63
2023 26,735 75.43 to 75.43 2,016,707 - to - 1.85 to 1.85 17.78 to 17.78
2022 31,498 64.05 to 64.05 2,017,343 - to - 1.72 to 1.72 (15.82) to (15.82)
2021 42,385 76.08 to 76.08 3,224,657 - to - 0.94 to 0.94 14.25 to 14.25
Putnam VT Focused International Equity Fund (Class IA)
2025 31,662 84.32 to 84.32 2,669,698 - to - 3.35 to 3.35 36.75 to 36.75
2024 34,907 61.66 to 61.66 2,152,338 - to - 1.88 to 1.88 3.63 to 3.63
2023 41,733 59.50 to 59.50 2,483,023 - to - 0.93 to 0.93 19.56 to 19.56
2022 46,134 49.77 to 49.77 2,295,878 - to - 2.13 to 2.13 (17.99) to (17.99)
2021 54,719 60.68 to 60.68 3,320,559 - to - 0.99 to 0.99 12.84 to 12.84
SA-48
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding #
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
Putnam VT Global Health Care Fund (Class IA)
2025 4,860 $ 82.19 to $ 82.19 $ 399,415 - % to - % -% to -% 15.34% to 15.34%
2024 5,284 71.26 to 71.26 376,531 - to - 0.66 to 0.66 1.70 to 1.70
2023 5,861 70.07 to 70.07 410,677 - to - 0.55 to 0.55 9.39 to 9.39
2022 10,043 64.06 to 64.06 643,362 - to - 0.63 to 0.63 (4.44) to (4.44)
2021 10,219 67.03 to 67.03 685,017 - to - 1.22 to 1.22 19.77 to 19.77
Putnam VT Large Cap Growth Fund (Class IA)
2025 222,713 51.51 to 51.51 11,473,012 - to - - to - 14.58 to 14.58
2024 243,928 44.96 to 44.96 10,966,961 - to - 0.09 to 0.09 33.71 to 33.71
2023 294,133 33.63 to 33.63 9,890,450 - to - - to - 44.89 to 44.89
2022 324,451 23.21 to 23.21 7,530,018 - to - - to - (30.36) to (30.36)
2021 403,250 33.33 to 33.33 13,439,521 - to - - to - 23.00 to 23.00
Putnam VT High Yield Fund (Class IA)
2025 9,975 67.33 to 67.33 671,671 - to - 6.54 to 6.54 8.86 to 8.86
2024 11,845 61.86 to 61.86 732,654 - to - 6.12 to 6.12 8.19 to 8.19
2023 13,737 57.17 to 57.17 785,369 - to - 5.60 to 5.60 12.29 to 12.29
2022 14,734 50.91 to 50.91 750,189 - to - 5.76 to 5.76 (11.37) to (11.37)
2021 21,006 57.45 to 57.45 1,206,729 - to - 4.91 to 4.91 5.20 to 5.20
Putnam VT Income Fund (Class IA)
2025 28,822 42.69 to 42.69 1,230,280 - to - 4.94 to 4.94 7.45 to 7.45
2024 30,299 39.73 to 39.73 1,203,680 - to - 5.66 to 5.66 2.56 to 2.56
2023 33,167 38.74 to 38.74 1,284,753 - to - 6.00 to 6.00 4.96 to 4.96
2022 35,206 36.91 to 36.91 1,299,304 - to - 5.95 to 5.95 (13.48) to (13.48)
2021 40,463 42.66 to 42.66 1,726,062 - to - 1.70 to 1.70 (4.44) to (4.44)
Putnam VT International Equity Fund (Class IA)
2025 8,888 65.51 to 65.51 582,221 - to - 0.23 to 0.23 38.00 to 38.00
2024 9,808 47.47 to 47.47 465,558 - to - 2.35 to 2.35 3.24 to 3.24
2023 10,656 45.98 to 45.98 489,942 - to - 0.27 to 0.27 18.86 to 18.86
2022 11,916 38.69 to 38.69 460,956 - to - 1.92 to 1.92 (14.58) to (14.58)
2021 13,883 45.29 to 45.29 628,755 - to - 1.37 to 1.37 9.09 to 9.09
Putnam VT Emerging Markets Equity Fund (Class IA)
2025 12,126 48.86 to 48.86 592,484 - to - 0.88 to 0.88 34.49 to 34.49
2024 12,727 36.33 to 36.33 462,397 - to - 1.58 to 1.58 15.90 to 15.90
2023 13,182 31.35 to 31.35 413,225 - to - 0.77 to 0.77 11.90 to 11.90
2022 18,992 28.01 to 28.01 532,047 - to - - to - (27.32) to (27.32)
2021 22,469 38.54 to 38.54 865,988 - to - 0.70 to 0.70 (3.94) to (3.94)
Putnam VT International Value Fund (Class IA)
2025 5,730 61.28 to 61.28 351,159 - to - 1.37 to 1.37 35.07 to 35.07
2024 5,880 45.37 to 45.37 266,788 - to - 2.56 to 2.56 5.44 to 5.44
2023 6,226 43.03 to 43.03 267,892 - to - 1.70 to 1.70 19.08 to 19.08
2022 7,460 36.14 to 36.14 269,590 - to - 2.32 to 2.32 (6.70) to (6.70)
2021 8,988 38.73 to 38.73 348,079 - to - 2.19 to 2.19 15.28 to 15.28
Putnam VT Core Equity Fund (Class IA)
2025 16,424 81.94 to 81.94 1,345,805 - to - 0.63 to 0.63 17.11 to 17.11
2024 16,204 69.97 to 69.97 1,133,786 - to - 0.83 to 0.83 27.32 to 27.32
2023 19,547 54.95 to 54.95 1,074,173 - to - 0.75 to 0.75 28.36 to 28.36
2022 21,600 42.81 to 42.81 924,761 - to - 1.64 to 1.64 (15.54) to (15.54)
2021 22,896 50.69 to 50.69 1,160,631 - to - 0.84 to 0.84 31.32 to 31.32
SA-49
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding #
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
Putnam VT Government Money Market Fund (Class IA)
2025 545,091 $ 2.05 to $ 2.05 $ 1,119,198 - % to - % 3.90% to 3.90% 3.95% to 3.95%
2024 762,939 1.98 to 1.98 1,506,988 - to - 4.82 to 4.82 4.92 to 4.92
2023 1,583,110 1.88 to 1.88 2,980,364 - to - 4.63 to 4.63 4.69 to 4.69
2022 449,101 1.80 to 1.80 807,596 - to - 1.23 to 1.23 1.28 to 1.28
2021 612,199 1.78 to 1.78 1,086,928 - to - 0.01 to 0.01 0.00(1) to 0.00(1)
Putnam VT Sustainable Leaders Fund (Class IA)
2025 38,667 191.29 to 191.29 7,396,715 - to - 0.86 to 0.86 10.99 to 10.99
2024 41,192 172.35 to 172.35 7,099,428 - to - 0.38 to 0.38 23.33 to 23.33
2023 49,731 139.74 to 139.74 6,949,613 - to - 0.75 to 0.75 26.42 to 26.42
2022 65,979 110.54 to 110.54 7,293,500 - to - 0.84 to 0.84 (22.72) to (22.72)
2021 73,724 143.04 to 143.04 10,545,530 - to - 0.34 to 0.34 23.84 to 23.84
Putnam VT Research Fund (Class IA)
2025 4,311 113.34 to 113.34 488,624 - to - 0.77 to 0.77 18.16 to 18.16
2024 4,616 95.92 to 95.92 442,779 - to - 0.58 to 0.58 26.61 to 26.61
2023 4,960 75.76 to 75.76 375,781 - to - 1.04 to 1.04 29.21 to 29.21
2022 8,357 58.63 to 58.63 489,995 - to - 0.82 to 0.82 (17.10) to (17.10)
2021 10,094 70.72 to 70.72 713,882 - to - 0.29 to 0.29 24.45 to 24.45
Putnam VT Small Cap Value Fund (Class IA)
2025 4,474 109.69 to 109.69 490,764 - to - 0.92 to 0.92 5.46 to 5.46
2024 4,523 104.01 to 104.01 470,429 - to - 1.15 to 1.15 6.48 to 6.48
2023 4,930 97.69 to 97.69 481,586 - to - 0.45 to 0.45 24.13 to 24.13
2022 6,401 78.69 to 78.69 503,762 - to - 0.46 to 0.46 (12.80) to (12.80)
2021 7,470 90.25 to 90.25 674,149 - to - 0.90 to 0.90 40.23 to 40.23
Morgan Stanley VIF Emerging Markets Debt Portfolio (Class I)
2025 1,134 48.56 to 48.56 55,075 - to - 14.37 to 14.37 15.33 to 15.33
2024 1,154 42.10 to 42.10 48,575 - to - 8.59 to 8.59 11.23 to 11.23
2023 1,174 37.85 to 37.85 44,421 - to - 8.60 to 8.60 11.84 to 11.84
2022 1,196 33.84 to 33.84 40,464 - to - 7.53 to 7.53 (18.74) to (18.74)
2021 1,272 41.65 to 41.65 52,993 - to - 5.11 to 5.11 (2.02) to (2.02)
Morgan Stanley VIF Emerging Markets Equity Portfolio (Class I)
2025 262 37.89 to 37.89 9,925 - to - 0.41 to 0.41 32.96 to 32.96
2024 266 28.49 to 28.49 7,581 - to - 1.21 to 1.21 7.82 to 7.82
2023 514 26.43 to 26.43 13,578 - to - 1.62 to 1.62 11.97 to 11.97
2022 523 23.60 to 23.60 12,338 - to - 0.29 to 0.29 (25.08) to (25.08)
2021 1,197 31.50 to 31.50 37,701 - to - 0.83 to 0.83 2.99 to 2.99
Morgan Stanley VIF Growth Portfolio (Class I)
2025 21,249 80.58 to 80.58 1,712,177 - to - - to - 35.72 to 35.72
2024 28,326 59.37 to 59.37 1,681,791 - to - - to - 46.59 to 46.59
2023 31,385 40.50 to 40.50 1,271,139 - to - - to - 48.66 to 48.66
2022 38,282 27.24 to 27.24 1,042,952 - to - - to - (60.07) to (60.07)
2021 40,515 68.22 to 68.22 2,764,092 - to - - to - 0.10 to 0.10
PSF PGIM Government Money Market Portfolio (Class I)
2025 55,738 12.14 to 12.14 676,673 - to - 3.97 to 3.97 4.05 to 4.05
2024 70,741 11.67 to 11.67 825,420 - to - 4.88 to 4.88 5.01 to 5.01
2023 58,582 11.11 to 11.11 650,908 - to - 4.90 to 4.90 4.88 to 4.88
2022 16,548 10.59 to 10.59 175,303 - to - 1.32 to 1.32 1.39 to 1.39
2021 19,559 10.45 to 10.45 204,373 - to - 0.04 to 0.04 0.04 to 0.04
SA-50
Separate Account Five
Talcott Resolution Life and Annuity Insurance Company
Notes to Financial Statements
6.Financial Highlights (continued):

Sub-Account
Units Outstanding
Unit
Fair Value
Lowest to Highest # 		Net Assets Expense
Ratio Lowest
to Highest* 		Investment Income
Ratio Lowest to
Highest** 		Total Return
Ratio Lowest to
Highest***
BlackRock S&P 500 Index V.I. Fund (Class I)
2025 298,377 $ 28.54 to $ 28.54 $ 8,516,632 - % to - % 1.07% to 1.07% 17.72% to 17.72%
2024 364,646 24.25 to 24.25 8,841,342 - to - 1.28 to 1.28 24.83 to 24.83
2023 388,874 19.42 to 19.42 7,553,029 - to - 1.27 to 1.27 26.22 to 26.22
2022 458,327 15.39 to 15.39 7,052,744 - to - 1.42 to 1.42 (18.23) to (18.23)
2021 517,259 18.82 to 18.82 9,734,083 - to - 1.29 to 1.29 28.53 to 28.53

*
These represent the annualized contract expenses of the Sub-Account for the period indicated and include only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the Funds and charges made directly to contract owner accounts through the redemption of units. Where the expense ratio is the same for each unit value, it is presented in both the lowest and highest columns.
**
These represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the Funds, net of management fees assessed by the Funds' manager, divided by the average net assets. These ratios exclude those expenses, if any, that result in direct reductions in the unit values. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the Funds in which the Sub-Account invests. Where the investment income ratio is the same for each unit value, it is presented in both the lowest and highest columns.
***
These represent the total return for the period indicated and reflect a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period.
#
Rounded units/unit fair values. Where only one unit value exists, it is presented in both the lowest and highest columns.
(1)
Amount is less than 0.01%.

7. Subsequent Events:

Management has evaluated events subsequent to December 31, 2025 and through April 16, 2026, the date the financial statements were available to be issued, noting there are no subsequent events requiring adjustment or disclosure in the financial statements.









SA-51
Talcott Resolution Life and Annuity Insurance Company Independent Auditor's Report Financial Statements - Statutory-Basis As of December 31, 2025, 2024 and 2023, and for the Years Ended December 31, 2025, 2024 and 2023 Supplemental Schedules as of and for the Year Ended December 31, 2025
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY CONTENTS Page: Independent Auditor's Report 1 - 3 Financial Statements - Statutory-Basis: Admitted Assets, Liabilities and Capital and Surplus 4 Statements of Operations 5 Statements of Changes in Capital and Surplus 6 Statements of Cash Flows 7 Notes to Financial Statements 8 - 54 Supplemental Schedules Schedule I - Selected Financial Data 55 - 57 Schedule II - Summary Investment Schedule 58 Schedule III - Investment Risks Interrogatories 59 - 64 Schedule IV - Supplemental Schedule of Reinsurance Contracts with Risk-Limiting Features 65
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS (STATUTORY-BASIS) Admitted assets As of December 31, 2025 2024 Bonds $ 2,992,962,146 $ 3,485,972,537 Common and preferred stocks 11,737,059 40,445,531 Mortgage loans on real estate 577,794,520 687,494,035 Contract loans 86,985,968 86,947,134 Cash, cash equivalents and short-term investments 195,554,580 636,655,573 Derivatives 48,296,942 101,755,280 Other invested assets 644,114,568 578,050,264 Total cash and invested assets 4,557,445,783 5,617,320,354 Investment income due and accrued 39,504,375 53,206,887 Amounts recoverable for reinsurance 76,185,846 65,644,758 Federal income tax recoverable 625,435 1,209,143 Net deferred tax asset 63,541,833 55,763,712 Other assets 36,265,159 36,466,689 Separate Account assets 24,106,820,931 23,803,924,174 Total admitted assets $ 28,880,389,362 $ 29,633,535,717 Liabilities Aggregate reserves for future benefits $ 2,963,051,806 $ 4,234,013,014 Liability for deposit-type contracts 125,690,078 143,312,740 Policy and contract claim liabilities 20,543,556 18,973,114 Asset valuation reserve 122,433,569 126,399,841 Interest maintenance reserve 96,162,702 33,676,604 Payables to parent, subsidiaries and affiliates 33,283,192 40,249,340 Accrued expense allowances and amounts due from Separate Accounts (10,329,925) (26,910,443) Derivatives 4,820,659 18,431,325 Collateral on derivatives 3,039,950 6,457,000 Payable for repurchase agreements 120,684,019 171,899,921 Payable for securities 58,049,967 119,134,538 Other liabilities 499,643,726 317,342,335 Separate Account liabilities 24,106,820,931 23,803,924,174 Total liabilities $ 28,143,894,230 $ 29,006,903,503 Capital and surplus Common stock - par value $1,250 per share, 3,000 shares authorized, 2,000 shares issued and outstanding 2,500,000 2,500,000 Aggregate write-ins for other than special surplus funds - 119,373,209 Gross paid-in and contributed surplus 98,742,904 85,431,561 Unassigned surplus 635,252,228 419,327,444 Total capital and surplus 736,495,132 626,632,214 Total liabilities and capital and surplus $ 28,880,389,362 $ 29,633,535,717 See notes to financial statements. 4
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF OPERATIONS (STATUTORY-BASIS) Revenues For the years ended December 31, 2025 2024 2023 Premiums and annuity considerations $ (8,856,324,429) $ 72,476,082 $ 74,015,374 Net investment income 221,343,136 274,137,829 274,931,065 Commissions and expense allowances on reinsurance ceded 4,936,832 105,876,954 110,570,839 Reserve adjustments on reinsurance ceded 5,369,474,934 (1,932,715,884) (1,389,948,223) Fee income 333,510,064 512,113,975 501,612,185 Other revenues 1,419,409 621,173 2,424,209 Total revenues (2,925,640,054) (967,489,871) (426,394,551) Benefits and expenses Death and annuity benefits 167,607,419 191,762,643 209,818,126 Disability and other benefits 915,716 1,418,538 1,409,180 Surrenders and other fund withdrawals 635,847,063 1,365,362,021 1,206,573,608 Commissions and expense allowances 107,872,426 112,007,776 110,130,356 Decrease in aggregate reserves for life and accident and health policies (1,270,961,207) (204,622,173) (226,502,136) General insurance expenses 108,490,771 99,010,457 86,779,049 Net transfers from Separate Accounts (2,574,874,525) (2,561,176,569) (2,144,561,129) Modified coinsurance adjustment on reinsurance assumed (150,471,186) (146,181,690) (129,276,050) IMR adjustment on reinsurance ceded 74,076,487 1,820,444 957,014 Other expenses (2,584,140) 11,530,839 10,373,178 Total benefits and expenses (2,904,081,176) (1,129,067,714) (874,298,804) Net (loss) gain from operations before federal income tax benefit (21,558,878) 161,577,843 447,904,253 Federal income tax expense (benefit) 41,633,472 (8,545,006) 19,898,443 Net (loss) gain from operations (63,192,350) 170,122,849 428,005,810 Net realized capital losses, after tax (75,630,359) (153,659,423) (411,793,622) Net (loss) income $(138,822,709) $16,463,426 $16,212,188 See notes to financial statements. 5
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS (STATUTORY-BASIS) Common stock - Par value $1,250 per share, 3,000 shares authorized, 2,000 shares issued and outstanding For the years ended December 31, 2025 2024 2023 Balance, beginning and end of year $ 2,500,000 $ 2,500,000 $ 2,500,000 Gross paid-in and contributed surplus Balance, beginning of year 85,431,561 85,431,561 85,431,561 Capital (return) paid-in 13,311,343 - - Balance, beginning and end of year 98,742,904 85,431,561 85,431,561 Aggregate write-ins for other than special surplus funds Balance, beginning of year 119,373,209 135,822,092 152,270,975 Amortization, decreases of gain on inforce reinsurance (119,373,209) (16,448,883) (16,448,883) Balance, end of year - 119,373,209 135,822,092 Unassigned funds Balance, beginning of year 419,327,444 663,185,906 708,426,635 Net income (loss) (138,822,709) 16,463,426 16,212,188 Change in net unrealized capital gains (losses) on investments, net of tax 60,764,196 641,856 28,927,296 Change in net unrealized foreign exchange capital gains (losses) 89,315 4,999 (966,839) Change in net deferred income tax 12,789,829 10,469,927 32,720,836 Change in reserve on account of change in valuation basis decrease - - - Change in asset valuation reserve 3,966,272 12,444,117 11,561,910 Cumulative effect of changes in accounting principles 119,373,209 - - Change in nonadmitted assets (27,599,199) (8,882,787) (38,896,120) Surplus adjustment: Change in surplus as a result of reinsurance 193,909,872 - - Dividends to stockholder (8,546,001) (275,000,000) (94,800,000) Balance, end of year 635,252,228 419,327,444 663,185,906 Capital and surplus Balance, end of year $ 736,495,132 $ 626,632,214 $ 886,939,559 See notes to financial statements. 6
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CASH FLOWS (STATUTORY-BASIS) Operating activities For the years ended December 31, 2025 2024 2023 Premiums and annuity considerations $ 49,478,977 $ 86,854,768 $ 44,441,167 Net investment income 247,959,103 271,623,693 284,481,875 Reserve adjustments on reinsurance (2,479,231,425) (1,938,188,538) (1,396,429,938) Miscellaneous income 571,810,416 601,771,957 596,191,264 Total income (1,609,982,929) (977,938,120) (471,315,632) Benefits paid 2,011,738,580 1,522,585,152 1,436,126,796 Federal income tax recovered (paid) 45,140,436 (10,050,179) 27,895,132 Net transfers from Separate Accounts (2,571,073,308) (2,566,990,382) (2,141,052,418) Other expenses 50,340,150 56,022,947 151,593,092 Total benefits and expenses (463,854,142) (998,432,462) (525,437,398) Net cash (used for) provided by operating activities (1,146,128,787) 20,494,342 54,121,766 Investing activities Proceeds from investments sold, matured or repaid Bonds 778,067,288 785,953,075 371,905,191 Common and preferred stocks 23,268,192 2,501,416 1,361,746 Mortgage loans 136,436,675 152,207,133 269,464,752 Derivatives and other 72,989,214 156,127,719 166,062,944 Total investment proceeds 1,010,761,369 1,096,789,343 808,794,633 Cost of investments acquired Bonds 344,827,420 412,943,739 118,736,760 Common and preferred stocks 13,862,572 1,675,845 1,368,839 Mortgage loans 22,985,976 66,632,663 70,086,833 Derivatives and other 157,635,501 296,303,867 417,047,643 Total investments acquired 539,311,469 777,556,114 607,240,075 Net decrease in contract loans 38,834 194,624 (1,312,192) Net cash provided by investing activities 471,411,066 319,038,605 202,866,750 Financing and miscellaneous activities Return of paid-in surplus 13,311,343 - - Change in borrowed funds 300,000,000 Dividends to stockholder - (275,000,000) (94,800,000) Other cash (used) provided (79,694,615) 74,861,539 26,698,352 Net cash provided by (used for) financing and miscellaneous activities 233,616,728 (200,138,461) (68,101,648) Net (decrease) increase in cash, cash equivalents and short-term investments (441,100,993) 139,394,486 188,886,868 Cash, cash equivalents and short-term investments, beginning of year 636,655,573 497,261,087 308,374,219 Cash, cash equivalents and short-term investments, end of year $ 195,554,580 $ 636,655,573 $ 497,261,087 Note: Supplemental disclosures of cash flow information for non-cash transactions: Non-cash proceeds from invested asset exchanges - bonds and other invested assets (62,395,417) (21,528,312) (47,551,763) Non-cash acquisitions from invested asset exchanges - bonds and other invested assets (62,395,417) (21,528,312) (47,551,763) Non-cash ceded premiums for reinsurance (3,163,407) (1,820,444) (957,014) Non-cash transfer of funds withheld for unauthorized reinsurance (2,066,458) 7,293,098 7,438,729 Non-cash transfer of IMR liability for reinsurance 5,229,864 1,820,444 957,014 Non-cash IMR reserve transferred on reinsurance - (1,820,444) (957,014) Non-cash payable on reinsurance - (5,472,654) (6,481,715) Non-cash proceeds from sale of common stock-affiliates (8,546,001) Non-cash dividend from distribution of affiliates 8,546,001 Non-cash premiums from recaptured reinsurance (10,576,146,399) Non-cash reserve adjustments from recaptured reinsurance 10,480,570,915 Non-cash funds withheld for unauthorized reinsurance from recaptured reinsurance 95,575,484 Non-cash commission and expense allowances on reinsurance ceded from recaptured reinsurance 39,651,169 Non-cash increase in aggregate reserves from recaptured reinsurance (39,651,169) Non-cash transfer of IMR liability from recaptured reinsurance 95,496,571 Non-cash IMR reserve transferred from recaptured reinsurance (95,496,571) Non-cash premiums for ceded reinsurance 19,497,654,997 Non-cash reserve adjustments on reinsurance ceded for ceded reinsurance (18,349,659,009) Non-cash aggregate reserve change for ceded reinsurance (1,187,647,157) Non-cash increase in aggregate reserves for ceded reinsurance 39,651,169 Non-cash transfer of IMR liability for ceded reinsurance (21,420,084) Non-cash IMR reserve transferred for ceded reinsurance 21,420,084 Non-cash transfers to Separate Accounts 20,381,735 Non-cash reserve adjustments for ceded reinsurance (20,381,735) See notes to financial statements. 7
1. Organization and Description of Business Talcott Resolution Life and Annuity Insurance Company ("TLA" or the "Company") is a wholly-owned subsidiary of TR Re, Ltd. ("TR Re") which is a Class E insurer domiciled in Bermuda with an ultimate parent of Talcott Financial Group, Ltd. ("TFG"). Refer to footnote 7, Related Party Transactions, for information about the Companies ownership changes in 2025. The Company maintains a complete line of fixed and variable annuities, universal and traditional individual life insurance and benefit products such as disability insurance. In Q4 2025, the Company began writing new retail business, including multi-year guaranteed annuities and fixed indexed annuities, with the volume of new business issued in 2025 being immaterial to the financial statements. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying statutory-basis financial statements of Talcott Resolution Life and Annuity Insurance Company (the "Company" or "TLA") have been prepared in conformity with statutory accounting practices prescribed or permitted by the State of Connecticut Insurance Department ("the Department"). The Department recognizes only statutory accounting practices prescribed or permitted by the State of Connecticut for determining and reporting the financial condition and results of operations of an insurance company and for determining solvency under the State of Connecticut Insurance Law. The National Association of Insurance Commissioners' Accounting Practices and Procedures Manual ("NAIC SAP") has been adopted as a component of prescribed practices by the State of Connecticut. A difference prescribed by Connecticut state law allows the Company to receive a reinsurance reserve credit for reinsurance treaties that provide for a limited right of unilateral cancellation by the reinsurer. Even if the Company did not obtain reinsurance reserve credit for this reinsurance treaty, the Company's risk-based capital would not have triggered a regulatory event. A reconciliation of the Company's net (loss) income and capital and surplus between NAIC SAP and practices prescribed by the Department is shown below for the years ended December 31: SSAP # F/S Page 2025 2024 2023 Net (loss) income 1. TLA state basis $ (138,822,709) $ 16,463,426 $ 16,212,188 2. State prescribed practices that change NAIC SAP: Less: Reinsurance reserve credit (as described above) 61R 4 (850,632) 2,570,609 (15,876,410) (850,632) 2,570,609 (15,876,410) 3. State permitted practices that change NAIC SAP - - - 4. Net SAP (1-2-3=4) 61R 4 $ (137,972,077) $ 13,892,817 $ 32,088,598 Surplus 5. TLA state basis $ 736,495,132 $ 626,632,214 $ 886,939,559 6. State prescribed practices that change NAIC SAP: Less: Reinsurance reserve credit (as described above) 61R 5 20,106,744 20,957,376 18,386,767 20,106,744 20,957,376 18,386,767 7. State permitted practices that change NAIC SAP - - - 8. NAIC SAP (5-6-7=8) 61R 5 $ 716,388,388 $ 605,674,838 $ 868,552,792 The Company does not follow any other prescribed or permitted statutory accounting practices that have a material effect on statutory surplus, statutory net income or risk-based capital of the Company. The preparation of financial statements in conformity with the National Association of Insurance Commissioners ("NAIC") Annual Statement Instructions and NAIC SAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The most significant estimates include those used in determining the liability for aggregate reserves for life, annuity and health policies, evaluation of other-than-temporary impairments ("OTTI"), valuation of derivatives, and contingencies relating to TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 8
corporate litigation and regulatory matters. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the statutory-basis financial statements. Although some variability is inherent in these estimates, management believes the amounts provided are adequate. Certain reclassifications were made to prior year balances for the presentation of reinsurance balances in Footnote 6 tables to be consistent with current year presentation. Accounting practices and procedures as prescribed or permitted by the Department are different in certain material respects from accounting principles generally accepted in the United States of America ("GAAP"). The more significant differences are: 1. for statutory purposes, policy acquisition costs (commissions, underwriting and selling expenses, etc.) and sales inducements are charged to expense when incurred rather than capitalized and amortized for GAAP purposes; 2. recognition of premium revenues and policy charges, which for statutory purposes are generally recorded as collected or when due during the premium paying period of the contract and which for GAAP purposes, for universal life policies and investment products, generally only consist of charges assessed to policy account balances for cost of insurance, policy administration and surrenders. For GAAP, when policy charges received relate to coverage or services to be provided in the future, the charges are recognized as revenue on a pro-rata basis over the expected life and gross profit stream of the policy. Also, for GAAP purposes, premiums for traditional life insurance policies are recognized as revenues when they are due from policyholders; 3. development of liabilities for future benefits, which for statutory purposes predominantly use interest rate and mortality assumptions prescribed by the National Association of Insurance Commissioners ("NAIC"), which may vary considerably from interest and mortality assumptions used under GAAP. Additionally for GAAP, reserves for guaranteed minimum death benefits ("GMDB") are based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience, and, reserves for guaranteed withdrawal benefits are considered market risk benefits and reported at fair value; 4. exclusion of certain assets designated as nonadmitted assets from the Statements of Admitted Assets, Liabilities and Capital and Surplus for statutory purposes by directly charging surplus, whereas on a GAAP basis, no such charges are recorded; 5. establishment of a formula reserve for realized and unrealized losses due to default and equity risk associated with certain invested assets (Asset Valuation Reserve ("AVR")) for statutory purposes; as well as the deferral and amortization of realized gains and losses, caused by changes in interest rates during the period the asset is held, into income over the original life to maturity of the asset sold (Interest Maintenance Reserve ("IMR")) for statutory purposes; whereas on a GAAP basis, no such formula reserve is required and realized gains and losses are recognized in the period the asset is sold; 6. the reporting of reserves and benefits, net of reinsurance ceded for statutory purposes; whereas on a GAAP basis, reserves are reported gross of reinsurance with reserve credits presented as recoverable assets, net of an allowance for expected credit losses; TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 9
7. for statutory purposes, asset-backed securities, excluding residual tranches or interests, are carried at amortized cost, except those rated in NAIC class 6, which are carried at the lower of amortized cost or fair value in accordance with the provisions of SSAP No. 43 - Asset-Backed Securities ("SSAP No. 43"). Significant changes in estimated cash flows from the original purchase assumptions are accounted for using the prospective method, except for highly rated securities, which use the retrospective method. Debt investments that do not meet the requirements of an issuer credit obligation in SSAP No. 26 - Bonds ("SSAP No. 26") or an asset-backed security in SSAP No. 43 are carried at the lower of amortized cost or fair value in accordance with SSAP No. 21- Other Admitted Assets ("SSAP No. 21"). In accordance with guidance in SSAP No. 21 - amortized cost for such debt investments is determined in a manner consistent with asset-backed securities within the scope of SSAP No. 43. GAAP requires that fixed maturities and loan-backed and structured securities be classified as "held-to-maturity," "available-for-sale" or "trading," based on the Company's intentions with respect to the ultimate disposition of the security and its ability to affect those intentions. The Company's bonds and asset-backed securities were classified on a GAAP basis as "available-for-sale" and accordingly, these investments were reflected at fair value with the corresponding impact included as a separate component of Stockholder's Equity; 8. for statutory purposes, Separate Account liabilities are calculated using prescribed actuarial methodologies, which approximate the market value of Separate Account assets, less applicable surrender charges. The Separate Account surplus generated by these reserving methods is recorded as an amount due to or from Separate Accounts on the Statements of Admitted Assets, Liabilities and Capital and Surplus, with changes reflected in the Statements of Operations. On a GAAP basis, Separate Account assets and liabilities must meet specific conditions to qualify as a Separate Account asset or liability. Amounts reported for Separate Account assets and liabilities are based upon the fair value of the underlying assets; 9. the consolidation of subsidiaries is required for GAAP reporting, whereas statutory accounting requires standalone financial statements with earnings of subsidiaries reflected as changes in unrealized gains or losses in surplus; 10. statutory deferred income taxes, which provide for tax temporary differences, are subject to limitation on deferred tax assets and are charged directly to surplus, whereas, GAAP includes tax temporary differences recognized as a component of net income, without limitation. 11. comprehensive income and its components are not presented in the statutory-basis financial statements; 12. for statutory purposes derivative instruments that qualify for hedging, replication, or income generation are accounted for in a manner consistent with the hedged item, cash instrument and covered asset, respectively, which is typically amortized cost. Derivative instruments held for other investment and risk management activities, which do not receive hedge accounting treatment, receive fair value accounting for statutory purposes and are recorded at fair value with corresponding changes in value reported in unrealized gains and losses within surplus. For GAAP, derivative instruments are recorded at fair value with changes in value reported in earnings, with the exception of cash flow hedges and net investment hedges of a foreign operation, which are carried at fair value with changes in value reported as a separate component of Stockholder's Equity. 13. embedded derivatives for statutory accounting are not bifurcated from the host contract, whereas, GAAP accounting requires the embedded derivative to be bifurcated from the host instrument, accounted for at fair value and reported separately. 14. for statutory purposes securities that are in an unrealized loss position are reviewed to determine if an OTTI is present based on (a) the length of time and the extent to which fair value has been less than cost or amortized cost, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, and (c) whether the debtor is current on contractually obligated payments; if the decline is determined other than temporary, an impairment charge is recorded and the previous cost less impairment becomes the new cost basis. For GAAP, credit impairment on "available-for-sale securities" is recognized through an allowance for credit losses as opposed to a direct write down of the security and improvements in expected cash flows are recognized immediately in income as a reduction in the allowance; the amount of time a security is in an unrealized loss position is not considered when assessing impairment. Aggregate Reserves for Life, Annuity and Accident and Health Policies and Contracts and Liability for Deposit-Type Contracts TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 10
Aggregate reserves for payment of future life, health and annuity benefits were computed in accordance with applicable actuarial standards. Reserves for life insurance policies are generally based on the 1941, 1958, 1980 and 2001 Commissioner's Standard Ordinary Mortality Tables and various valuation rates ranging from 2.00% to 6.00%. Fixed Accumulation and On- benefit annuity reserves are based principally on individual and group annuity mortality tables at various rates ranging from 1.00% to 8.75% and using the Commissioner's Annuity Reserve Valuation Method ("CARVM"). Variable Annuity reserves are calculated based on Section 21 of the Valuation Manual Requirements for Principle-Based Reserves for Variable Annuities ("VM-21") and Actuarial Guidelines XLIII CARVM for Variable Annuities ("AG43"). Accident and health reserves are established using a two year preliminary term method and morbidity tables based primarily on Company experience. For non-interest sensitive ordinary life plans, the Company waives deduction of deferred fractional premiums upon death of insured. Return of the unearned portion of the final premium is governed by the terms of the contract. The Company does not have any forms for which the cash values are in excess of the legally computed reserve. Extra premiums are charged for substandard lives, in addition to the regular gross premiums for the true age. Mean reserves for traditional insurance products are determined by computing the regular mean reserve for the plan at the true age, and adding one-half (1/2) of the extra premium charge for the year. For plans with explicit mortality charges, mean reserves are based on appropriate multiples of standard rates of mortality. As of December 31, 2025 and 2024, the Company had $30,235,981 and $29,111,981, respectively, of insurance in force, subject to 100% reinsurance to The Prudential Insurance Company of America ("Prudential"), for which the gross premiums are less than the net premiums according to the standard valuation set by the State of Connecticut. Reserves to cover the above insurance at December 31, 2025 and 2024 totaled $141,943 and $160,568 respectively, also subject to 100% reinsurance to Prudential. The Company has established Separate Accounts to segregate the assets and liabilities of certain life insurance, pension and annuity contracts that must be segregated from the Company's General Account assets under the terms of its contracts. The assets consist primarily of marketable securities and are reported at fair value. Premiums, benefits and expenses relating to these contracts are reported in the Statements of Operations. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 11
An analysis of annuity actuarial reserves and deposit fund liabilities by withdrawal characteristics for General and Separate Account liabilities as of December 31, 2025 is presented below: A. INDIVIDUAL ANNUITIES Separate Separate General Accounts with Accounts % of Account Guarantees Nonguaranteed Total Total 1. Subject to discretionary withdrawal a. With market value adjustment $ 1,413,997 $ - $ - $ 1,413,997 0.01 % b. At book value less current surrender charge of 5% or more 947,613 - - 947,613 0.00 % c. At fair value - - 17,544,674,767 17,544,674,767 79.01 % d. Total with market value adjustment or at fair value (total of 1 through 3) 2,361,610 - 17,544,674,767 17,547,036,377 79.02 % e. At book value without adjustment (minimal or no charge or adjustment) 942,663,958 - - 942,663,958 4.24 % 2. Not subject to discretionary withdrawal 3,499,701,600 - 217,581,396 3,717,282,996 16.74 % 3. Total (gross: direct + assumed) 4,444,727,168 - 17,762,256,163 22,206,983,331 100.00 % 4. Reinsurance ceded 2,072,183,915 - - 2,072,183,915 5. Total (net) $ 2,372,543,253 $ - $ 17,762,256,163 $ 20,134,799,416 6. Amount included in A(1)b above that will move to A(1)e in the year after the statement date: $ 473,807 $ - $ - $ 473,807 B. GROUP ANNUITIES Separate Separate General Accounts with Accounts % of Account Guarantees Nonguaranteed Total Total 1. Subject to discretionary withdrawal a. With market value adjustment $ - $ - $ - $ - 0.00 % b. At book value less current surrender charge of 5% or more 392 - - 392 0.02 % c. At fair value - - 2,225,026 2,225,026 88.02 % d. Total with market value adjustment or at fair value (total of 1 through 3) 392 - 2,225,026 2,225,418 88.04 % e. At book value without adjustment (minimal or no charge or adjustment) 302,288 - - 302,288 11.96 % 2. Not subject to discretionary withdrawal - - - - 0.00 % 3. Total (gross: direct + assumed) 302,680 - 2,225,026 2,527,706 100.00 % 4. Reinsurance ceded 302,680 - - 302,680 5. Total (net) $ - $ - $ 2,225,026 $ 2,225,026 6. Amount included in B(1)b above that will move to B(1)e in the year after the statement date: $ 196 $ - $ - $ 196 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 12
C. DEPOSIT-TYPE CONTRACTS Separate Separate General Accounts with Accounts % of Account Guarantees Nonguaranteed Total Total 1. Subject to discretionary withdrawal a. With market value adjustment $ - $ - $ - $ - 0.00 % b. At book value less current surrender charge of 5% or more - - - - 0.00 % c. At fair value - - - - 0.00 % d. Total with market value adjustment or at fair value (total of 1 through 3) - - - - 0.00 % e. At book value without adjustment (minimal or no charge or adjustment) 1,823,135 - - 1,823,135 0.31 % 2. Not subject to discretionary withdrawal 592,844,501 - - 592,844,501 99.69 % 3. Total (gross: direct + assumed) 594,667,636 - - 594,667,636 100.00 % 4. Reinsurance ceded 468,977,563 - - 468,977,563 5. Total (net) $ 125,690,073 $ - $ - $ 125,690,073 6. Amount included in C(1)b above that will move to C(1)e in the year after the statement date: $ - $ - $ - $ - Reconciliation of total annuity actuarial reserves and deposit fund liabilities: F. Life and Accident & Health Annual Statement: 1. Exhibit 5, Annuities Section, Total (net) $ 2,372,516,279 2. Exhibit 5, Supplementary Contract Section, Total (net) 26,974 3. Exhibit 7, Deposit-Type Contracts Section, Total (net) 125,690,073 4. Subtotal 2,498,233,326 Separate Account Annual Statement: - 5. Exhibit 3, Annuities Section, Total (net) 17,764,481,189 6. Exhibit 3, Supplemental Contract Section, Total (net) - 7. Policyholder dividend and coupon accumulations - 8. Policyholder premiums - 9. Guaranteed interest contracts - 10. Exhibit 4, Deposit-Type Contracts Section, Total (net) - 11. Subtotal 17,764,481,189 12. Combined total $ 20,262,714,515 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 13
An analysis of life actuarial reserves by withdrawal characteristics for General and Separate Account liabilities as of December 31, 2025 is presented below: A. General Account Account Value Cash Value Reserve 1. Subject to discretionary withdrawal, surrender values, or policy loans: a. Term Policies with Cash Value $ 75,414,586 $ 75,557,238 $ 891,117,233 b. Universal Life 765,469,098 766,530,946 811,050,031 c. Universal Life with Secondary Guarantees 3,006,361,823 2,728,250,934 11,289,541,877 d. Indexed Universal Life 452,701,643 433,761,905 486,605,357 e. Indexed Universal Life with Secondary Guarantees - - - f. Indexed Life - - - g. Other Permanent Cash Value Life Insurance - 2,801,156 3,064,664 h. Variable Life - - - i. Variable Universal Life 527,417,110 525,810,790 659,735,756 j. Miscellaneous Reserves - - - 2. Not subject to discretionary withdrawal or no cash values a. Term Policies without Cash Value XXX XXX 34,866,207 b. Accidental Death Benefits XXX XXX 48,773 c. Disability - Active Lives XXX XXX 504,535 d. Disability - Disabled Lives XXX XXX 41,601,912 e. Miscellaneous Reserves XXX XXX 682,834,435 3. Total (gross: direct + assumed) 4,827,364,260 4,532,712,969 14,900,970,780 4. Reinsurance Ceded 4,308,427,384 4,011,882,492 14,342,263,125 5. Total (net) (3) - (4) $ 518,936,876 $ 520,830,477 $ 558,707,655 B. Separate Account with Guarantees Not applicable. C. Separate Account Nonguaranteed Account Value Cash Value Reserve 1. Subject to discretionary withdrawal, surrender values, or policy loans: a. Term Policies with Cash Value $ - $ - $ - b. Universal Life - - - c. Universal Life with Secondary Guarantees - - - d. Indexed Universal Life - - - e. Indexed Universal Life with Secondary Guarantees - - - f. Indexed Life - - - g. Other Permanent Cash Value Life Insurance - - - h. Variable Life - - - i. Variable Universal Life 6,300,546,703 6,300,546,703 6,300,546,703 j. Miscellaneous Reserves - - - 2. Not subject to discretionary withdrawal or no cash values a. Term Policies without Cash Value XXX XXX - b. Accidental Death Benefits XXX XXX - c. Disability - Active Lives XXX XXX - d. Disability - Disabled Lives XXX XXX - e. Miscellaneous Reserves XXX XXX - 3. Total (gross: direct + assumed) 6,300,546,703 6,300,546,703 6,300,546,703 4. Reinsurance Ceded - - - 5. Total (net) (3) - (4) $ 6,300,546,703 $ 6,300,546,703 $ 6,300,546,703 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 14
Reconciliation of total life actuarial reserves and deposit fund liabilities: D. Life and Accident & Health Annual Statement: 1. Exhibit 5, Life Insurance Section, Total (net) $ 550,807,305 2. Exhibit 5, Accidental Death Benefits Section, Total (net) 48,773 3. Exhibit 5, Disability - Active Lives Section, Total (net) 386,184 4. Exhibit 5, Disability - Disabled Lives Section, Total (net) 3,384,748 5. Exhibit 5, Miscellaneous Reserves Section, Total (net) 4,080,645 6. Subtotal 558,707,655 Separate Account Annual Statement: 7. Exhibit 3, Line 0199999, Column 2 6,300,546,703 8. Exhibit 3, Line 0499999, Column 2 - 9. Exhibit 3, Line 0599999, Column 2 - 10. Subtotal (Lines (7) through (9)) 6,300,546,703 11. Combined Total ((6) and (10)) $ 6,859,254,358 Investments Investments in unaffiliated bonds, other than asset backed securities, rated in NAIC classes 1-5 are carried at amortized cost and unaffiliated bonds rated in NAIC class 6 are carried at the lower of amortized cost or fair value. Short-term investments include all investments whose maturities, at the time of acquisition, are one year or less and are stated at amortized cost. Money market mutual funds, which are included in cash equivalents, are reported at fair value. Unaffiliated common stocks are carried at fair value. Investments in stocks of subsidiaries, controlled and affiliated ("SCA") companies are based on the net worth of the subsidiary in accordance with SSAP No. 97 (Investment in Subsidiary, Controlled, and Affiliated Entities). The change in the carrying value is recorded as a change in net unrealized capital gains (losses), a component of unassigned surplus. Highest- quality or high-quality redeemable unaffiliated preferred stocks (NAIC designations 1 to 3), which have characteristics of debt securities, are valued at cost or amortized cost. All other unaffiliated redeemable preferred stocks (NAIC designation 4 to 6) are reported at the lower of cost, amortized cost, or fair value. Unaffiliated perpetual preferred stocks are valued at fair value, not to exceed any currently effective call price. Mortgage loans on real estate are stated at the outstanding principal balance, less any allowances for credit losses. Asset backed securities are carried at either amortized cost or the lower of amortized cost or fair value in accordance with the provisions of SSAP No. 43R. Significant changes in estimated cash flows from the original purchase assumptions are accounted for using the prospective method, except for highly rated securities, which use the retrospective method. The Company has ownership interests in joint ventures, investment partnerships and limited liability companies. The Company carries these interests based upon audited financial statements in accordance with SSAP No. 48 (Joint Ventures, Partnerships and Limited Liability Companies). Contract loans are carried at outstanding balance which approximates fair value. Interest income from fixed maturities and mortgage loans on real estate is recognized when earned on the constant effective yield method based on estimated timing of cash flows. The amortization of premium and accretion of discount for fixed maturities also takes into consideration call and maturity dates that produce the lowest yield. For fixed rate securitized financial assets subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future repayments using the retrospective method; however, if these investments are impaired, any yield adjustments are made using the prospective method. The Company has not elected under SSAP No. 43R to use the book value as of January 1, 1994 as the cost for applying the retrospective adjustment method to securities purchased prior to that date. Investment income on variable rate and interest only securities is determined using the prospective method. Prepayment fees on bonds and mortgage loans on real estate are recorded in net investment income when earned. Dividends are recorded as earned on the ex-dividend date. For partnership investments, income is earned when cash distributions of income are received and the total distribution amount is less than undistributed accumulated earnings related to the investment. If the distributions are in excess of the investment's undistributed accumulated earnings, the carrying value of investment will instead be reduced. For impaired debt securities, the Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security's yield. Due and accrued investment income amounts over 90 days past due are nonadmitted. The Company had investment income due and accrued of $6,687 and $97,388 excluded from surplus at December 31, 2025 and 2024. Net realized gains and losses from investment sales represent the difference between the sales proceeds and the cost or amortized cost of the investment sold, determined on a specific identification basis. Net realized capital gains and losses also TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 15
result from termination or settlement of derivative contracts that do not qualify, or are not designated, as a hedge for accounting purposes. Impairments are recognized within net realized capital losses when investment declines in value are deemed other- than-temporary. Foreign currency transaction gains and losses are also recognized within net realized capital gains and losses. The AVR is designed to provide a standardized reserving process for realized and unrealized losses due to default and equity risks associated with invested assets in accordance with SSAP No. 7 (Asset Valuation Reserve and Interest Maintenance Reserve). The AVR balances were $122,433,568 and $126,399,841 as of December 31, 2025 and 2024, respectively. Additionally, the IMR captures net realized capital gains and losses, net of applicable income taxes, resulting from changes in interest rates and amortizes these gains or losses into income over the life of the bond, redeemable preferred stock or mortgage loan sold or adjusts the IMR when an insurer reinsures a block of its in-force liabilities. The IMR balances as of December 31, 2025 and 2024 were $96,162,702 and $33,676,604, respectively. The net capital (losses) gains captured in the IMR, net of taxes, in 2025, 2024 and 2023 were ($9,491,621), ($7,715,428) and ($3,207,953), respectively. The amount of income amortized from the IMR, net of taxes, included in the Company's Statements of Operations in 2025, 2024 and 2023 was $2,098,767, $901,204 and $1,828,765, respectively. Realized capital gains and losses, net of taxes, not included in the IMR are reported in the Statements of Operations. The Company released (gains) / losses from the reserve of ($74,076,487) and ($1,820,444) as of December 31, 2025 and 2024, respectively, as a result of reinsurance, see Note 6. The Company's accounting policy requires that a decline in the value of a bond or equity security below its cost or amortized cost basis be assessed to determine if the decline is other-than-temporary. In addition, for securities expected to be sold, an OTTI charge is recognized if the Company does not expect the fair value of a security to recover to its cost or amortized cost basis prior to the expected date of sale. The previous cost basis less the impairment becomes the new cost basis. The Company has a security monitoring process overseen by a committee of investment and accounting professionals that identifies securities that, due to certain characteristics, as described below, are subjected to an enhanced analysis on a quarterly basis. For certain securitized financial assets with contractual cash flows (including asset-backed securities), SSAP No. 43 requires the Company to periodically update its best estimate of cash flows over the life of the security. If management determines that its best estimate of expected future cash flows discounted at the security's effective yield prior to the impairment are less than its amortized cost, then management will assess for OTTI. The Company's best estimate of expected future cash flows discounted at the security's effective yield prior to the impairment becomes its new cost basis. Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. As a result, actual results may differ from estimates. Projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral. In addition, if the Company does not have the intent and ability to hold a security subject to the provisions of SSAP No. 43 until the recovery of value, the security is written down to fair value. Securities that are in an unrealized loss position are reviewed at least quarterly to determine if an OTTI is present based on certain quantitative and qualitative factors. The Company considers the following factors, where applicable depending on the type of securities, in the evaluation of whether a decline in value is other than temporary: (a) the likelihood that the Company will be able to collect all amounts due according to the contractual terms of the debt security; (b) the present value of the expected future cash flows of the security; (c) the characteristics, quality and value of the underlying collateral or issuer securing the position; (d) collateral structure; (e) the length of time and extent to which the fair value has been below amortized cost; (f) the financial condition and near-term prospects of the issuer; (g) adverse conditions related to the security or industry; (h) the rating of the security; (i) the Company's ability and intent to hold the investment for a period of time sufficient to allow for an anticipated recovery to amortized cost; and (j) other qualitative and quantitative factors in determining the existence of OTTI including, but not limited to, unrealized loss trend analysis and significant short-term changes in value. Once an impairment charge has been recorded, the Company continues to review the impaired securities for further OTTI on an ongoing basis. Net realized capital losses resulting from write-downs for OTTI on corporate and asset-backed bonds were $0, $0 and $1,351,669 for the years ended December 31, 2025, 2024 and 2023, respectively. Net realized capital losses resulting from write-downs for OTTI on equities were immaterial for the years ended December 31, 2025, 2024, and 2023. See additional information on OTTI in Note 3. Mortgage loans on real estate are considered to be impaired when management estimates that, based upon current available information and events, it is probable that the Company will be unable to collect all amounts of principal and interest due according to the contractual terms of the mortgage loan agreement. A valuation allowance is recorded on a loan-by-loan basis in net unrealized capital losses for the excess of the carrying value of the mortgage loan over the fair value of its underlying TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 16
collateral less estimated costs to sell. Collectability and estimated decreases in collateral values are also assessed on a loan-by- loan basis considering all events and conditions relevant to the loan. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revisions as more information becomes available, as changes occur in the market or as negotiations with the borrowing entity evolve. If there is a change in the fair value of the underlying collateral or the estimated loss on the loan, the valuation allowance is adjusted accordingly. An OTTI occurs upon the realization of a credit loss, typically through foreclosure or after a decision is made to accept a discounted payoff, and is recognized in realized capital losses. The previously recorded valuation allowance is reversed from unrealized capital losses. When an OTTI is recorded, a new cost basis is established reflecting estimated value of the collateral. Changes in valuation allowances are recorded in net unrealized capital gains and losses. Interest income on an impaired loan is accrued to the extent it is deemed collectable and the loan continues to perform under its original or restructured terms. Interest income on defaulted loans is recognized when received. As of December 31, 2025, 2024 and 2023, the Company had $0 impaired mortgage loans on real estate with related allowances for credit losses, respectively. For derivative instruments accounted for in accordance with SSAP No. 86, Derivatives ("SSAP No. 86"), on the date the derivative contract is entered into, the Company designates the derivative as hedging, replication, or held for other investment and/or risk management activities. The Company's derivative transactions are permitted uses of derivatives under the derivative use plans required by the Department. Derivatives used in hedging relationships are accounted for in a manner consistent with the hedged item. Typically, cost paid or consideration received at inception of a contract is reported on the balance sheet as a derivative asset or liability, respectively. Periodic cash flows and accruals are recorded in a manner consistent with the hedged item. Derivatives used in replication relationships are accounted for in a manner consistent with the cash instrument and the replicated asset. Typically, cost paid or consideration received at inception of the contract is recorded on the balance sheet as a derivative asset or liability, respectively. Periodic cash flows and accruals of income/expense are recorded as a component of derivative net investment income. Upon termination of the derivative, any gain or loss is recognized as a derivative capital gain or loss. Derivatives used in income generation relationships are accounted for in a manner consistent with the associated covered asset. Typically, consideration received at inception of the contract is recorded on the balance sheet as a derivative liability. Periodic cash flows and accruals of income/expense are recorded as a component of derivative net investment income. Upon termination, any remaining derivative liability, along with any disposition payments are recorded as a derivative capital gain or loss. Derivatives held for other investment and/or risk management activities are reported at fair value in accordance with SSAP No. 86 and the changes in fair value are recorded in derivative unrealized gains and losses. Periodic cash flows and accruals of income/expense are recorded as components of derivative net investment income. Adoption of Accounting Standards Accounting Changes For the year ended December 31, 2025, the Company changed its accounting policy for deferrals of gains resulting from in- force assumed and ceded reinsurance transactions. The Company's prior policy presented such gains (and related amortization) as Aggregate Write-ins for Gains and Losses in Surplus and as Aggregate Write-ins for Other-than-Special Surplus. The Company's updated policy is to present such gains (and related amortization) as Changes in Surplus due to Reinsurance and unamortized reinsurance gains will be reflected as Unassigned Funds. The Company accounted for this change as a change in accounting principle pursuant to SSAP No. 3, Accounting Changes and Corrections of Errors given both presentations are acceptable under different NAIC guidance, the Company believes the new presentation is better aligned with the nature of such gains and Unassigned Funds as well as with the Annual Statement Instructions.. The Company notes retrospective application of the change does not impact total Assets, Liabilities or Net Income for years ended December 31, 2025 or December 31, 2024. Implementation of the change resulted in a decrease in Other-than-special surplus of $119.4 million reflected through Aggregate Write-ins for Gains and Losses in Surplus. The change also results in a corresponding increase in Unassigned Funds of $119.4 million reflected through Cumulative Effect of Change in Accounting Principles. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 17
For the year ended December 31, 2025, the Company updated its method to identify distributions that represent a return of capital and those that represent net investment income under SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies. The Company's updated method aligns with objective financial metrics as all distributions are now recognized in net investment income when declared, provided they do not exceed undistributed accumulated earnings. The Company's prior method included additional limitations on the recognition of net investment income based on correspondence with the applicable General Partners. The Company concluded the change represents a change in accounting principle pursuant to SSAP No. 3, Accounting Changes and Corrections of Errors. The Company notes retrospective application of the change does not impact beginning surplus, nor does the change impact total assets, liabilities, or surplus for the years ended December 31, 2025 or December 31, 2024. In 2025, the NAIC adopted revisions to SSAP No. 56 - Separate Accounts to clarify guidance for how to transfer any separate account assets carried at book value between the separate and general accounts. The Company elected early adoption of this guidance in 2025, however, it is not material to the Company. In 2025, the NAIC adopted revisions to SSAP No. 41 - Surplus Notes to clarify that capital notes should be nonadmitted in the event in which the regulatory authority halts principal or interest payments. The Company adopted this guidance in 2025, however, it is not material to the Company. In 2025, the NAIC adopted updates to SSAP No. 1 - Accounting Policies, Risks & Uncertainties, and Other Disclosures to require the reporting of assets held under modified coinsurance ("Modco") or funds withheld ("FWH") agreements within the restricted asset disclosure. The NAIC also adopted updates to SSAP No. 1 that require disclosure of investments held in FWH or Modco portfolios that are affiliated assets of the reinsurer. The Company adopted this guidance in 2025 and the updates are reflected in the disclosures within these Financial Statements. In 2025, the NAIC modified Appendix A-791 - Life and Health Reinsurance Agreements to clarify requirements when evaluating risk transfer for combined coinsurance and yearly renewable term ("YRT") reinsurance arrangements. The Company adopted this guidance in 2025, however, it is not material to the Company. In 2024, the NAIC modified SSAP No. 15 - Debt and Holding Company Obligations to require additional disclosures related to unused commitments and lines of credit, disaggregated by short and long-term commitments. The Company adopted this guidance in 2024, however, it is not material to the Company. In 2024, the NAIC modified SSAP No. 86 - Derivatives to require additional disclosures identifying where cash flows associated with derivative transactions are presented in the Statement of Cash Flow. The Company adopted this guidance in 2024, however, it is not material to the Company. In 2023, the NAIC adopted revisions to several statutory statements to finalize guidance throughout applicable standards related to the updated definition of a bond. The changes incorporated a principles-based definition which categorizes bonds as either issuer credit obligations (under SSAP No. 26) or asset-backed securities (under SSAP No. 43). The Company adopted the revised standards effective January 1, 2025 and reclassified investments in accordance with the new principles-based definition. Approximately $47 million of investments previously reported were reclassified. Of these investments, approximately $30 million of book adjusted carrying value went from an amortized cost measurement to a fair value measurement, which resulted in an approximate a $4 million unrealized loss to surplus. In 2023, the NAIC modified SSAP No. 34 - Investment Income Due and Accrued to require additional disclosures to capture gross, non-admitted and admitted amounts of accrued interest income and to separately identify the cumulative amount of paid- in-kind interest income included in the current principal balance. The guidance is effective December 31, 2023. The Company adopted this guidance in 2023, however, it is not material to the Company. In 2023, the NAIC modified SSAP No. 43 - Revised Loan-Backed and Structured Securities to add collateralized loan obligations (CLO) to the financial modeling guidance and clarify CLOs are not captured as legacy securities. This guidance is effective December 31, 2023 and will eventually result in CLOs no longer being eligible to use credit rating provider ratings to determine NAIC designation. The Company adopted this guidance in 2023, but effects of the guidance will not have an impact until CLO modeling methodology is implemented by the Securities Valuation Office. In 2023, the NAIC modified several statutory statements to ensure consistency in the reporting of residual interests, irrespective of legal form. The changes incorporate the 2022 principles-based definition of residual interests, which are characterized as TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 18
investments in structures backed by a discrete pool of collateral assets, where cash flows first provide principal and interest payments to debt holders, with remaining funds provided to holders of residual interests. The changes modify the following statutory statements: SSAP No. 30 - Revised Common Stock, SSAP No. 32 - Revised Preferred Stock, SSAP 43 - Revised Loan-Backed and Structured Securities, and SSAP No. 48 - Joint Ventures, Partnerships and Limited Liability Companies. All changes are effective December 31, 2023. The Company adopted this guidance in 2023, however, it is not material to the Company. In 2023, the NAIC adopted revisions to several statutory statements to finalize guidance throughout applicable standards related to the updated definition of a bond. The changes incorporated a principles-based definition which categorizes bonds as either issuer credit obligations (under SSAP No. 26 to be reported on Schedule D-1-1) or asset-backed securities (under SSAP No. 43 to be reported on Schedule D-1-2). The Company adopted the revised standards effective January 1, 2025 and reclassified investments in accordance with the new principles-based definition. Approximately $47 million of investments previously reported on Schedule D Part 1 were reclassified to Schedule BA. Of these investments, approximately $30 million of book adjusted carrying value went from an amortized cost measurement to a fair value measurement, which resulted in an approximate a $4 million unrealized loss to surplus. In 2024, the NAIC modified SSAP No. 21 - Other Admitted Assets to prescribe a measurement framework for all residual interests regardless of legal form. The updates allow for a policy election of the Allowable Earned Yield Method or Practical Expedient Method (i.e., cost recovery method). The Company adopted the revised standards effective January 1, 2025 and elected the Practical Expedient Method. However, the updates are not material to the Company. Recently Issued Accounting Standards In 2025, the NAIC adopted revisions that modify the SSAP No. 37 - Mortgage Loans to clarify that mortgage loans held by an insurer through a qualifying Delaware Statutory Trust ("DST") will be reported on Schedule B - Mortgage Loans. The Company will adopt the revised standards effective January 1, 2026; however, the Company does not expect the changes to have a material impact. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 19
3. Investments A. Components of Net Investment Income For the years ended December 31, 2025 2024 2023 Interest income from bonds and short-term investments $ 152,006,959 $ 197,751,860 $ 217,743,428 Interest income from affiliated bonds and short-term investments 11,618,811 15,195,247 - Dividends from common and preferred stocks 1,176,237 1,054,713 244,909 Interest income from contract loans 11,407 16,347 16,073 Interest income from mortgage loans on real estate 31,786,806 32,178,948 38,351,807 Interest and dividends from other investments 39,027,287 34,216,461 24,128,880 Gross investment income 235,627,507 280,413,576 280,485,097 Less: Investment expenses 6,393,833 6,275,747 5,554,032 Less: Interest expense $ 7,890,538 $ - $ - Net investment income $ 221,343,136 $ 274,137,829 $ 274,931,065 B. Components of Net Unrealized Capital (Losses) Gains on Bonds and Short-Term Investments As of December 31, 2025 2024 2023 Gross unrealized capital gains $ 35,622,764 $ 25,657,990 $ 55,090,753 Gross unrealized capital losses (312,219,714) (371,997,649) (346,996,508) Net unrealized capital (losses) gains (276,596,950) (346,339,659) (291,905,755) Balance, beginning of year (346,339,659) (291,905,755) (411,649,895) Change in net unrealized capital (losses) gains on bonds and short-term investments $ 69,742,709 $ (54,433,904) $ 119,744,140 C. Components of Net Unrealized Capital Gains (Losses) on Common and Preferred Stocks As of December 31, 2025 2024 2023 Gross unrealized capital gains $ 1,771,879 $ 2,448,340 $ 1,123,927 Gross unrealized capital losses (30,098) (957,676) (233,112) Net unrealized capital gains (losses) 1,741,781 1,490,664 890,815 Balance, beginning of year 1,490,664 890,815 (4,466,187) Change in net unrealized capital gains (losses) on common and preferred stocks $ 251,117 $ 599,849 $ 5,357,002 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 20
D. Components of Net Realized Capital Losses For the years ended December 31, 2025 2024 2023 Bonds and short-term investments $ (13,586,816) $ (13,328,872) $ (9,560,845) Common stocks - unaffiliated 1,425,505 2,002,920 167,016 Preferred stocks - unaffiliated (480,497) - - Mortgage loans on real estate 3,586,459 (18,607,252) (7,828,471) Derivatives (78,532,382) (130,394,309) (440,250,241) Other invested assets (3,221,583) (1,724,980) 54,659,326 Other 9,779,253 - - Net realized capital losses (81,030,061) (162,052,493) (402,813,215) Capital loss tax expense 4,091,920 (677,642) 12,188,360 Net realized capital losses, after tax (85,121,981) (161,374,851) (415,001,575) Less: Amounts transferred to IMR (9,491,622) (7,715,428) (3,207,953) Net realized capital losses, after tax $ (75,630,359) $ (153,659,423) $ (411,793,622) The following table summarizes sales activity of unaffiliated bond, short-term investments and equity securities before tax and transfers to the IMR (without maturities and calls): For the years ended December 31, 2025 2024 2023 Bonds and short-term investments Sale proceeds $ 2,167,009,107 $ 5,429,103,731 $ 3,652,187,797 Gross realized capital gains on sales 4,413,256 10,404,085 3,257,654 Gross realized capital losses on sales (20,379,973) (23,726,308) (9,657,467) Unaffiliated common and preferred stock Sale proceeds 23,016,291 2,501,415 25,987,746 Gross realized capital gains on sales 179,800 2,005,615 167,016 Gross realized capital losses on sales (480,568) - - Additionally, for the years ended December 31, 2025, 2024 and 2023, there were $49,580, $31,566 and $269,680 of investment income generated on 1, 1, and 9 securities, respectively, as a result of prepayment penalties and acceleration fees on disposed securities with callable features. E. Investments - Derivative Instruments Overview The Company utilizes a variety of Over-the counter ("OTC") derivatives, including OTC-cleared transactions, and exchange-traded derivative instruments as part of its overall risk management strategy. The types of instruments may include swaps, caps, floors, forwards, futures and options to achieve one of four Company-approved objectives: to hedge risk arising from interest rate, equity market, credit spread and issuer default, price or currency exchange rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions. On the date the derivative contract is entered into, the Company designates the derivative as hedging (fair value, cash flow, or net investment in a foreign operation), replication, or held for other investment and/or risk management activities, which primarily involves managing asset or liability related risks which do not qualify for hedge accounting under SSAP No. 86. The Company's derivative transactions are used in strategies permitted under the derivative use plans required by the Department. Interest rate swaps, equity, and index swaps involve the periodic exchange of payments with other parties, at specified intervals, calculated using agreed upon rates or indices and notional principal amounts. Generally, no cash or principal payments are TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 21
exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value. Credit default swaps entitle one party to receive a periodic fee in exchange for an obligation to compensate the other party should a credit event occur on the part of the referenced issuer. Forward contracts are customized commitments that specify a rate of interest or currency exchange rate to be paid or received on an obligation beginning on a future start date and are typically settled in cash. Financial futures are standardized commitments to either purchase or sell designated financial instruments at a future date for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures' contract values are settled daily in cash. Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date. Swaption contracts grant the purchaser, for a premium payment, the right to enter into an interest rate swap with the issuer on a specified future date. Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using agreed upon rates and exchanged principal amounts. The Company clears interest rate swap and certain credit default swap derivative transactions through central clearing houses. OTC-cleared derivatives require initial collateral at the inception of the trade in the form of cash or highly liquid collateral, such as U.S. Treasuries and government agency investments. Central clearing houses also require additional cash collateral as variation margin based on daily market value movements. In addition, OTC-cleared transactions include price alignment interest either received or paid on the variation margin, which is reflected in net investment income. Strategies The notional value, fair value, and carrying value of derivative instruments used during the years 2025 and 2024 are disclosed in the table presented below. During the years 2025 and 2024, the Company did not transact in or hold any positions related to net investment hedges in a foreign operation or income generation transactions. The notional amounts of derivative contracts represent the basis upon which pay or receive amounts are calculated and are not reflective of credit risk. The fair value of derivative instruments are based upon widely accepted pricing valuation models which utilize independent third-party data as inputs or independent broker quotations. For the years ended December 31, 2025 and 2024, the average fair values for derivatives held for other investment and/or risk management activities were $10,092,480 and $59,581,596, respectively. The Company did not have any unrealized gains or losses during 2025 and 2024 representing the component of the derivative instruments gain or loss from derivatives that no longer qualify for hedge accounting. (Amounts in thousands) As of December 31, 2025 As of December 31, 2024 Derivative type by strategy Notional Value Fair Value Carrying Value Notional Value Fair Value Carrying Value Cash flow hedges Interest rate swaps $ 125,000 $ (10,540) $ - $ 125,000 $ (16,069) $ - Foreign currency swaps 17,920 (154) (1,029) 22,324 1,523 1,362 Replication transactions Interest rate swaps 200,000 (43,132) 66 200,000 (45,480) 66 Credit default swaps - - - Other investment and/or Risk Management activities Interest rate swaps - offsetting - - - 0 0 0 Macro hedge program 1,113,832 44,440 44,440 4,349,417 81,897 81,897 Total $ 1,456,752 $ (9,386) $ 43,477 $ 4,696,741 $ 21,871 $ 83,325 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 22
Cash Flow Hedges Interest rate swaps and index swaps: Interest rate swaps and index swaps are primarily used to convert interest receipts on floating-rate fixed maturity investments and liabilities to fixed rates or other floating rates. There were no gains and losses classified in unrealized gains and losses related to cash flow hedges that have been discontinued because it was no longer probable that the original forecasted transactions would occur by the end of the originally specified time period. Foreign currency swaps: Foreign currency swaps are used to convert foreign currency denominated cash flows associated with certain foreign denominated fixed maturity investments and liabilities to U.S. dollars. The foreign fixed maturities and liabilities are hedged to minimize cash flow fluctuations due to changes in currency rates. Replication Transactions Interest rate swaps: The Company periodically enters into interest rate swaps as part of replication transactions. Credit default swaps: The Company periodically enters into credit default swaps that assume credit risk as part of replication transactions. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company's investment policies. Other Investment and/or Risk Management Activities The table below presents realized capital gains and (losses) on derivative instruments used for other investment and/or risk management activities. (Amounts in thousands) Realized Gains (Losses) By strategy For the year ended December 31, 2025 For the year ended December 31, 2024 For the year ended December 31, 2023 Credit default swaps $ 1,397 $ 2,968 $ 4,286 Foreign currency swaps and forwards 107 6 (23) Interest rate swaps and swaptions - - 176 Macro hedge program (80,037) (133,368) (444,681) Total $ (78,533) $ (130,394) $ (440,242) Credit default swaps: The Company enters into swap agreements in which the Company reduces or assumes credit exposure from an individual entity, referenced index or asset pool. In addition, the Company may enter into credit default swaps to terminate existing swaps in hedging relationships, thereby offsetting the changes in value of the original swap. Guaranteed Minimum Withdrawal Benefits ("GMWB") hedging derivatives: The Company utilizes GMWB hedging derivatives as part of an actively managed program designed to hedge a portion of the capital market risk exposures of the non-reinsured GMWB riders due to changes in interest rates, equity market levels, and equity volatility. These derivatives include customized swaps, interest rates swaps and futures, and equity swaps, options and futures, on certain indices including the S&P 500 index, EAFE index and NASDAQ index. Equity index swaps, options, and futures: The Company enters into equity index swaps and futures to hedge equity risk of equity common stock investments. The Company also enters into equity index options to economically hedge the equity risk associated with various equity indexed products. Interest rate swaps and swaptions: The Company enters into interest rate swaps and swaptions to manage duration between assets and liabilities. In addition, the Company may enter into interest rate swaps to terminate existing swaps in hedging relationships, thereby offsetting the changes in value in the original swap. Macro hedge program: The Company utilizes equity options, swaps, futures, and foreign currency options to hedge against a decline in the equity markets and the resulting statutory surplus and capital impact primarily arising from GMDB and GMWB obligations. Included are equity options with financing premiums for which the premium is paid at the end of the derivative contract. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 23
Credit Risk Assumed through Credit Derivatives The Company enters into credit default swaps that assume credit risk of a single entity or referenced index in order to synthetically replicate investment transactions that would be permissible under the Company's investment policies. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer's debt obligation after the occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade single corporate issuers and baskets, which include standard diversified portfolios of corporate and commercial mortgage-backed securities ("CMBS") issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and may be divided into tranches that possess different credit ratings. The Company's derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial stability and creditworthiness of the counterparty and typically requires credit enhancement/credit risk reducing agreements. The Company minimizes the credit risk in derivative instruments by entering into transactions with high quality counterparties rated A or better, which are monitored and evaluated by the Company's risk management team and reviewed by senior management. OTC-cleared transactions reduce risk due to their ability to require daily variation margin, monitor the Company's ability to request additional collateral in the event of a counterparty downgrade, and act as an independent valuation source. The Company has developed credit exposure thresholds which are based upon counterparty ratings. Credit exposures are measured using the market value of the derivatives, resulting in amounts owed to the Company by its counterparties or potential payment obligations from the Company to its counterparties. Credit exposures are generally quantified daily based on the prior business day's market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds. In accordance with industry standards and the contractual agreements, collateral is typically settled on the next business day. The Company may have exposure to credit risk for amounts below the exposure thresholds which are uncollateralized, as well as for market fluctuations that may occur between contractual settlement periods of collateral movements. Counterparty exposure thresholds are developed for each of the counterparties based upon their ratings. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company also generally requires that derivative contracts, other than exchange traded contracts, OTC-cleared swaps, certain forward contracts, and certain embedded and reinsurance derivatives, be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty and permits right of offset. As of December 31, 2025 and 2024, the Company did not hold any material credit derivatives that assume credit risk. Credit Risk The Company's derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial stability and creditworthiness of the counterparty and typically requires credit enhancement/credit risk reducing agreements. The Company minimizes the credit risk in derivative instruments by entering into transactions with high quality counterparties primarily rated A or better, which are monitored and evaluated by the Company's risk management team and reviewed by senior management. OTC-cleared transactions reduce risk due to their ability to require daily variation margin, monitor the Company's ability to request additional collateral in the event of a counterparty downgrade, and act as an independent valuation source. The Company has developed credit exposure thresholds which are based upon counterparty ratings. Credit exposures are measured using the market value of the derivatives, resulting in amounts owed to the Company by its counterparties or potential payment obligations from the Company to its counterparties. Credit exposures are generally quantified daily based on the prior business day's market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds. In accordance with industry standards and the contractual agreements, collateral is typically settled on the next business day. The Company has exposure to credit risk for amounts below the exposure thresholds which are uncollateralized, as well as for market fluctuations that may occur between contractual settlement periods of collateral movements. Counterparty exposure thresholds are developed for each of the counterparties based upon their ratings. The maximum uncollateralized threshold for a derivative counterparty is $5 million. In addition, the Company monitors counterparty credit TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 24
exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company also generally requires that OTC derivative contracts be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty. For the years ended December 31, 2025, 2024, and 2023, the Company had no losses on derivative instruments due to counterparty nonperformance. F. Concentration of Credit Risk The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk. As of December 31, 2025, the Company was not exposed to any credit concentration risk of a single issuer, excluding U.S. government and certain U.S. government agencies and wholly-owned subsidiaries, greater than 10% of the Company's capital and surplus. G. Bonds, Cash Equivalents, Short-Term Investments, Common Stocks and Preferred Stocks Gross Gross Estimated Bonds, Cash Equivalents and Short-Term Investments Statement Unrealized Unrealized Fair As of December 31, 2025 Value Gains Losses Value U.S. government and government agencies and authorities Guaranteed and sponsored - excluding asset-backed $ 519,258,337 $ - $ (186,107,497) $ 333,150,840 Guaranteed and sponsored - asset-backed 46,351,588 2,271,319 (3,387,031) 45,235,876 States, municipalities and political subdivisions 91,864,416 1,633,491 (6,379,975) 87,117,932 International governments 29,053,199 173,515 (192,324) 29,034,390 All other corporate - excluding asset-backed 1,558,695,179 32,810,111 (97,974,600) 1,493,530,690 All other corporate - asset-backed 747,739,426 1,931,939 (21,377,166) 728,294,199 Cash equivalents and short-term investments 122,505,472 1,269 - 122,506,741 Total bonds, cash equivalents and short-term investments $ 3,115,467,617 $ 38,821,644 $ (315,418,593) $ 2,838,870,668 Gross Gross Estimated Common Stocks Unrealized Unrealized Fair As of December 31, 2025 Cost Gains Losses Value Common stocks - unaffiliated $ 8,642,494 $ 1,243,677 $ - $ 9,886,171 Common stocks - affiliated - Total common stocks $ 8,642,494 $ 1,243,677 $ - $ 9,886,171 Gross Gross Estimated Preferred Stocks Unrealized Unrealized Fair As of December 31, 2025 Cost Gains Losses Value Preferred stocks - unaffiliated $ 1,889,237 $ - $ (38,349) $ 1,850,888 Total preferred stocks $ 1,889,237 $ - $ (38,349) $ 1,850,888 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 25
Gross Gross Estimated Bonds, Cash Equivalents and Short-Term Investments Statement Unrealized Unrealized Fair As of December 31, 2024 Value Gains Losses Value U.S. government and government agencies and authorities: Guaranteed and sponsored - excluding asset-backed $ 517,740,761 $ - $ (186,167,506) $ 331,573,255 Guaranteed and sponsored - asset-backed 56,484,451 1,041,075 (7,077,378) 50,448,148 States, municipalities and political subdivisions 100,108,529 460,230 (8,457,318) 92,111,441 International governments 30,054,346 42,288 (1,155,857) 28,940,777 All other corporate - excluding asset-backed 1,763,091,651 20,450,410 (135,712,848) 1,647,829,213 All other corporate - asset-backed 964,909,426 5,794,975 (35,403,888) 935,300,513 Hybrid securities 53,583,374 1,032,880 (1,186,778) 53,429,476 Cash equivalents and short-term investments 129,396,479 29 - 129,396,508 Cash equivalents and short-term investments affiliated 440,000,000 - - 440,000,000 Total bonds, cash equivalents and short-term investments $ 4,055,369,017 $ 28,821,887 $ (375,161,573) $ 3,709,029,331 Gross Gross Estimated Common Stocks Unrealized Unrealized Fair As of December 31, 2024 Cost Gains Losses Value Common stocks - unaffiliated $ 9,204,642 $ 1,327,035 $ 10,531,677 Common stocks - affiliated 7,300,225 1,085,317 8,385,542 Total common stocks $ 16,504,867 $ 2,412,352 $ - $ 18,917,219 Gross Gross Estimated Preferred Stocks Unrealized Unrealized Fair As of December 31, 2024 Cost Gains Losses Value Preferred stocks - unaffiliated $ 22,450,000 $ 921,688 $ 21,528,312 Total preferred stocks $ 22,450,000 $ - $ 921,688 $ 21,528,312 The statement value and estimated fair value of bonds, cash equivalents and short-term investments at December 31, 2025 by expected maturity year are shown below. Expected maturities may differ from contractual maturities due to call or prepayment provisions. Asset-backed securities ("ABS"), including mortgage-backed securities and collateralized mortgage obligations are distributed to maturity year based on the Company's estimate of the rate of future prepayments of principal over the remaining lives of the securities. These estimates are developed using prepayment speeds provided in broker consensus data. Such estimates are derived from prepayment speeds experienced at the interest rate levels projected for the applicable underlying collateral. Actual prepayment experience may vary from these estimates. Statement Estimated Maturity Value Fair Value Due in one year or less $ 221,452,611 $ 217,411,039 Due after one year through five years 565,031,623 556,431,778 Due after five years through ten years 624,468,132 620,997,662 Due after ten years 1,582,956,104 1,345,699,679 Total $ 2,993,908,470 $ 2,740,540,158 At December 31, 2025 and 2024, securities with a statement value of $4,868,203 and $4,862,867 respectively, were on deposit with government agencies as required by law in various jurisdictions in which the Company conducts business. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 26
H. Mortgage Loans on Real Estate The Company had a maximum and minimum lending rate of 8.22% and 7.02% for loans during 2025 and had a maximum and minimum lending rate of 8.45% and 7.80% for loans during 2024. During 2025 and 2024, the Company did not reduce interest rates on any outstanding mortgage loans on real estate. For loans held as of December 31, 2025 and 2024, the highest loan to value percentage of any one loan at the time of loan origination, exclusive of insured, guaranteed, purchase money mortgages or construction loans was 76.19% and 76.19%, respectively. There were no taxes, assessments or amounts advanced and not included in the mortgage loan total. As of December 31, 2025 and 2024, the Company did not hold mortgages with interest more than 180 days past due. As of December 31, 2025 and 2024, there were immaterial amounts of impaired loans and immaterial related allowances for credit losses, and the interest income recognized during the period the loans were impaired was also immaterial. I. Restructured Debt in which the Company is a Creditor The Company had no restructured commercial mortgage loan during the year ended December 31, 2025. The Company had one restructured commercial mortgage loan during the year ended December 31, 2024. The loan had an extension on the maturity date and no loss was incurred. J. Joint Ventures, Partnerships and Limited Liability Companies The Company has no investments in joint ventures, partnerships or limited liability companies that exceed 10% of admitted assets. The Company recognized OTTI of $2,619,208, $1,769,708 and $586,972 for the years ended December 31, 2025, 2024, and 2023, respectively, on certain limited partnerships. The partnerships were impaired because their cost basis sustained a decline in value that the Company determined to be other-than-temporary. The OTTI were determined as the difference between the fair value from the partnership financial statements and the carrying value of the investments based on the equity method of accounting. K. Repurchase Agreements and Other Collateral Transactions From time to time, the Company enters into repurchase agreements to manage liquidity or to earn incremental spread income. A repurchase agreement is a transaction in which one party (transferor) agrees to sell securities to another party (transferee) in return for cash (or securities), with a simultaneous agreement to repurchase the same securities at a specified price at a later date. A dollar roll is a type of repurchase transaction where a mortgage-backed security is sold with an agreement to repurchase substantially the same security at a specified time in the future. These transactions generally have a contractual maturity of 90 days or less. Therefore, the carrying amounts of these instruments approximate fair value. Under repurchase agreements, the Company transfers collateral of U.S. government, government agency and corporate securities and receives cash. For the repurchase agreements, the Company obtains cash in an amount equal to at least 95% of the fair value of the securities transferred. The agreements require additional collateral to be transferred when necessary and provide the counterparty the right to sell or re-pledge the securities transferred. The cash received from the repurchase program is typically invested in short-term investments or bonds and is reported as an asset on the Company's Statements of Admitted Assets, Liabilities and Capital and Surplus. Repurchase agreements include master netting provisions that provide both counterparties the right to offset claims and apply securities held by them with respect of their obligations in the event of default. The Company accounts for the repurchase agreements as collateralized borrowings. The securities transferred under repurchase agreements are included in bonds, with the obligation to repurchase those securities recorded in other liabilities in the Statements of Admitted Assets, Liabilities and Capital and Surplus. As of December 31, 2025, the fair value and amortized cost of the securities transferred were $115,952,027 and $125,761,411 respectively, with maturities greater than 3 years. The liability to repurchase was $120,684,019 with a contractual maturity less than one year as of December 31, 2025. The securities acquired from the use of the collateral in connection with the repurchase agreement transactions were short-term investments with amortized cost approximating fair value of $120,684,019 with a maturity date less than 360 as of December 31, 2025. As of December 31, 2024, the fair value and amortized cost of the securities transferred were $180,439,066 and $201,346,907 respectively, with maturities greater than 3 years. The corresponding liability to repurchase was $171,899,921 with a contractual maturity less than one year as of December 31, 2024. The securities acquired from the use of the collateral in connection with the repurchase agreement transactions were short-term investments with amortized cost approximating fair value of $171,899,921 with a maturity date less than 360 as of December 31, 2024. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 27
The Company also may enter into reverse repurchase agreements where the Company purchases securities and simultaneously agrees to resell the same or substantially the same securities. The agreements require additional collateral to be transferred to the Company when necessary and the Company has the right to sell or re-pledge the securities received. The agreements have a contractual maturity of one year or less, and are accounted for as collateralized financing. The receivable for reverse repurchase agreements, included within Short-term investments on the Company's Statements of Admitted Assets, Liabilities and Capital and Surplus, as of December 31, 2025, 2024 and 2023, was $0, as the Company did not participate in reverse repurchase agreements during 2025, 2024 and 2023. Reinvested proceeds from repurchase agreements transactions consist of short-term, high quality investments and U.S. government and government agency securities. These can be sold and used to meet collateral calls in a stress scenario. In addition, the liquidity resources of most of its general account investment portfolio are available to meet any potential cash demand when securities are returned to the Company. The potential impacts of repurchase agreements on the Company's liquidity and capital position are stress tested monthly, under Talcott's Liquidity Risk Policy. The Company also enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of December 31, 2025 and 2024, securities pledged of $48,435,600 and $118,943,190, respectively, were included in Bonds and Cash, cash equivalents and short-term investments, on the Statements of Admitted Assets, Liabilities and Capital and Surplus. The counterparties have the right to sell or re-pledge these securities. The Company also pledged cash collateral associated with derivative instruments with a statement value of $39,235,183 and $65,092,411, respectively, as of December 31, 2025 and 2024, included in Other invested assets, on the Statements of Admitted Assets, Liabilities and Capital and Surplus. As of December 31, 2025 and 2024, the Company accepted cash collateral associated with derivative instruments with a statement value of $3,039,950 and $6,547,000, respectively, which was invested and recorded in the Statements of Admitted Assets, Liabilities and Capital and Surplus in Bonds and Cash, cash equivalents and short-term investments with a corresponding amount recorded in Collateral on derivatives reported in Liabilities. The Company also accepted securities collateral as of December 31, 2025 and 2024 of $2,604,300 and $0, respectively, of which the Company has the ability to sell or repledge. As of December 31, 2025 and 2024, the Company did not repledge securities and did not sell any securities collateral. In addition, as of December 31, 2025 and 2024, noncash collateral accepted was held in separate custodial accounts and was not included in the Company's Statements of Admitted Assets, Liabilities and Capital and Surplus. L. Security Unrealized Loss Aging The Company has a security monitoring process overseen by a committee of investment and accounting professionals that, on a quarterly basis, identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For further discussion regarding the Company's OTTI policy, see Note 2. Due to the issuers' continued satisfaction of the securities' obligations in accordance with their contractual terms and the expectation that they will continue to do so, as well as the evaluation of the fundamentals of the issuers' financial condition and other objective evidence, the Company believes that the prices of the securities in the sectors identified in the tables below were temporarily depressed as of December 31, 2025 and 2024. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 28
The following table presents amortized cost or statement value, fair value, and unrealized losses for the Company's bond and equity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2025 and 2024: December 31, 2025 Less Than 12 Months 12 Months or More Total Amortized Unrealized Amortized Unrealized Amortized Unrealized (Amounts in thousands) Cost Fair Value Losses Cost Fair Value Losses Cost Fair Value Losses U.S. government and government agencies & authorities: Guaranteed & sponsored - excluding asset-backed $ 21,997 $ 21,553 $ (444) $ 520,393 $ 332,466 $ (187,927) $ 542,390 $ 354,019 $ (188,371) Guaranteed & sponsored - asset-backed 2,942 2,714 (228) 37,510 34,351 (3,159) 40,452 37,065 (3,387) States, municipalities & political subdivisions 4,462 4,284 (178) 44,394 38,192 (6,202) 48,856 42,476 (6,380) International governments 7,490 7,486 (4) 17,131 16,943 (188) 24,621 24,429 (192) All other corporate - excluding asset-backed 149,368 144,487 (4,881) 768,298 674,001 (94,297) 917,666 818,488 (99,178) All other corporate - asset-backed 97,938 97,435 (503) 250,808 231,137 (19,671) 348,746 328,572 (20,174) Total fixed maturities 284,197 277,959 (6,238) 1,638,534 1,327,090 (311,444) 1,922,731 1,605,049 (317,682) Common stock-unaffiliated - 377 347 (30) 377 347 (30) Total stocks - - - 377 347 (30) 377 347 (30) Total securities $ 284,197 $ 277,959 $ (6,238) $ 1,638,911 $ 1,327,437 $ (311,474) $ 1,923,108 $ 1,605,396 $ (317,712) December 31, 2024 Less Than 12 Months 12 Months or More Total Amortized Unrealized Amortized Unrealized Amortized Unrealized (Amounts in thousands) Cost Fair Value Losses Cost Fair Value Losses Cost Fair Value Losses U.S. government and government agencies & authorities: Guaranteed & sponsored - excluding asset-backed $ 1,617 $ 1,511 $ (106) $ 516,123 $ 330,062 $ (186,061) $ 517,740 $ 331,573 $ (186,167) Guaranteed & sponsored - asset-backed 9,130 8,295 (835) 42,599 36,357 (6,242) 51,729 44,652 (7,077) States, municipalities & political subdivisions 26,203 25,827 (376) 50,835 42,754 (8,081) 77,038 68,581 (8,457) International governments 2,292 2,255 (38) 25,632 24,514 (1,118) 27,924 26,769 (1,155) All other corporate - excluding asset-backed 357,837 345,099 (12,739) 903,228 780,254 (122,974) 1,261,065 1,125,353 (135,712) All other corporate - asset-backed 106,185 104,325 (1,860) 412,354 378,810 (33,544) 518,539 483,135 (35,404) Hybrid securities 1,147 1,142 (5) 16,481 15,299 (1,182) 17,628 16,441 (1,187) Total fixed maturities 504,411 488,454 (15,957) 1,967,252 1,608,050 (359,202) 2,471,663 2,096,504 (375,159) Common stock-unaffiliated - - - 361 326 (35) 361 326 (35) Preferred stock - unaffiliated - - - 22,450 21,528 (922) 22,450 21,528 (922) Total stocks - - - 22,811 21,854 (957) 22,811 21,854 (957) Total securities $ 504,411 $ 488,454 $ (15,957) $ 1,990,063 $ 1,629,904 $ (360,159) $ 2,494,474 $ 2,118,358 $ (376,118) As of December 31, 2025, fixed maturities, comprised of 502 securities, accounted for approximately 100% of the Company's total unrealized loss amount. The securities were primarily related to US. government securities, corporate securities concentrated in the utility, industrial & financial services sector, and mortgage-backed securities, which were depressed primarily due to an increase in interest rates and/or widening of credit spreads since the securities were purchased. As of December 31, 2025, 87% of the securities in an unrealized loss position were depressed less than 20% of amortized cost. The increase in fixed maturities' unrealized losses during 2025 was primarily attributable to increase in interest rates and widening spreads on higher yielding corporate securities and asset-back securities. Most of the securities depressed for twelve months or more are primarily related to US. government agency securities, mortgage- backed securities, and corporate securities concentrated in the financial & industrial sector, which were depressed primarily due to an increase in interest rates and/or widening of credit spreads since the securities were purchased. As of December 31, 2025, the Company does not have an intention to sell any securities in an unrealized loss position, and for loan-backed and structured securities, has the intent and ability to hold these securities until values recover. As of December 31, 2024, fixed maturities, comprised of 667 securities, accounted for approximately 99% of the Company's total unrealized loss amount. The securities were primarily related to US. government securities, corporate securities TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 29
concentrated in the utility, industrial & financial services sector, and mortgage-backed securities, which were depressed primarily due to an increase in interest rates and/or widening of credit spreads since the securities were purchased. As of December 31, 2024, 88% of the securities in an unrealized loss position were depressed less than 20% of amortized cost. The increase in fixed maturities' unrealized losses during 2024 was primarily attributable to increase in interest rates and widening spreads on higher yielding corporate securities and asset-back securities. M. Asset Backed Securities OTTI For the years ended December 31, 2025, 2024 and 2023, the Company did not recognize losses for OTTI on loan-backed and structured securities due to the intent to sell impaired securities or due to the inability or lack of intent to retain an investment in a security for a period of time sufficient to recover the amortized cost basis. N. 5GI Securities A 5GI is assigned by the NAIC Securities Valuation Office ("SVO") to certain obligations when an insurer certifies that the documentation necessary to permit a full credit analysis of a security does not exist, that the issuer or obligator is current on all contracted interest and principal pay downs and that the insurer has the expectation of ultimate payment of all contracted payments. The 5GI securities for the Company are immaterial for the years ended December 31, 2025 and 2024. 4. Fair Value Measurements Fair value is determined based on the "exit price" notion which is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Financial instruments carried at fair value in the Company's financial statements include certain bonds, stocks, derivatives, and Separate Account assets. The Company utilizes the services of Hartford Investment Management Company ("HIMCO"), a third-party investment manager, and Sixth Street Insurance Solutions, L.P., an affiliated investment manager, that are registered investment advisers under the Investment Advisers Act of 1940. The Company's Investment Valuation Committee ("IVC"), a working group chaired by the Chief Financial Officer ("CFO") of the Talcott Financial Group Investments, LLC subsidiaries, oversees the investment activities of these investment managers and directs other investments to maximize economic value and generate the returns necessary to support the Company's various product obligations, within internally established objectives, guidelines and risk tolerances. The portfolio objectives and guidelines are developed, by the Company, based upon the asset/liability profile, including duration, convexity and other characteristics within specified risk tolerances. The risk tolerances considered include, but are not limited to, asset sector, credit issuer allocation limits, and maximum portfolio limits for below investment grade holdings. The Company attempts to minimize adverse impacts to the investment portfolio and the Company's results of operations from changes in economic conditions through asset diversification, asset allocation limits, and asset/liability duration matching and the use of derivatives. The following section applies the fair value hierarchy and disclosure requirements for the Company's Separate Account assets, and categorizes the inputs in the valuation techniques used to measure fair value into three broad Levels (Level 1, 2, or 3): Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 Observable inputs, other than quoted prices included in Level 1, for the asset or liability, or prices for similar assets and liabilities. Level 3 Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Because Level 3 fair values, by their nature, contain one or more significant unobservable inputs as there is little or no observable market for these assets and liabilities, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the Company's best estimate of amounts that could be realized in a current market exchange absent actual market exchanges. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 30
In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company's investment manager will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. In most cases, both observable (e.g., changes in interest rates) and unobservable (e.g. changes in risk assumptions) inputs are used in determination of fair values that the Company's investment manager has classified within Level 3. Consequently, these values and the related gains and losses are based upon both observable and unobservable inputs. The Company's bonds included in Level 3 are classified as such because these securities are primarily within illiquid markets and/or priced by independent brokers. The following table presents assets and (liabilities) carried at fair value by hierarchy level: As of December 31, 2025 (Amounts in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value (NAV) Total a. Assets accounted for at fair value Common stocks - unaffiliated $ 6,884 $ - $ 3,002 $ - 9,886 Preferred stocks - unaffiliated - 1,851 - - 1,851 Cash equivalents 121,559 - - - 121,559 Total bonds and stocks 128,443 1,851 3,002 - 133,296 Derivative assets Equity derivatives - 23 - - 23 Macro hedge program - 48,208 - - 48,208 Total derivative assets - 48,231 - - 48,231 Separate Account assets [1] 24,098,084 - - - 24,098,084 Total assets accounted for at fair value $ 24,226,527 $ 50,082 $ 3,002 $ - $ 24,279,611 b. Liabilities accounted for at fair value Derivative liabilities Macro hedge program $ - $ 3,791 $ - $ - $ 3,791 Total liabilities accounted for at fair value $ - $ 3,791 $ - $ - $ 3,791 [1] Excludes approximately $9 million of investment sales receivable net of investment purchases payable that are not subject to SSAP No. 100 (Fair Value Measurements.) TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 31
As of December 31, 2024 (Amounts in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value (NAV) Total a. Assets accounted for at fair value Common stocks - unaffiliated $ 7,089 $ - $ 3,443 $ - $ 10,532 Preferred stocks - unaffiliated - 21,528 - - 21,528 Cash equivalents 129,308 - - - 129,308 Total bonds and stocks 136,397 21,528 3,443 - 161,368 Derivative assets Interest rate derivatives - - - - - Macro hedge program - 3,167 97,110 - 100,277 Total derivative assets - 3,167 97,110 100,277 Separate Account assets [1] 23,798,019 - - - $ 23,798,019 Total assets accounted for at fair value $ 23,934,416 $ 24,695 $ 100,553 $ - $ 24,059,664 b. Liabilities accounted for at fair value Derivative liabilities Interest rate derivatives $ - $ - $ - $ - $ - Macro hedge program - (18,381) - (18,381) Total liabilities accounted for at fair value $ - $ - $ (18,381) $ (18,381) [1] Excludes approximately $6 million of investment sales receivable net of investment purchases payable that are not subject to SSAP No. 100 (Fair Value Measurements.) Valuation Techniques, Procedures and Controls The Company determines the fair values of certain financial assets and liabilities based on quoted market prices where available and where prices represent reasonable estimates of fair value. The Company also determines fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company's default spreads, liquidity and, where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments listed in the preceding tables. The fair value process is monitored by the respective Valuation Committees of the Company's investment managers, which are comprised of senior management that meets at least quarterly. The purpose of the committee is to oversee the pricing policy and procedures by ensuring objective and reliable valuation practices and pricing of financial instruments as well as addressing valuation issues and approving changes to valuation methodologies and pricing sources. In addition, the IVC is responsible for the approval and monitoring of the valuation policy of the Company as well as the adjudication of any valuation disputes thereunder. The valuation policy addresses valuation of all financial instruments held in the general account and guaranteed separate accounts of the Company, including all derivative positions. The IVC meets regularly, and its members include a cross-functional group of senior management as well as various investment, accounting, finance, and risk management professionals. The Company also has an enterprise-wide Operational Risk Management function with Enterprise Risk Management ("ERM") which is responsible for establishing, maintaining and communicating the framework, principles and guidelines of the Company's operational risk management program. The Enterprise Model Oversight Working Group ensures compliance with the ERM framework by providing an independent review of the suitability, characteristics and reliability of model inputs as well as an analysis of significant changes to current models. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 32
Bonds, Asset Backed Securities and Stocks The fair values of bonds, asset backed securities and stocks in an active and orderly market (e.g., not distressed or forced liquidation) are determined by the Company's investment managers using a "waterfall" approach utilizing the following pricing sources: quoted prices for identical assets or liabilities, prices from third-party pricing services, independent broker quotations, or internal matrix pricing processes. Typical inputs used by these pricing sources include, but are not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and/or estimated cash flows, prepayment speeds, and default rates. Most bonds do not trade daily. Based on the typical trading volumes and the lack of quoted market prices for bonds, third-party pricing services utilize matrix pricing to derive security prices. Matrix pricing relies on securities' relationships to other benchmark quoted securities, which trade more frequently. Pricing services utilize recently reported trades of identical or similar securities making adjustments through the reporting date based on the preceding outlined available market observable information. If there are no recently reported trades, the third-party pricing services may develop a security price using expected future cash flows based upon collateral performance and discounted at an estimated market rate. Both matrix pricing and discounted cash flow techniques develop prices by factoring in the time value for cash flows and risk, including liquidity and credit. Prices from third-party pricing services may be unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding. The Company's investment managers utilize an internally developed matrix pricing process for private placement securities for which the Company is unable to obtain a price from a third-party pricing service. The process is similar to the third-party pricing services. The Company's investment managers develop credit spreads each month using market based data for public securities adjusted for credit spread differentials between public and private securities which are obtained from a survey of multiple private placement brokers. The credit spreads determined through this survey approach are based upon the issuer's financial strength and term to maturity, utilizing independent public security index and trade information and adjusting for the non-public nature of the securities. Credit spreads combined with risk-free rates are applied to contractual cash flows to develop a price. The Company's investment managers perform ongoing analyses of the prices and credit spreads received from third parties to ensure that the prices represent a reasonable estimate of the fair value. In addition, the Company's investment managers ensure that prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models utilizing spreads, and when available, market indices. As a result of these analyses, if the Company's investment managers determine that there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly and approved by the IVC of the Company's investment managers. The Company's investment managers conduct other specific monitoring controls around pricing. Daily, weekly and monthly analyses identify price changes over pre-determined thresholds for bonds and equity securities. Monthly analyses identify prices that have not changed, and missing prices. Also on a monthly basis, a second source validation is performed on most sectors. Analyses are conducted by a dedicated pricing unit that follows up with trading and investment sector professionals and challenges prices with vendors when the estimated assumptions used differs from what the Company's investment managers feel a market participant would use. Examples of other procedures performed include, but are not limited to, initial and ongoing review of third-party pricing services' methodologies, review of pricing statistics and trends and back testing recent trades. The Company's investment managers have analyzed the third-party pricing services' valuation methodologies and related inputs, and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Most prices provided by third-party pricing services are classified into Level 2 because the inputs used in pricing the securities are observable. Due to the lack of transparency in the process that brokers use to develop prices, most valuations that are based on brokers' prices are classified as Level 3. Some valuations may be classified as Level 2 if the price can be corroborated with observable market data. Derivative Instruments Derivative instruments are fair valued using pricing valuation models for OTC derivatives that utilize independent market data inputs, quoted market prices for exchange-traded derivatives and OTC-cleared derivatives, or independent broker quotations. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 33
The Company performs ongoing analysis of the valuations, assumptions, and methodologies used to ensure that the prices represent a reasonable estimate of the fair value. The Company performs various controls on derivative valuations which include both quantitative and qualitative analyses. Analyses are conducted by a cross-functional group of investment, actuarial, risk and information technology professionals that analyze impacts of changes in the market environment and investigate variances. There is a monthly analysis to identify market value changes greater than pre-defined thresholds, stale prices, missing prices and zero prices. Also on a monthly basis, a second source validation, typically to broker quotations, is performed for certain of the more complex derivatives and all new deals during the month. A model validation review is performed on any new models, which typically includes detailed documentation and validation to a second source. As to certain derivatives that are held by the Company as well as its investment manager's other clients, the Company's investment manager performs ongoing analysis of the valuations, assumptions, and methodologies used to ensure that the prices represent a reasonable estimate of the fair value. On a daily basis, the Company's derivatives collateral agent compares market valuations to counterparty valuations for all OTC derivatives held by the Company for collateral purposes. The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified with the same fair value hierarchy level as the associated assets and liabilities. Therefore the realized and unrealized gains and losses on derivatives reported in Level 3 may not reflect the offsetting impact of the realized and unrealized gains and losses of the associated assets and liabilities. Valuation Inputs for Investments For Level 1 investments, which are comprised of exchange traded securities and open-ended mutual funds, valuations are based on observable inputs that reflect quoted prices for identical assets in active markets that the Company has the ability to access at the measurement date. For the Company's Level 2 and 3 bonds and stocks, typical inputs used by pricing techniques include, but are not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and/or estimated cash flows, prepayment speeds, and default rates. Derivative instruments are valued using mid-market inputs that are predominantly observable in the market. Descriptions of additional inputs used in the Company's Level 2 and Level 3 measurements are included in the following discussion: Level 2 The fair values of most of the Company's Level 2 investments are determined by management after considering prices received from third-party pricing services. These investments include mostly bonds and preferred stocks. Asset-backed securities, collateralized loan obligations, commercial and residential mortgage-backed securities - Primary inputs also include monthly payment information, collateral performance, which varies by vintage year and includes delinquency rates, collateral valuation loss severity rates, collateral refinancing assumptions, and credit default swap indices. Commercial and residential mortgage-backed securities prices also include estimates of the rate of future principal prepayments over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. Foreign government/government agencies - Primary inputs also include observations of credit default swap curves related to the issuer and political events in emerging market economies. Interest rate derivatives - Primary input is the swap yield curve. Level 3 Most of the Company's securities classified as Level 3 include less liquid securities such as lower quality asset-backed securities, commercial and residential mortgage-backed securities primarily backed by sub-prime loans. Also included in Level 3 are securities valued based on broker prices or broker spreads, without adjustments. Primary inputs for non- broker priced investments, including structured securities, are consistent with the typical inputs used in Level 2 measurements noted above, but are Level 3 due to their less liquid markets. Additionally, certain long-dated securities are priced based on third-party pricing services, including municipal securities, foreign government/government agency securities, and bank loans. Primary inputs for these long-dated securities are consistent with the typical inputs used in the preceding noted Level 1 and Level 2 measurements, but include benchmark interest rate or credit spread assumptions that are not observable in the marketplace. Also included in Level 3 are certain derivative instruments that TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 34
either have significant unobservable inputs or are valued based on broker quotations. Significant inputs for these derivative contracts primarily include the typical inputs used in the Level 1 and Level 2 measurements noted above, but also may include equity and interest rate volatility and swap yield curves beyond observable limits. Separate Account assets Non-guaranteed Separate Account assets are primarily invested in mutual funds and are valued by the underlying mutual funds in accordance to their valuation policies and procedures. Significant Unobservable Inputs for Level 3 Assets Measured at Fair Values The following tables present information about significant unobservable inputs used in Level 3 assets measured at fair value. The tables exclude corporate securities for which fair values are predominantly based on broker quotations. The following tables present information about significant unobservable inputs used in Level 3 assets measured at fair value. (Amounts in thousands) December 31, 2025 Assets accounted for at fair value on a recurring basis [1] Fair Value Predominant Valuation Method Significant Unobservable Input Minimum [6] Maximum [6] Weighted Average [2] [6] Impact of Increase in Input on Fair Value [3] CMBS [4] $ 7,250 Discounted cash flows Spread 638 bps 638 bps 638 bps Decrease Corporate [5] 237,449 Discounted cash flows Spread 82 bps 619 bps 148 bps Decrease ABS 13,767 Discounted cash flows Spread 72 bps 255 bps 47 bps Decrease [1] Includes both General Account and Separate Account investments held. [2] The weighted average is determined based on the fair value of the securities. [3] Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table above. [4] Excludes securities for which the Company bases fair value on broker quotations. [5] Excludes securities for which the Company bases fair value on broker quotations; however, included are broker priced lower-rated private placement securities for which the Company receives spread and yield information to corroborate the fair value. [6] Basis points (bps). (Amounts in thousands) December 31, 2024 Free Standing Derivatives Fair Value Predominant Valuation Method Significant Unobservable Input Minimum Maximum Impact of Increase in Input on Fair Value [1] Macro hedge program Interest rate swaptions $ 8,998 Option model Interest rate volatility 14% 37% Increase Equity options [2] $ (38,711) Option model Equity volatility 0.8% 0.8% Increase [1] The impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. Changes are based on long positions, unless otherwise noted. Changes in fair value will be inversely impacted for short positions. [2] Level 3 macro hedge derivatives excludes those for which the Company bases fair value on broker quotations as noted in the following discussion. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 35
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The tables below provides a roll-forward of financial instruments measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2025 and 2024: Total Realized/ Unrealized Gains Fair Value Transfers Transfers (Losses) Included in: Fair Value as of into out of Net Purchases/ Sales/ as of (Amounts in thousands) Jan. 1, 2025 Level 3 [2] Level 3 [2] Income [1] Surplus Increases Decreases Settlements Dec. 31, 2025 Assets Common stocks - unaffiliated $ 3,443 $ - $ - $ - $ - $ - $ (441) $ - $ 3,002 Total bonds and stocks 3,443 - - - - - (441) - 3,002 Derivatives Macro hedge program 78,731 - (78,731) - - - - - - Total derivatives [3] 78,731 - (78,731) - - - - - - Total assets $ 82,174 $ - $ (78,731) $ - $ - $ - $ (441) $ - $ 3,002 Total liabilities $ - $ - $ - $ - $ - $ - $ - $ - $ - [1] All amounts in this column are reported in net realized capital gains (losses). All amounts are before income taxes. [2] Transfers in and/or (out) of Level 3 are primarily attributable to changes in the availability of market observable information and changes to the bond and stock carrying value based on the lower of cost and market requirement. [3] Derivative instruments are reported in this table on a net basis for asset/(liability) positions. Total Realized/ Unrealized Gains Fair Value Transfers Transfers (Losses) Included in: Fair Value as of into out of Net Purchases/ Sales/ as of (Amounts in thousands) Jan. 1, 2024 Level 3 [2] Level 3 [2] Income [1] Surplus Increases Decreases Settlements Dec. 31, 2024 Assets Common stocks - unaffiliated $ 3,443 $ - $ - $ - $ - $ - $ - $ - $ 3,443 Total bonds and stocks 3,443 - - - - - - - 3,443 Derivatives Macro hedge program 94,133 - - - (124,998) 73,922 - 35,674 78,731 Total derivatives [3] 94,133 - - - (124,998) 73,922 - 35,674 78,731 Total assets $ 97,576 $ - $ - $ - $ (124,998) $ 73,922 $ - $ 35,674 $ 82,174 Total liabilities $ - $ - $ - $ - $ - $ - $ - $ - $ - [1] All amounts in this column are reported in net realized capital gains (losses). All amounts are before income taxes. [2] Transfers in and/or (out) of Level 3 are primarily attributable to changes in the availability of market observable information and changes to the bond and stock carrying value based on the lower of cost and market requirement. [3] Derivative instruments are reported in this table on a net basis for asset/(liability) positions. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 36
Fair Values for All Financial Instruments by Levels 1, 2 and 3 The tables below reflects the fair values and admitted values of all admitted assets and liabilities that are financial instruments excluding those accounted for under the equity method (subsidiaries, joint ventures and partnerships). The fair values are also categorized into the three-level fair value hierarchy. (Amounts in thousands) December 31, 2025 Type of Financial Instrument Aggregate Fair Value Admitted Value (Level 1) (Level 2) (Level 3) Net Asset Value (NAV) Not Practicable (Carrying Value) Assets Issuer credit obligations $ 1,914,214 $ 2,170,245 $ - $ 1,653,329 $ 260,885 $ - $ - Asset-backed securities - unaffiliated 795,113 815,717 - 747,465 47,648 - - Asset-backed securities - affiliated 7,037 7,000 - 7,037 - - Preferred stocks - unaffiliated 1,851 1,851 - 1,851 - - Common stocks - unaffiliated 9,886 9,886 6,884 - 3,002 - - Mortgage loans 543,971 577,795 - - 543,971 - - Cash, cash equivalents and short-term investments - unaffiliated 195,555 195,555 195,555 - - - - Cash, cash equivalents and short-term investments - affiliated - - - - - - - Derivative related assets 48,671 48,297 - 48,671 - - - Contract loans 86,986 86,986 - - 86,986 - - Surplus debentures 33,928 35,324 - 33,928 - - - Capital Notes 7,652 6,960 - 7,652 - - - Debt securities without credit enhancement 11,673 11,673 - 4,423 7,250 - - Residual tranches fixed income 10,229 9,438 - - 10,229 - - Separate Account assets [1] 24,098,084 24,098,084 24,098,084 - - - - Total assets $ 27,764,850 $ 28,074,811 $ 24,300,523 $ 2,504,356 $ 959,971 $ - $ - Liabilities Liability for deposit-type contracts $ (125,690) $ (125,690) $ - $ - $ (125,690) $ - $ - Derivative related liabilities (58,057) $ (4,821) (58,057) - - - Separate Account liabilities (24,098,084) (24,098,084) (24,098,084) - - - - Total liabilities $ (24,281,831) $ (24,228,595) $ (24,098,084) $ (58,057) $ (125,690) $ - $ - [1] Excludes approximately $9 million, at December 31, 2025, of investment sales receivable net of investment purchases payable that are not subject to SSAP No. 100. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 37
(Amounts in thousands) December 31, 2024 Type of Financial Instrument Aggregate Fair Value Admitted Value (Level 1) (Level 2) (Level 3) Net Asset Value(NAV) Not Practicable (Carrying Value) Assets Bonds - unaffiliated $ 3,121,349 $ 3,467,973 $ - $ 2,625,021 $ 496,328 $ - $ - Bonds - affiliated 18,284 18,000 - 18,284 - - - Preferred stocks - unaffiliated 21,528 21,528 - 21,528 - - - Common stocks - unaffiliated 10,532 10,532 7,089 - 3,443 - - Mortgage loans 630,965 687,494 - - 630,965 - - Cash, cash equivalents and short-term investments - unaffiliated 196,656 196,656 196,567 - 89 - - Cash, cash equivalents and short-term investments - affiliated 440,000 440,000 - - 440,000 - - Derivative related assets 101,853 101,755 - 4,653 97,102 - - Contract loans 86,947 86,947 - - 86,947 - - Surplus debentures 40,162 41,837 - 40,162 - - - Separate Account assets [1] 23,798,019 23,798,019 23,798,019 - - - - Total assets $ 28,466,295 $ 28,870,741 $ 24,001,675 $ 2,709,648 $ 1,754,874 $ - $ - Liabilities Liability for deposit-type contracts $ (143,313) $ (143,313) $ - $ - $ (143,313) $ - $ - Derivative related liabilities (79,983) (18,431) - (59) (18,431) - - Separate Account liabilities (23,798,019) (23,798,019) (23,798,019) - - - - Total liabilities $ (24,021,315) $ (23,959,763) $ (23,798,019) $ (59) $ (161,744) $ - $ - [1] Excludes approximately $6 million, at December 31, 2024, of investment sales receivable net of investment purchases payable that are not subject to SSAP No. 100. The valuation methodologies used to determine the fair values of bonds, stocks and derivatives are described in the above Fair Value Measurements section of this note. The amortized cost of cash, cash equivalents and short-term investments approximates fair value. Fair values for mortgage loans on real estate were estimated using discounted cash flow calculations based on current lending rates for similar type loans. Current lending rates reflect changes in credit spreads and the remaining terms of the loans. The carrying amounts of the liability for deposit-type contracts and Separate Account liabilities approximate their fair values. The fair value of contract loans was determined using current loan coupon rates which reflect the current rates available under the contracts. As a result, the fair value approximates the carrying value of the contract loans. At December 31, 2025 and 2024 the Company had no investments where it was not practicable to estimate fair value. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 38
5. Income Taxes A. The components of the net deferred tax asset/(deferred tax liability) ("DTA"/"(DTL)") at period end and the change in those components are as follows: 1 2025 Ordinary Capital Total (a) Gross DTA $ 186,791,368 $ 706,889 $ 187,498,257 (b) Statutory valuation allowance adjustments - - - (c) Adjusted gross DTA 186,791,368 706,889 187,498,257 (d) Deferred tax assets nonadmitted 60,622,824 - 60,622,824 (e) Subtotal net admitted deferred tax assets 126,168,544 706,889 126,875,433 (f) Deferred tax liabilities 34,144,132 29,189,468 63,333,600 (g) Net admitted deferred tax asset/(net deferred tax liability) $ 92,024,412 $ (28,482,579) $ 63,541,833 2 2025 Ordinary Capital Total Admission Calculation Components SSAP No. 101 : (a) Federal income taxes paid in prior years recoverable by carrybacks $ - $ - $ - (b) Adjusted gross DTA expected to be realized 62,978,305 563,528 63,541,833 (1) DTAs expected to be realized after the balance sheet date 62,978,305 563,528 63,541,833 (2) DTAs allowed per limitation threshold XXX XXX 100,942,995 (c) DTAs offset against DTLs 63,190,239 143,361 63,333,600 (d) DTAs admitted as a result of application of SSAP No. 101 $ 126,168,544 $ 706,889 $ 126,875,433 3 (a) Ratio % used to determine recovery period and threshold limitation 876% (b) Adjusted capital and surplus used to determine 2(b) thresholds 672,953,299 4 2025 Ordinary Capital Impact of Tax Planning Strategies: (a) Determination of adjusted gross DTA and net admitted DTA, by tax character as a %. (1) Adjusted gross DTAs amount from Note 5A1c $ 186,791,368 $ 706,889 (2) % of adjusted gross DTAs by tax character attributable to the impact of planning strategies - % - % (3) Net admitted adj. gross DTAs amount from Note 5A1e $ 126,168,544 $ 706,889 (4) % of net admitted adjusted gross DTAs by tax character admitted because of the impact of planning strategies - % - % (b) Do the tax planning strategies include the use of reinsurance? Yes ___ No _X_ 1 2024 Ordinary Capital Total (a) Gross DTA $ 173,772,013 $ 1,168,019 $ 174,940,032 (b) Statutory valuation allowance adjustments - - - (c) Adjusted gross DTA 173,772,013 1,168,019 174,940,032 (d) Deferred tax assets nonadmitted 47,701,886 - 47,701,886 (e) Subtotal net admitted deferred tax assets 126,070,127 1,168,019 127,238,146 (f) Deferred tax liabilities 35,043,715 36,430,719 71,474,434 (g) Net admitted deferred tax asset/(net deferred tax liability) $ 91,026,412 $ (35,262,700) $ 55,763,712 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 39
2 2024 Ordinary Capital Total Admission Calculation Components SSAP No. 101 : (a) Federal income taxes paid in prior years recoverable by carrybacks $ - $ - $ - (b) Adjusted gross DTA expected to be realized 54,747,910 1,015,802 55,763,712 (1) DTAs expected to be realized after the balance sheet date 54,747,910 1,015,802 55,763,712 (2) DTAs allowed per limitation threshold XXX XXX 85,630,275 (c) DTAs offset against DTLs 71,322,217 152,217 71,474,434 (d) DTAs admitted as a result of application of SSAP No. 101 $ 126,070,127 $ 1,168,019 $ 127,238,146 3 (a) Ratio % used to determine recovery period and threshold limitation 691% (b) Adjusted capital and surplus used to determine 2(b) thresholds 570,868,502 4 2024 Ordinary Capital Impact of Tax Planning Strategies: (a) Determination of adjusted gross DTA and net admitted DTA, by tax character as a %. (1) Adjusted gross DTAs amount from Note 5A1c $ 173,772,013 $ 1,168,019 (2) % of adjusted gross DTAs by tax character attributable to the impact of planning strategies - % - % (3) Net admitted adj. gross DTAs amount from Note 5A1e $ 126,070,127 $ 1,168,019 (4) % of net admitted adjusted gross DTAs by tax character admitted because of the impact of planning strategies 1 % - % (b) Do the tax planning strategies include the use of reinsurance? Yes ___ No _X_ 1 Change During 2025 Ordinary Capital Total (a) Gross DTA $ 13,019,355 $ (461,130) $ 12,558,225 (b) Statutory valuation allowance adjustments - - - (c) Adjusted gross DTA 13,019,355 (461,130) 12,558,225 (d) Deferred tax assets nonadmitted 12,920,938 - 12,920,938 (e) Subtotal net admitted deferred tax assets 98,417 (461,130) (362,713) (f) Deferred tax liabilities (899,583) (7,241,251) (8,140,834) (g) Net admitted deferred tax asset/(net deferred tax liability) $ 998,000 $ 6,780,121 $ 7,778,121 2 Change During 2025 Ordinary Capital Total Admission Calculation Components SSAP No. 101 : (a) Federal income taxes paid in prior years recoverable by carrybacks $ - $ - $ - (b) Adjusted gross DTA expected to be realized 8,230,395 (452,274) 7,778,121 (1) DTAs expected to be realized after the balance sheet date 8,230,395 (452,274) 7,778,121 (2) DTAs allowed per limitation threshold XXX XXX 15,312,720 (c) DTAs offset against DTLs (8,131,978) (8,856) (8,140,834) (d) DTAs admitted as a result of application of SSAP No. 101 $ 98,417 $ (461,130) $ (362,713) 3 (a) Ratio % used to determine recovery period and threshold limitation 185% (b) Adjusted capital and surplus used to determine 2(b) thresholds $102,084,797 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 40
4 Change During 2025 Ordinary Capital Impact of Tax Planning Strategies: (a) Determination of adjusted gross DTA and net admitted DTA, by tax character as a %. (1) Adjusted gross DTAs amount from Note 5A1c $ 13,019,355 $ (461,130) (2) % of adjusted gross DTAs by tax character attributable to the impact of planning strategies - % - % (3) Net admitted adj. gross DTAs amount from Note 5A1e $ 98,417 $ (461,130) (4) % of net admitted adjusted gross DTAs by tax character admitted because of the impact of planning strategies (1) % - % B. DTLs are not recognized for the following amounts: Not Applicable. C. Significant Components of Income Taxes Incurred 1. The components of current income tax (benefit)/expense are as follows: 2025 2024 Change (a) Federal $ 41,633,472 $ (8,545,006) $ 50,178,478 (b) Foreign - - - (c) Subtotal 41,633,472 (8,545,006) 50,178,478 (d) Federal income tax on net capital gains 4,091,920 (677,642) 4,769,562 (e) Utilization of capital loss carryforwards - - - (f) Other - - - (g) Federal and foreign income taxes incurred $ 45,725,392 $ (9,222,648) $ 54,948,040 2. The main components of the period end deferred tax amounts and the change in those components are as follows: 2025 2024 Change DTA: Ordinary Policyholder reserves $ 38,053,331 $ 42,417,756 $ (4,364,425) Deferred acquisition costs 119,929,448 110,832,496 9,096,952 Compensation and benefits 1,869 287 1,582 Investments 433,811 (433,811) Net operating loss carryforward 8,711,268 - 8,711,268 Tax credit carryforward 13,954,532 14,127,915 (173,383) Other 6,140,920 5,959,748 181,172 Subtotal: DTA Ordinary 186,791,368 173,772,013 13,019,355 Ordinary statutory valuation allowance - - - Total adjusted gross ordinary DTA 186,791,368 173,772,013 13,019,355 Nonadmitted ordinary DTA 60,622,824 47,701,886 12,920,938 Admitted ordinary DTA 126,168,544 126,070,127 98,417 DTA: Capital Investments 706,889 1,168,019 (461,130) Subtotal: DTA Capital 706,889 1,168,019 (461,130) Capital statutory valuation allowance - - - Total adjusted gross capital DTA 706,889 1,168,019 (461,130) Nonadmitted capital DTA - - - Admitted capital DTA 706,889 1,168,019 (461,130) Total Admitted DTA $ 126,875,433 $ 127,238,146 $ (362,713) TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 41
DTL: Ordinary Investments $ 33,999,815 $ 33,840,731 $ 159,084 Deferred and uncollected premium - - - Policyholder reserves - 1,191,888 (1,191,888) Other 144,317 11,096 133,221 Gross DTL ordinary 34,144,132 35,043,715 (899,583) DTL: Capital Investments 29,189,468 36,430,719 (7,241,251) Other - - - Gross DTL capital 29,189,468 36,430,719 (7,241,251) Total DTL 63,333,600 71,474,434 (8,140,834) Net adjusted DTA/(DTL) $ 63,541,833 $ 55,763,712 $ 7,778,121 Adjust for the change in deferred tax on unrealized gains/losses (7,909,230) Adjust for the change in nonadmitted deferred tax 12,920,938 Adjusted change in net deferred Income Tax $ 12,789,829 D. Reconciliation of federal income tax rate to actual effective rate: The sum of the income tax incurred and the change in the DTA/DTL is different from the result obtained by applying the statutory federal income tax rate to the pretax income. The significant items causing this difference are as follows: % of Pre-tax % of Pre-tax % of Pre-tax 2025 income 2024 income 2023 income Tax effect $ (93,097,317) Tax effect $ 7,240,778 Tax effect $ 48,298,991 Statutory tax $ (19,550,437) 21.00 % $ 1,520,563 21.00 % $ 10,142,788 21.00 % Tax preferred investments (12,953,662) 13.91 % (13,047,890) (180.20) % (17,031,728) (35.26) % Interest maintenance reserve 13,122,071 (14.10) % (1,427,199) (19.71) % (856,738) (1.77) % Amortization of inception gain (8,104,300) 8.71 % (3,454,265) (47.71) % (3,454,265) (7.15) % VA Hedge gains reported in surplus 13,012,081 (13.98) % (1,073,404) (14.82) % 14,478,051 29.98 % Prior period adjustments 88,507 (0.10) % 9,563 0.13 % (593,187) (1.23) % Deferred Gain 48,825,374 (52.45) % - - % - % Change in deferred tax on non-admitted assets (247,510) 0.27 % 37,996 0.52 % (54,419) (0.11) % Foreign related investments (2,219,900) 2.38 % (2,528,000) (34.91) % (3,002,000) (6.22) % All other 963,339 (1.02) % 270,061 3.73 % (262,535) (0.56) % Total statutory income tax 32,935,563 (35.38) % (19,692,575) (271.97) % (634,033) (1.32) % Federal and foreign income taxes incurred 45,725,392 (49.12) % (9,222,648) (127.37) % 32,086,803 66.43 % Change in net deferred income taxes (12,789,829) 13.74 % (10,469,927) (144.60) % (32,720,836) (67.75) % Total statutory income tax $ 32,935,563 (35.38) % $ (19,692,575) (271.97) % $ (634,033) (1.32) % E. Operating loss and tax credit carryforwards and protective tax deposits 1. At December 31, 2025, the Company had $41,482,229 of net operating loss carryforwards, and $13,954,532 of foreign tax credit carryovers which expire between 2029 and 2035. 2. The amount of federal income taxes incurred in the current year and each preceding year that will be available for recoupment in the event of future net losses are: 2025 - 2024 - 2023 - TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 42
3. The aggregate amount of deposits reported as admitted assets under Section 6603 of the IRS Code was $0 as of December 31, 2025. F. Consolidated Federal Income Tax Return 1. The Company's federal income tax return is included within TR Re, Ltd.'s ("TR Re"), consolidated federal income tax return. The consolidated federal income tax return includes the following entities: TR Re, Ltd. Talcott Resolution Life Insurance Company (For the period January 1, 2025 - July 1, 2025) Talcott Resolution Life and Annuity Insurance Company 2. Federal Income Tax Allocation Estimated tax payments are made quarterly (if necessary), at which time intercompany tax balances are settled. In the subsequent year, additional settlements (if necessary) are made on the unextended due date of the return and at the time the return is filed. The method of allocation among affiliates of the Company is subject to written agreement approved by the Board of Directors and based upon separate return calculations with current credit for net losses to the extent the losses provide a benefit in the consolidated tax return. G. Any federal or foreign income tax loss contingencies as determined in accordance with SSAP No.5 - Liabilities, Contingencies and Impairments of Assets with modifications provided in SSAP No. 101 Income Taxes with reasonable possibility that the total liability will significantly increase within 12 months of the reporting date. Not Applicable. H. Repatriation Transition Tax (RTT) Not Applicable. I. Alternative Minimum Tax (AMT) Credit Not Applicable. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 43
6. Reinsurance The amount of reinsurance recoverables from and payables to affiliated and unaffiliated reinsurers were $76,185,846 and $24,604,927 respectively, as of December 31, 2025 and $65,644,758 and $85,525,728 respectively, as of December 31, 2024. The effect of reinsurance as of and for the years ended December 31 is summarized as follows: 2025 Direct Assumed Ceded Net Aggregate reserve for future benefits $ 19,014,136,416 $ 386,919,370 $ (16,438,003,980) $ 2,963,051,806 Liability for deposit-type contracts 603,067,250 413,934 (477,791,106) 125,690,078 Policy and contract claim liabilities 199,070,797 12,029,516 (190,556,757) 20,543,556 Premium and annuity considerations 701,686,251 45,092,751 (9,603,103,431) (8,856,324,429) Annuity benefits 380,334,745 5,333,743 (221,349,409) 164,319,079 Death, disability and other benefits 1,190,497,042 69,021,385 (1,255,314,371) 4,204,056 Surrenders and other fund withdrawals 2,713,097,288 166,443,910 (2,243,694,135) 635,847,063 2024 Direct Assumed Ceded Net Aggregate reserve for future benefits $ 19,042,528,013 $ 405,615,588 $ (15,214,130,587) $ 4,234,013,014 Liability for deposit-type contracts 657,180,562 432,390 (514,300,212) 143,312,740 Policy and contract claim liabilities 234,711,671 11,530,140 (227,268,697) 18,973,114 Premium and annuity considerations 739,626,216 48,748,921 (715,899,055) 72,476,082 Annuity benefits 386,739,099 5,360,813 (198,027,504) 194,072,408 Death, disability and other benefits 1,352,584,345 59,511,745 (1,412,987,316) (891,226) Surrenders and other fund withdrawals 2,807,056,045 175,749,681 (1,617,443,705) 1,365,362,021 2023 Direct Assumed Ceded Net Aggregate reserves for future benefits $ 18,910,472,242 $ 430,711,040 $ (14,902,548,096) $ 4,438,635,186 Liability for deposit-type contracts 733,418,140 430,092 (577,312,682) 156,535,550 Policy and contract claim liabilities 209,526,698 14,022,376 (199,675,762) 23,873,312 Premium and annuity considerations 774,475,502 51,512,860 (751,972,988) 74,015,374 Annuity Benefits 392,489,618 7,122,853 (192,681,062) 206,931,409 Death, disability and other benefits 1,207,941,612 73,620,906 (1,277,266,621) 4,295,897 Surrenders and other fund withdrawals 2,452,684,835 158,857,240 (1,404,968,467) 1,206,573,608 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 44
A. External reinsurance The Company cedes insurance to unaffiliated insurers in order to limit its maximum losses. Such agreements do not relieve the Company from its primary liability to policyholders. The inability or unwillingness of a reinsurer to meet its financial obligations to the Company, including the impact of any insolvency or rehabilitation proceedings involving a reinsurer that could affect the Company's access to collateral held in trust, could have a material adverse effect on the Company's financial condition, results of operations and liquidity. The Company reduces this risk by evaluating the financial condition of reinsurers and monitoring for possible concentrations of credit risk. As of December 31, 2025, the Company has two reinsurance-related concentrations of credit risk greater than 10% of the Company's capital and surplus. The concentrations, which are actively monitored, are as follows: reserve credits totaling $14.3 billion for Prudential Financial Inc. ("Prudential") offset by $11.1 billion of market value of assets held in trust, for a net exposure of $3.2 billion. In addition, reserve credits totaling $1.5 billion for Commonwealth Annuity and Life Insurance Company are offset by $1.4 billion of market value of assets held in trust, for a net exposure of $0.1 billion. As of December 31, 2024, the Company had two reinsurance-related concentrations of credit risk greater than 10% of the Company's capital and surplus. The concentrations, which were actively monitored, were as follows: reserve credits totaling $14.2 billion for Prudential offset by $10.8 billion of market value of assets held in trust, for a net exposure of $3.4 billion. In addition, reserve credits totaling $1.5 billion for Commonwealth Annuity and Life Insurance Company were offset by $1.4 billion of market value of assets held in trust, for a net exposure of $0.1 billion. The Company has a reinsurance agreement under which the reinsurer has a limited right to unilaterally cancel the reinsurance for reasons other than for nonpayment of premium or other similar credits. The estimated amount of aggregate reduction in the Company's surplus of this limited right to unilaterally cancel this reinsurance agreement by the reinsurer for which such obligation is not presently accrued is $20,106,744 in 2025, a decrease of $850,632 from the 2024 balance of $20,957,376. The total amount of reinsurance credits taken for this agreement was $25,451,575 in 2025, a decrease of $1,076,749 from the 2024 balance of $26,528,324. On January 2, 2013, The Hartford completed the sale of its Individual Life insurance business to Prudential. The net gain totaling $600 million, before tax, was deferred as a component of Other than special surplus funds on the Company's Statements of Admitted Assets, Liability and Capital and Surplus, and will be amortized over 20 years as earnings are projected to emerge from this block of business. Amortization amounts, which are recorded as Commissions and expense allowances on reinsurance ceded on the Statements of Operations and as Amortization and a decrease of Gain on inforce reinsurance on the Statements of Changes in Capital and Surplus totaled $13.2 million, $13.2 million, and $13.2 million in 2025, 2024 and 2023, respectively. In 2018, the Company and TL entered into reinsurance agreements with Commonwealth Annuity and Life Insurance Company, a subsidiary of Global Atlantic Financial Group. The net gain totaling $73 million, after tax, was deferred as a component of Other than special surplus funds on the Company's Statements of Admitted Assets, Liabilities and Capital and Surplus, and will be amortized over a period of 25 years as earnings are projected to emerge from this block of business. Amortization amounts, which are recorded as Commission and expense allowances on reinsurance ceded on the Statements of Operation and as amortization and a decrease of Gain on inforce reinsurance on the Statements of Changes in Capital and Surplus totaled $3.3 million, $3.3 million, and $3.3 million in 2025, 2024, and 2023, respectively. B. Reinsurance with Affiliates The Company entered into an affiliated reinsurance agreement with its indirect parent, TR Re, Ltd., an unauthorized reinsurer, which was effective October 1, 2021, and implemented December 30, 2021. Pursuant to such reinsurance agreement, the Company generally ceded 50% of the Company's variable annuity and payout annuity blocks with certain variable annuity guarantees ceded at 100% and certain structured settlement contracts ceded at a lesser quota share percentage. All such business is ceded on a modified coinsurance basis. The net impact of this reinsurance transaction on the Company's results of operations and financial condition included ceded premiums totaling $13.5 billion, substantially offset by reserve adjustments on reinsurance totaling $13.4 billion and the transfer of IMR totaling approximately $104.4 million. The transfer of IMR was offset by funds held under reinsurance treaties with unauthorized reinsurers totaling $104.4 million which are included in Other liabilities. The Company paid additional amounts totaling $35.6 million (before tax) and as a result, incurred a net loss for the same amount. On July 1, 2025, the Company recaptured an affiliate reinsurance agreement, originally effective as of October 1, 2021, from TR Re. As a result of the recapture, the Company recorded interest maintenance reserve balances totaling $96 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 45
million and reduced funds withheld under reinsurance treaties with unauthorized reinsurers by $96 million. The Company also recorded negative ceded premiums totaling $10.6 billion, partially offset by reserve adjustments on reinsurance of $10.5 billion for recaptured insurance reserves previously ceded on a modified coinsurance basis. Additionally, the Company paid a recapture fee to TR Re of $190 million (before tax). On July 1, 2025, the Company entered into a reinsurance agreement on a coinsurance and modified coinsurance basis with TL (the "TL/TLA Reinsurance Agreement"), pursuant to which the Company reinsured certain variable annuity and payout reserves to TL. As a result, the Company recorded reserve credits for insurance reserves totaling $1.1 billion ceded on a coinsurance basis and ceded IMR balances totaling $21 million. The Company also recorded ceded premiums totaling $19.5 billion, partially offset by reserve adjustments on reinsurance of $18.3 billion for insurance reserves ceded on a modified coinsurance basis. As a result of the reinsurance, the Company recognized an after-tax deferred gain in surplus of $233 million which will be amortized into the Summary of Operations over the life of the business. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 46
7. Related Party Transactions Transactions between the Company and its affiliates, relate principally to tax settlements, reinsurance, intercompany lending, insurance coverages, rental and service fees, capital contributions, returns of capital and payments of dividends. Substantially all general insurance expenses related to the Company, including rent and benefit plan expenses, are initially paid by TL. Direct expenses are allocated using specific identification and indirect expenses are allocated using other applicable methods. Indirect expenses include those for corporate areas which, depending on type, are allocated based on either a percentage of direct expenses or on utilization. As a result of a new Amended and Restated Services and Cost Allocation Agreement effective July 1, 2021, certain indirect expense are allocated on a cost plus basis. The Company reported $33,283,192 and $40,249,340 as payable to parents, subsidiaries and affiliates as of December 31, 2025 and 2024, respectively. Amounts are settled in accordance with terms of the agreements. Effective March 31, 2025, TLA entered into an agreement among several subsidiaries of Talcott Financial Group, Ltd. to optimize the use of cash by facilitating the lending and borrowing of funds between the Company and its affiliates (the "Cash Management Agreement"). The aggregate individual and combined (with TL) lending and borrowing amount permitted under the agreement for the Company is $1 billion. On December 31, 2025, TLA borrowed $300 million from TLI per the cash management agreement. The interest rate of this loan is 3.83% and the maturity date is March 31, 2026. On November 17, 2025, TLA borrowed $300 million from TLI per the cash management agreement. The interest rate of this loan is 4.53% and the maturity date is December 31, 2025. On December 31, 2025, this loan was repaid plus accrued interest. On September 30, 2025, TLA borrowed $350 million from TLI per the cash management agreement. The interest rate of this loan is 4.53% and the maturity date is December 31, 2025. On November 17, 2025, this loan was repaid plus accrued interest. On July 1, 2025, TLA borrowed $350 million from TLI per the cash management agreement. The interest rate of this loan was 4.78% and the maturity date was September 30, 2025. On September 30, 2025, this loan was repaid plus accrued interest. On March 31, 2025, TLA loaned $440 million to Talcott Financial Group ("TFG") under the Cash Management Agreement. The original interest rate of this loan was 4.92% and the maturity date was July 9, 2025. On June 5, 2025, $140 million was repaid to TLA with accrued interest and the loan was cancelled and reissued as a $300 million loan to TFG under the Cash Management Agreement. The interest rate at reissuance was 4.78% and the original maturity date was September 30, 2025. The loan was repaid with accrued interest on July 1, 2025. Effective September 21, 2022, TLA entered into an intercompany liquidity agreement between several Talcott entities: including TR Re, TLR and TLAR. TLA may lend a total of $200 million in aggregate to the affiliates. TLA may also borrow a total of $600 million consisting of $200 million from each of the aforementioned entities. Under the agreement, TLR, TLAR and TR Re cannot extend loans between one another. This agreement was terminated effective March 31, 2025. On October 15, 2024, TLA loaned $140 million to TR Re per the intercompany liquidity agreement. The interest rate of this loan was 4.21% and the maturity date was October 14, 2025. On March 31, 2025, this loan was repaid plus accrued interest. On July 3, 2024, TLA loaned $300 million to TL per the 2018 intercompany liquidity agreement. The interest rate of this loan was 5.06% and the maturity date was July 2, 2025. On March 31, 2025, this loan was repaid plus accrued interest. On January 27, 2023, TLA loaned $60M to TR Re per the intercompany liquidity agreement. The interest rate of this loan was 4.5% and the maturity date was January 26, 2024. The loan was repaid on December 21, 2023. On October 16, 2023, TLA loaned $140M to TR Re per the intercompany liquidity agreement. The interest rate of this loan is 5.22% and the maturity date is October 15, 2024. The loan was repaid on October 15, 2024. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 47
Effective June 1, 2018, TL entered into an Intercompany Liquidity Agreement (the "Liquidity Agreement") with TLA. The Agreement allows for short-term advances of funds between TL and TLA. Effective March 31, 2025, the aggregate lending and borrowing amount permitted under the agreement was amended from $1 billion to a total of $500 million. There are currently no advances outstanding. In July 2025, TL contributed 100% of the issued and outstanding shares of Talcott Resolution International Life Reassurance Company ("TIL"), valued at $13,311,343, to the Company. In July 2025, TL distributed 100% of the issued and outstanding shares of the Company to TR Re, which then became the Company's direct parent. An extraordinary dividend in the amount of $8,546,001 on July 1, 2025 was distributed by the Company, representing 100% of the common stock ownership in Talcott Resolution Distribution Company, Inc. On December 24, 2024, TLA paid a dividend of $275,000,000 to Talcott Resolution Life Insurance Company ("TL"), the Company's parent at the time. On July 6, 2023, TLA paid a dividend of $94,800,000 to TL, the Company's parent at the time. In June 2025, TLA sold approximately $110 million of Collateral Loan Obligations (CLO) to its parent at the time, TL, in exchange for cash. The exchange was completed prior to reorganization finalized in July. The exchange was accounted for at book value, as a non-economic transaction between parent and subsidiary. Related party transactions may not be indicative of the costs that would have been incurred on a stand-alone basis. For additional information, see Notes 5, 6, 8 and 13. 8. Retirement Plans, Other Postretirement Benefit Plans and Postemployment Benefits In September, 2021, the Company adopted a new Long-term Cash Incentive Plan ("the Plan") to attract and retain executive and management level employees of the Company and its affiliates in support of the continued growth and long-term performance of the Company. U.S. employees in certain employment bands (generally executive and management level) are eligible to participate in the Plan. Targets vary by employment level. Awards are issued annually at the discretion of management, and vest in full on the third anniversary of the date of the grant, subject to the participant's continued employment with the Company. Any payments to a participant or other person hereunder shall be paid from the general assets of the Company, and each participant shall have the status of an unsecured general creditor of the Company with respect to any amounts payable under the Plan. The expense accrued for the Company during 2025 and 2024 was immaterial. As of June 1, 2018, TL adopted an investment and savings plan, the Talcott 401(k) Plan and a non-qualified savings plan, the Talcott Resolution Deferred Compensation Plan. Effective December 31, 2018, both plans were assigned to TLI, the Company's indirect parent. Substantially all U.S. employees of the Company are eligible to participate in the Talcott 401(k) Plan under which designated contributions can be invested in a variety of investments. Subject to IRS limits, the employee can contribute up to 90% of their eligible compensation. The Company's contributions include a non-elective contribution of 2% of eligible compensation and a dollar-for-dollar matching contribution of up to 6% of eligible compensation contributed by the employee each pay period. The Talcott Resolution Deferred Compensation Plan is for a select group of management and provides an opportunity to defer compensation on a pre-tax basis and accumulate tax-deferred earnings. The Plan has a 6% matching contribution for eligible compensation earned in excess of the 401(a)(17) $350,000 limit as of the most current year end. Eligible compensation includes salary and bonuses and participants can defer up to 80% of their eligible pay. The Plan shall represent an unfunded, unsecured obligation of the company to provide deferred compensation. Any payments to a participant or other person hereunder shall be paid from the general assets of the Company, and each participant shall have the status of an unsecured general creditor of the Company with respect to any amounts payable under the Plan. The accrued liability for the company during 2025 and 2024 was immaterial. The Company participates in Talcott sponsored postemployment plans that provide for medical and salary replacement benefits for employees on long-term disability. The expenses allocated to the Company for long term disability were not material to the results of operations for the years ended December 31, 2025 and 2024. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 48
9. Debt A. FHLB (Federal Home Loan Bank) Agreements 1. The Company is a member of the Federal Home Loan Bank of Boston ("FHLB"). Membership allows the Company access to collateralized advances, which may be used to support various spread-based businesses or to enhance liquidity management. FHLB membership requires the Company to own member stock and borrowings require the purchase of activity-based stock in an amount (generally between 3.0% and 4.0% of the principal balance) based upon the term of the outstanding advances. FHLB stock held by the Company is classified within Common stocks on the Statements of Admitted Assets, Liabilities and Capital and Surplus. As of December 31, 2025 and 2024, there were no advances outstanding. State law limits the Company's ability to pledge, hypothecate or otherwise encumber its assets. The amount of advances that can be taken by the Company are dependent on the assets pledged by the Company to secure the advances, and are therefore subject to this legal limit. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. For 2025 and 2024, the Company's pledge limits were $184,000,000 and $157,000,000, respectively. The Company would need to seek prior written approval from the Department in order to exceed this limit. If the Company were to pursue borrowing additional amounts under its estimated capacity it may have to purchase additional shares of activity stock. 2. FHLB Capital Stock a. Aggregate Totals 1. As of December 31, 2025 1 Total 2+3 2 General Account 3 Separate Accounts a. Membership Stock - Class A - - - b. Membership Stock - Class B 2,914,900 2,914,900 - c. Activity Stock - - - d. Excess Stock 87,500 87,500 - e. Aggregate Total (a+b+c+d) 3,002,400 3,002,400 - f. Actual or estimated borrowing capacity as determined by the insurer 184,000,000 184,000,000 - 2. As of December 31, 2024 1 Total 2+3 2 General Account 3 Separate Accounts a. Membership Stock - Class A - - - b. Membership Stock - Class B 3,254,300 3,254,300 - c. Activity Stock - - - d. Excess Stock - - - e. Aggregate Total (a+b+c+d) 3,254,300 3,254,300 - f. Actual or estimated borrowing capacity as determined by the insurer 157,000,000 157,000,000 - TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 49
b. Membership Stock (Class A and B) Eligible for Redemption as of December 31, 2025 Eligible for Redemption Membership Stock 1 Current Period Total (2+3+4+5+6) 2 Not Eligible for Redemption 3 Less Than 6 Months 4 6 Months to Less than 1 Year 5 1 to Less than 3 Years 6 3 to 5 Years 1 Class A $ - $ - $ - $ - $ - 2 Class B 3,002,400 2,914,806 87,594 - - - 3. Collateral Pledged to FHLB a. Amount Pledged as of December 31, 2025 1 Fair Value 2 Carrying Value Aggregate Total Borrowing 1 Current Year Total General and Separate Accounts (Total Collateral Pledged (Lines 2 + 3) $ 90,780,508 $ 96,444,026 $ - 2 Current Year General Account: Total Collateral Pledged 90,780,508 96,444,026 - 3 Current Year Separate Account: Total Collateral Pledged - - - 4 Prior Year-end Total General and Separate Accounts: Total Collateral Pledged 94,656,248 104,427,367 - b. Maximum Amount Pledged During Reporting Period 1 Fair Value 2 Carrying Value 3 Amount Borrowed at Time of Maximum Collateral 1 Current Year Total General and Separate Accounts (Maximum Collateral Pledged (Lines 2 + 3) 93,683,964 103,248,363 $ - 2 Current Year General Account Maximum Collateral Pledged 93,683,964 103,248,363 - 3 Current Year Separate Account Maximum Collateral Pledged - - - 4 Prior Year-end Total General and Separate Accounts Maximum Collateral Pledged 107,289,771 115,082,140 - 4. a. & b. Borrowing from FHLB - Amount as of the Reporting Date The Company had no borrowings from the FHLB as of December 31, 2025 and 2024. c. FHLB - Prepayment Obligations The Company does not have any prepayment obligations as of December 31, 2025 and 2024. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 50
10. Capital and Surplus and Shareholder Dividend Restrictions Dividend Restrictions The maximum amount of dividends which can be paid to shareholders by Connecticut domiciled insurance companies, without prior approval of the Connecticut Insurance Commissioner (the "Commissioner"), is generally restricted to the greater of 10% of surplus as of the preceding December 31st or the net gain from operations after dividends to policyholders, federal income taxes and before realized capital gains or (losses) for the previous year. In addition, if any dividend exceeds the insurer's earned surplus, it requires the prior approval of the Commissioner. Dividends are paid as determined by the Board of Directors in accordance with state statutes and regulations, and are not cumulative. For additional information on dividends paid in 2023, 2024 and 2025 see Note 7. With respect to dividends to its parent, TL, the Company's dividend limitation under the holding company laws of Connecticut is $74,999,714 in 2026. Unassigned Funds The portion of unassigned funds represented or reduced by each item below at December 31 was as follows: 2025 2024 Unrealized capital losses, gross of tax $ 103,155,879 $ 50,211,598 Asset valuation reserve (122,433,569) (126,399,841) Nonadmitted asset values (91,520,600) (63,921,401) Separate Account expense allowance 4,156,155 23,568,381 11. Separate Accounts The Company maintained Separate Account assets totaling $24,106,820,931, $23,803,924,174 as of December 31, 2025 and 2024 respectively. The Company utilizes Separate Accounts to record and account for assets and liabilities for particular lines of business. For the current reporting year, the Company recorded assets and liabilities for individual variable annuities, variable life and variable universal life product lines in the Separate Accounts. The Separate Account classifications are supported by state statute and are in accordance with the domiciliary state procedures for approving items within the Separate Accounts. Separate Account assets are segregated from other investments and reported at fair value. Some assets are considered legally insulated whereas others are not legally insulated from the General Account. As of December 31, 2025 and 2024, the Company's Separate Account statement included legally insulated assets of $24,106,820,931 and $23,803,924,174, respectively. Separate Account liabilities are determined in accordance with prescribed actuarial methodologies, which approximate the market value less applicable surrender charges. The resulting surplus is recorded in the General Account Statements of Operations as a component of Net transfers from Separate Accounts. The Company's Separate Accounts are non-guaranteed, wherein the policyholder assumes substantially all the investment risks and rewards. Investment income (including investment gains and losses) and interest credited to policyholders on Separate Account assets are not separately reflected in the Statements of Operations. Separate Account fees, net of minimum guarantees, were $453,919,629, $466,445,205 and $458,449,252 for the years ended December 31, 2025, 2024 and 2023, respectively, and are recorded as a component of fee income on the Company's Statements of Operations. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 51
An analysis of the Separate Accounts as of December 31, 2025 is as follows: Indexed Nonindexed Guaranteed Less Than or Equal to 4% Nonindexed Guaranteed More Than 4% Nonguaranteed Separate Accounts Total Premium considerations or deposits for the year ended December 31, 2025 $ - $ - $ - $ 274,514,493 $ 274,514,493 Reserves at year-end: For accounts with assets at: Fair value $ - $ - $ - $ 24,065,027,892 $ 24,065,027,892 Amortized cost - - - - - Total reserves $ - $ - $ - $ 24,065,027,892 $ 24,065,027,892 By withdrawal characteristics: Subject to discretionary withdrawal $ - $ - $ - $ - $ - With market value adjustment - - - - - At book value without market value adjustment and with surrender charge of 5% or more - - - - - At fair value - - - 23,773,204,010 23,773,204,010 At book value without market value adjustment and with surrender charge of less than 5% - - - 74,242,486 74,242,486 Subtotal - - - 23,847,446,496 23,847,446,496 Not subject to discretionary withdrawal - - - 217,581,396 217,581,396 Total $ - $ - $ - $ 24,065,027,892 $ 24,065,027,892 Below is a reconciliation of net transfers from Separate Accounts: December 31, 2025 December 31, 2024 December 31, 2023 Transfer to Separate Accounts 274,514,493 $ 282,662,034 $ 254,614,683 Transfer from Separate Accounts 2,822,904,439 2,836,264,001 2,394,979,793 Net Transfer from Separate Accounts (2,548,389,946) (2,553,601,967) (2,140,365,110) Internal exchanges and other Separate Account activity (26,484,579) (7,574,602) (4,196,019) Transfer from Separate Accounts on the Statements of Operations $ (2,574,874,525) $ (2,561,176,569) $ (2,144,561,129) 12. Commitments and Contingent Liabilities A. Litigation On August 15, 2023, Talcott Resolution Life Insurance Company and Talcott Resolution Life and Annuity Insurance Company (collectively "Talcott Resolution") were named as defendants in a putative class action lawsuit in the United States District Court for the District of Massachusetts. The case is captioned as follows: Casey v. Talcott Resolution Life Insurance Company and Talcott Resolution Life and Annuity Insurance Company, et al. The lawsuit relates to data security events involving the MOVEit file transfer system ("MOVEit Cybersecurity Incident"). The MOVEit file transfer system is software used by a broad range of companies to move sensitive electronic data. PBI Research Services ("PBI"), a former third-party service provider for Talcott Resolution, used the MOVEit file transfer system in the performance of its services. PBI used the software on behalf of Talcott Resolution to, among other things, search various databases to identify the deaths of insured persons and annuitants under life insurance policies and annuity contracts, respectively, as required by applicable law. Plaintiff seeks to represent various classes and subclasses of Talcott Resolution insurance policy and annuity contract holders whose data allegedly was accessed or potentially accessed in connection with the MOVEit Cybersecurity Incident. Plaintiff alleges that Talcott Resolution breached a purported duty to safeguard their sensitive data from unauthorized access. The complaint asserts claims for, among other things, negligence, negligence per se, breach of contract, unjust enrichment, and violations of various consumer protection statutes, and the Plaintiffs seek declaratory and injunctive relief, compensatory and punitive damages, restitution, attorneys' fees and costs, and other relief. On October 4, 2023, the Judicial Panel on Multidistrict TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 52
Litigation issued an order consolidating all actions relating to the MOVEit Cybersecurity Incident before a single federal judge in the United States District Court for the District of Massachusetts. We intend to vigorously defend the action. The Company is or may become involved in various legal actions, some of which assert claims for substantial amounts. Such actions have alleged, for example, bad faith in the handling of insurance claims and improper sales practices in connection with the sale of insurance and investment products. Some of these actions also seek punitive damages. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the financial condition of the Company. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's financial condition, results of operations or cash flows in particular quarterly or annual periods. B. Guaranty Funds In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states, in the event of the insolvency of an insurer writing any such class of insurance in the state, members of the funds are assessed to pay certain claims of the insolvent insurer. A particular state's fund assesses its members based on their respective written premiums in the state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or two percent of premiums written per year, depending on the state. Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty associations for certain obligations of insolvent insurance companies to policyholders and claimants. Part of the assessments paid by/refunded to the Company pursuant to these laws may be used as credits for a portion of the associated premium taxes. The Company paid immaterial net guaranty fund assessments in 2025, 2024, and 2023. The Company had immaterial guaranty fund receivables as of December 31, 2025 and 2024, respectively. C. Contingent Commitments As of December 31, 2025 and 2024, the Company has outstanding commitments totaling $558,686,348 and $291,031,590, respectively, of which $354,924,577 and $188,731,161, respectively, is committed to fund limited partnership and other alternative investments, which may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. Additionally, at December 31, 2025 and 2024, $14,665,731 and $46,729,149, respectively, is largely related to commercial whole loans. The remaining outstanding commitments of $189,096,040 and $55,571,280 are related to various funding obligations associated with private placement securities, as of December 31, 2025 and 2024, respectively. Detail of Other Contingent Commitments 1 Nature and Circumstances of Guarantee and Key Attributes, Including Date and Duration of Agreement 2 Liability Recognition of Guarantee 3 Ultimate Financial Statement Impact if Action Under the Guarantee is Required 4 Maximum Potential Amount of Future Payments the Guarantor Could be Required to Make 5 Current Status of Payment or Performance Risk of Guarantee Effective February 1, 2018, TLA guaranteed the obligations of Talcott Resolution Comprehensive Employee Benefit Service Company ("TCB"), a wholly-owned subsidiary, with respect to certain structured settlement liability obligations to provide an increased level of security to claimants under such structured settlements; these obligations were assumed from TL on February 1, 2018. As of December 31, 2024 and December 31, 2023, no liability was recorded for this guarantee, as TCB was able to meet these policyholder obligations.. $ - Increase in Investments in SCA, Dividends to stockholders (capital contribution), Expense, or Other Unlimited (1) The guaranteed affiliate maintains surplus in addition to policyholder reserves. The payment or performance risk of this guarantee is low as It is unlikely that this guarantee will be triggered. (1) There is no limit on the Company's guarantee to pay policyholder obligations on behalf of the affiliate for the contracts covered in the guarantee agreement. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 53
D. Leases Transactions include rental facilities and equipment. Rent paid by the Company for its share of space occupied and equipment used by the Company was $895,060, $995,636 and $723,965 in 2025, 2024, and 2023, respectively. Future minimum rental commitments are immaterial. The office of the Company, together with its parent and other life insurance affiliates, is located in Hartford, Connecticut. E. Tax Matters The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal or state and local income tax examinations for years prior to 2021, except for net operating loss carryforwards utilized in open tax years. Management believes that adequate provision has been made in the financial statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years. The Company believes it is more likely than not that all deferred tax assets will be fully realized. Consequently, no valuation allowance has been provided. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carryback years and other tax planning strategies. From time to time, tax planning strategies could include holding a portion of debt securities with market value losses until recovery, making investments which have specific tax characteristics, and business considerations such as asset-liability matching. 13. Subsequent Events On January 28, 2026, the Company executed a funding agreement with a special purpose vehicle for $250 million, with the same effective date, when the initial funding occurred. Funding agreements are considered deposit-type contracts for U.S. Statutory reporting purposes. The Company recorded a deposit liability in line 3, Liability for deposit-type contracts, in the financial statements in the amount of the funding on the date the agreements were funded. On February 2, 2026, the Company paid down $250 million of the $300 million cash management agreement loan from TLI. See Note 7. Related Party Transactions for further detail on the loan. The Company has evaluated events subsequent to December 31, 2025, through March 27, 2026, the date the statutory-basis financial statements were available to be issued. The Company has not evaluated subsequent events after that date for presentation in these statutory-basis financial statements. There were no other subsequent events that had a material impact on the financial results of the Company. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 54
Investment income earned: U.S. government bonds $ 11,319,964 Bonds exempt from U.S. tax - Other bonds (unaffiliated) 134,186,672 Bonds of affiliates 1,475,172 Preferred stocks (unaffiliated) (12,075) Preferred stocks of affiliates - Common stocks (unaffiliated) 1,188,312 Common stocks of affiliates - Mortgage loans 31,786,806 Real estate - Contract loans 11,407 Cash, cash equivalents and short-term investments 16,643,962 Derivative instruments (7,675,498) Other invested assets 52,835,884 Aggregate write-ins for investment expense (6,133,099) Gross investment income 235,627,507 Less: Investment expenses 14,284,371 Net investment income $ 221,343,136 Real estate owned - book value less encumbrances: $ - Mortgage loans - book value: Farm mortgages $ - Mezzanine mortgages - Commercial mortgages 577,794,520 Total mortgage loans $ 577,794,520 Mortgage loans by standing - book value: Good standing $ 577,794,520 Good standing with restructured terms - Interest overdue more than 90 days - Not in foreclosure - Foreclosure in process - Other long-term assets - statement value: $ 603,880,764 Collateral loans: $ - Bonds, cash equivalents and stock of parent, subsidiaries and affiliates - book value: Bonds $ 8,712,860 Preferred stocks - Common stocks 16,142,964 Bonds, cash equivalents and short-term investments by class and maturity: By maturity - statement value Due within one year or less $ 221,964,957 Over 1 year through 5 years 567,096,139 Over 5 years through 10 years 620,261,206 Over 10 years through 20 years 670,597,514 Over 20 years 913,988,653 No maturity Date - Total by maturity (1) $ 2,993,908,469 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE I - SELECTED FINANCIAL DATA DECEMBER 31, 2025 55
By class - statement value Class 1 $ 1,850,976,598 Class 2 1,116,318,149 Class 3 22,460,429 Class 4 1,074,083 Class 5 3,077,263 Class 6 1,947 Total by class (1) $ 2,993,908,469 Total publicly traded $ 1,842,685,647 Total privately placed 1,151,222,822 Total by major type (1) $ 2,993,908,469 (1) Excludes money market investments of $121,559,149 that have not been rated by the SVO and/or have not received exempt status. Investment balances: Preferred stocks - statement value $ 1,850,888 Common stocks - statement value 9,886,171 Short-term investments - statement value 946,363 Options, caps, floors, collars, swaps and forwards open - statement value 43,476,283 Futures open - fair value - Cash on deposit 73,049,108 Cash equivalents 121,559,149 Life insurance in force (in thousands): Industrial $ - Ordinary 107,654,070 Credit life - Group life 115,500 Amount of accidental death insurance in force under (in thousands): Ordinary policies $ 113,327 Policies with disability provisions in force (in thousands): Industrial $ - Ordinary 3,551,636 Credit life - Group life - Supplemental contracts in force: Ordinary - not involving life contingencies Amount on deposit $ - Income payable - Ordinary - involving life contingencies Amount on deposit $ - Income payable 254,818 Group - not involving life contingencies Amount on deposit $ - Income payable - TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE I - SELECTED FINANCIAL DATA DECEMBER 31, 2025 56
Group - involving life contingencies Amount on deposit $ - Income payable - Annuities: Ordinary: Immediate - amount of income payable $ 141,535,643 Deferred fully paid: account balance 759,590,435 Deferred not fully paid: account balance 17,827,822 Group: Immediate - amount of income payable $ 17,899 Deferred fully paid: account balance 129,795,713 Deferred not fully paid: account balance - Accident and health insurance-premiums in force: Group $ - Credit - Other 130,831 Deposit funds and dividend accumulations: Deposit funds - account balance $ 9,278,721 Dividend accumulations - account balance 1,394,797 Claim payments (in thousands): Group accident and health 2025 - 2024 - 2023 - 2022 - 2021 - Prior - Other accident and health 2025 2 2024 2 2023 - 2022 - 2021 - Prior 105 Other coverages that use development methods to calculate claim reserves 2025 - 2024 - 2023 - 2022 - 2021 - Prior - TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE I - SELECTED FINANCIAL DATA DECEMBER 31, 2025 57
Gross Investment Holdings Admitted Assets as Reported in the Annual Statement Investment Categories Amount Percentage Amount Percentage 1. Issuer Credit Obligations 1.01 U.S. Government Obligations $519,262,120 11.40 $519,262,120 11.40 1.02 All Other Government Obligations 0 0.00 0 0.00 1.03 Non-U.S. Sovereign Jurisdiction Securities 29,053,199 0.60 29,053,199 0.60 1.04 Municipal Bonds - General Obligations (Direct & Guaranteed) 9,117,203 0.20 9,117,203 0.20 1.05 Municipal Bonds - special revenue 82,747,214 1.80 82,747,214 1.80 1.06 Project finance bonds issued by operating entities 2,753,452 0.10 2,753,452 0.10 1.07 Corporate bonds 1,432,988,390 31.20 1,432,988,390 31.30 1.08 Mandatory convertible bonds 0 0.00 0 0.00 1.09 Single entity backed obligations 43,674,468 1.00 43,674,468 1.00 1.10 SVO-Identified bond exchange traded funds - fair value 0 0.00 0 0.00 1.11 SVO-Identified bond exchange traded funds - systematic value 0 0.00 0 0.00 1.12 Bonds Issued By Funds Representing Operating Entities 50,652,477 1.10 50,652,477 1.10 1.18 Total Issuer Credit Obligations 2,170,248,523 47.40 2,170,248,523 47.50 2. Asset-backed securities 2.01 Asset-backed securities, Financial asset-backed securities - self liquidating 803,673,344 17.60 803,673,344 17.60 2.02 Asset-backed securities, Financial asset-backed securities - not self- liquidating 0 0.00 0 0.00 2.03 Asset-backed securities, Non-financial asset-backed securities 19,040,279 0.40 19,040,279 0.40 2.04 Total Asset-backed Securities 822,713,623 18.00 822,713,623 18.00 3. Preferred Stocks 3.01 Preferred Stocks, Industrial and Miscellaneous (Unaffiliated) 1,850,888 0.00 1,850,888 0.00 3.02 Preferred Stocks, Parent, Subsidiaries and Affiliates 0 0.00 0 0.00 3.03 Total Preferred Stocks 1,850,888 0.00 1,850,888 0.00 4. Common Stocks 4.01 Common stocks, Industrial and miscellaneous - publicly traded (unaffiliated) 0 0.00 0 0.00 4.02 Common stocks, Industrial and miscellaneous - other (unaffiliated) 3,002,401 0.10 3,002,401 0.10 4.04 Common stocks, Parent, subsidiaries and affiliates - other 16,142,964 0.30 0 0.00 4.05 Common Stocks, Mutual Funds 6,883,770 0.20 6,883,770 0.20 4.09 Total Common Stocks 26,029,135 0.60 9,886,171 0.30 5. Mortgage Loans 5.01 Farm Mortgages 0 0.00 0 0.00 5.02 Residential Mortgages 0 0.00 0 0.00 5.03 Commercial Mortgages 577,794,520 12.60 577,794,520 12.70 5.04 Mezzanine Real Estate Loans 0 0.00 0 0.00 5.05 Total Valuation Allowance 0 0.00 0 0.00 5.06 Total Mortgage Loans 577,794,520 12.60 577,794,520 12.70 6. Real Estate 6.01 Properties Occupied by Company 0 0.00 0 0.00 6.02 Properties Held for Production of Income 0 0.00 0 0.00 6.03 Properties Held for Sale 0 0.00 0 0.00 6.04 Total Real Estate 0 0.00 0 0.00 7. Cash, Cash Equivalents, and Short-Term Investments:: 7.01 Cash 73,049,108 1.60 73,049,108 1.60 7.02 Cash Equivalents 121,559,149 2.70 121,559,149 2.70 7.03 Short-Term Investments 946,323 0.00 946,323 0.00 6.04 Total Cash, Cash Equivalents, and Short-Term Investments 195,554,580 4.30 195,554,580 4.30 8. Contract Loans 86,985,968 1.90 86,985,968 1.90 9. Derivatives 48,296,942 1.10 48,296,942 1.10 10. Other Invested Assets 603,880,764 13.20 603,880,764 13.30 11. Receivables for Securities 1,213,653 0.00 1,139,524 0.00 12. Securities Lending 0 0.00 0 0.00 13. Other Invested Assets 39,094,280 0.90 39,094,280 0.90 14. Total Invested Assets $4,573,662,876 100.00 $4,557,445,783 100.00 TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE II - SUMMARY INVESTMENT SCHEDULE DECEMBER 31, 2025 58
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Reinsurance Credit 1. The Company has no reinsurance contracts (or multiple contracts with the same reinsurer or its affiliates) subject to A-791 that include a provision, which limits the reinsurer's assumption of significant risks identified as in A-791. 2. The Company has 9 reinsurance contracts (or multiple contracts with the same reinsurer or its affiliates) not subject to A-791, for which reinsurance accounting was applied that include a provision that limits the reinsurer's assumption of risk. Reinsurance credit was reduced for the risk limiting features in all cases. 3. The Company has no reinsurance contracts that contain features which result in delays in payment in form or in fact. 4. The Company has no reinsurance accounting credits for contracts not subject to A-791 and not yearly renewable term, which meet the risk transfer requirements of SSAP No. 61R. 5. The Company has not ceded any risk which is not subject to A-791 and not yearly renewable term reinsurance, under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period covered by the financial statement which is either: (i) accounted for as reinsurance under statutory accounting principles ("SAP") and as a deposit under generally accepted accounting principles ("GAAP") or (ii) accounted for as reinsurance under GAAP and a deposit under SAP. 6. Not applicable. TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE IV - SUPPLEMENTAL SCHEDULE OF REINSURANCE CONTRACTS WITH RISK-LIMITING FEATURES DECEMBER 31, 2025 65
Separate Account Five of Talcott Resolution Life & Annuity Insurance Co. published this content on April 17, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 17, 2026 at 14:58 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]