Company: APO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001858681-25-000034
Chunk: 314

Company: Apollo Global Management, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1A
Chunk 314
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”) through the BMA’s Enhanced Capital Requirement (“ECR”) and minimum margin of solvency.

In any particular year, our subsidiaries’ capital ratios and/or statutory surplus amounts may increase or decrease depending on a variety of factors, some of which are outside of our control and some of which we can only partially control, including, but not limited to, the following: the amount of statutory income or loss generated by our insurance subsidiaries; the amount of additional capital our insurance subsidiaries must hold to support their business growth; changes in reserve requirements applicable to our insurance subsidiaries; changes in market value of certain securities in our investment portfolio; recognition of write-downs or other losses on investments held in the investment portfolio of our retirement services business; changes in the credit ratings of investments held in the investment portfolio of our retirement services business; changes in the value of certain derivative instruments; changes in interest rates; credit market volatility; changes in policyholder behavior; changes in corporate tax rates; changes to the RBC formulas and interpretations of the NAIC instructions with respect to RBC calculation methodologies; and changes to the ECR, Bermuda Solvency Capital Requirement (“BSCR”), or target capital level (“TCL”) formulas and interpretations of the BMA’s instructions with respect to ECR, BSCR, or TCL calculation methodologies.

Further to NAIC activities with respect to RBC calculation methodologies, the NAIC has recently adopted and is currently considering a variety of reforms to its RBC framework, which could increase the capital requirements for our U.S. insurance subsidiaries. For example, the NAIC recently adopted changes to certain statements of statutory accounting principles in connection with its principles-based bond project, which are currently scheduled to become effective on January 1, 2025, setting forth the factors to determine whether an investment in asset-backed securities qualifies for reporting on an insurer’s statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term invested assets), the latter of which could result, among other things, in the capital charge treatment of an investment being less favorable. The NAIC also adopted an interim change to the life RBC formula for year-end 2023 and 2024 reporting to increase the RBC base factor for residual tranches of structured securities, and increased the base factor in 2024. In addition, the NAIC is reviewing changes related to filing exempt status for certain securities, including a proposal that sets forth procedures for the NAIC’s review of investments that are exempt from filing with the NAIC’s Securities