# EDGAR Filing Document

**Accession Number:** 0000914283
**File Stem:** 0001104659-26-044301
**Filing Date:** 2026-4
**Character Count:** 284997
**Document Hash:** 55f996f97296f2641970fbe0ab0bdf2b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-044301.hdr.sgml**: 20260416

**ACCESSION NUMBER**: 0001104659-26-044301

**CONFORMED SUBMISSION TYPE**: N-VPFS

**PUBLIC DOCUMENT COUNT**: 3

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260416

**DATE AS OF CHANGE**: 20260416

**EFFECTIVENESS DATE**: 20260416

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** VEL II ACCOUNT OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE CO
- **CENTRAL INDEX KEY:** 0000914283

**ORGANIZATION NAME:**
- **EIN:** 041867050
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-VPFS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-08130
- **FILM NUMBER:** 26867197

**BUSINESS ADDRESS:**
- **STREET 1:** 20 GUEST STREET
- **CITY:** BRIGHTON
- **STATE:** MA
- **ZIP:** 02135
- **BUSINESS PHONE:** 508-855-1000

**MAIL ADDRESS:**
- **STREET 1:** 20 GUEST STREET
- **CITY:** BRIGHTON
- **STATE:** MA
- **ZIP:** 02135

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VEL II ACCT OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE CO
- **DATE OF NAME CHANGE:** 20220303

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VEL II ACCT OF STATE MUTUAL LIFE ASSUR CO OF AMERICA
- **DATE OF NAME CHANGE:** 19931101

## Series and Classes Contracts Data

### VEL II ACCOUNT OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE CO (Series ID: S000009651)

| Class ID   | Class Name              | Ticker Symbol   |
|:---|:---|:---|
| C000026446 | VEL ('93) (33-71056)    |  |
| C000027698 | VEL II ('93) (33-71056) |  |

First Allmerica Financial Life Insurance Company

VEL II Account

Financial Statements

December 31, 2025

First Allmerica Financial Life Insurance Company

VEL II Account

Financial Statements

December 31, 2025

Contents

---

| | |
|:---|:---|
| Report of Independent Registered Public Accounting Firm | SA-1 |
| Audited Financial Statements |  |
| Statements of Net Assets | SA-2 |
| Statements of Operations | SA-6 |
| Statements of Changes in Net Assets | SA-10 |
| Notes To Financial Statements | SA-17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 1 - Organization | SA-17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 2 - Summary of Significant Accounting Policies | SA-18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 3 - Expenses and Related Party Transactions | SA-20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 4 - Changes In Units Outstanding | SA-24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 5 - Purchases and Sales of Investments | SA-25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 6 - Financial Highlights | SA-26 |

---

**REPORT** OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors of

First Allmerica Financial Life Insurance Company and

Policy Owners of VEL II Account

**Opinion on the Financial Statements and Financial Highlights**

We have audited the accompanying statements of net assets for each of the underlying funds, listed in Note 1A to the financial statements (the "Sub-Accounts") of VEL II Account (the "Separate Account") of First Allmerica Financial Life Insurance Company as of December 31, 2025, the related statements of operations for the year then ended, statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the five years in the period then ended, except for the Sub-Account included in the table below; the related statement of operations, statements of changes in net assets, and financial highlights for the Sub-Account and periods indicated in the table below; and the related notes (collectively referred to as the "financial statements and financial highlights"). In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Sub-Accounts comprising the Separate Account as of December 31, 2025, and the results of their operations for the year then ended (or for the periods listed in the table below), the changes in their net assets for each of the two years in the period then ended (or for the periods listed in the table below), and the financial highlights for each of the five years in the period then ended (or for the periods listed in the table below), in conformity with accounting principles generally accepted in the United States of America.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Sub-Account** | &nbsp;&nbsp;**Statement of<br> Operations** | &nbsp;&nbsp;**Statements of <br> Changes in Net Assets** | &nbsp;&nbsp;**Financial Highlights** |
| &nbsp;&nbsp;Nomura VIP International Core Equity Series - Standard Class | &nbsp;&nbsp;For the year ended December 31, 2025 | &nbsp;&nbsp;For the year ended December 31, 2025 and for the period from April 26, 2024 through December 31, 2024 | &nbsp;&nbsp;For the year ended December 31, 2025 and for the period from April 26, 2024 through December 31, 2024 |

---

**Basis for Opinion**

These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on the Separate 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 Separate 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 Separate 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 Separate 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 investments owned as of December 31, 2025, by correspondence with each Sub-Account's fund manager. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

April 16, 2026

We have served as the auditor of one or more separate accounts of First Allmerica Financial Life Insurance Company since 2021.

**VEL II Account**

**Statements of Net Assets**

**December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **AB VPS Large<br> Cap Growth<br> Portfolio** | **Fidelity VIP<br> Asset Manager<br> 50% Portfolio<br> (a)** | **Fidelity VIP<br> Equity-Income<br> Portfolio** | **Fidelity VIP<br> Growth Portfolio** | **Fidelity VIP High<br> Income Portfolio** |
| **ASSETS:** |  |  |  |  |  |
| Investments in shares of the Underlying Funds, at fair value | $380739 | $702036 | $3441934 | $6529407 | $835700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets | $380739 | $702036 | $3441934 | $6529407 | $835700 |
| **Net assets by category:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulation reserves | $380739 | $702036 | $3441934 | $6529407 | $835700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets | $380739 | $702036 | $3441934 | $6529407 | $835700 |
| Units outstanding, December 31, 2025 | 30545 | 173650 | 478888 | 451184 | 231537 |
| Investments in shares of the Underlying Funds, at cost | $272636 | $612059 | $2753292 | $5045634 | $905018 |
| Underlying Fund shares held | 4673 | 39843 | 116953 | 66818 | 171250 |

---

(a) Name change. See Note 1.

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Net Assets**

**December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fidelity VIP<br> Overseas<br> Portfolio** | **FT VIP Franklin<br> Large Cap<br> Growth VIP Fund** | **FT VIP Franklin<br> Small-Mid Cap<br> Growth VIP Fund** | **Goldman Sachs<br> VIT Core Fixed<br> Income Fund** | **Goldman Sachs<br> VIT Government<br> Money Market<br> Fund** |
| **ASSETS:** |  |  |  |  |  |
| Investments in shares of the Underlying Funds, at fair value | $667081 | $254343 | $664654 | $441057 | $3688616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets | $667081 | $254343 | $664654 | $441057 | $3688616 |
| **Net assets by category:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulation reserves | $667081 | $254343 | $664654 | $441057 | $3688616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets | $667081 | $254343 | $664654 | $441057 | $3688616 |
| Units outstanding, December 31, 2025 | 126529 | 31374 | 89438 | 262255 | 3019789 |
| Investments in shares of the Underlying Funds, at cost | $528440 | $260645 | $722866 | $461777 | $3688616 |
| Underlying Fund shares held | 24240 | 14185 | 46447 | 45330 | 3688616 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Net Assets**

**December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Goldman Sachs<br> VIT International<br> Equity Insights<br> Fund** | **Goldman Sachs<br> VIT Mid Cap<br> Growth Fund** | **Goldman Sachs<br> VIT Mid Cap<br> Value Fund** | **Goldman Sachs<br> VIT Strategic<br> Growth Fund** | **Goldman Sachs<br> VIT U.S. Equity<br> Insights Fund** |
| **ASSETS:** |  |  |  |  |  |
| Investments in shares of the Underlying Funds, at fair value | $844788 | $1672352 | $2082505 | $6878427 | $2050710 |
| &nbsp;&nbsp;&nbsp;Net assets | $844788 | $1672352 | $2082505 | $6878427 | $2050710 |
| **Net assets by category:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accumulation reserves | $844788 | $1672352 | $2082505 | $6878427 | $2050710 |
| &nbsp;&nbsp;&nbsp;Net assets | $844788 | $1672352 | $2082505 | $6878427 | $2050710 |
| Units outstanding, December 31, 2025 | 215047 | 139575 | 263235 | 561721 | 233044 |
| Investments in shares of the Underlying Funds, at cost | $741259 | $2200490 | $2066804 | $5739679 | $1688916 |
| Underlying Fund shares held | 80764 | 170822 | 125907 | 453124 | 93045 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Net Assets**

**December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Invesco V.I.<br> Health Care Fund** | **Janus<br> Henderson<br> Research<br> Portfolio** | **Nomura VIP<br> International<br> Core Equity<br> Series (a)** | **T. Rowe Price<br> International<br> Stock Portfolio** |
| **ASSETS:** |  |  |  |  |
| Investments in shares of the Underlying Funds, at fair value | $141107 | $212644 | $552198 | $732738 |
| &nbsp;&nbsp;&nbsp;Net assets | $141107 | $212644 | $552198 | $732738 |
| **Net assets by category:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accumulation reserves | $141107 | $212644 | $552198 | $732738 |
| &nbsp;&nbsp;&nbsp;Net assets | $141107 | $212644 | $552198 | $732738 |
| Units outstanding, December 31, 2025 | 22283 | 18327 | 45003 | 165135 |
| Investments in shares of the Underlying Funds, at cost | $126381 | $123650 | $485544 | $683919 |
| Underlying Fund shares held | 4721 | 3472 | 28537 | 46084 |

---

(a) Name change. See Note 1.

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Operations**

**For the Year Ended December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **AB VPS Large<br> Cap Growth<br> Portfolio** | **Fidelity VIP<br> Asset Manager<br> 50% Portfolio<br> (a)** | **Fidelity VIP<br> Equity-Income<br> Portfolio** | **Fidelity VIP<br> Growth Portfolio** | **Fidelity VIP High<br> Income Portfolio** |
| **INVESTMENT INCOME:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends | $- | $16912 | $58781 | $18307 | $54884 |
| **EXPENSES:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortality and expense risk fees | 2433 | 4318 | 21046 | 40320 | 5513 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | (2433) | 12594 | 37735 | (22013) | 49371 |
| **REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital gain distributions | 36273 | 29990 | 181544 | 811327 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) from sales of investments | 16848 | 3305 | 48854 | 118252 | (8757) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 53121 | 33295 | 230398 | 929579 | (8757) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | (7157) | 42526 | 277272 | (69752) | 37448 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) | 45964 | 75821 | 507670 | 859827 | 28691 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | $43531 | $88415 | $545405 | $837814 | $78062 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Name change. See Note 1.

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Operations**

**For the Year Ended December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fidelity VIP<br> Overseas<br> Portfolio** | **FT VIP Franklin<br> Large Cap<br> Growth VIP Fund** | **FT VIP Franklin<br> Small-Mid Cap<br> Growth VIP Fund** | **Goldman Sachs<br> VIT Core Fixed<br> Income Fund** | **Goldman Sachs<br> VIT Government<br> Money Market<br> Fund** |
| **INVESTMENT INCOME:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends | $11172 | $- | $- | $15315 | $143090 |
| **EXPENSES:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortality and expense risk fees | 4380 | 1605 | 4240 | 2720 | 24108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | 6792 | (1605) | (4240) | 12595 | 118982 |
| **REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital gain distributions | 61997 | 47845 | 36884 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) from sales of investments | 21717 | 73 | (2689) | (2719) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 83714 | 47918 | 34195 | (2719) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | 25301 | (30337) | (16986) | 16402 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) | 109015 | 17581 | 17209 | 13683 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | $115807 | $15976 | $12969 | $26278 | $118982 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Operations**

**For the Year Ended December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Goldman Sachs<br> VIT International<br> Equity Insights<br> Fund** | **Goldman Sachs<br> VIT Mid Cap<br> Growth Fund** | **Goldman Sachs<br> VIT Mid Cap<br> Value Fund** | **Goldman Sachs<br> VIT Strategic<br> Growth Fund** | **Goldman Sachs<br> VIT U.S. Equity<br> Insights Fund** |
| **INVESTMENT INCOME:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends | $18618 | $- | $19190 | $- | $9440 |
| **EXPENSES:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortality and expense risk fees | 5004 | 10881 | 13116 | 41637 | 12537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | 13614 | (10881) | 6074 | (41637) | (3097) |
| **REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital gain distributions | 101244 | 290025 | 217507 | 1052493 | 257861 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) from sales of investments | 11499 | (23735) | 8882 | 102812 | 41841 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 112743 | 266290 | 226389 | 1155305 | 299702 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | 115091 | (146183) | (67493) | (86326) | (23921) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) | 227834 | 120107 | 158896 | 1068979 | 275781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | $241448 | $109226 | $164970 | $1027342 | $272684 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Operations**

**For the Year Ended December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Invesco V.I.<br> Health Care Fund** | **Janus<br> Henderson<br> Research<br> Portfolio** | **Nomura VIP<br> International<br> Core Equity<br> Series_(a)** | **T. Rowe Price<br> International<br> Stock Portfolio** |
| **INVESTMENT INCOME:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends | $- | $- | $6911 | $13692 |
| **EXPENSES:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortality and expense risk fees | 845 | 1281 | 3417 | 4583 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | (845) | (1281) | 3494 | 9109 |
| **REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital gain distributions | 5466 | 15693 | 25426 | 60135 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) from sales of investments | 605 | 5646 | 5087 | 8308 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 6071 | 21339 | 30513 | 68443 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | 12941 | 11487 | 75423 | 35323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) | 19012 | 32826 | 105936 | 103766 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | $18167 | $31545 | $109430 | $112875 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Name change. See Note 1.

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **AB VPS Large Cap Growth Portfolio** | **AB VPS Large Cap Growth Portfolio** | **Fidelity VIP Asset Manager 50%<br> Portfolio (a)** | **Fidelity VIP Asset Manager 50%<br> Portfolio (a)** | **Fidelity VIP Equity-Income Portfolio** | **Fidelity VIP Equity-Income Portfolio** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $(2433) | $(2281) | $12594 | $11441 | $37735 | $33627 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 53121 | 23395 | 33295 | 6681 | 230398 | 239802 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | (7157) | 52444 | 42526 | 28822 | 277272 | 140208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 43531 | 73558 | 88415 | 46944 | 545405 | 413637 |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 6247 | 8458 | 14819 | 15074 | 80974 | 93938 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (20312) | (7869) | (6581) | (6062) | (121535) | (146140) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (18796) | (18572) | (34953) | (32837) | (153973) | (163453) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | 3837 | (4535) | (1036) | 11311 | 15207 | (69642) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (29024) | (22518) | (27751) | (12514) | (179327) | (285297) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 14507 | 51040 | 60664 | 34430 | 366078 | 128340 |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 366232 | 315192 | 641372 | 606942 | 3075856 | 2947516 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $380739 | $366232 | $702036 | $641372 | $3441934 | $3075856 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Name change. See Note 1.

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Fidelity VIP Growth Portfolio** | **Fidelity VIP Growth Portfolio** | **Fidelity VIP High Income Portfolio** | **Fidelity VIP High Income Portfolio** | **Fidelity VIP Overseas Portfolio** | **Fidelity VIP Overseas Portfolio** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $(22013) | $(38852) | $49371 | $43771 | $6792 | $5939 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 929579 | 1585417 | (8757) | (6921) | 83714 | 56179 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | (69752) | (45003) | 37448 | 27573 | 25301 | (31622) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 837814 | 1501562 | 78062 | 64423 | 115807 | 30496 |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 99517 | 112298 | 33797 | 38613 | 21425 | 24363 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (93345) | (476727) | (13693) | (8849) | (18912) | (22939) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (241439) | (251932) | (57764) | (60427) | (34881) | (35643) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | (110775) | (21355) | (38216) | 1599 | (10697) | (45515) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (346042) | (637716) | (75876) | (29064) | (43065) | (79734) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 491772 | 863846 | 2186 | 35359 | 72742 | (49238) |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 6037635 | 5173789 | 833514 | 798155 | 594339 | 643577 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $6529407 | $6037635 | $835700 | $833514 | $667081 | $594339 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **FT VIP Franklin Large Cap Growth<br> VIP Fund** | **FT VIP Franklin Large Cap Growth<br> VIP Fund** | **FT VIP Franklin Small-Mid Cap<br> Growth VIP Fund** | **FT VIP Franklin Small-Mid Cap<br> Growth VIP Fund** | **Goldman Sachs VIT Core Fixed<br> Income Fund** | **Goldman Sachs VIT Core Fixed<br> Income Fund** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $(1605) | $(1566) | $(4240) | $(3978) | $12595 | $11676 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 47918 | 28965 | 34195 | (5047) | (2719) | (4055) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | (30337) | 25659 | (16986) | 68053 | 16402 | (7098) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 15976 | 53058 | 12969 | 59028 | 26278 | 523 |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 5410 | 7492 | 16646 | 27278 | 32058 | 31127 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (52) | (11872) | (12164) |  | (10399) | (18266) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (8445) | (7841) | (29298) | (40057) | (36543) | (36893) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | (312) | (10299) | 47445 | 1341 | 50740 | 10966 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (3399) | (22520) | 22629 | (11438) | 35856 | (13066) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 12577 | 30538 | 35598 | 47590 | 62134 | (12543) |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 241766 | 211228 | 629056 | 581466 | 378923 | 391466 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $254343 | $241766 | $664654 | $629056 | $441057 | $378923 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Goldman Sachs VIT Government<br> Money Market Fund** | **Goldman Sachs VIT Government<br> Money Market Fund** | **Goldman Sachs VIT International<br> Equity Insights Fund** | **Goldman Sachs VIT International<br> Equity Insights Fund** | **Goldman Sachs VIT Mid Cap Growth<br> Fund** | **Goldman Sachs VIT Mid Cap Growth<br> Fund** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $118982 | $156869 | $13614 | $13706 | $(10881) | $(10258) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) |  |  | 112743 | 30442 | 266290 | 116871 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | - | - | 115091 | (7747) | (146183) | 174404 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 118982 | 156869 | 241448 | 36401 | 109226 | 281017 |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 134834 | 142751 | 28747 | 43360 | 27484 | 45057 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (68140) | (342326) | (13364) | (19682) | (28902) | (34271) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (207505) | (219281) | (40530) | (51254) | (70362) | (84086) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | (52378) | 212244 | (48966) | (5797) | (19529) | (82985) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (193189) | (206612) | (74113) | (33373) | (91309) | (156285) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | (74207) | (49743) | 167335 | 3028 | 17917 | 124732 |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 3762823 | 3812566 | 677453 | 674425 | 1654435 | 1529703 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $3688616 | $3762823 | $844788 | $677453 | $1672352 | $1654435 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Goldman Sachs VIT Mid Cap Value<br> Fund** | **Goldman Sachs VIT Mid Cap Value<br> Fund** | **Goldman Sachs VIT Strategic<br> Growth Fund** | **Goldman Sachs VIT Strategic<br> Growth Fund** | **Goldman Sachs VIT U.S. Equity<br> Insights Fund** | **Goldman Sachs VIT U.S. Equity<br> Insights Fund** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $6074 | $1200 | $(41637) | $(37188) | $(3097) | $(4632) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 226389 | 138084 | 1155305 | 585029 | 299702 | 341964 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | (67493) | 85177 | (86326) | 1008613 | (23921) | 116733 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 164970 | 224461 | 1027342 | 1556454 | 272684 | 454065 |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 57236 | 82179 | 144647 | 166697 | 47087 | 49753 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (45724) | (129249) | (64540) | (329663) | (90521) | (201721) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (96732) | (115256) | (278394) | (274479) | (90238) | (94496) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | (18641) | (108923) | (116022) | (261299) | (26233) | (83788) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (103861) | (271249) | (314309) | (698744) | (159905) | (330252) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 61109 | (46788) | 713033 | 857710 | 112779 | 123813 |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 2021396 | 2068184 | 6165394 | 5307684 | 1937931 | 1814118 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $2082505 | $2021396 | $6878427 | $6165394 | $2050710 | $1937931 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Invesco V.I. Health Care Fund** | **Invesco V.I. Health Care Fund** | **Janus Henderson Research<br> Portfolio** | **Janus Henderson Research<br> Portfolio** | **Nomura VIP International Core<br> Equity Series (a)** | **Nomura VIP International Core<br> Equity Series (a)** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024 (b)** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |  |  |  |  |
| **FROM OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $(845) | $(942) | $(1281) | $(1141) | $3494 | $3917 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 6071 | 2147 | 21339 | 7906 | 30513 | 1903 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | 12941 | 5351 | 11487 | 42763 | 75423 | (8769) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 18167 | 6556 | 31545 | 49528 | 109430 | (2949) |
| **FROM Policy TRANSACTIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 1677 | 2139 | 3821 | 3909 | 17947 | 11899 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (3362) |  | (370) |  | (13864) | (4314) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (4219) | (5326) | (4958) | (5126) | (27788) | (18412) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | 2729 | (22651) | (9265) | (2938) | (567) | 480816 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (3175) | (25838) | (10772) | (4155) | (24272) | 469989 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 14992 | (19282) | 20773 | 45373 | 85158 | 467040 |
| **NET ASSETS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 126115 | 145397 | 191871 | 146498 | 467040 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $141107 | $126115 | $212644 | $191871 | $552198 | $467040 |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) Name change. See Note 1. |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) For the period from April 26, 2024 through December 31, 2024. | &nbsp;&nbsp;&nbsp;&nbsp;(b) For the period from April 26, 2024 through December 31, 2024. |  |  |  |  |  |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Statements of Changes in Net Assets**

**For the Years Ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **T. Rowe Price International Stock<br> Portfolio** | **T. Rowe Price International Stock<br> Portfolio** |
|  | **2025** | **2024** |
| **INCREASE (DECREASE) IN NET ASSETS:** |  |  |
| **FROM OPERATIONS:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | $9109 | $1910 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss) | 68443 | 21071 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) | 35323 | (5284) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from operations | 112875 | 17697 |
| **FROM Policy TRANSACTIONS:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net purchase payments | 14231 | 18256 |
| &nbsp;&nbsp;&nbsp;&nbsp;Terminations and withdrawals | (36553) | (17493) |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and other charges | (25606) | (28567) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfers | 19992 | 3783 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets from Policy transactions | (27936) | (24021) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in net assets | 84939 | (6324) |
| **NET ASSETS:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 647799 | 654123 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $732738 | $647799 |

---

The accompanying notes are an integral part of these financial statements.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 1 - Organization**

VEL II Account of First Allmerica Financial Life Insurance Company ("VEL II Account" or the "Separate Account"), which is a funding vehicle for the Vari-Exceptional Life 93 variable life insurance policies, is a separate investment account of First Allmerica Financial Life Insurance Company ("FAFLIC"), established on April 1, 1994, for the purpose of separating from the general assets of FAFLIC (the "General Account") those assets used to fund the variable portion of certain flexible premium variable life insurance policies (the "Policies") issued by FAFLIC. FAFLIC is the Sponsor of the Separate Account. FAFLIC is a wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company ("Commonwealth Annuity"). Commonwealth Annuity is a wholly-owned indirect subsidiary of Global Atlantic Financial Group Limited ("GAFG"), a Bermuda company. GAFG is a wholly-owned subsidiary of KKR & Co., Inc. ("KKR").

FAFLIC is subject to the laws of the Commonwealth of Massachusetts governing insurance companies and to regulation by the Commissioner of Insurance of Massachusetts. In addition, FAFLIC is subject to the insurance laws and regulations of other states and jurisdictions in which it is licensed to operate. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the other assets and liabilities of FAFLIC. The Separate Account cannot be charged with liabilities arising out of any other business of FAFLIC. The General Account is subject to the claims of creditors.

The Separate Account is registered with the Securities and Exchange Commission ("SEC") as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). Global Atlantic Distributors, LLC is the principal underwriter for the Separate Account. Global Atlantic Distributors, LLC, an affiliate of FAFLIC, is a wholly-owned indirect subsidiary of GAFG.

The Separate Account is divided into Sub-Accounts, each of which invests exclusively in an Underlying Fund. Purchase payments for the Separate Account are allocated to one or more of the Sub-Accounts that comprise the Separate Account. Nineteen Sub-Accounts were offered by the Separate Account during 2025, all of which had activity.

A. The following underlying funds had net assets as of or during the year ended December 31, 2025:

---

| | |
|:---|:---|
| **Underlying Fund** | **Class** |
| AB VPS Large Cap Growth Portfolio | Class B |
| Fidelity VIP Asset Manager 50% Portfolio | Initial Class |
| Fidelity VIP Equity-Income Portfolio | Initial Class |
| Fidelity VIP Growth Portfolio | Initial Class |
| Fidelity VIP High Income Portfolio | Initial Class |
| Fidelity VIP Overseas Portfolio | Initial Class |
| FT VIP Franklin Large Cap Growth VIP Fund | Class 2 |
| FT VIP Franklin Small-Mid Cap Growth VIP Fund | Class 2 |
| Goldman Sachs VIT Core Fixed Income Fund | Service Shares |
| Goldman Sachs VIT Government Money Market Fund | Service Shares |
| Goldman Sachs VIT International Equity Insights Fund | Service Shares |
| Goldman Sachs VIT Mid Cap Growth Fund | Service Shares |
| Goldman Sachs VIT Mid Cap Value Fund | Service Shares |
| Goldman Sachs VIT Strategic Growth Fund | Service Shares |
| Goldman Sachs VIT U.S. Equity Insights Fund | Service Shares |
| Invesco V.I. Health Care Fund | Series I |
| Janus Henderson Research Portfolio | Service Shares |
| Nomura VIP International Core Equity Series | Standard Class |
| T. Rowe Price International Stock Portfolio |  |

---

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 1 - Organization (Continued)**

Each Sub-Account invests exclusively in one of the Underlying Funds that are part of the following fund groups:

**<u>Fund Group</u>**

AB Variable Products Series Fund, Inc.

Aim Variable Insurance Funds (Invesco Variable Insurance Funds)

Delaware VIP Trust

Fidelity Variable Insurance Products Funds

Franklin Templeton Variable Insurance Products Trust

Goldman Sachs Variable Insurance Trust

Janus Aspen Series

T. Rowe Price International Series, Inc.

In 2025 the following Sub-Accounts were renamed:

---

| | | |
|:---|:---|:---|
| **Date** | **New Name** | **Old Name** |
| May 1, 2025 | Fidelity VIP Asset Manager 50% Portfolio | Fidelity VIP II Asset Manager |
| December 1, 2025 | Nomura VIP International Core Equity Series | Macquarie VIP International Core Equity Series |

---

**Note 2 - Summary of Significant Accounting Policies**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and Financial Accounting Standards Board ("FASB") Accounting Standards Codification 946 "Financial Services - Investment Companies". The following is a summary of significant accounting policies followed by the Separate Account in the preparation of its financial statements.

**Estimates**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates at the date of the financial statements. Actual results could differ from those estimates.

**Subsequent Events**

For the year ended December 31, 2025, FAFLIC evaluated subsequent events through April 16, 2026 the issuance date of the financial statements. There are no subsequent events requiring accounting adjustments or disclosure.

**Investments**

Investment transactions are recorded as of the trade date. Investments held by the Sub-Accounts are recorded at fair value based on the stated net asset value per share ("NAV") of the Underlying Funds. The change in the difference between cost and fair value is reflected in unrealized gain (loss) in the statements of operations. Realized investment gains and losses are determined using the average cost method. Dividend income and capital gain distributions are recorded on the ex-distribution date and are reinvested in additional shares of the Underlying Funds at NAV. Investment income receivable represents dividends receivable by, but not yet reinvested in, the Underlying Funds.

**Financial Instruments**

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). The best evidence of fair value is a quoted price in an active market. If listed prices or quotations are not available, fair value is determined by reference to prices of similar instruments and quoted prices or recent prices in less active markets.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 2 - Summary of Significant Accounting Policies (Continued)**

U.S. GAAP establishes a three-level valuation hierarchy based upon observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The fair value hierarchy prioritizes inputs to the valuation techniques used to measure fair value, giving the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. A financial instrument's level in the fair value hierarchy is based on the lowest level of any input that is significant to fair value measurement of the financial instrument. The three levels of the fair value hierarchy are described below:

Basis of Fair Value Measurement

---

| | |
|:---|:---|
| Level 1 | Inputs are unadjusted quoted prices in active markets to which FAFLIC had access at the measurement date for identical, unrestricted assets or liabilities. |
| Level 2 | Inputs to valuation techniques are observable either directly or indirectly through quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
| Level 3 | Model-derived where one or more inputs to the valuation techniques are significant and unobservable. |

---

The Underlying Funds in the Separate Account produce a daily NAV that is validated with a sufficient level of observable activity to support classification of the fair value measurement as level 1.

**Statements of Changes in Net Assets**

Policy owners may allocate their Policy values to variable investment options in the Separate Account and to the Fixed Account, which is a part of the General Account that guarantees principal and a fixed minimum interest rate.

Net purchase payments represent payments by Policy owners under the Policies (excluding amounts allocated to the Fixed Account) reduced by refunds made during the initial free-look period, and by applicable deductions, charges, and state premium taxes. Terminations and withdrawals are payments to Policy owners and beneficiaries made under the terms of the Policies and amounts that Policy owners have requested to be withdrawn and paid to them. Insurance and other charges are deductions from Policy values for Policy fees such as Cost of Insurance. Cost of Insurance are charges based on individual characteristics such as the age, Policy year, underwriting class, face amount and sex of the insured. Transfers include amounts that Policy owners have directed to be moved among funds, including permitted transfers from and to the Fixed Account, along with Policy loan activity and death claims.

**Federal Income Taxes**

The operations of the Separate Account are included in the federal income tax return of FAFLIC, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, FAFLIC does not expect to incur federal income taxes on the earnings or realized capital gains attributable to the Separate Account. Based on this, no Federal income tax provision is required. FAFLIC 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 Policies. The Separate Account did not record any changes in and had no recorded liabilities for uncertain tax benefits or related interest and penalties as of and for the year ended December 31, 2025.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 2 - Summary of Significant Accounting Policies (Continued)**

**Diversification Requirement**

Under the provisions of Section 817(h) of the IRC, a variable life insurance policy, other than a policy issued in connection with certain types of employee benefit plans, will not be treated as a variable life insurance policy for federal income tax purposes for any period for which the investments of the segregated asset account on which the policy is based are not adequately diversified. The IRC provides that the "adequately diversified" requirement may be met if the underlying investments satisfy either a statutory safe harbor test or diversification requirements set forth in regulations issued by the Secretary of the Treasury. The Internal Revenue Service has issued regulations under Section 817(h) of the IRC. FAFLIC believes that the Separate Account satisfies the current requirements of the regulations, and it intends that it will continue to meet such requirements.

**Segment Reporting**

The Separate Account is engaged in a single line of business as a funding vehicle for the Vari-Exceptional Life 93 variable life insurance policies, established for the purpose of separating from the General Account those assets used to fund the variable portion of the Policies issued by FAFLIC. The President of FAFLIC acts as the chief operating decision maker ("CODM"), who is responsible for ensuring the Separate Account maintains compliance with its Policy agreements and meets applicable regulations and reporting requirements. Each Sub-Account's operations constitute a single operating segment, and therefore, a single reportable segment, because the CODM manages the business using Net Increase in net assets from operations as their performance measure, in order to make operational decisions of each of the Sub-Accounts within the Separate Account. Refer to the Statements of Net Assets, Statements of Operations and Statements of Changes in Net Assets and related notes for each Sub-Account's operating segment assets, revenues, and significant expenses.

**Expense Disaggregation Disclosures**

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). ASU 2024-03 requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis. The update will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. FAFLIC is currently evaluating the impact of adopting this guidance on the Separate Account's financial statements and disclosures.

**Note 3 - Expenses and Related Party Transactions**

On each monthly payment date commencing with the date of issue, FAFLIC deducts a Cost of Insurance Charge for the cost of insurance protection under the Policies; a charge for any optional insurance benefits added by rider, and an Administrative Charge as reimbursement for expenses related to issuance and maintenance of the Policies. The Charges for Optional Benefits vary depending upon the optional benefits selected and by the underwriting classification of the insured. FAFLIC may also charge other one-time fees for certain Policy transactions, which are not listed in the following table.

FAFLIC also assesses a Mortality and Expense Risk Fee and a Separate Account Administrative Charge. The Mortality and Expense Risk Fee compensates FAFLIC for assuming mortality and expense risks for variable interests in the Policy. The mortality risk assumed by FAFLIC is that insureds may live for a shorter time than anticipated, and that FAFLIC therefore will pay an aggregate amount of death proceeds greater than anticipated. The expense risk assumed is that the expenses incurred in issuing and administering the Policies will exceed the amounts realized from the administrative charges provided in the Policies. If the fee for mortality and expense risks is not sufficient to cover mortality experience and expenses, FAFLIC absorbs the losses. If the fee is higher than mortality and expense risk expenses, the difference is a profit to FAFLIC. The Separate Account Administrative Charge reimburses FAFLIC for the costs of administering the Separate Account and the Sub-Accounts.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 3 - Expenses and Related Party Transactions (Continued)**

Fees and charges may be deducted daily, monthly, or annually. They may be deducted from the net assets of each Sub-Account ("Unit Fair Value") or deducted from individual Policies ("Individual Policy"). Current fees and charges are summarized in the following table.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 3 - Expenses and Related Party Transactions (Continued)**

---

| | |
|:---|:---|
|  | **Vari-Exceptional Life 93** |
| Mortality and Expense Risk Fee |  |
| &nbsp;&nbsp;&nbsp;Frequency | Daily |
| &nbsp;&nbsp;&nbsp;Deduction Method | Unit Fair Value |
| &nbsp;&nbsp;&nbsp;Financial Statement Line | Statements of Operations, Mortality and expense risk fees |
| &nbsp;&nbsp;&nbsp;Rate (Annual) | 0.65% |
| Separate Account Administrative Charge |  |
| &nbsp;&nbsp;&nbsp;Frequency | Daily |
| &nbsp;&nbsp;&nbsp;Deduction Method | Unit Fair Value |
| &nbsp;&nbsp;&nbsp;Financial Statement Line | Statements of Operations, Other expenses |
| &nbsp;&nbsp;&nbsp;Rate (Current Annual) | 0.15% |
| &nbsp;&nbsp;&nbsp;Rate (Maximum Annual) | 0.25% during the first 10 Policy years, with no charge imposed thereafter |
| Cost of Insurance Charge |  |
| &nbsp;&nbsp;&nbsp;Frequency | Monthly |
| &nbsp;&nbsp;&nbsp;Deduction Method | Individual Policy |
| &nbsp;&nbsp;&nbsp;Financial Statement Line | Statements of Changes in Net Assets, Insurance and other charges |
| &nbsp;&nbsp;&nbsp;Rate (Annual) | Varies by Policy |
| Charges for Optional Benefits |  |
| &nbsp;&nbsp;&nbsp;Frequency | Monthly |
| &nbsp;&nbsp;&nbsp;Deduction Method | Individual Policy |
| &nbsp;&nbsp;&nbsp;Financial Statement Line | Statements of Changes in Net Assets, Insurance and other charges |
| &nbsp;&nbsp;&nbsp;Rate (Annual) | Varies by Policy |
| Administrative Charge |  |
| &nbsp;&nbsp;&nbsp;Frequency | Monthly |
| &nbsp;&nbsp;&nbsp;Deduction Method | Individual Policy |
| &nbsp;&nbsp;&nbsp;Financial Statement Line | Statements of Changes in Net Assets, Insurance and other charges |
| &nbsp;&nbsp;&nbsp;Maximum Annual Fee | $5 |

---

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 3 - Expenses and Related Party Transactions (Continued)**

A surrender charge may be deducted upon request of a full surrender of the Policy or a decrease in the face amount if less than a certain number of years have lapsed from the date of issue or from the effective date of any increase in the face amount.

Some states and municipalities impose premium taxes, which currently range up to 5%, on variable life policies.

There are other fees and charges that may be assessed at the discretion of FAFLIC, in accordance with Policy terms.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 4 - Changes In Units Outstanding**

The changes in units outstanding were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| <br>**Sub-Account** | <br>**Units**<br>**Issued** | <br>**Units**<br>**Redeemed** | **Net**<br>**Increase**<br>**(Decrease)** | <br>**Units**<br>**Issued** | <br>**Units**<br>**Redeemed** | **Net**<br>**Increase**<br>**(Decrease)** |
| AB VPS Large Cap Growth Portfolio | 2115 | (4511) | (2396) | 321 | (2573) | (2252) |
| Fidelity VIP Asset Manager 50% Portfolio (a) | 3516 | (11098) | (7582) | 5442 | (9070) | (3628) |
| Fidelity VIP Equity-Income Portfolio | 10184 | (37339) | (27155) | 13022 | (62681) | (49659) |
| Fidelity VIP Growth Portfolio | 5070 | (30134) | (25064) | 6331 | (58740) | (52409) |
| Fidelity VIP High Income Portfolio | 6466 | (28133) | (21667) | 6455 | (15742) | (9287) |
| Fidelity VIP Overseas Portfolio | 9357 | (17665) | (8308) | 4478 | (22024) | (17546) |
| FT VIP Franklin Large Cap Growth VIP Fund | 1087 | (1480) | (393) | 734 | (3791) | (3057) |
| FT VIP Franklin Small-Mid Cap Growth VIP Fund | 8323 | (5099) | 3224 | 3438 | (5132) | (1694) |
| Goldman Sachs VIT Core Fixed Income Fund | 46515 | (24485) | 22030 | 17748 | (26276) | (8528) |
| Goldman Sachs VIT Government Money Market Fund | 101159 | (262593) | (161434) | 374413 | (552662) | (178249) |
| Goldman Sachs VIT International Equity Insights Fund | 5869 | (27524) | (21655) | 23798 | (34807) | (11009) |
| Goldman Sachs VIT Mid Cap Growth Fund | 2603 | (10307) | (7704) | 8666 | (24118) | (15452) |
| Goldman Sachs VIT Mid Cap Value Fund | 9328 | (23121) | (13793) | 12728 | (51519) | (38791) |
| Goldman Sachs VIT Strategic Growth Fund | 13074 | (39539) | (26465) | 6751 | (83030) | (76279) |
| Goldman Sachs VIT U.S. Equity Insights Fund | 4095 | (23731) | (19636) | 1460 | (49582) | (48122) |
| Invesco V.I. Health Care Fund | 727 | (1263) | (536) | 593 | (4999) | (4406) |
| Janus Henderson Research Portfolio | 285 | (1360) | (1075) | 321 | (781) | (460) |
| Nomura VIP International Core Equity Series (a)(b) | 2774 | (4871) | (2097) | 49965 | (2865) | 47100 |
| T. Rowe Price International Stock Portfolio | 10335 | (16951) | (6616) | 9155 | (15302) | (6147) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Name change. See Note 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For the period from April 26, 2024 through December 31, 2024.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 5 - Purchases and Sales of Investments**

The cost of purchases and proceeds from sales of shares of the Underlying Funds of the Separate Account during the year ended December 31, 2025 were as follows:

---

| | | |
|:---|:---|:---|
| **Investment Portfolios** | **Purchases** | **Sales** |
| AB VPS Large Cap Growth Portfolio | $60523 | $55706 |
| Fidelity VIP Asset Manager 50% Portfolio (a) | 59343 | 44510 |
| Fidelity VIP Equity-Income Portfolio | 302649 | 262696 |
| Fidelity VIP Growth Portfolio | 888692 | 445420 |
| Fidelity VIP High Income Portfolio | 75329 | 101834 |
| Fidelity VIP Overseas Portfolio | 119808 | 94084 |
| FT VIP Franklin Large Cap Growth VIP Fund | 55787 | 12946 |
| FT VIP Franklin Small-Mid Cap Growth VIP Fund | 96707 | 41435 |
| Goldman Sachs VIT Core Fixed Income Fund | 90395 | 41944 |
| Goldman Sachs VIT Government Money Market Fund | 259558 | 333765 |
| Goldman Sachs VIT International Equity Insights Fund | 137602 | 96857 |
| Goldman Sachs VIT Mid Cap Growth Fund | 317711 | 129877 |
| Goldman Sachs VIT Mid Cap Value Fund | 302340 | 182620 |
| Goldman Sachs VIT Strategic Growth Fund | 1178836 | 482289 |
| Goldman Sachs VIT U.S. Equity Insights Fund | 295348 | 200489 |
| Invesco V.I. Health Care Fund | 9687 | 8242 |
| Janus Henderson Research Portfolio | 18309 | 14668 |
| Nomura VIP International Core Equity Series (a) | 63119 | 58472 |
| T. Rowe Price International Stock Portfolio | 115473 | 74164 |

---

(a) Name change. See Note 1.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 6 - Financial Highlights**

The Separate Account has multiple combinations of features and fees that are charged against the Policy owner's account balance. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The information presented below identifies the range of lowest to highest expense ratios and the corresponding total return. Only product designs within each product that had units outstanding during the respective periods were considered when determining the lowest and highest total return. The summary may not reflect the minimum and maximum Policy charges offered by the Separate Account as Policy owners may not have selected all available and applicable Policy options as discussed in Note 3.

Unit fair values, units outstanding, income and expense ratios and total returns for the Separate Account were as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **Units** | **Unit Fair<br> Values<br> Lowest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($) <br> (5)** | **Net<br> Assets ($)** | **Investment<br> Income<br> Ratios<br> (%) (1)(4)** | **Expense<br> Ratios<br> Lowest (%)<br> (2)(4)(5)** | **Expense<br> Ratios<br> Highest (%)<br> (2)(4)(5)** | **Total<br> Returns<br> Lowest (%)<br> (3)(4)(5)** | **Total<br> Returns<br> Highest (%)<br> (3)(4)(5)** |
| AB VPS Large Cap Growth Portfolio | AB VPS Large Cap Growth Portfolio |  |  |  |  |  |  |  |  |
| 2025 | 30545 | 12.46 | 12.46 | 380739 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | 0.65 | 0.65 | 12.05 | 12.05 |
| 2024 | 32941 | 11.12 | 11.12 | 366232 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | 0.65 | 0.65 | 24.11 | 24.11 |
| 2023 | 35193 | 8.96 | 8.96 | 315192 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | 0.65 | 0.65 | 33.93 | 33.93 |
| 2022 | 36260 | 6.69 | 6.69 | 242504 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | 0.65 | 0.65 | (29.13) | (29.13) |
| 2021 | 41411 | 9.44 | 9.44 | 390903 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | 0.65 | 0.65 | 27.74 | 27.74 |
| Fidelity VIP Asset Manager 50% Portfolio (a) | Fidelity VIP Asset Manager 50% Portfolio (a) | Fidelity VIP Asset Manager 50% Portfolio (a) |  |  |  |  |  |  |  |
| 2025 | 173650 | 4.04 | 4.04 | 702036 | 2.55 | 0.65 | 0.65 | 14.12 | 14.12 |
| 2024 | 181232 | 3.54 | 3.54 | 641372 | 2.47 | 0.65 | 0.65 | 7.93 | 7.93 |
| 2023 | 184860 | 3.28 | 3.28 | 606942 | 2.48 | 0.65 | 0.65 | 11.95 | 11.95 |
| 2022 | 180357 | 2.93 | 2.93 | 527713 | 2.06 | 0.65 | 0.65 | (15.32) | (15.32) |
| 2021 | 193544 | 3.46 | 3.46 | 670077 | 1.63 | 0.65 | 0.65 | 9.15 | 9.15 |
| Fidelity VIP Equity-Income Portfolio | Fidelity VIP Equity-Income Portfolio |  |  |  |  |  |  |  |  |
| 2025 | 478888 | 7.19 | 7.19 | 3441934 | 1.82 | 0.65 | 0.65 | 18.26 | 18.26 |
| 2024 | 506043 | 6.08 | 6.08 | 3075856 | 1.75 | 0.65 | 0.65 | 14.72 | 14.72 |
| 2023 | 555702 | 5.30 | 5.30 | 2947516 | 1.95 | 0.65 | 0.65 | 9.96 | 9.96 |
| 2022 | 579545 | 4.82 | 4.82 | 2796286 | 1.84 | 0.65 | 0.65 | (5.68) | (5.68) |
| 2021 | 653373 | 5.11 | 5.11 | 3338602 | 1.90 | 0.65 | 0.65 | 24.03 | 24.03 |

---

(a) Name change. See Note 1.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 6 - Financial Highlights (Continued)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **Units** | **Unit Fair<br> Values<br> Lowest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Net<br> Assets ($)** | **Investment<br> Income<br> Ratios<br> (%) (1)(4)** | **Expense<br> Ratios<br> Lowest (%)<br> (2)(4)(5)** | **Expense<br> Ratios<br> Highest (%)<br> (2)(4)(5)** | **Total<br> Returns<br> Lowest (%)<br> (3)(4)(5)** | **Total<br> Returns<br> Highest (%)<br> (3)(4)(5)** |
| Fidelity VIP Growth Portfolio | Fidelity VIP Growth Portfolio |  |  |  |  |  |  |  |  |
| 2025 | 451184 | 14.47 | 14.47 | 6529407 | 0.30 | 0.65 | 0.65 | 14.12 | 14.12 |
| 2024 | 476248 | 12.68 | 12.68 | 6037635 | 0.00 | 0.65 | 0.65 | 29.52 | 29.52 |
| 2023 | 528657 | 9.79 | 9.79 | 5173789 | 0.13 | 0.65 | 0.65 | 35.41 | 35.41 |
| 2022 | 567654 | 7.23 | 7.23 | 4104359 | 0.63 | 0.65 | 0.65 | (24.92) | (24.92) |
| 2021 | 631945 | 9.63 | 9.63 | 6087945 | N/A | 0.65 | 0.65 | 22.36 | 22.36 |
| Fidelity VIP High Income Portfolio | Fidelity VIP High Income Portfolio |  |  |  |  |  |  |  |  |
| 2025 | 231537 | 3.61 | 3.61 | 835700 | 6.49 | 0.65 | 0.65 | 9.73 | 9.73 |
| 2024 | 253204 | 3.29 | 3.29 | 833514 | 6.05 | 0.65 | 0.65 | 8.22 | 8.22 |
| 2023 | 262491 | 3.04 | 3.04 | 798155 | 5.69 | 0.65 | 0.65 | 9.75 | 9.75 |
| 2022 | 273925 | 2.77 | 2.77 | 758851 | 5.06 | 0.65 | 0.65 | (12.06) | (12.06) |
| 2021 | 291274 | 3.15 | 3.15 | 916424 | 5.39 | 0.65 | 0.65 | 3.96 | 3.96 |
| Fidelity VIP Overseas Portfolio | Fidelity VIP Overseas Portfolio |  |  |  |  |  |  |  |  |
| 2025 | 126529 | 5.27 | 5.27 | 667081 | 1.66 | 0.65 | 0.65 | 19.50 | 19.50 |
| 2024 | 134837 | 4.41 | 4.41 | 594339 | 1.57 | 0.65 | 0.65 | 4.50 | 4.50 |
| 2023 | 152383 | 4.22 | 4.22 | 643577 | 0.99 | 0.65 | 0.65 | 19.55 | 19.55 |
| 2022 | 173923 | 3.53 | 3.53 | 613530 | 1.06 | 0.65 | 0.65 | (24.89) | (24.89) |
| 2021 | 182113 | 4.70 | 4.70 | 856267 | 0.53 | 0.65 | 0.65 | 18.99 | 18.99 |
| FT VIP Franklin Large Cap Growth VIP Fund | FT VIP Franklin Large Cap Growth VIP Fund | FT VIP Franklin Large Cap Growth VIP Fund |  |  |  |  |  |  |  |
| 2025 | 31374 | 8.11 | 8.11 | 254343 | N/A | 0.65 | 0.65 | 6.57 | 6.57 |
| 2024 | 31767 | 7.61 | 7.61 | 241766 | N/A | 0.65 | 0.65 | 25.37 | 25.37 |
| 2023 | 34824 | 6.07 | 6.07 | 211228 | N/A | 0.65 | 0.65 | 39.54 | 39.54 |
| 2022 | 36756 | 4.35 | 4.35 | 159779 | N/A | 0.65 | 0.65 | (36.87) | (36.87) |
| 2021 | 34551 | 6.89 | 6.89 | 238210 | N/A | 0.65 | 0.65 | 14.45 | 14.45 |
| FT VIP Franklin Small-Mid Cap Growth VIP Fund | FT VIP Franklin Small-Mid Cap Growth VIP Fund | FT VIP Franklin Small-Mid Cap Growth VIP Fund |  |  |  |  |  |  |  |
| 2025 | 89438 | 7.43 | 7.43 | 664654 | N/A | 0.65 | 0.65 | 1.78 | 1.78 |
| 2024 | 86214 | 7.30 | 7.30 | 629056 | N/A | 0.65 | 0.65 | 10.44 | 10.44 |
| 2023 | 87908 | 6.61 | 6.61 | 581466 | N/A | 0.65 | 0.65 | 25.90 | 25.90 |
| 2022 | 91540 | 5.25 | 5.25 | 480863 | N/A | 0.65 | 0.65 | (34.13) | (34.13) |
| 2021 | 99431 | 7.97 | 7.97 | 792849 | N/A | 0.65 | 0.65 | 9.18 | 9.18 |

---

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 6 - Financial Highlights (Continued)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **Units** | **Unit Fair<br> Values<br> Lowest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Net<br> Assets ($)** | **Investment<br> Income<br> Ratios<br> (%) (1)(4)** | **Expense<br> Ratios<br> Lowest (%)<br> (2)(4)(5)** | **Expense<br> Ratios<br> Highest (%)<br> (2)(4)(5)** | **Total<br> Returns<br> Lowest (%)<br> (3)(4)(5)** | **Total<br> Returns<br> Highest (%)<br> (3)(4)(5)** |
| Goldman Sachs VIT Core Fixed Income Fund | Goldman Sachs VIT Core Fixed Income Fund | Goldman Sachs VIT Core Fixed Income Fund |  |  |  |  |  |  |  |  |
| 2025 | 262255 | 1.68 |  | 1.68 | 441057 | 3.66 | 0.65 | 0.65 | 6.33 | 6.33 |
| 2024 | 240225 | 1.58 |  | 1.58 | 378923 | 3.73 | 0.65 | 0.65 | 0.64 | 0.64 |
| 2023 | 248753 | 1.57 |  | 1.57 | 391466 | 2.79 | 0.65 | 0.65 | 4.67 | 4.67 |
| 2022 | 275906 | 1.50 |  | 1.50 | 412955 | 1.43 | 0.65 | 0.65 | (14.77) | (14.77) |
| 2021 | 303491 | 1.76 |  | 1.76 | 533356 | 1.11 | 0.65 | 0.65 | (2.76) | (2.76) |
| Goldman Sachs VIT Government Money Market Fund | Goldman Sachs VIT Government Money Market Fund | Goldman Sachs VIT Government Money Market Fund | Goldman Sachs VIT Government Money Market Fund |  |  |  |  |  |  |  |
| 2025 | 3019789 | 1.22 |  | 1.22 | 3688616 | 3.88 | 0.65 | 0.65 | 3.39 | 3.39 |
| 2024 | 3181223 | 1.18 |  | 1.18 | 3762823 | 4.80 | 0.65 | 0.65 | 4.42 | 4.42 |
| 2023 | 3359472 | 1.13 |  | 1.13 | 3812566 | 4.77 | 0.65 | 0.65 | 3.67 | 3.67 |
| 2022 | 748915 | 1.09 |  | 1.09 | 816392 | 1.47 | 0.65 | 0.65 | 0.93 | 0.93 |
| 2021 | 581677 | 1.08 |  | 1.08 | 629583 | 0.01 | 0.65 | 0.65 | (0.92) | (0.92) |
| Goldman Sachs VIT International Equity Insights Fund | Goldman Sachs VIT International Equity Insights Fund | Goldman Sachs VIT International Equity Insights Fund |  |  |  |  |  |  |  |  |
| 2025 | 215047 | 3.93 |  | 3.93 | 844788 | 2.42 | 0.65 | 0.65 | 37.41 | 37.41 |
| 2024 | 236702 | 2.86 |  | 2.86 | 677453 | 2.62 | 0.65 | 0.65 | 5.15 | 5.15 |
| 2023 | 247711 | 2.72 |  | 2.72 | 674425 | 2.53 | 0.65 | 0.65 | 17.75 | 17.75 |
| 2022 | 240633 | 2.31 |  | 2.31 | 556827 | 2.94 | 0.65 | 0.65 | (14.44) | (14.44) |
| 2021 | 262086 | 2.70 |  | 2.70 | 707472 | 2.56 | 0.65 | 0.65 | 11.11 | 11.11 |
| Goldman Sachs VIT Mid Cap Growth Fund | Goldman Sachs VIT Mid Cap Growth Fund | Goldman Sachs VIT Mid Cap Growth Fund | Goldman Sachs VIT Mid Cap Growth Fund |  |  |  |  |  |  |  |
| 2025 | 139575 | 11.98 |  | 11.98 | 1672352 | N/A | 0.65 | 0.65 | 6.68 | 6.68 |
| 2024 | 147279 | 11.23 |  | 11.23 | 1654435 | N/A | 0.65 | 0.65 | 19.47 | 19.47 |
| 2023 | 162731 | 9.40 |  | 9.40 | 1529703 | N/A | 0.65 | 0.65 | 17.65 | 17.65 |
| 2022 | 175964 | 7.99 |  | 7.99 | 1405566 | N/A | 0.65 | 0.65 | (26.76) | (26.76) |
| 2021 | 200641 | 10.91 |  | 10.91 | 2188940 | N/A | 0.65 | 0.65 | 10.76 | 10.76 |
| Goldman Sachs VIT Mid Cap Value Fund | Goldman Sachs VIT Mid Cap Value Fund | Goldman Sachs VIT Mid Cap Value Fund | Goldman Sachs VIT Mid Cap Value Fund |  |  |  |  |  |  |  |
| 2025 | 263235 | 7.91 |  | 7.91 | 2082505 | 0.95 | 0.65 | 0.65 | 8.36 | 8.36 |
| 2024 | 277028 | 7.30 |  | 7.30 | 2021396 | 0.71 | 0.65 | 0.65 | 11.45 | 11.45 |
| 2023 | 315819 | 6.55 |  | 6.55 | 2068184 | 0.72 | 0.65 | 0.65 | 10.46 | 10.46 |
| 2022 | 336967 | 5.93 |  | 5.93 | 1998996 | 0.41 | 0.65 | 0.65 | (10.83) | (10.83) |
| 2021 | 370346 | 6.65 |  | 6.65 | 2463396 | 0.21 | 0.65 | 0.65 | 29.63 | 29.63 |

---

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 6 - Financial Highlights (Continued)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **Units** | **Unit Fair<br> Values<br> Lowest ($) <br> (5)** | **Unit Fair<br> Values<br> Lowest ($) <br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Net<br> Assets ($)** | **Investment<br> Income<br> Ratios<br> (%) (1)(4)** | **Expense<br> Ratios<br> Lowest (%)<br> (2)(4)(5)** | **Expense<br> Ratios<br> Highest (%)<br> (2)(4)(5)** | **Total<br> Returns<br> Lowest (%)<br> (3)(4)(5)** | **Total<br> Returns<br> Highest (%)<br> (3)(4)(5)** |
| Goldman Sachs VIT Strategic Growth Fund | Goldman Sachs VIT Strategic Growth Fund | Goldman Sachs VIT Strategic Growth Fund | Goldman Sachs VIT Strategic Growth Fund | Goldman Sachs VIT Strategic Growth Fund |  |  |  |  |  |  |  |
| 2025 | 561721 |  | 12.25 |  | 12.25 | 6878427 | N/A | 0.65 | 0.65 | 16.89 | 16.89 |
| 2024 | 588186 |  | 10.48 |  | 10.48 | 6165394 | N/A | 0.65 | 0.65 | 31.16 | 31.16 |
| 2023 | 664465 |  | 7.99 |  | 7.99 | 5307684 | N/A | 0.65 | 0.65 | 40.67 | 40.67 |
| 2022 | 708728 |  | 5.68 |  | 5.68 | 4022703 | N/A | 0.65 | 0.65 | (33.10) | (33.10) |
| 2021 | 726995 |  | 8.49 |  | 8.49 | 6169655 | N/A | 0.65 | 0.65 | 20.77 | 20.77 |
| Goldman Sachs VIT U.S. Equity Insights Fund | Goldman Sachs VIT U.S. Equity Insights Fund | Goldman Sachs VIT U.S. Equity Insights Fund | Goldman Sachs VIT U.S. Equity Insights Fund | Goldman Sachs VIT U.S. Equity Insights Fund |  |  |  |  |  |  |  |
| 2025 | 233044 |  | 8.80 |  | 8.80 | 2050710 | 0.49 | 0.65 | 0.65 | 14.73 | 14.73 |
| 2024 | 252680 |  | 7.67 |  | 7.67 | 1937931 | 0.41 | 0.65 | 0.65 | 27.20 | 27.20 |
| 2023 | 300802 |  | 6.03 |  | 6.03 | 1814118 | 0.46 | 0.65 | 0.65 | 22.81 | 22.81 |
| 2022 | 328731 |  | 4.91 |  | 4.91 | 1614625 | 0.59 | 0.65 | 0.65 | (20.42) | (20.42) |
| 2021 | 356039 |  | 6.17 |  | 6.17 | 2197601 | 0.57 | 0.65 | 0.65 | 28.27 | 28.27 |
| Invesco V.I. Health Care Fund | Invesco V.I. Health Care Fund | Invesco V.I. Health Care Fund | Invesco V.I. Health Care Fund | Invesco V.I. Health Care Fund |  |  |  |  |  |  |  |
| 2025 | 22283 |  | 6.33 |  | 6.33 | 141107 | N/A | 0.65 | 0.65 | 14.47 | 14.47 |
| 2024 | 22819 |  | 5.53 |  | 5.53 | 126115 | N/A | 0.65 | 0.65 | 3.56 | 3.56 |
| 2023 | 27225 |  | 5.34 |  | 5.34 | 145397 | N/A | 0.65 | 0.65 | 2.30 | 2.30 |
| 2022 | 27545 |  | 5.22 |  | 5.22 | 143723 | N/A | 0.65 | 0.65 | (13.86) | (13.86) |
| 2021 | 33470 |  | 6.06 |  | 6.06 | 202777 | 0.21 | 0.65 | 0.65 | 11.60 | 11.60 |
| Janus Henderson Research Portfolio | Janus Henderson Research Portfolio | Janus Henderson Research Portfolio |  |  |  |  |  |  |  |  |  |
| 2025 | 18327 |  | 11.60 |  | 11.60 | 212644 | N/A | 0.65 | 0.65 | 17.29 | 17.29 |
| 2024 | 19402 |  | 9.89 |  | 9.89 | 191871 | N/A | 0.65 | 0.65 | 34.01 | 34.01 |
| 2023 | 19862 |  | 7.38 |  | 7.38 | 146498 | 0.06 | 0.65 | 0.65 | 41.92 | 41.92 |
| 2022 | 23859 |  | 5.20 |  | 5.20 | 124025 | N/A | 0.65 | 0.65 | (30.48) | (30.48) |
| 2021 | 28231 |  | 7.48 |  | 7.48 | 211211 | 0.02 | 0.65 | 0.65 | 19.30 | 19.30 |
| Nomura VIP International Core Equity Series (a) | Nomura VIP International Core Equity Series (a) | Nomura VIP International Core Equity Series (a) | Nomura VIP International Core Equity Series (a) |  |  |  |  |  |  |  |  |
| 2025 | 45003 |  | 12.27 |  | 12.27 | 552198 | 1.32 | 0.65 | 0.65 | 23.69 | 23.69 |
| 2024 (b) | 47100 |  | 9.92 |  | 9.92 | 467040 | 1.25 | 0.65 | 0.65 | (0.80) | (0.80) |

---

(a) Name change. See Note 1.

(b) For the period from April 26, 2024 through December 31, 2024.

**VEL II Account**

**Notes To Financial Statements**

**December 31, 2025**

**Note 6 - Financial Highlights (Continued)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31** | **At December 31** | **At December 31** | **At December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **Units** | **Unit Fair<br> Values<br> Lowest ($)<br> (5)** | **Unit Fair<br> Values<br> Highest ($)<br> (5)** | **Net<br> Assets ($)** | **Investment<br> Income<br> Ratios<br> (%) (1)(4)** | **Expense<br> Ratios<br> Lowest (%)<br> (2)(4)(5)** | **Expense<br> Ratios<br> Highest (%)<br> (2)(4)(5)** | **Total<br> Returns<br> Lowest (%)<br> (3)(4)(5)** | **Total<br> Returns<br> Highest (%)<br> (3)(4)(5)** |
| T. Rowe Price International Stock Portfolio | T. Rowe Price International Stock Portfolio | T. Rowe Price International Stock Portfolio |  |  |  |  |  |  |  |
| 2025 | 165135 | 4.44 | 4.44 | 732738 | 1.94 | 0.65 | 0.65 | 17.77 | 17.77 |
| 2024 | 171751 | 3.77 | 3.77 | 647799 | 0.94 | 0.65 | 0.65 | 2.45 | 2.45 |
| 2023 | 177898 | 3.68 | 3.68 | 654123 | 1.02 | 0.65 | 0.65 | 15.72 | 15.72 |
| 2022 | 177491 | 3.18 | 3.18 | 565112 | 0.74 | 0.65 | 0.65 | (16.54) | (16.54) |
| 2021 | 200675 | 3.81 | 3.81 | 763904 | 0.59 | 0.65 | 0.65 | 0.79 | 0.79 |

---

(1) These amounts represent the dividends, excluding
 distributions of capital gains, received by the Sub-Account from the Underlying Fund, net
 of management fees assessed by the fund manager, divided by the average net assets. These
 ratios exclude those expenses, such as mortality and expense risk fees, that result in direct
 reductions in the unit fair values. The recognition of investment income by the Sub-Account
 is affected by the timing of the declaration of dividends by the Underlying Fund in which
 the Sub-Accounts invest. Investment income ratio has not been annualized for periods less
 than one year.

(2) These ratios represent the annualized Policy
 expenses of the Separate Account, consisting primarily of mortality and expense risk fees,
 for each period indicated. The ratios include only those expenses that result in a direct
 reduction to unit fair values. See Note 3 for a list of all unit fair value charges. Charges
 made directly to Policy owner accounts through the redemption of units and expenses of the
 Underlying Fund are excluded.

(3) These amounts represent the total return
 for the periods indicated, including changes in the value of the Underlying Fund, and reflect
 deductions for all items included in the expense ratio. 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 variable
 account. The total return is calculated for the period indicated or from the effective date
 through the end of the reporting period. Total return has not been annualized for periods
 less than one year.

(4) Investment income ratios for closed or liquidated
 Sub-Accounts with periods less than one year are calculated using the average net assets
 for the period. Expense ratios for closed or liquidated Sub-Accounts with periods less than
 one year have been annualized. Total returns for closed or liquidated Sub-Accounts with periods
 less than one year are calculated using the final unit values.

(5) The highest unit fair value and total return
 correspond with the product with the lowest expense ratio. The lowest unit fair value and
 total return correspond with the product with the highest expense ratio. Because the total
 return is presented as a range of minimum to maximum values, based on the product grouping
 representing the minimum and maximum expense ratio amounts, some individual contract total
 returns are not within the ranges presented.

**FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY**

**(a wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATUTORY FINANCIAL STATEMENTS as of December 31, 2025 and 2024 and for the years ended December 31, 2025 and 2024 and Supplemental Information as of and for the Year Ended December 31, 2025**

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Index to Statutory Financial Statements**

---

| | |
|:---|:---|
| Independent Auditor's Report | 3 |
| Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus | 6 |
| Statutory Statements of Operations | 7 |
| Statutory Statements of Changes in Capital and Surplus | 8 |
| Statutory Statements of Cash Flows | 9 |
| Notes to Statutory Financial Statements | 11 |
| Supplemental Information | 67 |
| Supplemental Schedule of Selected Statutory Financial Data | 68 |
| Supplemental Schedule of Investment Risks Interrogatories | 71 |
| Summary Investment Schedule | 76 |
| Supplemental Schedule of Reinsurance Disclosures | 77 |

---

---

| | |
|:---|:---|
| ![](tm262751d2_img001.jpg) | Deloitte & Touche LLP<br>115 Federal St <br> 15<sup>th</sup> Floor<br> Boston, MA 02110<br> USA |
|  | Tel: + 1 617 437 2000 |
|  | Fax: + 1 617 437 2111 |
|  | www.deloitte.com |

---

**INDEPENDENT AUDITOR'S REPORT**

Audit Committee of Global Atlantic Financial Group LLC

**Opinions**

We have audited the statutory financial statements of First Allmerica Financial Life Insurance Company (the "Company"), which comprise the statutory statements of admitted assets, liabilities, capital and surplus as of December 31, 2025 and 2024, and the related statutory statements of operations, changes in capital and surplus, and cash flows for the years then ended, and the related notes to the statutory financial statements (collectively referred to as the "statutory financial statements").

**Unmodified Opinion on Statutory Accounting**

In our opinion, the accompanying statutory financial statements present fairly, in all material respects, the admitted assets, liabilities, and capital and surplus of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in accordance with the accounting practices prescribed or permitted by the Division of Insurance of the Commonwealth of Massachusetts described in Note 2.

**Adverse Opinion on Accounting Principles Generally Accepted in the United States of America**

In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion on Accounting Principles Generally Accepted in the United States of America section of our report, the statutory financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2025 and 2024, or the results of its operations or its cash flows for the years then ended.

**Basis for Opinions**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Statutory Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

**Basis for Adverse Opinion on Accounting Principles Generally Accepted in the United States of America**

As described in Note 2 to the statutory financial statements, the statutory financial statements are prepared by the Company using the accounting practices prescribed or permitted by the Division of Insurance of the Commonwealth of Massachusetts, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of the Division of Insurance of the Commonwealth of Massachusetts. The effects on the statutory financial statements of the variances between the statutory accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not readily determinable, are presumed to be material and pervasive.

**Emphasis of Matter**

As discussed in Note 1 to the statutory financial statements, since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Statutory Financial Statements**

Management is responsible for the preparation and fair presentation of the statutory financial statements in accordance with the accounting practices prescribed or permitted by the Division of Insurance of the Commonwealth of Massachusetts. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of statutory financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the statutory financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the statutory financial statements are issued.

**Auditor's Responsibilities for the Audit of the Statutory Financial Statements**

Our objectives are to obtain reasonable assurance about whether the statutory financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the statutory financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the statutory financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the statutory financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the statutory financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

**Report on Supplemental Schedules**

Our 2025 audit was conducted for the purpose of forming an opinion on the 2025 statutory financial statements as a whole. The supplemental schedule of selected statutory financial data, the supplemental schedule of investment risk interrogatories, the supplemental summary investment schedule, and the supplemental schedule of reinsurance disclosures as of and for the year ended December 31, 2025, are presented for purposes of additional analysis and are not a required part of the 2025 statutory financial statements. These schedules are the responsibility of the Company's management and were derived from and relate directly to the underlying accounting and other records used to prepare the statutory financial statements. Such schedules have been subjected to the auditing procedures applied in our audit of the 2025 statutory financial statements and certain additional procedures, including comparing and reconciling such schedules directly to the underlying accounting and other records used to prepare the statutory financial statements or to the statutory financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, such schedules are fairly stated in all material respects in relation to the 2025 statutory financial statements as a whole.

![](tm262751d2_img002.jpg)

March 30, 2026

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS**

**As of December 31, 2025 and 2024**

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands, except share data) | **Notes** | **2025** | **2024** |
| <u>ASSETS</u> |  |  |  |
| Bonds | 34 | $8980134 | $9029595 |
| Common stock |  | 5000 | 5000 |
| Mortgage loans | 34 | 3554502 | 3698031 |
| Other invested assets including receivables for securities | 34 | 263036 | 253491 |
| Cash and short-term investments | 34 | 345914 | 519468 |
| Policy loans | 34 | 552334 | 551782 |
| Derivatives | 34 | 1348 | 21106 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal, cash and invested assets |  | 13702268 | 14078473 |
| Investment income due and accrued |  | 137041 | 128996 |
| Deferred and uncollected premiums | 8 | 1017 | 1616 |
| Reinsurance receivable and funds withheld receivable |  | 1108097 | 742676 |
| Net deferred tax asset | 6 | 19281 | 17856 |
| Current federal and foreign income tax recoverable |  | 30314 | 55007 |
| Receivables from parent, subsidiaries, and affiliates, net |  | 50577 |  |
| Other assets | 15 | 20716 | 15665 |
| Separate account assets | 16 | 682541 | 121401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total admitted assets |  | $15751852 | $15161690 |
| <u>LIABILITIES</u> |  |  |  |
| Aggregate reserve for life policies and contracts |  | 2023631 | 1922049 |
| Deposit funds and other contract liabilities |  | 256601 | 266842 |
| Policy and contract claims |  | 15437 | 16239 |
| Dividends payable to policyholders |  | 347 | 358 |
| Reinsurance payable |  | 12463606 | 12608332 |
| General expenses and commissions payable |  | 4237 | 3454 |
| Transfers to separate accounts due or accrued |  | (2555) | (1251) |
| Payable to parent, subsidiaries, and affiliate |  |  | 1035 |
| Asset valuation reserve |  | 96867 | 63652 |
| Derivative collateral | 34 | 760 | 3340 |
| Other liabilities | 15 | 62561 | 19344 |
| Separate account liabilities | 16 | 682541 | 121401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities |  | $15604033 | $15024795 |
| <u>CAPITAL AND SURPLUS</u> |  |  |  |
| Common stock, $10 par value, 1,000,000 shares authorized, 500,001 shares issued and outstanding |  | 5000 | 5000 |
| Paid in surplus |  | 384062 | 349062 |
| Unassigned surplus (deficit) |  | (252025) | (228931) |
| Special contingency reserves |  | 2250 | 2250 |
| Admitted disallowed IMR |  | 8532 | 9514 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital and surplus |  | 147819 | 136895 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities, capital, and surplus |  | $15751852 | $15161690 |

---

*The accompanying notes are an integral part of these financial statements*

*Page* 6

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATUTORY STATEMENTS OF OPERATIONS**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands) | **Notes** | **2025** | **2024** |
| <u>REVENUE</u> |  |  |  |
| Premiums and annuity considerations |  | $213241 | $126030 |
| Considerations for supplementary contracts |  | 227 | 77 |
| Net investment income | 3 | 812822 | 812203 |
| Amortization of interest maintenance reserve | 3 | (4404) | (4368) |
| Separate Accounts net gain from operation excluding unrealized gains or (losses) |  | (52413) |  |
| Investment management and administration fees from separate accounts |  | 32110 | 31941 |
| Commissions, expense allowances and reserve adjustments on reinsurance ceded |  | 634454 | 117843 |
| Policyholder fee income |  | 28919 | 29759 |
| Other income |  | (23933) | 108128 |
| Funds withheld net investment income / (loss) |  | 33078 | 3471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue |  | 1674101 | 1225084 |
| <u>BENEFITS AND EXPENSES</u> |  |  |  |
| Benefits paid or provided for: |  |  |  |
| &nbsp;&nbsp;&nbsp;Surrender benefits |  | 108211 | 100095 |
| &nbsp;&nbsp;&nbsp;Annuity payments |  | 48696 | 53396 |
| &nbsp;&nbsp;&nbsp;Death benefits |  | 16966 | 11803 |
| &nbsp;&nbsp;&nbsp;Disability benefits |  | 56 | 62 |
| &nbsp;&nbsp;&nbsp;Interest and adjustments on deposit-type contract funds |  | 107 | (1458) |
| &nbsp;&nbsp;&nbsp;Change in policy reserves |  | 101582 | 46403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total benefits |  | 275618 | 210301 |
| Change in loading expenses | 8 | 176 | 222 |
| Commissions and expense allowances |  | 125800 | 115769 |
| General insurance expenses |  | 14214 | 16013 |
| Insurance taxes, licenses and fees |  | 3405 | 3376 |
| Expense as a result of reinsurance |  | 754123 | 900282 |
| Other expenses | 15 | 1883 | 1838 |
| Net transfers to/(from) separate accounts | 16 | 476471 | 343 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total benefits and expenses |  | 1651690 | 1248144 |
| Net (loss) / gain from operations before dividends, federal income taxes and realized capital gains/(losses) |  | 22411 | (23060) |
| Dividends to policyholders |  | 91 | 92 |
| Net (loss) / gain from operations before federal income taxes and realized capital gains/(losses) |  | 22320 | (23152) |
| Federal and foreign income tax expense (benefit) | 6 | (8875) | (54256) |
| Net (loss) / gain from operations before realized capital gains/(losses) |  | 31195 | 31104 |
| Net realized capital gains/(losses), net of tax and transfers to interest maintenance reserve | 3 | (9683) | (278) |
| Net income/(loss) |  | $21512 | $30826 |

---

*The accompanying notes are an integral part of these financial statements*

*Page* 7

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (Dollars in thousands) | Common <br> Stock | Paid in <br> Surplus | Special<br> Contingency <br> Reserve | Other | Unassigned<br> Surplus <br> (Deficit) | Total Capital <br> and Surplus |
| Balance at December 31, 2023 | $5000 | $349062 | $2250 | $— | $(220940) | $135372 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  | 30826 | 30826 |
| &nbsp;&nbsp;&nbsp;Change in net unrealized capital gains |  |  |  |  | (4523) | (4523) |
| &nbsp;&nbsp;&nbsp;Change in net unrealized foreign exchange capital gain (loss) |  |  |  |  | (346) | (346) |
| &nbsp;&nbsp;&nbsp;Change in net deferred income tax |  |  |  |  | (22115) | (22115) |
| &nbsp;&nbsp;&nbsp;Change in asset valuation reserve |  |  |  |  | (24565) | (24565) |
| &nbsp;&nbsp;&nbsp;Change in non-admitted assets |  |  |  |  | 38386 | 38386 |
| &nbsp;&nbsp;&nbsp;Change in surplus in separate accounts |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in unauthorized reinsurance |  |  |  |  | (3) | (3) |
| &nbsp;&nbsp;&nbsp;Change as a result of reinsurance |  |  |  |  | (15056) | (15056) |
| &nbsp;&nbsp;&nbsp;Other changes to capital and surplus |  |  |  | 9514 | (9514) |  |
| &nbsp;&nbsp;&nbsp;Prior year reserve correction |  |  |  |  | (1081) | (1081) |
| Balance at December 31, 2024 | 5000 | 349062 | 2250 | 9514 | (228931) | 136895 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  | 21512 | 21512 |
| &nbsp;&nbsp;&nbsp;Change in net unrealized capital gains |  |  |  |  | (13594) | (13594) |
| &nbsp;&nbsp;&nbsp;Change in net unrealized foreign exchange capital gain (loss) |  |  |  |  | (2924) | (2924) |
| &nbsp;&nbsp;&nbsp;Change in net deferred income tax |  |  |  |  | (11286) | (11286) |
| &nbsp;&nbsp;&nbsp;Change in asset valuation reserve |  |  |  |  | (33215) | (33215) |
| &nbsp;&nbsp;&nbsp;Change in non-admitted assets |  |  |  |  | 8282 | 8282 |
| &nbsp;&nbsp;&nbsp;Change in surplus in separate accounts |  |  |  |  | (1752) | (1752) |
| &nbsp;&nbsp;&nbsp;Change in unauthorized reinsurance |  |  |  |  | (1) | (1) |
| &nbsp;&nbsp;&nbsp;Change as a result of reinsurance |  |  |  |  | (13969) | (13969) |
| &nbsp;&nbsp;&nbsp;Additional paid in capital |  | 35000 |  |  |  | 35000 |
| &nbsp;&nbsp;&nbsp;Change in surplus due to ceded unrealized gains (losses) |  |  |  |  | 22871 | 22871 |
| &nbsp;&nbsp;&nbsp;Other changes to capital and surplus |  |  |  | (982) | 982 |  |
| Balance at December 31, 2025 | $5000 | $384062 | $2250 | $8532 | $(252025) | $147819 |

---

*The accompanying notes are an integral part of these financial statements*

 

*Page* 8

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATUTORY STATEMENTS OF CASH FLOWS**

**For the Years Ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **2025** | **2024** |
| CASH FROM OPERATIONS |  |  |
| Premiums and annuity considerations | $224709 | $141020 |
| Net investment income | 722029 | 732678 |
| Other (loss) / income | (209126) | 126206 |
| Claims, surrenders and other benefits | 670050 | (125637) |
| Commissions and expenses paid | (928122) | (1048219) |
| Net transfers (to)/from separate accounts | (479527) | 50 |
| Dividends to policyholders | (102) | (99) |
| Federal income taxes (paid) / recovered | 33414 | (551) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operations | 33325 | (174552) |
| <u>CASH FROM INVESTMENTS</u> |  |  |
| Proceeds from investments sold, matured or repaid |  |  |
| &nbsp;&nbsp;&nbsp;Bonds | 3259886 | 8434009 |
| &nbsp;&nbsp;&nbsp;Mortgage loans | 447841 | 252407 |
| &nbsp;&nbsp;&nbsp;Other invested assets | 86611 | 25361 |
| &nbsp;&nbsp;&nbsp;Net gains or (losses) on cash, cash equivalents, and short-term investments |  | 497 |
| &nbsp;&nbsp;&nbsp;Miscellaneous proceeds | 26471 | 95275 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investment proceeds | 3820809 | 8807549 |
| Cost of investments acquired |  |  |
| &nbsp;&nbsp;&nbsp;Bonds | (3227933) | (6460964) |
| &nbsp;&nbsp;&nbsp;Stocks |  | (1909) |
| &nbsp;&nbsp;&nbsp;Mortgage loans | (260023) | (2664383) |
| &nbsp;&nbsp;&nbsp;Other invested assets | (70212) | (204342) |
| &nbsp;&nbsp;&nbsp;Miscellaneous applications |  | (19112) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of investments acquired | (3558168) | (9350710) |
| Net change in policy loans | (321) | (13140) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) / from investments | 262320 | (556301) |
| CASH FROM FINANCING AND OTHER SOURCES |  |  |
| Net withdrawals on deposit type contracts and other liabilities | (10241) | (19480) |
| Capital and paid in surplus, less treasury stock | 15000 |  |
| Net change in fund held for reinsurers | (480850) | (577244) |
| Other cash provided / (applied) | 6892 | 5765 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) / provided from financing and other sources | (469199) | (590959) |
| Net change in cash and short-term investments | (173554) | (1321812) |
| Beginning of the year | 519468 | 1841280 |
| End of the year | $345914 | $519468 |

---

*The accompanying notes are an integral part of these financial statements*

*Page* 9

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**STATEMENTS OF CASH FLOWS - STATUTORY BASIS (Continued)**

**For the Years Ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **2025** | **2024** |
| <u>SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES</u> |  |  |
| Non cash investment transactions - bonds | $331954 | $123228 |
| Non cash investment transactions - mortgages | 34515 | 44893 |
| Non cash investment transactions - other invested assets | 28414 | 3187 |
| Paid in kind interest - bonds | 10446 | 6156 |
| Paid in kind interest - mortgages | 15348 | 6207 |
| Paid in kind interest - other invested assets | 5195 | 1400 |
| Reclass due to Principal Based Bond Definition | 36502 |  |
| <u>SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES</u> |  |  |
| Non cash capital contribution | 20000 |  |

---

*The accompanying notes are an integral part of these financial statements*

*Page* 10

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**1.** **ORGANIZATION AND NATURE OF OPERATIONS** 

First Allmerica Financial Life Insurance Company, a Massachusetts domiciled life insurance company (the Company), is a wholly owned subsidiary of Commonwealth Annuity and Life Insurance Company, a Massachusetts domiciled life insurance company (Commonwealth Annuity), which in turn is a wholly owned indirect subsidiary of The Global Atlantic Financial Group LLC, a Bermuda company (Global Atlantic, which shall mean The Global Atlantic Financial Group LLC and, unless otherwise indicated or the context otherwise requires, its applicable subsidiaries). Global Atlantic is majority owned by KKR & Co. Inc (KKR).

On February 1, 2021, KKR & Co. Inc. ("KKR") indirectly acquired a majority interest in the Company following the merger of Global Atlantic Financial Group Limited ("GAFGL") and Magnolia Merger Sub Limited, with GAFGL as the surviving entity of the merger transaction. Prior to the merger transaction, Magnolia Merger Sub Limited was a Bermuda exempted company, a direct wholly owned subsidiary of Magnolia Parent LLC (now known as The Global Atlantic Financial Group LLC or "TGAFGL") and an indirect subsidiary of KKR. Accordingly, TGAFGL is now the holding company of GAFGL and KKR is deemed the ultimate controlling person of FAFLIC

On January 2, 2024, KKR acquired all the remaining equity interests in Global Atlantic that KKR did not already own. As of January 2, 2024, KKR owns 100.0% of Global Atlantic.

The Company insures and reinsures blocks of traditional life insurance, universal life insurance, fixed annuities, group retirement products, variable annuities, variable universal life insurance, and an exited accident and health (A&H) business with external parties as well as affiliates. The results of operations may not be indicative of a stand alone entity.

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

The accompanying financial statements have been prepared in conformity with statutory accounting practices prescribed or permitted by the Division of Insurance of the Commonwealth of Massachusetts (MADOI), which differ in some respects from accounting principles generally accepted in the United States of America (GAAP). Prescribed statutory accounting practices (SAP) include publications of the National Association of Insurance Commissioners "Accounting Practices and Procedures Manual" (NAIC SAP), state laws, regulations and general administrative rules. The more significant of these differences are as follows:

● Bonds which are "available-for-sale" or "trading" are carried at fair value under GAAP, and are carried at amortized cost under NAIC SAP, except for bonds in or near default which are carried at the lower of fair value or amortized cost under NAIC SAP;

● Derivatives for which the Company employs fair value accounting are carried at fair value. However, changes in unrealized capital gains and losses are not recognized in net income, but as changes to surplus;

*Page* 11

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

● The Asset Valuation Reserve (AVR) is required under NAIC SAP to offset potential credit-related investment losses on bonds, mortgage loans, stocks, real estate, and other invested assets. The AVR is recorded as a liability with changes in the reserve accounted for as direct increases or decreases in surplus. Under GAAP, no such reserve is required;

● The Interest Maintenance Reserve (IMR) is required under NAIC SAP to defer recognition of realized gains and losses (net of applicable federal income taxes) on short and long term fixed income investments resulting from interest rate changes. The deferred gain and loss is amortized over the expected remaining life (maturity) of the investment sold. In the event that realized capital losses exceed gains on a cumulative basis, negative IMR is reclassified to Other Assets on the Statement of Admitted Assets and Liabilities and admitted to extent that it is within 10% of an adjusted surplus. Any admitted balance is presented as "admitted disallowed IMR" in the sections of Surplus and is excluded from Unassigned surplus for the purposes of establishing level of dividends which may be paid by the Company. Under GAAP, no such reserve is required;

● Policy acquisition costs, such as commissions, and other costs that are directly related to the successful efforts of acquiring new business are deferred under GAAP. Under NAIC SAP, such items are recorded as expenses when incurred;

● Benefit reserves are determined using statutorily prescribed interest, morbidity and mortality assumptions under NAIC SAP, except under certain principles-based reserve methodologies. With respect to variable annuities, VM-21 prescribes various approaches for setting assumptions related to policyholder and economic behavior that can vary by reserve component (Stochastic Reserve and Standard Projection Amount). With respect to life insurance products, valuation assumptions are prudent estimates used in determining Stochastic and Deterministic reserve components as prescribed by VM-20. In all cases the Company follows these prescribed practices. Under US GAAP, reserves and related balances are generally calculated using assumptions that are based on best estimates, which in some cases require appropriate adjustments that are required under certain FASB Accounting Standards. Effective January 1, 2023, public company reporting for long duration insurance contracts changed under the new long duration targeted improvements (LDTI) insurance accounting standard. LDTI requires the unlocking of assumptions for traditional life and limited pay contracts, requiring more frequent update to best estimates

● Under NAIC SAP, amounts recoverable from reinsurers for unpaid losses are not recorded as assets, but as offsets against the respective policyholder liabilities. Under GAAP, amounts recoverable from reinsurers for unpaid losses are recorded as assets and not offset against the respective policyholder liabilities. Reinsurance balance amounts deemed to be uncollectible are written off through a charge to operations. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings;

● Deferred income taxes, which provide for book/tax temporary differences, are charged directly to unassigned surplus under NAIC SAP, whereas under GAAP, they are included as a component of net income. Deferred tax assets are also subject to an admissibility test under NAIC SAP;

*Page* 12

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

● Under NAIC SAP, certain items are designated as "non-admitted" assets (such as furniture and equipment, prepaid expenses, bills receivable, computer system software, and agents' balance, etc.) and are excluded from assets by a direct charge to surplus. Under GAAP, such assets are carried on the balance sheet with appropriate valuation allowances;

● Under GAAP acquisition accounting, an intangible asset can be assigned a value representing the cost to duplicate, create or replace the asset, assigned a finite life, and amortized accordingly. NAIC SAP does not recognize this type of transaction but recognizes any amount paid in excess of the subsidiary's underlying statutory capital and surplus as unamortized goodwill on the parent company's books. Goodwill is then amortized into unrealized capital gains and losses, on a straight line basis for a period which the acquiring entity benefits economically, not to exceed 10 years;

● Under GAAP accounting, the Company's assets and liabilities were remeasured at fair value upon the close of the KKR acquisition. This resulted in the recognition of Value of Business Acquired (VOBA), which is generally amortized on a constant level basis using policy count over the estimated lives of the contracts, and goodwill, which is not amortized but assessed for impairment annually or more frequently if circumstances indicate impairment may have occurred, for GAAP. There was no such remeasurement of assets and liabilities for Statutory reporting. Under NAIC SAP, consideration in excess of the net book value of business acquired is recognized as a ceding commission. Ceding commission expenses are recognized in income on the date of the transaction. Ceding commission revenues are recognized as a separate surplus item on a net of tax basis and are subsequently amortized into income as earnings from the business emerge;

● Under NAIC SAP, revenues for annuity contracts and universal life policies consist of the entire premium received, and benefits incurred represent the total of death benefits paid, surrenders (net of surrender charges), and the change in policy reserves. Under GAAP, premiums received for annuity contracts and universal life that do not include significant mortality risk would not be recognized as premium revenue and benefits would represent the excess of benefits paid over the policy account value and interest credited to the account values. Charges for mortality expenses and surrenders for both types of policies would be recognized as revenue under GAAP;

● Policyowner dividends are recognized when declared under NAIC SAP rather than over the term of the related policies as required by GAAP;

● Under GAAP the Company has elected to carry the funds withheld assets at fair value while for statutory treatment the Company carries the funds withheld assets at amortized cost;

● Under NAIC SAP, cash and short-term investments in the statements of cash flows represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less;

● Investments in subsidiaries where the Company has the ability to exercise control are consolidated for GAAP reporting. Under NAIC SAP, the equity value of subsidiaries is recorded as other invested assets and investments in common stocks of affiliated entities;

*Page* 13

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

● Bond portfolios and associated liabilities comprising guaranteed separate accounts, also referred to as market value adjusted annuities, are included in separate accounts for NAIC SAP, whereas these are classified under the Company's general account under GAAP.

The effects on the financial statements of the variances between statutory and GAAP, although not readily determinable, are presumed to be material.

**Use of Estimates**

The preparation of financial statements in accordance with statutory accounting principles 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 period. Actual results could differ significantly from those estimates. Significant estimates included in the accompanying statutory basis financial statements are assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, valuation methods for infrequently traded securities and private placements, policy liabilities, accruals relating to legal and administrative proceedings and estimates to establish the reserves for future policy benefits.

**Investments**

*Bonds*

The NAIC classifies bonds into six quality categories and 20 subcategories. These categories range from 1A (the highest) to 5C (the lowest) for non-defaulted bonds, and category 6 for bonds in and near default. Bonds in default are required to be carried at the lower of amortized cost or NAIC fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Bonds and preferred stocks, excluding loan-backed and structured securities (LBASS), are stated at amortized cost using the modified scientific method, or fair value in accordance with the "Purposes and Procedures Manual (P & P Manual) of the NAIC Capital Markets and Investment Analysis Office" (CMIAO). Fair values are measured in accordance with the Statements of Statutory Accounting Principles (SSAP) No. 100 *Fair Value Measurements* (SSAP No.100). Short-term investments are highly liquid investments readily convertible to cash, with maturities of greater than 90 days and less than one year at time of purchase and are reported at amortized cost.

LBASS are stated at amortized cost or fair value in accordance with the P & P Manual of the CMIAO. Prepayment assumptions are primarily obtained from external sources or internal estimates, and are consistent with the current interest rate and economic environment. The prospective adjustment method is used on most non-agency LBASS. Fair values are based on quoted market prices. If a quoted market price is not available, fair values are estimated using independent pricing sources or internally developed pricing models, based on discounted cash flow analysis. The Company reviews securities at least quarterly for other-than-temporary impairments (OTTI) using current cash flow assumptions.

*Page* 14

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The NAIC has contracted with Blackrock for non-agency Residential Mortgage Backed Securities (RMBS) and Commercial Mortgage Backed Securities (CMBS), to provide expected loss information, which the Company must use to determine the appropriate NAIC designations for accounting, and risk-based capital (RBC) calculations.

*Mortgage Loans*

Mortgage loans on real estate are carried at unpaid principal balances, net of discounts/premiums and valuation allowances, and are secured. Specific valuation allowances are established for the excess carrying value of the mortgage loan over its estimated fair value, when it is probable that based on current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Specific valuation allowances are based on the fair value of the collateral. Fair value is determined by discounting the projected cash flows for each property to determine the current net present value.

Commercial mortgage loans (CMLs) acquired at a premium or discount are carried at amortized cost using the effective interest rate method. CMLs held by the Company are diversified by property type and geographic area throughout the United States. CMLs are considered impaired when it is probable that the Company will not collect amounts due according to the terms of the original loan agreement. The Company assesses the impairment of loans individually for all loans in the portfolio. The Company estimates the fair value of the underlying collateral using internal valuations generally based on discounted cash flow analyses.

*Financial Instruments and Derivatives*

In the normal course of business, the Company enters into transactions involving various types of financial instruments including derivatives. Derivatives are instruments that derive their value from underlying asset prices, indices, reference rates and other inputs or a combination of these factors. Derivatives may be privately negotiated contracts, which are usually referred to as over-the-counter (OTC) derivatives, or they may be listed and traded on an exchange (exchange-traded). Exchange-traded equity futures are transacted through a regulated exchange. From time to time, futures contracts are terminated. The clearinghouse guarantees the performance of both counterparties, which mitigates credit risk.

The Company primarily uses derivatives to hedge its exposure to indexed universal life insurance products with potential growth in interest linked to market indexes. OTC call options and call spreads are purchased to hedge the growth in interest credited to the customer as a direct result of increases in the related indices. Upon exercise, the Company will receive the fair value of the call options and call spreads. In accordance with SSAP No. 86, *Derivatives* (SSAP No. 86), the Company has elected to account for these derivatives using the fair value method of accounting. Under such treatment, the derivatives are marked to market, with changes in fair value recorded as unrealized investment gains or losses. Upon termination, the unrealized investment gains and losses are reclassified to realized gains and losses in earnings. The Company values the OTC options utilizing the Black-Scholes and Heston models. The Company also compares the derivative valuations to the daily counterparty marks to validate the model outputs. The parties with whom the Company enters into OTC option contracts are highly rated financial institutions. Contracts are also fully supported by collateral, which minimizes the credit risk associated with such contracts.

*Page* 15

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The Company also owns foreign currency denominated bonds that generate exposure to FX risk. The Company has hedged this risk by entering into foreign currency swaps. Under the terms of the swaps, the Company pays fixed and floating rate terms denominated in foreign currency and receives fixed USD. The Company considers these derivatives to be cash flow hedges. Under such treatment, the unrealized gains and losses on are recorded consistent with the bonds hedged.

*Policy Loans*

Policy loans are carried at unpaid principal balances.

*Other Invested Assets*

Other invested assets consist primarily of collateral loans, which are carried at amortized costs; securities which do not qualify as bonds, which are carried at the lower of fair value or amortized cost; residual tranche investments, which are carried at the lower of fair value or amortized cost; and investments in partnerships and LLCs, which are accounted for using the equity method of accounting.

*Cash and Short-Term Investments*

Cash and short-term investments include cash on hand, amounts due from banks, and highly liquid short-term investments. The Company considers all investments with an original maturity of 90 days or less as cash equivalents. Cash equivalent investments are stated at amortized cost. The Company considers all investments with an original maturity of greater than 90 days and less than one year as short-term investments. Short-term investments are stated at amortized cost.

*Investment Income*

Investment income is recognized on an accrual basis. Any investment income which is over 90 days past due is excluded from surplus. Investments in bonds that are delinquent are placed on non-accrual status, and thereafter interest income is recognized only when cash payments are received. Interest income on policy loans is recorded as earned using the contractually agreed upon interest rate and is included in accrued investment income until the policy's anniversary date at which point the interest is capitalized and added to principal.

*Capital Gains and Losses*

Realized capital gains and losses are determined on the basis of specific identification and are recorded net of related federal income taxes. The AVR is established by the Company to provide for potential losses in the event of default by issuers of certain invested assets. These amounts are determined using a formula prescribed by the NAIC and are reported as a liability. The formula for the AVR provides for a corresponding adjustment for realized gains and losses. Under a formula prescribed by the NAIC, the Company defers, to the IMR, the portion of realized gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the security.

The Company acquires IMR associated with certain assumed blocks of business through reinsurance transactions. Should realized capital losses exceed gains on a cumulative basis, the resulting negative IMR is reclassified to other assets and recorded as an admitted asset up to 10% of the Company's prior period adjusted capital and surplus.

*Page* 16

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Impairments*

The Company evaluates mortgages for impairment based on the credit quality of the borrowers ability to pay, common stocks, which are primarily affiliated companies, based on the underlying financial condition of those companies, and joint ventures, partnerships and Limited Liability Companies (LLCs) when it is probable that it will be unable to recover the carrying amount of the investment or there is evidence indicating inability of the investee to sustain earnings that would justify the carrying value of the investment.

At least quarterly, management reviews impaired securities for OTTI. The Company considers several factors when determining if a security is other-than-temporarily impaired, including but not limited to the following: its intent and ability to hold the impaired security until an anticipated recovery in value; the issuer's ability to meet current and future principal and interest obligations for bonds; the length and severity of the impairment; and, the financial condition and near term and long-term prospects for the issuer. The review process involves monitoring market events that could impact issuers' credit ratings, business climate, management changes, litigation and government actions and other similar factors. The process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Additional factors are considered when evaluating the unique features that apply to certain structured securities, including but not limited to the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority with the tranche structure of the security.

**Recognition of Premium Income and Acquisition Costs**

Life premiums are recognized as income over the premium-paying period of the related polices. Annuity considerations are recognized as income when received. Deposits on deposit-type contracts, such as funding agreements, supplemental contracts, dividend accumulations, and premium and other deposit funds, are recorded as a liability when received. Health premiums are earned ratably over the terms of the related insurance or reinsurance contracts or policies. Considerations for inforce block liabilities assumed are recognized as premium income when received. Expenses incurred in connection with acquiring new insurance business, including acquisition costs such as sales commissions, are charged to operations as incurred.

Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

**Deposit Accounting**

In accordance with SSAP No. 61R, Life, Deposit-Type and Accident and Health Reinsurance (SSAP No. 61R) and P & P Manual Appendix A-791 "Life and Health Reinsurance Contracts", deposits and returns of deposits are recorded directly to the balance sheet. Fee income and expenses are recorded as earned / incurred. The liabilities under applicable treaties are categorized as deposit liabilities rather than reserves, and any unpaid settlements are categorized as other payables or receivables rather than reinsurance payables or receivables. P & P Manual Appendix A-791 "Life and Health Reinsurance Contracts", allows for increase in surplus net of tax to be identified separately as a surplus item.

*Page* 17

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**Modified Coinsurance and Funds Withheld Reserve Adjustment**

Reinsurance premiums, commissions, expense reimbursement, claims, and claims adjustment expenses related to reinsured business are accounted for on a basis consistent with that used in accounting for the original policies issued and with the terms of the reinsurance contracts and are reported net of amounts ceded to other companies. A liability has been provided for unsecured policy reserves on reinsurance ceded to companies not authorized to assume business in the state of domicile. Changes in this liability are reported directly in unassigned surplus. Policy and contract liabilities ceded have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

In accordance with SSAP No. 61R, the cedent retains invested assets supporting the ceded reserves for modified coinsurance and funds withheld coinsurance. The counterparties settle statutory basis policyholder activity, investment activity and agreed upon fees. Significant contributors to periodic settlements are transfers from separate accounts, change in statutory reserves, mark-to-market of the derivative portfolio, other investment returns, and administration fees.

**Policy and Contract Claims**

The liability for policy and contract claims is based on actual claims submitted but not paid on the statement date and an estimate of claims that had been incurred but not been reported on the statement date.

**Insurance Reserves and Annuity and Other Fund Reserves**

*Reserving Practices*

Reserves for life insurance, annuities, and accident and health insurance are established in amounts adequate to meet the estimated future obligations of policies in force based upon accepted actuarial methods. These liabilities are computed based upon mortality, morbidity, withdrawal, and interest rate assumptions applicable to these coverages. Reserves for life insurance and annuity policies are computed using interest rates ranging from 2.5% to 6% for life insurance policies and 1.00% to 9.5% for annuity contracts. Mortality, morbidity, and withdrawal assumptions for all policies are based on industry standards and assumptions prescribed by statute. The assumptions vary by plan, age at issue, year of issue and duration.

Claim reserves are computed based on historical experience modified for expected trends in frequency and severity. Withdrawal characteristics of annuity and other fund reserves vary by contract. At December 31, 2025 and 2024, approximately 29.32% and 25.62% of the account value, respectively, of the contracts (included in both the general account and separate accounts of the Company) were not subject to discretionary withdrawal or were subject to withdrawal at book value less surrender charge greater than 5%.

Policy liabilities and accruals are based on the various estimates discussed above. Although the adequacy of these amounts cannot be assured, the Company believes that policy liabilities and accruals will be sufficient to meet future obligations of policies in force. The amount of liabilities and accruals, however, could be revised in the near term if the estimates discussed above are revised.

For individual life insurance, claim reserves are established equal to 100% of the benefit payable.

*Page* 18

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The Company's variable annuity contracts contain guaranteed minimum death benefit features. For all variable annuity contracts, including those that reduce the death benefit on a dollar-for-dollar basis, reserves are calculated in accordance with the Commissioners Annuity Reserve Valuation Method (CARVM) and VM-21 (CARVM for variable annuities). However, the adoption of VM-21 did not have an impact as these contracts are 100% ceded. For non-universal life plans and universal life accidental death and waiver of premium features, tabular interest, tabular less actual reserve released and tabular costs are calculated by formulas. For universal life, except for accidental death and waiver of premium features, tabular interest and tabular cost are equal to actual credits and charges to the policies.

Tabular interest on funds not involving life contingencies is calculated by formula.

Other increases reflect significant items for changes in adjustment from fund value to reserve for annuities and universal life insurance.

For the years ended December 31, 2025 and 2024, the Company's assumed participating policies were approximately 1.6% and 1.6%, respectively of the total life insurance in force. The method of accounting for policyholder dividends is based upon dividends credited annually to policyholders on their policy anniversary date plus the change from the prior period on one year's projected dividend liability on policies in force at the statement date. Source data is produced from the cedant's policy administration system. The amount of dividend expense incurred for the year ended December 31, 2025 and the year ended December 31, 2024 was $91 and $92, respectively. There was no additional income allocated to participating policyholders.

*Waiver of Premiums, and Gross Premiums less than Net Premiums*

The Company waives deduction of deferred fractional premiums at death and returns any portion of the final premium paid beyond the month of death. Surrender values are not promised in excess of the legally computed reserves. As of December 31, 2025 and 2024, the Company had $1,878,577 and $1,856,666, respectively of insurance in force for which the gross premiums are less than the net premiums according to the standard valuation required by the Commonwealth of Massachusetts.

*Substandard Policies*

Extra premiums are assessed for substandard lives in addition to the standard mortality charges. Mean reserves for universal life policies include (1) the standard mean reserve plus (2) the excess of the mean reserve calculated using the appropriate multiple of the 1958 or 1980 CSO Mortality Table and/or the appropriate additional mortality charge per 1,000 and 4.5%, 5.5% and 6% interest over the standard mean reserve. In no event is the total reserve less than the policy's cash surrender value.

Extra premiums are assessed for substandard lives in addition to the standard gross premium. Mean reserves for policies and riders based on table ratings include (1) the regular mean reserve for the plan and (2) the excess, if any, of the mean reserve calculated using the appropriate multiple of the 1958 or 1980 CSO Mortality Table and 4.0%, 5.0% or 5.5% interest over the standard mean reserve. In the case of flat extra premium ratings, mean reserves are equal to (1) the regular mean reserve and (2) 1/2 of the net extra premium.

*Page* 19

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**Federal Income Taxes**

Deferred federal income taxes are calculated as defined by SSAP No. 101, *Income Taxes* (SSAP No. 101). SSAP No. 101 establishes deferred tax assets and liabilities based on differences between statutory and tax bases of reporting. The deferred tax assets are then subject to an admissibility test, which can limit the amount of deferred tax assets that are recorded. The deferred federal income taxes result primarily from insurance reserves, policy acquisition expenses, and ceding commissions.

**Separate Accounts**

Separate account assets and liabilities represent segregated funds administered and invested by the Company for the benefit of certain variable annuity, variable life insurance, and pension contract holders. Assets consist principally of bonds, common stocks, mutual funds, and short-term obligations and are generally stated at fair value. The investment income gains and losses of these accounts generally accrue to the contract holders and therefore, are not included in the Company's net income. Appreciation and depreciation of the Company's interest in the separate accounts, including undistributed net investment income, is reflected as other income. The fair value of assets and liabilities held in separate accounts is based on quoted market prices. Separate account assets representing contract holder funds are measured at fair value and reported as a summary total in the Statements of Admitted Assets, Liabilities, Capital and Surplus, with an equivalent summary total reported for separate account liabilities.

The Company receives fees for assuming mortality and certain expense risks. Such fees are included in investment management and administration fees from separate accounts in the accompanying Statement of Operations. Reserves in the separate accounts for variable annuity contracts are provided in accordance with the Variable Annuity Commissioners' Annuity Reserve Valuation Method (VACARVM) under VM-21. However, the adoption of VM-21 did not have an impact as these contracts are 100% ceded.

**Transfers from Separate Accounts Due or Accrued and Accrued Expense Allowance**

The Company records a negative liability due from the separate accounts which primarily represents amounts that are held for policy account values in excess of statutory reserves, and certain other policy charges, including cost of insurance charges, administrative charges and guaranteed minimum death benefit (GMDB) charges, partially offset by associated reinsurance credits. This negative liability due from the separate accounts also includes assumed and ceded business. Amounts held in excess of the statutory reserve cannot be transferred from the separate account unless the policy is terminated or the policy account value is withdrawn.

**Closed Block**

The Company established and began operating a closed block for the benefit of participating policies, consisting of certain individual life insurance participating policies, individual deferred annuity contracts and supplementary contracts not involving life contingencies which were in force as of the Company's demutualization on October 16, 1995.

*Page* 20

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The purpose of the closed block is to benefit certain classes of policies and contracts for which the Company has a dividend scale payable. The closed block will continue to be in effect until none of the closed block policies is in force, except in the event that the Massachusetts Commissioner of Insurance consents to an earlier termination. The Company allocated to the closed block assets in an amount that is expected to produce cash flows which, together with future revenues from the closed block, are reasonably sufficient to support the closed block, including provision for payment of policy benefits, certain future expenses and taxes, and for continuation of policyholder dividend scales as payable in 1994 so long as the experience underlying such dividend scales continues. The Company expects that the factors underlying such experience will fluctuate in the future and policyholder dividend scales for the closed block will be set accordingly.

Effective December 1, 2015, the Company entered into a coinsurance agreement whereby it ceded substantially all risk in the closed block. The net retained closed block balances and activity are included in the Company's financial statements. A presentation of the entire closed block financial schedules are included in footnote 18 of the financial statements.

**Dividends to Policyholders**

Prior to demutualization, the Company issued certain life, health and annuity insurance policies that contained dividend payment provisions which enabled the policyholder to participate in the earnings of the Company. The amount of policyholders' dividends to be paid was determined annually by the Board of Directors. The aggregate amount of policyholders' dividends was related to the actual interest, mortality, morbidity, and expense experience for the year and the Company's judgment as to the appropriate level of statutory surplus to be retained. Upon demutualization, certain participating individual life policies, individual annuity, and supplemental contracts were transferred to the Closed Block. The Closed Block was funded to protect the dividend expectations of such policies and contracts. Accordingly, these policies no longer participate in the earnings and surplus of the remaining block. Prior to demutualization, the Company ceased issuance of participating policies.

**Guaranty Fund Assessments**

Guaranty fund assessments are paid to various states. The assessments are amortized against the premium tax benefit period.

**Affiliated Entities and Related Parties**

The Company recognizes entities which are under common control as affiliated entities consistent with SSAP No. 25 - *Affiliates and Other Related Parties* guidance. In addition, entities in which the company or affiliated companies own at least 10% of the voting interests are considered to be related parties even if there is no control or affiliation, and are disclosed consistent with related party disclosure guidelines in SSAP No. 25 guidance.

*Page* 21

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**Recently Adopted Accounting Standards**

In August, 2025, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 51 – Life Contracts which reflects different reversing methodologies in VM-22, Statutory Maximum Valuation Interest Rates for Income Annuities, and principle-based reserve (PBR) requirements. The Company has adopted these changes for the 2025 annual reporting period.

In March, 2025, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 1 – Accounting Policies, Risks & Uncertainties, and Other Disclosures which provided additional specifications on how modco/funds withheld assets should be captured as restricted assets and requires all restricted assets to be reported in a single table. The Company has adopted these changes for the annual 2025 reporting period.

In February, 2025, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 56 – Book Value Separate Accounts which clarify measurement method and transfer guidance for how transfers to/from the general account and separate account should be recognized. The Company has adopted these changes for the annual 2025 reporting period.

In August, 2024, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 15 - Debt and Holding Company Obligations to incorporate, with modification, the ASU 2023-06 disclosure requirements for unused commitments and lines of credit, extending the guidance to both short-term and long-term arrangements. The Company has adopted these changes for the 2025 annual reporting period.

In March, 2024, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 21R - Other Admitted Assets which provides guidance for debt securities that do not qualify as bonds under the Principles-Based Bond definition and measurement method guidance for all residual interests regardless of legal form, with a January 1, 2025 effective date. The Company has adopted accounting and presentation changes for the annual 2025 reporting period.

In August & March, 2024, the NAIC Statutory Accounting Principles Working Group adopted revisions to expand and amend guidance on New Markets Tax Credit Project within SSAP No. 93 - Low-Income Housing Tax Credit Property Investments to include all tax credit investments regardless of structure and type of state or federal tax credit program. Revisions to SSAP No. 94R - Transferable and Non-Transferable Stat Tax credits expand and amend guidance to include both purchased state and federal tax credits. The Company has adopted these changes for the annual 2024 reporting period.

In February, 2024, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 21R - Other Admitted Assets which incorporates a collateral loan disclosure that details admitted and nonadmitted collateral loans with the underlying collateral supporting the loan. The Company has adopted this disclosure change as appropriate.

In January, 2024, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 61R - Life, Deposit-Type and Accident and Health Reinsurance which provides guidance for the specific 2023 liquidation of U.S. based life reinsurer Scottish Re. The Company has adopted accounting and presentation changes to balances from this reinsurer as appropriate.

In December, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 30 – Unaffiliated Common Stock and SSAP No. 32 – Preferred Stock to address residual tranche investments which may be reported as preferred stock and common stock. Also, in September, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 48 – Joint Ventures, Partnerships, and Limited Liability Companies to address residual tranche investments which may be reported as equity method investments. These clarifications state that structures that are in-substance residual interests will be reported residual tranche investments. The Company has adopted these changes for the annual 2023 reporting period.

*Page* 22

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

In October, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 20 – Nonadmitted Assets and SSAP No. 21R – Other Admitted Assets to clarify guidance on collateral loan accounting and reporting. The adopted revisions clarify that all collateral assets must qualify as admitted invested assets if they were owned directly and provides additional details about documentation required for the collateral assets. The Company has adopted these changes for the annual 2023 reporting period, and updated policies and procedures as appropriate.

In August, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 34 – Investment Income Due and Accrued, which requires new disclosure around aggregate paid-in-kind (PIK) interest included in asset balances. The Company has included such disclosures in 2023 financial statements as appropriate.

In August, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 7 – Asset Valuation and Interest Maintenance Reserve which allows for the temporary admittance of a net negative interest maintenance reserve (IMR). Outlined in INT 23-01T, this guidance allows the admittance of negative IMR up to 10% of adjusted capital and surplus and provides additional accounting and reporting guidance. Pending any future adoptions, this interpretation will be automatically nullified on January 1, 2027. The Company has adopted these changes for the annual 2023 reporting period.

In August, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP 43R – Loan-Backed and Structured Securities which add collateralized loan obligations (CLOs) to financial modeling guidance and provide clarification that CLOs are not captured as legacy securities. This guidance aligns with changes adopted by the NAIC's Valuation of Securities Task Force in February, 2023. The Company has adopted these changes for the annual 2023 reporting period and there is no significant impact on the financial statements.

In August, 2023, the NAIC Statutory Accounting Principles Working Group adopted revisions to SSAP No. 26R – Bonds, SSAP No. 43R – Loan-Backed and Structured Securities and SSAP No. 21R – Other Admitted Assets which establishes a new principles-based definition of a bond for statutory reporting. The Company has adopted these changes for the annual 2025 reporting period. The impacts of the transition are included in the Change in Accounting Principle section below.

**Change in Accounting Principle**

In 2025, the Company reviewed and evaluated their bond portfolios as part of the Principles based Bond Definition Project. The Company reclassified certain investments that did not meet the new Principle Based Bond Definition, from bonds to other invested assets. The aggregate book adjusted carrying value after transition for all securities reclassified out of the bond category is $34,646. As a result of the reclassification, certain investments are carried at the lower of amortized cost or fair value as of January 1, 2025, whereas they had been carried at amortized cost as of December 31, 2024. The aggregate book adjusted carrying value of investments which were subject to this change in measurement basis is 4,935. The aggregate reduction in surplus due to reclassified investments which are now carried at the lower of amortized cost or fair value is $1,149. Effective January 2025, SSAP21, Other Admitted Assets was updated to reflect new accounting requirements for residual tranche investments. The Company has adopted that guidance, and has elected the allowable earned yield method for its residual tranche investments.

**Correction of Errors**

During 2024, the company discovered reporting errors for the prior year balances resulting in a $1 increase in insurance taxes, licenses, and fees. As a result, $1,079 of state income tax payable were written off. The impact of this error has been reported as an adjustment to opening surplus per SSAP No. 3, *Accounting Changes and Corrections of Errors,* paragraph 10, which states: "Correction of errors in previously issued financial statements shall be reported as adjustments to unassigned funds (surplus) in the period an error is detected." The Company does not believe these errors are significant to capital and surplus at December 31, 2024, or in prior years.

*Page* 23

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**3.** **INVESTMENTS** 

**Bonds**

*Book/Adjusted Carrying Value and Fair Values*

The book/adjusted carrying value and fair value of investment in long term bonds, short-term (excludes non-bond investments of $0) and cash equivalent bonds (excludes non-bond cash and cash equivalent investments of $308,279) are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Book / Adjusted <br> Carrying Value** | **Gross Unrealized <br> Gains** | **Gross Unrealized <br> Losses** | **Fair Value** |
| **December 31, 2025** |  |  |  |  |
| U.S. government obligations | $337255 | $— | $(81277) | $255978 |
| Other U.S. government obligations | 28324 | 397 | (1371) | 27350 |
| Non-U.S. sovereign jurisdiction securities | 26757 |  | (3234) | 23523 |
| Municipal Bonds - general obligations (direct & guaranteed) | 43107 | 383 | (3844) | 39646 |
| Municipal bonds - special revenue | 133553 | 521 | (12382) | 121692 |
| Project finance bonds issues by operating entities | 424252 | 9474 | (165) | 433561 |
| Corporate bonds | 4764369 | 57014 | (213084) | 4608299 |
| Single entity backed obligations | 19287 | 1127 | (17) | 20397 |
| SVO-identified bond exchange traded funds - fair value | 33241 |  |  | 33241 |
| Total issuer credit obligations | $5810145 | $68916 | $(315374) | $5563687 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Book / Adjusted <br> Carrying Value** | **Gross Unrealized <br> Gains** | **Gross Unrealized <br> Losses** | **Fair Value** |
| **December 31, 2025** |  |  |  |  |
| Financial asset-backed securities - self-liquidating | $2580231 | $41005 | $(8316) | $2612921 |
| Financial asset-backed securities - not self-liquidating | 93074 | 384 | (2363) | 91095 |
| Non-financial asset-backed securities | 497558 | 10191 | (5214) | 502536 |
| Total asset-backed securities | $3170863 | $51580 | $(15893) | $3206552 |

---

*Page* 24

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Book / Adjusted <br> Carrying Value** | **Gross Unrealized <br> Gains** | **Gross Unrealized <br> Losses** | **Fair Value** |
| **December 31, 2024** |  |  |  |  |
| Long term bonds: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;United States government and agencies | $789268 | $— | $(97202) | $692066 |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 281775 | 3704 | (22220) | 263259 |
| &nbsp;&nbsp;&nbsp;Foreign government | 62156 | 2877 | (3859) | 61174 |
| &nbsp;&nbsp;&nbsp;Corporate securities | 4410546 | 29562 | (272144) | 4167964 |
| &nbsp;&nbsp;&nbsp;Hybrid | 35576 | 724 | (1902) | 34398 |
| &nbsp;&nbsp;&nbsp;Parent, subsidiaries and affiliates | 1442028 | 16242 | (12038) | 1446232 |
| &nbsp;&nbsp;&nbsp;Asset-backed securities | 571981 | 4658 | (1406) | 575233 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 659497 | 15160 | (2765) | 671892 |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed securities | 776768 | 16797 | (4275) | 789290 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long term bonds | 9029595 | 89724 | (417811) | 8701508 |
| &nbsp;&nbsp;&nbsp;Short-term bonds | 18565 | 9 | (82) | 18492 |
| &nbsp;&nbsp;&nbsp;Cash equivalent bonds |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long term, short-term and cash equivalent bonds | $9048160 | $89733 | $(417893) | $8720000 |

---

At December 31, 2025 and 2024, respectively, 95.7% and 96.4% of debt securities were rated by the NAIC as investment grade (1 or 2 by the NAIC).

The book/adjusted carrying value and fair value of bonds by contractual maturity at December 31, 2025 are shown below. Actual maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties or the Company may have the right to put or sell the obligations back to the issuers. Mortgage-backed securities are included in their own distinct category.

---

| | | |
|:---|:---|:---|
|  | **Book / Adjusted <br> Carrying Value** | **Fair Value** |
| Due in one year or less | $55327 | $55584 |
| Due after one year through five years | 421583 | 429530 |
| Due after five years through ten years | 386362 | 391238 |
| Due after ten years | 4946872 | 4687335 |
| Mortgage-backed and asset-backed securities | 3170864 | 3206552 |
| Total | $8981008 | $8770239 |

---

*Page* 25

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The following tables provide information about the Company's bonds that have been continuously in an unrealized loss position.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Less than or equal to <br> Twelve Months** | **Less than or equal to <br> Twelve Months** | **Greater than <br> Twelve Months** | **Greater than <br> Twelve Months** | **Total** | **Total** |
| <br>**December 31, 2025** | **Fair<br> Value** | **Gross<br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** |
| Category |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government security obligations | $1918 | $(26) | $254060 | $(81251) | $255978 | $(81277) |
| &nbsp;&nbsp;&nbsp;Other U.S. government obligations | 5185 | (37) | 13313 | (1334) | 18498 | (1371) |
| &nbsp;&nbsp;&nbsp;Non-U.S. sovereign jurisdiction securities |  |  | 23523 | (3234) | 23523 | (3234) |
| &nbsp;&nbsp;&nbsp;Municipal bonds - general obligations (direct & guaranteed) |  |  | 29316 | (3844) | 29316 | (3844) |
| &nbsp;&nbsp;&nbsp;Municipal bonds - special revenue | 3011 | (43) | 81537 | (12339) | 84548 | (12382) |
| &nbsp;&nbsp;&nbsp;Project finance bonds issues by operating entities | 33102 | (165) |  |  | 33102 | (165) |
| &nbsp;&nbsp;&nbsp;Corporate bonds | 1747366 | (34529) | 977669 | (178555) | 2725035 | (213084) |
| &nbsp;&nbsp;&nbsp;Mandatory convertible bonds |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Single entity backed obligations |  |  | 332 | (17) | 332 | (17) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total issuer credit obligations | $1790582 | $(34800) | $1379750 | $(280574) | $3170332 | $(315374) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Less than or equal to <br> Twelve Months** | **Less than or equal to <br> Twelve Months** | **Greater than <br> Twelve Months** | **Greater than <br> Twelve Months** | **Total** | **Total** |
| <br>**December 31, 2025** | **Fair<br> Value** | **Gross<br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** |
| Category: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial asset-backed securities - self-liquidating | $426438 | $(5002) | $102949 | $(3314) | $529387 | $(8316) |
| &nbsp;&nbsp;&nbsp;Financial asset-backed securities - not self-liquidating | 16253 | (567) | 51477 | (1796) | 67730 | (2363) |
| &nbsp;&nbsp;&nbsp;Non-financial asset-backed securities | 47162 | (4696) | 9694 | (518) | 56856 | (5214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total asset-backed securities | $489853 | $(10265) | $164120 | $(5628) | $653973 | $(15893) |

---

*Page* 26

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Less than or equal to <br> Twelve Months** | **Less than or equal to <br> Twelve Months** | **Greater than <br> Twelve Months** | **Greater than <br> Twelve Months** | **Total** | **Total** |
| <br>**December 31, 2024** | **Fair<br> Value** | **Gross<br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** | **Fair<br> Value** | **Gross <br> Unrealized <br> Losses** |
| Long term bonds: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;United States government and agencies | $688388 | $(97009) | $3678 | $(192) | $692066 | $(97201) |
| &nbsp;&nbsp;&nbsp;State and political subdivision | 29839 | (623) | 136954 | (21597) | 166793 | (22220) |
| &nbsp;&nbsp;&nbsp;Foreign government | 1652 | (1) | 23259 | (3858) | 24911 | (3859) |
| &nbsp;&nbsp;&nbsp;Corporate securities | 1894350 | (68941) | 1079155 | (203201) | 2973505 | (272142) |
| &nbsp;&nbsp;&nbsp;Hybrid |  |  | 16630 | (1902) | 16630 | (1902) |
| &nbsp;&nbsp;&nbsp;Parent, subsidiaries and affiliates | 232521 | (8380) | 54032 | (3658) | 286553 | (12038) |
| &nbsp;&nbsp;&nbsp;Asset-backed securities | 121094 | (629) | 37591 | (777) | 158685 | (1406) |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 29286 | (397) | 18373 | (2368) | 47659 | (2765) |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed securities | 69681 | (894) | 36249 | (3382) | 105930 | (4276) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long term bonds | $3066811 | $(176874) | $1405921 | $(240935) | $4472732 | $(417809) |
| &nbsp;&nbsp;&nbsp;Short-term bonds | 6916 | (83) |  |  | 6916 | (83) |
| &nbsp;&nbsp;&nbsp;Cash equivalent bonds |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long term, short-term and cash equivalent bonds | $3073727 | $(176957) | $1405921 | $(240935) | $4479648 | $(417892) |

---

The Company has the intent and ability to hold all bonds in an unrealized loss position until amortized cost basis is recovered.

As of December 31, 2025 and 2024, the number of securities in an unrealized loss position for over 12 months consisted of 366 and 445, respectively.

In the course of the Company's asset management, no securities have been sold or reacquired within 30 days of the sale date to enhance the Company's yield on its investment portfolio.

*Insurer Self-Certified Securities*

The following represents securities for which the Company does not have all information required for the NAIC to provide a NAIC designation, but for which the Company is receiving timely payments of principal and interest. These securities are referred to as "5GI Securities".

The Company's 5GI securities as of December 31, 2025 and 2024, respectively, were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Number of 5GI Securities** | **Number of 5GI Securities** | **Aggregate BACV** | **Aggregate BACV** | **Aggregate Fair Value** | **Aggregate Fair Value** |
| <br>**Investment** | **Current Year** | **Prior Year** | **Current Year** | **Prior Year** | **Current Year** | **Prior Year** |
| LBASS - AC |  | 14 |  | 34558 |  | 33409 |
| Total |  | 14 |  | 34558 |  | 33409 |

---

AC – Amortized cost

BACV – Book adjusted carrying value

*Page* 27

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Subprime Mortgage Related Risk Exposure*

While the Company holds no direct investments in subprime mortgage loans, the Company has limited exposure to subprime borrowers, through direct investments in primarily investment grade securities with underlying subprime exposure. The Company's definition of subprime is predominantly based on borrower statistics from a residential pool of mortgages. Included in the statistics evaluated is the average credit score of the borrower, the loan-to-value ratio, the debt-to-income statistics, and the diversity of all these statistics across the borrower profile. As is true for all securities in the Company's portfolio, the Company reviews the entire portfolio for impairments at least quarterly. Included in that analysis are current delinquency and default statistics, as well as the current and original levels of subordination on the security.

The Company has indirect subprime exposure through the following investments:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Actual Cost** | **Book / Adjusted <br> Carrying Value <br> (excluding interest)** | **Fair Value** | **Other Than<br> Temporary <br> Impairment Losses <br> Recognized** |
| December 31, 2025 |  |  |  |  |
| Residential mortgage-backed securities | $6053 | $4719 | $5106 | $— |
| Total | $6053 | $4719 | $5106 | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Actual Cost** | **Book / Adjusted <br> Carrying Value <br> (excluding interest)** | **Fair Value** | **Other Than <br> Temporary<br> Impairment Losses <br> Recognized** |
| December 31, 2024 |  |  |  |  |
| Residential mortgage-backed securities | $7258 | $5920 | $7997 | $— |
| Total | $7258 | $5920 | $7997 | $— |

---

**Mortgage Loans**

*Maturities*

The maturity distribution for mortgages is as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **Percentage** |
| 2026 | $245012 | 6.89% |
| 2027 | 1100387 | 30.96% |
| 2028 | 23110 | 0.65% |
| 2029 | 167598 | 4.72% |
| 2030 and thereafter | 2018396 | 56.78% |
| &nbsp;&nbsp;&nbsp;Total | $3554503 | 100.00% |

---

*Page* 28

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Impairments*

The Company evaluates all of its mortgage loans for impairment. This evaluation considers the borrower's ability to pay and the value of the underlying collateral. When a loan is impaired, its impaired value is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, except that as a practical expedient, the impaired value may be based on a loan's observable market price (where available), or the fair value of the collateral if the loan is a collateral-dependent loan. An allowance is established for the difference between the loan's impaired value and its current carrying value. Additional allowance amounts established for incurred but not specifically identified impairments in the mortgage portfolio, based on analysis of market loss rate data, adjusted for specific characteristics of the Company's portfolio and changes in economic conditions. When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off against the allowance.

During 2025, the Company established a specific allowance of $425 on 2 high-risk commercial mortgage loans as a result of re-underwriting process by the KKR Real Estate Credit team. During 2024, the Company did not establish any specific allowance on high-risk commercial mortgage loans.

During 2025, the Company recognized total impairments of $510 on mortgage loans all of which was recorded as a reduction to the carrying value of loans. During 2024, the Company recognized total impairments of $0 on mortgage loans all of which was recorded as a reduction to the carrying value of loans.

*Regions and Type*

The Company diversifies its mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration.

The following tables present the Company's mortgage loans by geographic region and property type.

The mortgage loans were concentrated in the following regions:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **Percentage** | **2024** | **Percentage** |
| East North Central | $38573 | 1.09% | $46184 | 1.25% |
| East South Central | 34758 | 0.98% | 38515 | 1.04% |
| Middle Atlantic | 357315 | 10.05% | 384373 | 10.39% |
| New England | 51914 | 1.46% | 63717 | 1.72% |
| Pacific | 699695 | 19.68% | 720115 | 19.47% |
| South Atlantic | 735507 | 20.69% | 850617 | 23.00% |
| Mountain | 234249 | 6.59% | 269345 | 7.28% |
| West North Central | 13187 | 0.37% | 17445 | 0.47% |
| West South Central | 367260 | 10.33% | 379505 | 10.26% |
| Various | 1022044 | 28.76% | 928215 | 25.12% |
| &nbsp;&nbsp;&nbsp;Total | $3554502 | 100.00% | $3698031 | 100.00% |

---

*Page* 29

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The mortgage loans by type are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **Percentage** | **2024** | **Percentage** |
| Office building | $504969 | 14.21% | $412328 | 11.15% |
| Retail | 29849 | 0.84% | 23509 | 0.64% |
| Industrial | 631085 | 17.75% | 787737 | 21.31% |
| Apartment / Multifamily | 2201839 | 61.95% | 2457853 | 66.46% |
| Self storage |  | 0.00% | 8656 | 0.23% |
| Other | 186760 | 5.25% | 7948 | 0.21% |
| &nbsp;&nbsp;&nbsp;Total | $3554502 | 100.00% | $3698031 | 100.00% |

---

In 2025 the minimum and maximum rates of interest received for commercial and residential loans were 3.0% and 11.0%. The maximum percentage of any one loan to the value of the security at the time of the loan was 100.0%. There were no taxes, assessments or other amounts advances that were not included in the mortgage total.

**Derivative and Hedging Activities**

The Company utilizes various derivative instruments to hedge risk identified in the normal course of its insurance business. The Company's derivative instruments are primarily used to hedge a wide range of risks including interest rate risk, equity market risk, and foreign currency exchange rate risk. The Company limits its net exposure to equity market risk by entering into equity index futures. The Company uses cross currency swaps and currency forwards to hedge currency risk. The Company utilizes interest rate swaps to hedge exposure to interest rate risk. The Company receives collateral from its derivative counterparties to limit the risk of nonperformance by the counterparties. The Company limits the general business risk by entering into equity index futures. The total carrying values of derivative assets were $1,348 and $21,106 as of December 31, 2025 and 2024, respectively.

The Company has designated cash flow hedge interest rate swaps to hedge the interest rate risk associated with floating rate investments and fair value hedge cross currency swaps to hedge the foreign currency risk associated with foreign currency-denominated bonds. The derivatives that hedge those assets are valued in a manner consistent with the underlying hedged item, which are carried at amortized cost. The Company also enters into the derivatives that do not qualify for hedge accounting under SSAP 86, including currency forwards, cross currency swaps, and equity index future as economic hedges. These derivatives are accounted for under the fair value method of accounting, with changes in fair value recorded as unrealized investment gains or losses.

The current credit exposure of the Company's OTC derivative contracts is limited to the fair value of $(24,441) as of December 31, 2025. Credit risk is managed by entering into transactions with creditworthy counterparties and obtaining full collateral of $760 from counterparties as of December 31, 2025. In the event of the nonperformance by the counterparties, the Company has the right to the collateral pledged by counterparties. The exchange-traded derivatives are affected through a regulated exchange and positions are marked to market on a daily basis, the Company has little exposure to credit-related losses in the event of nonperformance by counterparties to such financial instruments.

*Page* 30

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The fair value of the derivative assets and liabilities by risk hedged were as follows:

**As of December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| Risk Hedged | Derivative<br> Assets | Derivative<br> Liabilities | Notional<br> Amounts |
| Equity/index | $— | $— | $4136 |
| Currency | 2596 | 20567 | 417844 |
| Interest Rates | 3542 |  | 115000 |
| Gross fair value of derivative instruments | $6138 | $20567 | $536980 |
| Offset per SSAP No. 64 | (4790) | (4790) |  |
| Net Fair value included within derivatives | $1348 | $15777 |  |

---

**As of December 31, 2024**

---

| | | | |
|:---|:---|:---|:---|
| Risk Hedged | Derivative<br> Assets | Derivative<br> Liabilities | Notional<br> Amounts |
| Equity/index | $— | $— | $594 |
| Currency | 17815 | 198 | 444123 |
| Interest Rates | 3489 |  | 115000 |
| Gross fair value of derivative instruments | $21304 | $198 | $559717 |
| Offset per SSAP No. 64 | (198) | (198) |  |
| Net Fair value included within derivatives | $21106 | $— |  |

---

*Page* 31

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The fair value of the derivative assets and liabilities by instrument were as follows:

**As of December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| Derivative Instruments | Derivative<br> Assets | Derivative<br> Liabilities | Notional<br> Amounts |
| Equity index options | $— | $— | $— |
| Currency Swaps / Forwards | 2597 | 20567 | 417844 |
| Interest Rate Swaps | 3542 |  | 115000 |
| Futures |  |  | 4136 |
| Gross fair value of derivative instruments | $6139 | $20567 | $536980 |
| Offset per SSAP No. 64 | (4790) | (4790) |  |
| Net Fair value included within derivatives | $1349 | $15777 |  |

---

**As of December 31, 2024**

---

| | | | |
|:---|:---|:---|:---|
| Derivative Instruments | Derivative<br> Assets | Derivative<br> Liabilities | Notional<br> Amounts |
| Equity index options | $— | $— | $— |
| Currency Swaps / Forwards | 17815 | 198 | 444123 |
| Interest Rate Swaps | 3489 |  | 115000 |
| Futures |  |  | 594 |
| Gross fair value of derivative instruments | $21304 | $198 | $559717 |
| Offset per SSAP No. 64 | (198) | (198) |  |
| Net Fair value included within derivatives | $21106 | $— |  |

---

The derivative gains and losses by investment were as follows:

**As of December 31, 2025**

---

| | | |
|:---|:---|:---|
| Derivative Instruments | Amount of<br> Realized Gain /<br> (Loss) on <br> Derivatives | Amount of<br> Unrealized Gain / <br> (Loss) on <br> Derivatives |
| Equity index options | $— | $— |
| Currency Swaps / Forwards | (5195) | 35812 |
| Interest Rate Swaps | (627) | (53) |
| Futures | (764) | (21) |
| Total gains (losses) | $(6586) | $35738 |

---

*Page* 32

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**As of December 31, 2024**

---

| | | |
|:---|:---|:---|
| Derivative Instruments | Amount of<br> Realized Gain / <br> (Loss) on <br> Derivatives | Amount of<br> Unrealized Gain / <br> (Loss) on <br> Derivatives |
| Equity index options | $— | $— |
| Currency Swaps / Forwards | 2220 | 17272 |
| Interest Rate Swaps | (3694) | 3489 |
| Futures | 119 | (33) |
| Total gains (losses) | $(1355) | $20728 |

---

The Company's off balance sheet credit risk is the risk of nonperformance by OTC counterparties. The Company limits this risk by utilizing and managing collateral according to a Credit Support Annex agreement (CSA). The company negotiates the CSA agreement with each highly rated counterparty prior to trading. Collateral is managed to CSA standards by the Company's derivative custodian.

As of December 31, 2025, the Company had collateral cash on deposit with its custodian with a fair value of $760.

**Other Investments**

*Other Invested Assets*

Other invested assets on the Company's Statements of Admitted Assets, Liabilities, Capital and Surplus consist of interests in partnerships, term notes and loans and receivable for bonds and other securities. The carrying value of these investments for the years ended December 31, were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Collateral loans | $96082 | $133747 |
| Partnerships | 5445 | 6379 |
| Receivable for bonds and stocks | 7613 | 2171 |
| Investments - bonds (non-qualifying) | 40735 |  |
| Other | 85 |  |
| Residual tranches | 113076 | 111194 |
| Total | $263036 | $253491 |

---

*Page* 33

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

***Collateral Loans***

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2025** | **2025** |
| <br>**Collateral Type** | **Aggregate<br> Collateral Loan** | **Admitted** | **Nonadmitted** |
| Mortgage loans - unaffiliated | $81126 | $81126 | $— |
| Joint ventures, partnerships, and LLCs - unaffiliated | 14956 | 14956 |  |
| Total | $96082 | $96082 | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2024** | **2024** | **2024** |
| <br>**Collateral Type** | **Aggregate<br> Collateral Loan** | **Admitted** | **Nonadmitted** |
| Mortgage loans - unaffiliated | $104644 | $104644 | $— |
| Joint ventures, partnerships, and LLCs - unaffiliated | 29103 | 29103 |  |
| Total | $133747 | $133747 | $— |

---

*Cash and Short-Term Investments*

Cash and short-term investments held at December 31, were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Cash and cash equivalents | $345040 | $493073 |
| Short-term investments | 874 | 26395 |
| Total | $345914 | $519468 |

---

*Restricted Assets*

The Company has securities on deposit with various state and governmental authorities. The statement value of these securities as of December 31, 2025 and 2024 was $12,043 and $12,134, respectively. Additionally, the statement value as of December 31, 2025 of assets held under modco reinsurance agreements and assets held under funds withheld reinsurance agreements were $9,774,645 and $1,373,227, respectively.

**Proceeds, Net Investment Income and Capital Gains and Losses**

Proceeds from the sale of bonds and related capital gains and losses were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Proceeds | $2529161 | $8035869 |
| Gross realized gains | 22189 | 163104 |
| Gross realized losses | (62336) | (14114) |
| Total net realized gains/(losses) | $(40147) | $148990 |

---

*Page* 34

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Major categories of net investment income are summarized below:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Bonds | $527406 | $575146 |
| Stocks | 276 | 236 |
| Policy loans | 30289 | 32455 |
| Cash equivalents and short-term investments | 15853 | 46028 |
| Mortgage loans | 250496 | 186622 |
| Derivatives | 1914 | 603 |
| Other invested assets | 32409 | 15878 |
| Miscellaneous income | 1418 | 765 |
| Gross investments income | 860061 | 857733 |
| Less investment expenses | 47239 | 45530 |
| Net investment income before IMR amortization | 812822 | 812203 |
| IMR amortization | (4404) | (4368) |
| Net investment income after IMR amortization | $808418 | $807835 |

---

There were no amounts excluded from investment income for bonds where collection of interest was uncertain at December 31, 2025 and 2024.

The Company did not have any due and accrued amounts over 90 days past due to exclude from surplus at December 31, 2025 and 2024, respectively.

The cumulative amounts of paid-in-kind (PIK) interest included in the current principal balance is $45,239 as of December 31, 2025.

Realized gains and losses, net of amounts transferred to the IMR and federal income tax, are as follows:

*Page* 35

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Realized gains (losses) |  |  |
| Bonds | $(40943) | $144111 |
| Derivatives | 4725 | 1994 |
| Mortgages | 1148 | (1330) |
| Other invested assets | (5931) |  |
| Miscellaneous realized gain/loss | 1480 |  |
| Cash, cash equivalents and short-term investments |  | 497 |
| Total realized gains (losses) on investments | (39521) | 145272 |
| Less amount transferred to IMR (net of related taxes of $7,972 in 2025 and ($30534) in 2024) | (29991) | 114865 |
| Total realized gains (losses) on investments | (9529) | 30407 |
| Federal income tax expense (benefit) | 154 | 30685 |
| Net realized gains (losses) | $(9683) | $(278) |

---

The change in unrealized gains and losses on investments recorded in unassigned surplus is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended<br> December 31, <br> 2024** |
|  | **Unrealized <br> Capital Gain <br> (Loss)** | **Foreign <br> Exchange <br> Unrealized <br> Capital Gain <br> (Loss)** | **Unrealized <br> Capital Gain <br> (Loss)** |
| Bonds | $655 | $8914 | $(707) |
| Stocks |  |  |  |
| Derivative instruments | 21 | (35812) | (33) |
| Mortgages | (425) | 24015 |  |
| Other invested assets | (16189) | (41) | (1840) |
| &nbsp;&nbsp;&nbsp;Total change in unrealized gains (losses) | (15938) | (2924) | (2580) |
| Capital gains tax expense (benefit) | (2344) |  | 1943 |
| &nbsp;&nbsp;&nbsp;Change in unrealized gains (losses), net of taxes | $(13594) | $(2924) | $(4523) |

---

*Page* 36

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The Company employs a systematic methodology to evaluate declines in fair values below amortized cost for all investments. The Company evaluates the ability and intent to hold the investment to maturity, the issuer's overall financial condition, the issuer's credit and financial strength ratings, the issuer's financial performance including earnings trends, dividend payments, and asset quality, weakening of the general market conditions in the industry or geographic region in which the issuer operates, the length of time in which the fair value of an issuer's securities remains below cost, and, with respect to fixed maturity investments, any factors that might raise doubt about the issuer's ability to pay all amounts due according to the contractual terms. The Company applies these factors to all securities, as necessary.

The Company recognized $981 and $66 losses for OTTI charges on invested assets at December 31, 2025 and 2024.

There were no loan backed securities with a recognized OTTI held by the Company at December 31, 2025 and 2024, with the present value of cash flows expected to be less than amortized cost.

The following is the aggregate amount of unrealized losses and related fair value of impaired loan-backed securities (the fair value is less than cost or amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss as of December 31, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Less than 12 Months** | **Less than 12 Months** | **12 Months or More** | **12 Months or More** | **Total** | **Total** |
|  | **Fair Value** | **Unrealized <br> Losses** | **Fair Value** | **Unrealized <br> Losses** | **Fair Value** | **Unrealized <br> Losses** |
| Loan-backed and structured securities | $657552 | $(10083) | $157437 | $(6198) | $814988 | $(16280) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Less than 12 Months** | **Less than 12 Months** | **12 Months or More** | **12 Months or More** | **Total** | **Total** |
|  |<br>**Fair Value** | **Unrealized**<br>**Losses** |<br>**Fair Value** | **Unrealized**<br>**Losses** |<br>**Fair Value** | **Unrealized**<br>**Losses** |
| Loan-backed and structured securities | $708048 | $(12532) | $98317 | $(7006) | $806365 | $(19538) |

---

*Page* 37

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**4.** **FAIR VALUE OF FINANCIAL INSTRUMENTS** 

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). The fair value hierarchy under SSAP No. 100 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are described below:

**Basis of Fair Value Measurement**

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities

---

| | |
|:---|:---|
| Level 2 | Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly. |
| Level 3 | Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |

---

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

**Summary of Fair Value Methodologies**

The following methods and assumptions were used by the Company in estimating fair value for financial instruments:

*Bonds, preferred stock and common stock -* Fair values are based on quoted market prices. If quoted market prices are not available, fair values are estimated using independent pricing sources or internally developed pricing models using discounted cash flow analyses, which utilize current interest rates for similar financial instruments having comparable terms and credit. Bonds rated a 6 in accordance with the P&P Manual of the NAIC CMIAO are carried at the lower of amortized cost or fair value.

*Cash, cash equivalents, and short-term investments -* For these investments, the carrying amounts reported in the Statements of Admitted Assets, Liabilities, Capital and Surplus approximate fair value.

*Mortgage loans -* The fair value of mortgage loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

*Derivatives -* The Company values the OTC options utilizing the Black-Scholes models implemented in the SunGard derivative system with index marks updated daily. The Company's OTC equity options trade in liquid markets, resulting in calculations that do not involve significant management judgment and valuations that generally can be verified. The Company also compares the derivative valuations to the daily counterparty marks to validate the model outputs. Such instruments are typically classified within Level 2 of the fair value hierarchy maturities.

*Policy loans -* The estimated fair value for policy loans with variable interest rates approximates the carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. The estimated fair value for policy loans with fixed interest rates is based on discounted cash flows.

*Policy and contract liabilities -* Fair values of the Company's liabilities under contracts not involving significant mortality or morbidity risks (principally, annuities and supplementary contracts) are stated at the cost the Company would incur to extinguish the liability (i.e., the cash surrender value).

*Page* 38

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

 

*Separate accounts -* The estimated fair value of assets held in separate accounts is based on quoted market prices. Separate account assets representing contract holder funds are measured at fair value and reported as a summary total in the Statements of Admitted Assets, Liabilities, Capital and Surplus, with an equivalent summary total reported for related liabilities. Based on the level of observable activity, these assets will be measured at either level 1 or level 2.

*Financial Instruments Held at Fair Value*

As of December 31, 2025, the Company's assets carried at fair value consist of bonds, derivative instruments and separate account funds on a recurring basis. The following table presents, by level within the fair value hierarchy, financial assets and liabilities held at fair value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **December 31, 2025** |  |  |  |  |
| Financial Assets |  |  |  |  |
| Derivatives | $— | $653 | $— | $653 |
| Separate account assets | 682541 |  |  | 682541 |
| Total assets at fair value | $682541 | $653 | $— | $683194 |
| Financial Liabilities |  |  |  |  |
| Derivatives liabilities |  | 18556 |  | 18556 |
| Total liabilities at fair value | $— | $— | $— | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **December 31, 2024** |  |  |  |  |
| Financial Assets |  |  |  |  |
| Derivatives | $— | $21106 | $— | $21106 |
| Separate account assets | 121401 |  |  | 121401 |
| Total assets at fair value | $121401 | $21106 | $— | $142507 |
| Financial Liabilities |  |  |  |  |
| Derivatives liabilities |  |  |  |  |
| Total liabilities at fair value | $— | $— | $— | $— |

---

*Transfers Into or Out of Level 3*

Overall, transfers into and/or out of level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred into level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Transfers into and/or out of any level are assumed to occur at the beginning of the period.

The Company did not hold any Level 3 financial assets or liabilities carried at fair value, nor were there any transfers into or out of Level 3 for the year ended December 31, 2025.

*Page* 39

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

 

*Fair Value of All Financial Instruments*

The aggregate fair value of the Company's financial instruments and the level within the fair value hierarchy in which the fair value measurements fall, together with the related admitted values, are presented in the following tables. Pursuant to SSAP No. 100R, insurance contracts have been excluded.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Aggregate <br> Fair Value | Admitted <br> Assets | Level 1 | Level 2 | Level 3 | Not <br> Practicable <br> (carrying value) |
| **December 31, 2025** |  |  |  |  |  |  |
| Financial Assets |  |  |  |  |  |  |
| Bonds | $8769366 | $8980134 | $33241 | $6694060 | $2042065 | $— |
| Common stock | 5000 | 5000 |  |  | 5000 |  |
| Separate account assets | 682541 | 682541 | 682541 |  |  |  |
| Short-term investments | 872 | 874 |  | 872 |  |  |
| Cash and cash equivalents | 345040 | 345040 | 345040 |  |  |  |
| Mortgage loans | 3568040 | 3554502 |  |  | 3568040 |  |
| Derivatives | (5012) | 1348 |  | (5012) |  |  |
| Other invested assets | 275870 | 257755 | 7613 | 1453 | 266804 | 5281 \* |
| Policy loans | 552334 | 552334 |  |  | 552334 |  |
| Financial Liabilities |  |  |  |  |  |  |
| Derivative liabilities | 19428 | 15777 |  | 19428 |  |  |
| Other contract deposit funds | 16938 | 16938 |  |  | 16938 |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Aggregate <br> Fair Value | Admitted <br> Assets | Level 1 | Level 2 | Level 3 | Not <br> Practicable <br> (carrying value) |
| **December 31, 2024** |  |  |  |  |  |  |
| Financial Assets |  |  |  |  |  |  |
| Bonds | $8701508 | $9029595 | $— | $6843110 | $1858398 | $— |
| Common stock | 5000 | 5000 |  |  | 5000 |  |
| Separate account assets | 121401 | 121401 | 121401 |  |  |  |
| Short-term investments | 26322 | 26395 |  | 18492 | 7830 |  |
| Cash and cash equivalents | 493072 | 493072 | 493072 |  |  |  |
| Mortgage loans | 3706923 | 3698031 |  |  | 3706923 |  |
| Derivatives | 21106 | 21106 |  | 21106 |  |  |
| Other invested assets | 281994 | 247112 | 2171 |  | 279823 | 6415 \* |
| Policy loans | 551782 | 551782 |  |  | 551782 |  |
| Financial Liabilities |  |  |  |  |  |  |
| Derivative liabilities |  |  |  |  |  |  |
| Other contract deposit funds | 19372 | 19372 |  |  | 19372 |  |

---

\* Not practicable as there are no available quoted market prices for these assets.

*Page* 40

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Financial Instruments Held at Carrying Value*

The following is the estimated fair values of financial instruments held at carrying value:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Carrying**<br> **Value** | **Fair**<br> **Value** | **Carrying**<br> **Value** | **Fair**<br> **Value** |
| **Financial Assets** |  |  |  |  |
| Short-term investments | $874 | $872 | $26395 | $26322 |
| Common stock | 5000 | 5000 | 5000 | 5000 |
| Bonds | 8980134 | 8769366 | 9029595 | 8701509 |
| Mortgage loans | 3554502 | 3568040 | 3698031 | 3706923 |
| Other invested assets | 257755 | 275870 | 247111 | 281994 |
| Policy loans | 552334 | 552334 | 551782 | 551782 |
| Cash and equivalents | 345040 | 345040 | 493072 | 493072 |
| Total | $13695639 | $13516522 | $14050986 | $13766602 |
| **Financial Liabilities** |  |  |  |  |
| Premium deposit funds | $238951 | $272349 | $246741 | $278020 |
| Other deposit funds | 17650 | 17650 | 20101 | 20101 |
| Total | $256601 | $289999 | $266842 | $298121 |

---

**5.** **FEDERAL HOME LOAN BANK** 

The Company is a member of the Federal Home Loan Bank (FHLB) Boston. Through its membership, the Company has the ability to conduct business activity (borrowings with the FHLB). It is part of the Company's strategy to utilize these funds as a key source of liquidity and to promote liability- driven duration management. The Company has determined the actual/estimated maximum borrowing capacity as $1,260,148. The Company calculated this amount in accordance with current and potential acquisitions of FHLB capital stock.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| FHLB stock purchased/owned as part of the agreement | $5000 | $5000 |
| Funding capacity currently available | 1260148 | 1214000 |
| Agreement assets and liabilities |  |  |
| General account assets | 5000 | 5000 |
| General account liabilities |  |  |

---

*Page* 41

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**6.** **FEDERAL INCOME TAXES** 

*Components of Net Deferred Tax Asset/ (Liability)*

The components of the net deferred tax asset /liability at December 31, 2025 and 2024 and the change is comprised of the following components:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Ordinary** | **Capital** | **Total** |
| Gross deferred tax assets | $151903 | $17484 | $169387 |
| Statutory valuation allowance adjustments |  |  |  |
| Adjusted gross deferred tax assets | 151903 | 17484 | 169387 |
| Deferred tax assets nonadmitted | 100543 |  | 100543 |
| Subtotal net admitted deferred tax asset | 51360 | 17484 | 68844 |
| Gross deferred tax liabilities | 39490 | 10073 | 49563 |
| Net admitted deferred tax asset / (liability) | $11870 | $7411 | $19281 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Ordinary** | **Capital** | **Total** |
| Gross deferred tax assets | $156173 | $7559 | $163732 |
| Statutory valuation allowance adjustments |  |  |  |
| Adjusted gross deferred tax assets | 156173 | 7559 | 163732 |
| Deferred tax assets nonadmitted | 105619 | 5291 | 110910 |
| Subtotal net admitted deferred tax asset | 50554 | 2268 | 52822 |
| Gross deferred tax liabilities | 34966 |  | 34966 |
| Net admitted deferred tax asset / (liability) | $15588 | $2268 | $17856 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change** | **Change** | **Change** |
|  | **Ordinary** | **Capital** | **Total** |
| Gross deferred tax assets | $(4270) | $9925 | $5655 |
| Statutory valuation allowance adjustments |  |  |  |
| Adjusted gross deferred tax assets | (4270) | 9925 | 5655 |
| Deferred tax assets nonadmitted | (5076) | (5291) | (10367) |
| Subtotal net admitted deferred tax asset | 806 | 15216 | 16022 |
| Gross deferred tax liabilities | 4524 | 10073 | 14597 |
| Net admitted deferred tax asset / (liability) | $(3718) | $5143 | $1425 |

---

The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences are deductible and prior to the expiration of capital loss, net operating loss and tax credit carry-forwards. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry-back and carry-forward periods), projected taxable income, and tax planning strategies in making this assessment. Management believes it is more likely than not that all deferred tax assets will be realized based on projected taxable income and available tax planning strategies. There were no tax planning strategies used related to reinsurance.

*Page* 42

 

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Components of Admission Calculation*

The admission calculation components under SSAP No. 101 are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Ordinary** | **Capital** | **Total** |
| Federal income taxes paid in prior years recoverable through loss carrybacks | $— | $— | $— |
| Adjusted gross deferred tax assets expected to be realized (Excluding threshold limitation) | 11870 | 7411 | 19281 |
| Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 42279 | 7411 | 49690 |
| Adjusted gross deferred tax assets allowed per limitation |  |  | 19281 |
| Adjusted gross deferred tax assets (excluding the amount of deferred taxes from above) offset by gross liabilities | 39490 | 10073 | 49563 |
| Deferred tax assets admitted as the result of application of SSAP No. 101 | $51360 | $17484 | $68844 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Ordinary** | **Capital** | **Total** |
| Federal income taxes paid in prior years recoverable through loss carrybacks | $— | $— | $— |
| Adjusted gross deferred tax assets expected to be realized (Excluding threshold limitation) | 15589 | 2267 | 17856 |
| Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 32990 | 2267 | 35257 |
| Adjusted gross deferred tax assets allowed per limitation |  |  | 17856 |
| Adjusted gross deferred tax assets (excluding the amount of deferred taxes from above) offset by gross liabilities | 34965 |  | 34965 |
| Deferred tax assets admitted as the result of application of SSAP No. 101 | $50554 | $2267 | $52821 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change** | **Change** | **Change** |
|  | **Ordinary** | **Capital** | **Total** |
| Federal income taxes paid in prior years recoverable through loss carrybacks | $— | $— | $— |
| Adjusted gross deferred tax assets expected to be realized (Excluding threshold limitation) | (3719) | 5144 | 1425 |
| Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 9289 | 5144 | 14433 |
| Adjusted gross deferred tax assets allowed per limitation |  |  | 1425 |
| Adjusted gross deferred tax assets (excluding the amount of deferred taxes from above) offset by gross liabilities | 4525 | 10073 | 14598 |
| Deferred tax assets admitted as the result of application of SSAP No. 101 | $806 | $15217 | $16023 |

---

*Other Admissibility Criteria*

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Ratio percentage used to determine recovery period | 916.80% | 829.55% |
| Ratio percentage used to determine recovery period and threshold limitation amount | $244726 | $200593 |

---

*Page* 43

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Impact of tax planning strategies*

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Ordinary** | **Capital** | **Total** |
| Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage |  |  |  |
| Adjusted Gross DTAs | $151903 | $17484 | $169387 |
| Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies. | (4.9)% | 42.4% | 0% |
| Net Admitted Adjusted Gross DTAs | 51360 | 17484 | 68844 |
| Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies | (14.4)% | 42.4% | 0% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Ordinary** | **Capital** | **Total** |
| Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage |  |  |  |
| Adjusted Gross DTAs | $156173 | $7559 | $163732 |
| Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies. | 0.2% | 30% | 1.5% |
| Net Admitted Adjusted Gross DTAs | 50554 | 2268 | 52822 |
| Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies | 0.5% | 100% | 4.8% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change** | **Change** | **Change** |
|  | **Ordinary** | **Capital** | **Total** |
| Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage |  |  |  |
| Adjusted Gross DTAs | $(4270) | $9925 | $5655 |
| Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies. | (5.1)% | 12.4% | (1.5)% |
| Net Admitted Adjusted Gross DTAs | 806 | 15216 | 16022 |
| Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies | (14.9)% | (57.6)% | (4.8)% |

---

There are no temporary differences for which deferred tax liabilities are not recognized.

*Current Tax Expense and Change in Deferred Tax*

Current income taxes incurred consist of the following categories:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Federal income tax expense (benefit) on operations | $(8875) | $(54256) |
| Federal income tax (benefit) on net capital gains | 154 | 30685 |
| Current year income tax expense/(benefit) | $(8721) | $(23571) |

---

*Page* 44

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The main components of the deferred tax amounts from book/tax differences are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **Change** |
| Deferred tax assets |  |  |  |
| Policyholder reserves | $30508 | $28091 | $2417 |
| Deferred acquisition costs | 102073 | 112616 | (10543) |
| Policyholders dividends accrual | 1540 | 1668 | (128) |
| Receivables - nonadmitted | 394 | 486 | (92) |
| Ceding Commission | 11573 | 12760 | (1187) |
| Investments | 5530 |  | 5530 |
| Other | 285 | 552 | (267) |
| Total gross ordinary deferred tax assets | $151903 | $156173 | $(4270) |
| Nonadmitted | 100543 | 105619 | (5076) |
| Admitted ordinary deferred tax assets | $51360 | $50554 | $806 |
| Capital |  |  |  |
| Investments | 540 | 7559 | (7019) |
| Net capital loss carry-forward | 16944 |  | 16944 |
| Total gross capital deferred tax assets | 17484 | 7559 | 9925 |
| Nonadmitted |  | 5291 | (5291) |
| Admitted capital deferred tax assets | $17484 | $2268 | $15216 |
| Admitted deferred tax asset | $68844 | $52822 | $16022 |
| Deferred tax liabilities |  |  |  |
| Investments | $37519 | $31559 | $5960 |
| Deferred and uncollected premium | 215 | 357 | (142) |
| Policyholder reserves |  | 1294 | (1294) |
| Other |  |  |  |
| Acquired reserve basis | 1756 | 1756 |  |
|  | $39490 | $34966 | $4524 |
| Capital | $— | $— | $— |
| Investments | 10073 |  | 10073 |
|  | $10073 | $— | $10073 |
| Deferred tax liabilities | $49563 | $34966 | $14597 |
| Net deferred tax assets | $19281 | $17856 | $1425 |

---

*Page* 45

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The change in deferred income taxes reported in surplus before consideration of non-admitted assets is comprised of the following components:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | |
|  | Ordinary | Capital | Total | Ordinary | Capital | Total |<br>Change |
| Total deferred tax assets (admitted and non-admitted) | $151903 | $17484 | $169387 | $156173 | $7559 | $163732 | $5655 |
| Total deferred tax liabilities | 39490 | 10073 | 49563 | 34966 |  | 34966 | 14597 |
| Net deferred tax assets/ (liabilities) | $112413 | $7411 | $119824 | $121207 | $7559 | $128766 | $(8942) |
| Tax effect of unrealized (gains) / losses |  |  |  |  |  |  | (2344) |
| Tax effect of balance sheet only adjustments |  |  |  |  |  |  |  |
| Change in net deferred income tax |  |  |  |  |  |  | $(11286) |

---

*Page* 46

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

*Reconciliation of Federal Income Tax Rate to Actual Rate*

The significant items causing a difference between the statutory federal income tax rate and the Company's effective income tax rate are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amount** | **Tax Effect** | **Effective Rate** |
| Provision computed at statutory rate | $12789 | $2686 | 21.00% |
| IMR | (1543) | (324) | (2.53)% |
| Ceding commission | (13971) | (2934) | (22.94)% |
| Return to provision true up (permanent) | (7081) | (1487) | (11.63)% |
| Tax Credits | (1190) | (250) | (1.95)% |
| Tax on non-admitted assets | 438 | 92 | 0.72% |
| DREs | 15100 | 3171 | 24.79% |
| Nontaxable income | (143) | (30) | (0.23)% |
| Deferred validation |  |  | —% |
| Subpart F inclusion |  | 4048 | 31.65% |
| Other permanent adjustments | (11467) | (2408) | (18.83)% |
| Total | $(7068) | $2564 | 20.05% |
| Federal income taxes incurred |  | (8875) | (69.39)% |
| Realized capital gains (losses) tax |  | 153 | 1.20% |
| Change in net deferred income taxes |  | 11286 | 88.24% |
| Total statutory income tax expense / (benefit) |  | $2564 | 20.05% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amount** | **Tax Effect** | **Effective Rate** |
| Provision computed at statutory rate | $7256 | $1524 | 21.00% |
| IMR | 11233 | 2359 | 32.51% |
| Ceding commission | (15057) | (3162) | (43.58)% |
| Return to provision true up (permanent) | 38 | 8 | 0.11% |
| Tax Credits | (1314) | (276) | (3.80)% |
| Tax on non-admitted assets | 3171 | 666 | 9.18% |
| DREs | (14733) | (3094) | (42.64)% |
| Nontaxable Income | (4052) | (851) | (11.73)% |
| Deferred Validation |  |  | —% |
| Subpart F inclusion | 7043 | 1479 | 20.38% |
| Other Permanent Adjustments | (519) | (109) | (1.50)% |
| Total | $(6934) | $(1456) | (20.07)% |
| Federal income taxes incurred |  | (54256) | (747.74)% |
| Realized capital gains (losses) tax |  | 30685 | 422.89% |
| Change in net deferred income taxes |  | 22115 | 304.78% |
| Total statutory income tax expense / (benefit) |  | $(1456) | (20.07)% |

---

*Page* 47

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

At December 31, 2025, the Company has $0 in net operating loss carry-forwards, $0 in foreign tax credit carry-forwards and has $81M of capital loss carry-forwards.

As a result of the Tax Cuts and Jobs Act ("TCJA"), the Company can no longer carry back future net operating losses (capital losses are still eligible for carry back); therefore, there are no available taxes for recoupment.

The Company will file in a consolidated life/non-life federal income tax return with its parent, Global Atlantic Limited (Delaware), and its affiliates for the period ending December 31, 2025. The Company is a party to a written agreement, approved by the Company's Board of Directors, which sets forth the manner in which the total combined federal income tax is allocated to each entity within the consolidated group.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits as a component of its income tax provision. As of December 31, 2025 and 2024, the Company has no amounts accrued for the payment of interest and penalties, which does not include the federal tax benefit of interest deductions, where applicable. The Company had no unrecognized tax benefits as of December 31, 2025 and 2024.

The IRS routinely audits the Company's federal income tax returns, and when appropriate, provisions are made in the financial statements in anticipation of the results of these audits. The Company believes that its income tax filing positions and deductions will be sustained on audit, and does not anticipate any adjustments that will result in a material, adverse effect on the Company's financial condition, results of operations, or cash flow. Therefore, no reasonable estimate can be made for tax loss contingencies and none has been recorded.

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2020. The Company has no tax positions for which it believes it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

In June 2007, the Financial Accounting Standard Board (FASB) issued FASB interpretation (FIN) No. 48, *According for Uncertainty in Income Taxes* (FIN No. 48). The NAIC is still evaluating the applicability of FIN No. 48 to Statutory Financial Reporting. The Company continues to recognize tax benefits and related reserves in accordance with SSAP No. 5R, *Liabilities, Contingencies and Impairments of Assets* (SSAP No. 5R). The Company believes that its income tax filing positions and deductions will be sustained in audit, and does not anticipate any adjustments that will results in a material, adverse effect on the Company's financial condition, results of operations, or cash flow. Therefore, no contingent tax liabilities have been recorded pursuant to SSAP No. 5R as modified by SSAP No. 101.

On August 16, 2022, the Inflation Reduction Act (the "IRA") was signed into law. The IRA enacted a new 15% corporate minimum tax ("CAMT") on the "adjusted financial statement income" of certain large corporations, which became effective on January 1, 2023. As required under the authoritative guidance of ASC 740, Income Taxes, we reviewed the impact on income taxes due to the change in legislation and concluded there was no material impact to the financial statements for the years ended December 31, 2025 and 2024.

*Page* 48

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law. We have evaluated the impact on income taxes due to the change in legislation and concluded there was no material impact to the financial statements for the year ended December 31, 2025.

**7.** **REINSURANCE** 

The Company seeks to diversify risk and limit its overall financial exposure by reinsuring certain levels of risk through acquisition and cessions with other insurance companies or reinsurers. In addition, consistent with the overall business strategy, the Company assumes certain policy risks written by other insurance companies on a coinsurance basis. Under a coinsurance arrangement, depending upon the terms of the contract, the reinsurer may share in the risk of loss due to mortality or morbidity, lapses, and the investment risk, if any, inherent in the underlying policy. Modified coinsurance and funds withheld coinsurance differ from coinsurance in that the ceding company retains the assets supporting the reserves while the risk is transferred to the reinsurer.

The Company cedes on a coinsurance basis 100% of a block of variable annuity and life insurance business to Commonwealth Annuity. At December 31, 2025 and 2024, the Company ceded $25,293 and $27,549, respectively, in reserves pursuant to the aforementioned agreement.

Effective April 1, 2025, the Company entered into a reinsurance agreement with an affiliated party on a modified coinsurance basis where the company ceded $513,916 of separate account reserves as of December 31, 2025.

Reinsurance assumed for the years ended December 31, is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Coinsurance reserves | $16380532 | $16930128 |
| Modco reserves assumed | 14000672 | 13547318 |

---

Reinsurance ceded for the years ended December 31, is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Deduction from insurance liabilities including reinsurance recoverable on unpaid claims | $15644427 | $16121973 |
| Reinsurance recoverable on paid losses | 14278 | 18706 |
| Modco reserves ceded | 13627496 | 12701867 |

---

*Page* 49

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The effects of reinsurance premiums for the years ended December 31, were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Life and accident and health insurance |  |  |
| Direct | $524022 | $39350 |
| Reinsurance assumed - non - affiliated | 363461 | 260321 |
| Reinsurance assumed - affiliated |  |  |
| Less: Reinsurance ceded - non - affiliated | (244574) | (260797) |
| Less: Reinsurance ceded - affiliated | (429668) | 87156 |
| &nbsp;&nbsp;&nbsp;Net premiums | $213241 | $126030 |

---

As of December 31, 2025 and 2024 our net reserves pertaining to affiliate activity was ($14,795,783) and ($15,228,821), respectively. As of December 31, 2025 and 2024 our net modco reserves pertaining to affiliate activity was ($6,414,643) and ($5,725,100) respectively.

In the normal course of business, the Company seeks to reduce the loss that may arise from events that cause unfavorable underwriting results by ceding certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers.

Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company; consequently, allowances are established for amounts deemed uncollectible. The Company determines the appropriate amount of reinsurance based on evaluation of the risks accepted and analyses prepared by consultants and reinsurers and on market conditions (including the availability and pricing of reinsurance). The Company also believes that the terms of its reinsurance contracts are consistent with industry practice in that they contain standard terms with respect to lines of business covered, limit and retention, arbitration and occurrence. Based on the Company's review of its reinsurers' financial statements and reputations in the reinsurance marketplace, the Company believes that its reinsurers are financially sound. There was no allowance for uncollectible amounts at December 31, 2025 and 2024.

**8.** **PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED** 

Deferred and uncollected life insurance premiums represent annual or fractional premiums, either due and uncollected or not yet due, where policy reserves have been provided on the assumption that the full life insurance premium for the current policy year has been collected. Gross premiums as represented below are net of reinsurance. Loading is the amount added to premiums to cover operating expenses. Net deferred and uncollected premiums represent only the portion of gross premiums related to mortality charges and interest. As of December 31, 2025 and 2024, the Company had deferred and uncollected life insurance premiums (excluding accident and health) as follows:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** | **2024** |
|  | **Gross** | **Loading** | **Net** | **Non-<br> Admitted** | **Net <br> Admitted** | **Gross** | **Loading** | **Net** | **Non-<br> Admitted** | **Net <br> Admitted** |
| Traditional life | $953 | $75 | $1028 | $(11) | $1017 | $1448 | $251 | $1699 | $(83) | $1616 |
| Total | $953 | $75 | $1028 | $(11) | $1017 | $1448 | $251 | $1699 | $(83) | $1616 |

---

*Page* 50

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**9.** **ANNUITY RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS** 

As December 31, 2025, the Company's annuity reserves, supplementary contract reserves and deposit liabilities that are subject to discretionary withdrawal (without adjustment) and not subject to discretionary withdrawal provisions are summarized as follows:

Individual Annuities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **General <br> Account** | **Separate Account<br> With Guarantee** | **Separate Account <br> Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $623513 | $— | $— | $623513 | 11.9% |
| At book value less surrender charge of 5% or more | 22283 |  |  | 22283 | 0.4% |
| At fair value |  |  | 19063 | 19063 | 0.4% |
| Total with adjustment or at market value | 645796 |  | 19063 | 664859 | 12.7% |
| At book value without adjustment (minimal or no charge or adjustment) | 3348064 |  |  | 3348064 | 63.8% |
| Not subject to discretionary withdrawal | 1238449 |  | 415 | 1238864 | 23.5% |
| Total (gross) | 5232309 |  | 19478 | 5251787 | 100.0% |
| Less: reinsurance ceded | 4101259 |  |  | 4101259 |  |
| Total (net) | $1131050 | $— | $19478 | $1150528 |  |

---

Group Annuities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **General <br> Account** | **Separate Account <br> With Guarantee** | **Separate Account <br> Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $— | $120 | $— | $120 | —% |
| At book value less surrender charge of 5% or more | 15758 |  |  | 15758 | 0.4% |
| At fair value |  |  | 43296 | 43296 | 1.2% |
| Total with adjustment or at market value | 15758 | 120 | 43296 | 59174 | 1.6% |
| At book value without adjustment (minimal or no charge or adjustment) | 2277303 |  |  | 2277303 | 63.0% |
| Not subject to discretionary withdrawal | 736765 |  | 541708 | 1278473 | 35.4% |
| Total (gross) | 3029826 | 120 | 585004 | 3614950 | 100.0% |
| Less: reinsurance ceded | 2746274 |  |  | 2746274 |  |
| Total (net) | $283552 | $120 | $585004 | $868676 |  |

---

*Page* 51

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Total Deposit-type Contracts:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **General <br> Account** | **Separate Account <br> With Guarantee** | **Separate Account <br> Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $— | $— | $— | $— | —% |
| At book value less surrender charge of 5% or more |  |  |  |  | —% |
| At fair value |  |  | 4080 | 4080 | 0.8% |
| Total with adjustment or at market value |  |  | 4080 | 4080 | 0.8% |
| At book value without adjustment (minimal or no charge or adjustment) | 308210 |  |  | 308210 | 61.0% |
| Not subject to discretionary withdrawal | 192866 |  | 64 | 192930 | 38.2% |
| Total (gross) | 501076 |  | 4144 | 505220 | 100.0% |
| Less: reinsurance ceded | 244476 |  |  | 244476 |  |
| Total (net) | $256600 | $— | $4144 | $260744 |  |

---

Reconciliation of total annuity actuarial reserves and deposit fund liabilities amounts:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **General<br> Account** | **Separate <br> Account** | **Total** |
| Life, accident & health, and supplemental contracts with life contingencies | $1671202 | $— | $1671202 |
| Separate Accounts |  | 608745 | 608745 |
| Total annuity actuarial reserves and deposit liabilities | $1671202 | $608745 | $2279947 |

---

*Page* 52

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

As of December 31, 2025, the Company's life reserves, that are subject to discretionary withdrawal (without adjustment) and not subject to discretionary withdrawal provisions are summarized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **General Account** | **General Account** | **General Account** | **Separate Account-Guaranteed and <br> Nonguaranteed** | **Separate Account-Guaranteed and <br> Nonguaranteed** | **Separate Account-Guaranteed and <br> Nonguaranteed** |
|  | **Account <br> Value** | **Cash Value** | **Reserve** | **Account <br> Value** | **Cash Value** | **Reserve** |
| Subject to discretionary withdrawal, surrender values, or policy loans: |  |  |  |  |  |  |
| Term Policies with Cash Value | $— | $53600 | $62573 | $— | $— | $— |
| Universal Life | 1104388 | 1110481 | 1172508 |  |  |  |
| Universal Life with Secondary Guarantees | 967325 | 947545 | 4571797 |  |  |  |
| Indexed Universal Life with | 98816 | 97990 | 85887 |  |  |  |
| Indexed Universal Life with Secondary Guarantees | 296836 | 294493 | 915811 |  |  |  |
| Other permanent cash value life insurance |  | 337154 | 354921 |  |  |  |
| Variable Universal Life | 593649 | 593591 | 464488 | 56134 | 56134 | 53217 |
| Not subject to discretionary withdrawal or no cash value: |  |  |  |  |  |  |
| Term Policies without Cash Value |  |  | 54076 |  |  |  |
| Accidental Death Benefits |  |  | 313 |  |  |  |
| Disability-Active Lives |  |  | 1789 |  |  |  |
| Disability-Disabled Lives |  |  | 3351 |  |  |  |
| Miscellaneous Reserves |  |  | 1193441 |  |  | 3137 |
| Total (gross) | 3061014 | 3434854 | 8880955 | 56134 | 56134 | 56354 |
| Less: reinsurance ceded | 2726608 | 3145855 | 8285183 |  |  |  |
| Total (net) | $334406 | $288999 | $595772 | $56134 | $56134 | $56354 |

---

Reconciliation of total life & accident & health reserves

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **General<br> Account** | **Separate <br> Account<br> without <br> Guarantees** | **Total** |
| Life insurance reserves | $560959 | $53217 | $614176 |
| Accidental death benefit reserves | 282 |  | 282 |
| Disability-active lives reserves | 138 |  | 138 |
| Disability-disabled lives reserves | 239 |  | 239 |
| Miscellaneous reserves | 34154 | 3137 | 37291 |
| Total life and accident & health reserves | $595772 | $56354 | $652126 |

---

*Page* 53

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

As December 31, 2024, the Company's annuity reserves, supplementary contract reserves and deposit liabilities that are subject to discretionary withdrawal (without adjustment) and not subject to discretionary withdrawal provisions are summarized as follows:

Individual Annuities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **General <br> Account** | **Separate Account**<br> **With Guarantee** | **Separate Account**<br> **Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $446694 | $— | $— | $446694 | 8.0% |
| At book value less surrender charge of 5% or more | 35678 |  |  | 35678 | 0.6% |
| At fair value |  |  | 20264 | 20264 | 0.4% |
| Total with adjustment or at market value | 482372 |  | 20264 | 502636 | 9.0% |
| At book value without adjustment (minimal or no charge or adjustment) | 3726560 |  |  | 3726560 | 66.6% |
| Not subject to discretionary withdrawal | 1363561 |  | 347 | 1363908 | 24.4% |
| Total (gross) | 5572493 |  | 20611 | 5593104 | 100.0% |
| Less: reinsurance ceded | 4567639 |  |  | 4567639 |  |
| Total (net) | $1004854 | $— | $20611 | $1025465 |  |

---

Group Annuities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **General <br> Account** | **Separate Account <br> With Guarantee** | **Separate Account <br> Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $— | $116 | $— | $116 | —% |
| At book value less surrender charge of 5% or more | 1799 |  |  | 1799 | 0.1% |
| At fair value |  |  | 43361 | 43361 | 1.3% |
| Total with adjustment or at market value | 1799 | 116 | 43361 | 45276 | 1.4% |
| At book value without adjustment (minimal or no charge or adjustment) | 2506540 |  |  | 2506540 | 75.0% |
| Not subject to discretionary withdrawal | 788949 |  | 706 | 789655 | 23.6% |
| Total (gross) | 3297288 | 116 | 44067 | 3341471 | 100.0% |
| Less: reinsurance ceded | 2987207 |  |  | 2987207 |  |
| Total (net) | $310081 | $116 | $44067 | $354264 |  |

---

*Page* 54

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Total Deposit-type Contracts:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **General <br> Account** | **Separate Account <br> With Guarantee** | **Separate Account <br> Without Guarantee** | **Total** | **% of Total** |
| Subject to discretionary withdrawal |  |  |  |  |  |
| With market value adjustment | $— | $— | $— | $— | —% |
| At book value less surrender charge of 5% or more |  |  |  |  | —% |
| At fair value |  |  | 3262 | 3262 | 0.6% |
| Total with adjustment or at market value |  |  | 3262 | 3262 | 0.6% |
| At book value without adjustment (minimal or no charge or adjustment) | 316054 |  |  | 316054 | 56.3% |
| Not subject to discretionary withdrawal | 241816 |  |  | 241816 | 43.1% |
| Total (gross) | 557870 |  | 3262 | 561132 | 100.0% |
| Less: reinsurance ceded | 291028 |  |  | 291028 |  |
| Total (net) | $266842 | $— | $3262 | $270104 |  |

---

Reconciliation of total annuity actuarial reserves and deposit fund liabilities amounts:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **General <br> Account** | **Separate <br> Account**<br> **With Guarantee** | **Total** |
| Life, accident & health, and supplemental contracts with life contingencies | $1581777 | $— | $1581777 |
| Separate Accounts |  | 68056 | 68056 |
| Total annuity actuarial reserves and deposit liabilities | $1581777 | $68056 | $1649833 |

---

*Page* 55

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

As December 31, 2024, the Company's life reserves, that are subject to discretionary withdrawal (without adjustment) and not subject to discretionary withdrawal provisions are summarized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **General Account** | **General Account** | **General Account** | **Separate Account-Guaranteed and<br> Nonguaranteed** | **Separate Account-Guaranteed and<br> Nonguaranteed** | **Separate Account-Guaranteed and<br> Nonguaranteed** |
|  | **Account<br> Value** | **Cash Value** | **Reserve** | **Account<br> Value** | **Cash Value** | **Reserve** |
| Subject to discretionary withdrawal, surrender values, or policy loans: |  |  |  |  |  |  |
| Term Policies with Cash Value | $— | $56597 | $68132 | $— | $— | $— |
| Universal Life | 1165494 | 1171767 | 1261768 |  |  |  |
| Universal Life with Secondary Guarantees | 1006110 | 971590 | 4456918 |  |  |  |
| Indexed Universal Life with | 101971 | 100722 | 88244 |  |  |  |
| Indexed Universal Life with Secondary Guarantees | 298532 | 294299 | 889981 |  |  |  |
| Other permanent cash value life insurance |  | 353190 | 369373 |  |  |  |
| Variable Universal Life | 594154 | 593996 | 448793 | 52086 | 52086 | 49279 |
| Not subject to discretionary withdrawal or no cash value: |  |  |  |  |  |  |
| Term Policies without Cash Value |  |  | 65346 |  |  |  |
| Accidental Death Benefits |  |  | 335 |  |  |  |
| Disability-Active Lives |  |  | 2085 |  |  |  |
| Disability-Disabled Lives |  |  | 3840 |  |  |  |
| Miscellaneous Reserves |  |  | 681181 |  |  | 2998 |
| Total (gross) | 3166261 | 3542161 | 8335996 | 52086 | 52086 | 52277 |
| Less: reinsurance ceded | 2805770 | 3226620 | 7751230 |  |  |  |
| Total (net) | $360491 | $315541 | $584766 | $52086 | $52086 | $52277 |

---

Reconciliation of total life & accident & health reserves

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **General <br> Account** | **Separate <br> Account <br> without <br> Guarantees** | **Total** |
| Life insurance reserves | $557163 | $49279 | $606442 |
| Accidental death benefit reserves | 300 |  | 300 |
| Disability-active lives reserves | 161 |  | 161 |
| Disability-disabled lives reserves | 264 |  | 264 |
| Miscellaneous reserves | 26878 | 2998 | 29876 |
| Total life and accident & health reserves | $584766 | $52277 | $637043 |

---

*Page* 56

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**10.** **ACCIDENT AND HEALTH POLICY AND CLAIMS LIABILITIES** 

On January 2, 2009, The Hanover Insurance Group, Inc. (THG) sold all the outstanding shares of capital stock of the Company to Commonwealth Annuity pursuant to a Stock Purchase Agreement entered into on July 30, 2008. Additionally, coincident with the sale transaction, the Company and the Hanover Insurance Company (HIC) entered into a reinsurance contract whereby HIC assumed the Company's accident and health insurance business through a 100% coinsurance agreement. The Company did not have any policy and claims liabilities related to its accident and health business net of reinsurance at both December 31, 2025 and 2024.

The Company regularly updates its estimates of policy and claims liabilities as new information becomes available and further events occur which may impact the resolution of unsettled claims for its accident and health line of business. Changes in prior estimates are generally reflected in results of operations in the year such changes are determined to be needed.

**11.** **CAPITAL AND SURPLUS AND DIVIDEND RESTRICTIONS** 

Massachusetts has enacted laws governing the payment of dividends and other distributions to stockholders by insurers. These laws affect the dividend paying ability of the Company. Pursuant to Massachusetts statutes, the maximum amount of dividends and other distributions that an insurer may pay in any twelve-month period, without prior approval of the MA DOI, is limited to the greater of the Company's statutory net gains from operations of the preceding December 31 or 10% of the statutory policyholder's surplus as of the preceding December 31. Dividends must be paid from unassigned funds. The maximum ordinary dividend the Company can pay in 2026 is $31,195.

On February 17, 2026, which was approved by the Massachusetts Department of Insurance to be a Type 1 subsequent event reflected on the December 31, 2025 balance sheet, the Company received a $20,000 capital contribution from Commonwealth Annuity.

On June 24, 2025, the Company received a $15,000 cash contribution from Commonwealth Annuity.

The Company's unassigned surplus was impacted by each item below as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Unrealized gains (losses) | $(9320) | $(4274) |
| Non-admitted asset values | (126740) | (135022) |
| Asset valuation reserves | (96867) | (63652) |

---

The Company must meet minimum capital and surplus requirements under a RBC formula. RBC is the standard measurement of an insurance company's required capital on a statutory basis. It is calculated by using a formula that applies factors to various assets, premium, and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and business risk. Regulatory action is tied to the amount of a company's capital position in relation to required capital as calculated under the RBC formula. Total adjusted capital for life insurance companies is defined as statutory capital and surplus, plus asset valuation reserve plus subsidiary asset valuation reserves, plus 50% of dividends apportioned for payment, plus 50% of subsidiary dividends apportioned for payment, and was $244,726 at December 31, 2025.

*Page* 57

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**12.** **RELATED PARTY TRANSACTIONS** 

*Service Agreements*

The Company entered into a Services and Expense Agreement with GAFG under which GAFG and affiliates agreed to provide personnel, management services, administrative support, the use of facilities and such other services as the parties may agree to from time to time. The agreement was filed with the MA DOI. The Company recognized $14,113 and $15,502 in intercompany charges for 2025 and 2024, respectively.

On February 1, 2021, the Company entered into an investment management agreement with Kohlberg Kravis Roberts & Co. L.P., a Delaware limited partnership and KKR subsidiary. The Company incurred expenses for this agreement of $40,683 and $35,906 for the years ended December 31, 2025 and 2024, respectively.

The Company has funds withheld agreements with related parties. Net amounts due from affiliates related to funds withheld agreements were $4,149 and $1,145 for the years ended December 31, 2025 and 2024, respectively. Net amounts due to affiliates related to funds withheld agreements were $41,071 and $31,913 for the years ended December 31, 2025 and 2024, respectively. All intercompany balances related to funds withheld agreements are settled in the subsequent quarter.

The Company has agreements with affiliated parties to receive and pay certain fee income and expenses related to policyholder administration. Net income related to these agreements was $29,017 and $25,306 for the years ended December 31, 2025 and 2024, respectively, and net amounts receivable were $10,474 and $8,586 at December 31, 2025 and 2024, respectively.

*Payable to/Receivable from Affiliates*

The Company reported a net receivable to parent, subsidiaries and affiliates of $50,577 and $0 as of December 31, 2025 and 2024, respectively. All intercompany balances shown as receivable to or from parent, subsidiaries and affiliates are settled within 30 days of their incurrence under the terms of the intercompany expense sharing agreements.

The Company reported a net payable to related parties of $0 and $1,035 for the years ended December 31, 2025 and 2024 respectively. All intercompany balances shown as payable to or from parent, subsidiaries and affiliates are settled within 30 days of their incurrence under the terms of the intercompany expense sharing agreements.

*Page* 58

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The Company and certain subsidiaries and affiliates are part of an intercompany borrowing arrangement whereby companies may borrow from one another on a short-term basis for various purposes.

*Affiliated Investments*

In 2022, the NAIC clarified that certain investments which are originated, sponsored or managed by affiliated entities shall be reported as affiliated investments even if the underlying assets are unrelated third party investments with no credit exposure to affiliates. The Company holds investments of this type, which are included in invested assets balances as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Bonds | $1503688 | $1442028 |
| Mortgages | 1139853 | 978946 |
| Common stocks |  |  |
| Other invested assets | 157011 | 116837 |
|  | $2800552 | $2537811 |

---

**13.** **COMMITMENTS AND CONTINGENCIES** 

*Litigation*

The Company is involved from time to time in judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of its business.

Given the inherent difficulty of predicting the outcome of the Company's litigation and regulatory matters, particularly in cases or proceedings in which substantial or indeterminate damages or fines are sought, the Company cannot estimate losses, or ranges of losses, for cases or proceedings where there is only a reasonable possibility that a loss may be incurred.

In connection with the process of converting over 500,000 in-force life insurance policies (representing policies for both the Company and Accordia) from systems managed by Athene Holdings Limited to the platform of one of our third party service providers DXC (the Conversion), the Company and Accordia expect to incur a variety of litigation-related costs. On June 28, 2018 a subsidiary of Athene and FAFLIC entered into a consent order with the New York State Department of Financial Services, or "NYSDFS," relating to the NYSDFS' market conduct examination findings that related primarily to disruptions in servicing caused by the Conversion. Pursuant to the consent order, Athene paid the NYSDFS a fine of $15,000 and will also take corrective actions and provide remediation to policyholders impacted by the Conversion. The agreements between the Company, Commonwealth Annuity and Athene provide indemnities to Athene, including for fines and penalties resulting from violations of law. Commonwealth Annuity has reimbursed Athene an amount equal to the NYSDFS fine in July, 2018. As of December 31, 2023 the Company no longer holds reserves for costs related to certain aspects of the corrective actions agreed under the consent order.

*Page* 59

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

In connection with a cybersecurity incident on May 29, 2023, related to services provided to several companies by Pension Benefits Information LLC, and its use of MOVEit software ("PBI/MOVEit Incident"), The Global Atlantic Financial Group LLC or some of its affiliates have received a total of five putative class action complaints alleging failure to properly secure and safeguard customers' sensitive information. Four cases originated in United States District Court for the Southern District of New York: Clancy, Michael v. The Global Atlantic Financial Group LLC (1:23-cv-07975) filed September 8, 2023, Guzman, Marcelina v. The Global Atlantic Financial Group LLC (1:23-cv-08150) filed September 14, 2023, and Hendrix, Eudoice v. Global Atlantic Financial Company, Accordia Life and Annuity Company, Commonwealth Annuity and Life Insurance Company, First Allmerica Financial Life Insurance Company and Forethought Life Insurance Company (1:23-cv-08058) filed September 12, 2023, and Bernstein, Michael v. The Global Atlantic Financial Group LLC (1:23-cv-9868) filed in New York state court September 15, 2023. A fifth case was filed in the United States District Court for the Southern District of Indiana, but subsequently was voluntarily dismissed: Hansa v. Forethought Life Insurance Company, Global Atlantic Insurance Network LLC, and The Global Atlantic Financial Group LLC (1:23-cv-01549) filed August 28, 2023. The Company itself is currently a party only in the Hendrix case. A judicial panel consolidated certain PBI/MOVEit Incident-related litigation in an MDL and transferred the cases to the District of Massachusetts, before Judge Allison Burroughs. This order applies to all matters against The Global Atlantic Financial Group LLC and its affiliates.

However, the Company believes that at the present time there are no pending or threatened lawsuits that are reasonably likely to have a material adverse effect on its financial position or results of operations.

*Assessments*

Unfavorable economic conditions may contribute to an increase in the number of insurance companies that are under regulatory supervision. This may result in an increase in mandatory assessments by state guaranty funds, or voluntary payments by solvent insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Mandatory assessments, which are subject to statutory limits, can be partially recovered through a reduction in future premium taxes in some states. The Company is not able to reasonably estimate the potential impact of any such future assessments or voluntary payments.

*Commitments*

The Company has an operational servicing agreement with a third party administrator for contract / policy administration of the Company's traditional life business. Additionally, there is a professional services agreement to manage certain aspects of the Company's reinsurance portfolio. As of December 31, 2025 the purchase commitments related to the agreement with the third party administrator were as follows:

---

| | |
|:---|:---|
| 2026 | $940 |
| 2027 | 187 |
| 2028 | 103 |
| 2029 | 70 |
| 2030 |  |
| 2031 and thereafter |  |
| &nbsp;&nbsp;&nbsp;Total | $1300 |

---

The Company invests in certain joint ventures, limited liability companies (LLCs) and partnerships, and in some cases makes a commitment for additional investment up to a maximum invested amount.

*Page* 60

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

The Company has funding commitments subsequent to December 31, 2025 for the following:

---

| | |
|:---|:---|
| Commercial Mortgage Loans and Other Lending Facilities | $257286 |
| Limited Partnerships and LLC's | 4489 |
| Collateral Loans |  |

---

**14.** **SUBSEQUENT EVENTS** 

The Company has evaluated subsequent events from December 31, 2025 through March 30, 2026, the date that these financial statements were available to be issued, and determined that there is:

Type - I Recognized Subsequent Events: On February 17, 2026, the Company received a capital contribution of $20,000 from Commonwealth which was approved by the Massachusetts Department of Insurance to be a Type 1 subsequent event reflected on the December 31 balance sheet.

Type - II Non-recognized Subsequent Events: No Type II subsequent events to report.

**15.** **COMPOSITION OF OTHER ASSETS, LIABILITIES AND EXPENSES** 

Other assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Miscellaneous receivables | $7503 | $5915 |
| Admitted disallowed IMR | 8532 | 9514 |
| Unfunded commit accounts receivable | 4627 | 187 |
| Guaranty funds receivable or on deposit | 54 | 49 |
| &nbsp;&nbsp;&nbsp;Total other assets | $20716 | $15665 |

---

The percentage of total net negative (disallowed) IMR admitted in General Account or recognized in Separate Account to adjusted capital and surplus is 10%.

Other liabilities consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Remittances and items not allocated | $35548 | $17182 |
| Payable for securities | 7430 |  |
| Miscellaneous liabilities | 1020 | 581 |
| Tax liabilities | 1831 | 631 |
| Policyholder liabilities | 955 | 950 |
| Derivatives | 15777 |  |
| &nbsp;&nbsp;&nbsp;Total other liabilities | $62561 | $19344 |

---

*Page* 61

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Other expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Captive financing fee | 1883 | 1838 |
| &nbsp;&nbsp;&nbsp;Total other expenses | $1883 | $1838 |

---

**16. SEPARATE ACCOUNTS**

The Company utilizes separate accounts to record and account for assets and liabilities for variable annuity and variable life transactions. In accordance with the products/transactions recorded within the separate account, assets are considered legally insulated. The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.

The Company's separate account statement includes legally insulated assets of $682,541 and $121,401 as of December 31, 2025 and 2024, respectively. The assets legally insulated from the general account as of December 31, 2025 are attributed to the following products/transactions:

---

| | | |
|:---|:---|:---|
| Product/Transaction | Legally Insulated Assets | (Not Legally Insulated) |
| Variable annuities | $626203 | $— |
| Variable life insurance products | 56338 |  |
| Total | $682541 | $— |

---

Separate accounts assets held by the Company generally relate to variable annuities or life insurance of a non-guaranteed return nature. The net investment return of the separate account is credited directly to the policyholder and can be positive or negative. The variable annuities generally provide a minimum guaranteed death benefit, the nature of which has varied over time. In 1996, the company began offering a minimum guaranteed death benefit which is adjusted annually to the current account value. The maximum amount associated with death benefit guarantees for 2025 was $1,523 with associated risk charges paid by the separate account to compensate for these risks of $0.

The maximum amount associated with death benefit guarantees for 2024 was $1,534 with associated risk charges paid by the separate account to compensate for these risks of $0.

The maximum amount associated with death benefit guarantees for 2023 was $2,451 with associated risk charges paid by the separate account to compensate for these risks of $0.

The maximum amount associated with death benefit guarantees for 2021 was $10,140 with associated risk charges paid by the separate account to compensate for these risks of $0.

The maximum amount associated with death benefit guarantees for 2021 was $2,365 with associated risk charges paid by the separate account to compensate for these risks of $1

*Page* 62

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Information regarding the Separate Accounts of the Company as of December 31, 2025 is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2025** | **Indexed** | **Non-Indexed <br> Guarantee<br> Less than / <br> equal to 4%** | **Non-Indexed <br> Guarantee<br> More than<br> 4%** | **Non-<br> Guaranteed <br> Separate <br> Accounts** | **Total** |
| Premiums, considerations or deposits | $— | $488400 | $— | $1190 | $489590 |
| Reserves |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;For accounts with assets at: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value |  | 120 |  | 119935 | 120055 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortized Cost |  | 540964 |  |  | 540964 |
| By withdrawal characteristics |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;With MV adjustment |  | 120 |  |  | 120 |
| &nbsp;&nbsp;&nbsp;At fair value |  |  |  | 118882 | 118882 |
| Not subject to discretionary withdrawal |  | 540964 |  | 1053 | 542017 |
| Total | $— | $541084 | $— | $119935 | $661019 |

---

Reconciliation of net transfers to / (from) separate accounts as reported in the statements of operations for the year ended December 31, 2025 is as follows:

---

| | |
|:---|:---|
| Transfers to separate accounts | $489801 |
| Transfers from separate accounts | 24529 |
| Net transfers to/(from) separate accounts | 465272 |
| Reconciling adjustments: | 19 |
| Administration and policy fees | (2535) |
| Matured deferred contracts | 37 |
| Reinsurance | 13678 |
| &nbsp;&nbsp;&nbsp;Transfers as reported in the statements of operations | $476471 |

---

*Page* 63

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

Information regarding the Separate Accounts of the Company as of December 31, 2024 is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2024** | **Indexed** | **Non-Indexed <br> Guarantee<br> Less than / <br> equal to 4%** | **Non-Indexed <br> Guarantee <br> More than<br> 4%** | **Non-<br> Guaranteed <br> Separate <br> Accounts** | **Total** |
| Premiums, considerations or deposits | $— | $— | $— | $1643 | $1643 |
| Reserves |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;For accounts with assets at: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value |  | 116 |  | 116956 | 117072 |
| By withdrawal characteristics |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;With MV adjustment |  | 116 |  |  | 116 |
| &nbsp;&nbsp;&nbsp;At fair value |  |  |  | 115903 | 115903 |
| Not subject to discretionary withdrawal |  |  |  | 1053 | 1053 |
| Total | $— | $116 | $— | $116956 | $117072 |

---

Reconciliation of net transfers to / (from) separate accounts as reported in the statements of operations for the year ended December 31, 2024 is as follows:

---

| | |
|:---|:---|
| Transfers to separate accounts | $1643 |
| Transfers from separate accounts | 10226 |
| Net transfers to/(from) separate accounts | (8583) |
| Reconciling adjustments: | 296 |
| Administration and policy fees | (2564) |
| Matured deferred contracts | (232) |
| Reinsurance | 11426 |
| &nbsp;&nbsp;&nbsp;Transfers as reported in the statements of operations | $343 |

---

*Page* 64

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

**17. CLOSED BLOCK**

Effective December 1, 2015, and following the approval of the MADOI, the Company entered into a coinsurance agreement with Ameritas Life Insurance Corp whereby it ceded substantially all of its closed block of business. The closed block consists of individual whole life insurance participating policies, term life policies and individual deferred annuity contracts which were inforce as of October 16, 1995. As a result of the transaction, the Company ceded $571,400 policyholder liabilities, and transferred associated assets.

The table below presents financial schedule for the closed block, prior to the impact of reinsurance at December 31, 2025 and 2024.

Summarized financial information of the Closed Block for the years ended December 31, was as follows:

---

| | | |
|:---|:---|:---|
| **BALANCE SHEET** | **2025** | **2024** |
| Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Bonds, at amortized cost | $336214 | $347907 |
| &nbsp;&nbsp;&nbsp;Cash & short-term investments | 12880 | 10049 |
| &nbsp;&nbsp;&nbsp;Policy loans | 50452 | 51654 |
| &nbsp;&nbsp;&nbsp;Investment income due & accrued | 6336 | 6265 |
| &nbsp;&nbsp;&nbsp;Premiums deferred and uncollected | 1044 | 1153 |
| &nbsp;&nbsp;&nbsp;Aggregate write-ins for other than invested assets | 7325 | 8177 |
| &nbsp;&nbsp;&nbsp;Current federal & foreign income tax recoverable | 1606 | 2507 |
| &nbsp;&nbsp;&nbsp;Total admitted assets | $415857 | $427712 |
| Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Policy liabilities & accruals | $426298 | $437572 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 2844 | 4533 |
| &nbsp;&nbsp;&nbsp;Total liabilities | $429142 | $442105 |

---

---

| | | |
|:---|:---|:---|
| **INCOME STATEMENT** | **2025** | **2024** |
| Revenues: |  |  |
| &nbsp;&nbsp;&nbsp;Premiums and other considerations | $8123 | $8607 |
| &nbsp;&nbsp;&nbsp;Net investment income | 19601 | 22515 |
| &nbsp;&nbsp;&nbsp;Realized gains | (541) | (1216) |
| &nbsp;&nbsp;&nbsp;Total revenue | $27183 | $29906 |
| Benefits & expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Policy benefits | $25351 | $24288 |
| &nbsp;&nbsp;&nbsp;Operating & selling expenses | (177) | (27) |
| &nbsp;&nbsp;&nbsp;Taxes, excluding capital gains tax | 901 | 1007 |
| &nbsp;&nbsp;&nbsp;Total benefits & expenses | $26075 | $25268 |
| &nbsp;&nbsp;&nbsp;**Closed Block Net Income** | $**1108** | $**4638** |

---

*Page* 65

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Notes to Statutory Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

*(Dollars in thousands)*

---

| | | |
|:---|:---|:---|
| **CASH FLOWS** | **2025** | **2024** |
| **Cash from Operations:** |  |  |
| &nbsp;&nbsp;&nbsp;Premiums & annuity considerations | $8247 | $8768 |
| &nbsp;&nbsp;&nbsp;Net investment income | 20346 | 22702 |
| &nbsp;&nbsp;&nbsp;Claims, surrenders & other benefits | (27071) | (28571) |
| &nbsp;&nbsp;&nbsp;Commissions & expenses paid |  |  |
| &nbsp;&nbsp;&nbsp;Dividends to policyholders | (8233) | (6892) |
| &nbsp;&nbsp;&nbsp;Federal income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operations | $(6711) | $(3993) |
| **Cash from Investments:** |  |  |
| Proceeds from investments sold, matured or repaid |  |  |
| &nbsp;&nbsp;&nbsp;Bonds | $34662 | $33130 |
| Cost of investments acquired |  |  |
| &nbsp;&nbsp;&nbsp;Bonds | (24326) | (26935) |
| &nbsp;&nbsp;&nbsp;Net decrease in policy loans | 1202 | (1717) |
| &nbsp;&nbsp;&nbsp;Net decrease in receivable for securities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) / provided by investments | $11538 | $4478 |
| **Cash from Financing & Other Sources:** |  |  |
| &nbsp;&nbsp;&nbsp;Net deposits on deposit type contracts & other liabilities | $(1159) | $(1213) |
| &nbsp;&nbsp;&nbsp;Other cash applied | (836) | (2126) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) / provided by financing and other sources | $(1995) | $(3339) |
| **Cash and Short Term Investments** |  |  |
| &nbsp;&nbsp;&nbsp;Net Change in cash and short term investments | $2831 | $(2854) |
| &nbsp;&nbsp;&nbsp;Beginning of the year | 10049 | 12903 |
| &nbsp;&nbsp;&nbsp;End of the year | $12880 | $10049 |

---

Many expenses related to Closed Block operations are charged to operations outside the Closed Block; accordingly, the contribution from the Closed Block does not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside the Closed Block.

*Page* 66

**SUPPLEMENTAL INFORMATION**

*Page* 67

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Selected Statutory Basis Financial Data**

**December 31, 2025**

*(Dollars in thousands)*

---

| | |
|:---|:---|
| **Investment Income Earned** | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. government bonds | $18845 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other bonds (unaffiliated) | 416367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds of affiliates |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock | 92470 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 250496 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premium notes, policy loans and liens | 30289 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and short term-investments | 15853 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other invested assets | 32409 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous income | 1418 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments | 1914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross investment income | $860061 |
| Other long term assets–statement value | $263036 |
| **Bonds and Short-Term Investments by Maturity and Class by Maturity (weighted based on future cash flows) - Statement Value** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due within one year or less | $318092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over 1 year through 5 years | 2363955 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over 5 years through 10 years | 993746 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over 10 years through 20 years | 1450549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over 20 years | 3854666 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total by Maturity | $8981008 |
| &nbsp;&nbsp;&nbsp;**by Class- Statement Value** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 1 | $5412077 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 2 | 3179992 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 3 | 300236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 4 | 88703 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class 6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total by Class | $8981008 |
| Total Publicly Traded | $4702378 |
| Total Privately Traded | 4278630 |
| Total | $8981008 |
| Mortgage loans on real estate (book value including nonadmitted portion): |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgages | $2574104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | 980398 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $3554502 |
| Mortgage loans on real estate by standing (book value); |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Good standing | $3537265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Good standing with restructured terms |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With overdue interest over 90 days | 12542 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In process of foreclosure | 4695 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $3554502 |

---

*Page* 68

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Selected Statutory Basis Financial Data**

**December 31, 2025**

*(Dollars in thousands)*

---

| | |
|:---|:---|
| Collateral loans | $96082 |
| Common stocks - statement value | $5000 |
| Collar, swap and forward agreements open - statement value | $— |
| Short-term investments - book value | $874 |
| Cash equivalents | 308280 |
| Cash on deposit | 36760 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $345914 |
| Life insurance in force |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary life | $2009356 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group life | 7010 |
|  | $2016366 |
| Amount of accidental death insurance in force under ordinary policies | $2581542 |
| Life insurance policies with disability provisions in force |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary life | $584602 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group life | 2946 |
|  | $587548 |
| Supplementary contracts in force |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary - involving life contingencies |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount on deposit | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount of income payable | 7418 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary - not involving life contingencies |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount on deposit | $14414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount of income payable | 3150 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group - involving life contingencies |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount on deposit | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount of income payable | 203 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group - not involving life contingencies |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount on deposit | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount of income payable |  |

---

*Page* 69

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Selected Statutory Basis Financial Data**

**December 31, 2025**

*(Dollars in thousands)*

---

| | |
|:---|:---|
| Annuities: |  |
| &nbsp;&nbsp;&nbsp;Ordinary |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediate - amount of income payable | $86 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred - fully paid account balance | 1032149 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred - not fully paid account balance |  |
| &nbsp;&nbsp;&nbsp;Group |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediate - amount of income payable | $20492 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred - fully paid account balance | 170899 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred - not fully paid account balance |  |
| &nbsp;&nbsp;&nbsp;Deposit funds and dividend accumulations: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposit funds - account balance | $240301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividend accumulations - account balance | 712 |

---

*Page* 70

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Investment Risk Interrogatories**

**December 31, 2025**

*(Dollars in thousands)*

**Investment Risk Interrogatories**

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's admitted assets as reported in the statutory
 basis statements of admitted assets, liabilities and capital and surplus is $15,069,311 at
 December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;2. The 10 largest exposures to a single issuer/borrower/investment,
 by investment category, excluding: (i) U.S. government, US Government agency securities
 and those U.S government money market funds listed in the Appendix to the SVO Purposes and
 Procedures Manual as exempt, (ii) property occupied by the Company and (iii) policy
 loans:

---

| | | | | |
|:---|:---|:---|:---|:---|
| Investment Category | Issuer | Issuer | Amount | Percentage of<br> Total Admitted <br> Assets |
| Mortgages / Other Invested Assets | 2.01 | Project Catalyst | $440622 | 2.9% |
| Issuer Credit Obligations (D-1.1) | 2.02 | INTEL CORP | 212746 | 1.4% |
| Mortgages / Other Invested Assets | 2.03 | Hatteras MOB Portfolio | 208220 | 1.4% |
| Issuer Credit Obligations (D-1.1) | 2.04 | CRTBS 2024-1 LLC | 182918 | 1.2% |
| Asset-Backed Securities (D-1.2) / Other Invested Assets | 2.05 | PICO 2020-1B LLC | 172917 | 1.1% |
| Mortgages | 2.06 | Cyrus One | 171703 | 1.1% |
| Asset-Backed Securities (D-1.2) / Other Invested Assets | 2.07 | JAYP 2020-1A LLC | 163222 | 1.1% |
| Asset-Backed Securities (D-1.2) / Other Invested Assets | 2.08 | Blue Eagle 2022-1D LLC | 162345 | 1.1% |
| Asset-Backed Securities (D-1.2) / Other Invested Assets | 2.09 | SBKR 2024-1 LLC | 145665 | 1.0% |
| Asset-Backed Securities (D-1.2) / Other Invested Assets | 2.10 | WALR 2019-1 | 111862 | 0.7% |

---

&nbsp;&nbsp;&nbsp;&nbsp;3. The amount and percentage of the Company's total admitted assets
 held in bonds, short-term investments and cash equivalents, and by NAIC rating is as follows:

---

| | | | |
|:---|:---|:---|:---|
| NAIC Rating | NAIC Rating | Amount | Percentage<br> of Total Admitted <br> Assets |
| 3.01 | NAIC-1 | $5412077 | 35.9% |
| 3.02 | NAIC-2 | 3179992 | 21.1% |
| 3.03 | NAIC-3 | 300236 | 2.0% |
| 3.04 | NAIC-4 | 88703 | 0.6% |
| 3.05 | NAIC-5 |  | —% |
| 3.06 | NAIC-6 |  | —% |
|  |  | $8981008 | 59.6% |

---

*Page* 71

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Investment Risk Interrogatories**

**December 31, 2025**

*(Dollars in thousands)*

&nbsp;&nbsp;&nbsp;&nbsp;4. Assets held in foreign investments are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | Amount | Percentage<br> of Total <br> Admitted <br> Assets |
| 4.02 | Total admitted assets held in foreign investments | $1345604 | 8.9% |
| 4.03 | Foreign-currency-denominated investments | 194331 | 1.3% |
| 4.04 | Insurance linked liabilities denominated in that same foreign currency |  | —% |

---

&nbsp;&nbsp;&nbsp;&nbsp;5. Aggregate foreign investment exposure categorized by NAIC sovereign
 rating:

---

| | | | |
|:---|:---|:---|:---|
|  |  | Amount | Percentage <br>of Total <br> Admitted <br> Assets |
| 5.01 | Countries rated NAIC-1 | $1336678 | 8.9% |
| 5.02 | Countries rated NAIC-2 | 7197 | 0.0% |
| 5.03 | Countries rated NAIC-3 or less | 1729 | 0.0% |
|  |  | $1345604 | 8.9% |

---

&nbsp;&nbsp;&nbsp;&nbsp;6. Largest foreign investment exposure to a single country, categorized
 by the country's NAIC sovereign rating:

---

| | | | |
|:---|:---|:---|:---|
|  |  | Amount | Percentage <br>of Total <br> Admitted <br> Assets |
| Countries rated NAIC-1 | Countries rated NAIC-1 |  |  |
| 6.01 | Cayman Islands | $416172 | 2.8% |
| 6.02 | France | 250407 | 1.7% |
| Countries rated NAIC-2 | Countries rated NAIC-2 |  |  |
| 6.03 | Panama | 6370 | 0.0% |
| 6.04 | Italy | 594 | 0.0% |
| Countries rated NAIC-3 | Countries rated NAIC-3 |  |  |
| 6.05 | Liberia | 1729 | 0.0% |
|  |  | $675272 | 4.5% |

---

7-9. Assets held in unhedged foreign currency exposure are less than 2.5% of the Company's total admitted assets.

*Page* 72

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Investment Risk Interrogatories**

**December 31, 2025**

*(Dollars in thousands)*

&nbsp;&nbsp;&nbsp;&nbsp;10. Ten largest non-sovereign (i.e. non-governmental) foreign issues:

---

| | | | | |
|:---|:---|:---|:---|:---|
| Issuer | Issuer | NAIC Rating | Amount | Percentage <br>of Total <br> Admitted <br> Assets |
| 10.01 | WALR 2019-1 | 1, 2, 3 & NR | $108789 | 0.7% |
| 10.02 | Montclair | CM2 | 72086 | 0.5% |
| 10.03 | Garbe | CM2 | 66596 | 0.4% |
| 10.04 | HITR 5A | 1 | 64988 | 0.4% |
| 10.05 | Wallaby (Mileway) | CM2 | 55649 | 0.4% |
| 10.06 | LLOYDS BANKING GROUP PLC | 1 & 2 | 46126 | 0.3% |
| 10.07 | VODAFONE GROUP PLC | 2 | 44652 | 0.3% |
| 10.08 | CREDIT AGRICOLE SA | 1 & 2 | 44052 | 0.3% |
| 10.09 | TOTALENERGIES CAPITAL SA | 1 | 43704 | 0.3% |
| 10.10 | RIO TINTO FIN USA PLC | 1 | 34072 | 0.2% |
|  |  |  | $580714 | 3.8% |

---

&nbsp;&nbsp;&nbsp;&nbsp;11. Assets held in Canadian investments are less than 2.5% of the Company's
 total admitted assets,

&nbsp;&nbsp;&nbsp;&nbsp;12. Assets held in investments with contractual sales restrictions are
 less than 2.5% of the Company's total admitted assets.

&nbsp;&nbsp;&nbsp;&nbsp;13. Assets held in equity interests are less than 2.5% of the Company's
 total admitted assets.

&nbsp;&nbsp;&nbsp;&nbsp;14. Assets held in nonaffiliated, privately placed equities are less
 than 2.5% of the Company's total admitted assets.

&nbsp;&nbsp;&nbsp;&nbsp;15. Assets held in general partnership interests are less than 2.5%
 of the Company's total admitted assets.

&nbsp;&nbsp;&nbsp;&nbsp;16. With respect to mortgage loans reported in Schedule B, the Company's
 ten largest aggregate mortgage interests are as follows: The aggregate mortgage interest
 represents the combined value of all mortgages secured by the same group of properties:

---

| | | | |
|:---|:---|:---|:---|
| Type | Type | Amount | Percentage <br> of Total <br> Admitted <br> Assets |
| 16.01 | Commercial | $171703 | 1.14% |
| 16.02 | Commercial | 165958 | 1.10% |
| 16.03 | Commercial | 101543 | 0.67% |
| 16.04 | Commercial | 100121 | 0.66% |
| 16.05 | Commercial | 93543 | 0.62% |
| 16.06 | Commercial | 86862 | 0.58% |
| 16.07 | Commercial | 85539 | 0.57% |
| 16.08 | Commercial | 84225 | 0.56% |
| 16.09 | Commercial | 79352 | 0.53% |
| 16.10 | Commercial | 79190 | 0.53% |

---

*Page* 73

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Investment Risk Interrogatories**

**December 31, 2025**

*(Dollars in thousands)*

Amounts and percentages of the Company's total admitted assets held in the following categories of mortgage loans:

---

| | | | |
|:---|:---|:---|:---|
|  |  | Amount | Percentage<br> of Total <br> Admitted <br> Assets |
| 16.11 | Construction loans | $— | —% |
| 16.12 | Mortgage loans over 90 days past due | 12542 | 0.08% |
| 16.13 | Mortgage loans in the process of foreclosure | 4695 | 0.03% |
| 16.14 | Mortgage loans foreclosed |  | —% |
| 16.15 | Restructured mortgage loans |  | —% |

---

&nbsp;&nbsp;&nbsp;&nbsp;17. Aggregate mortgage loans have the following loan-to-value ratios
 as determined for the most current appraisal as of the statement date:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Residential | Residential | Commercial | Commercial | Agricultural | Agricultural |
| Loan to Value | Loan to Value | Amount | Percentage<br> of Total <br> Admitted <br> Assets | Amount | Percentage<br> of Total <br> Admitted <br> Assets | Amount | Percentage <br> of Total <br> Admitted <br> Assets |
| 17.01 | above 95% | $9698 | 0.06% | $94229 | 0.63% | $— | —% |
| 17.02 | 91 to 95% | 4585 | 0.03% | 157287 | 1.04% |  | —% |
| 17.03 | 81 to 90% | 68326 | 0.45% | 75552 | 0.50% |  | —% |
| 17.04 | 71 to 80% | 299296 | 1.99% | 107523 | 0.71% |  | —% |
| 17.05 | below 70% | 598493 | 3.97% | 2139513 | 14.20% |  | —% |
|  |  | 980398 | 6.50% | 2574104 | 17.08% |  | —% |

---

&nbsp;&nbsp;&nbsp;&nbsp;18. Assets held in each of the five largest investments in one parcel
 or group of contiguous parcels of real estate reported in Schedule A are less than 2.5% of
 the Company's total admitted assets.

&nbsp;&nbsp;&nbsp;&nbsp;19. Assets held in mezzanine real estate loans are more than 2.5% of
 the Company's total admitted assets.

---

| | | | |
|:---|:---|:---|:---|
|  |  | Amount | Percentage of Total <br> Admitted Assets |
| 19.02 | Aggregate statement value of investments held in mezzanine real estate loans | 480379 | 3.19% |
|  | Largest three investments held in mezzanine real estate loans: |  |  |
| 19.03 | Hatteras MOB Portfolio | 165958 | 1.10% |
| 19.04 | Catalyst - Pool 5 | 42261 | 0.28% |
| 19.05 | Catalyst - Pool 3 | 37616 | 0.25% |

---

&nbsp;&nbsp;&nbsp;&nbsp;20. The Company did not have any securities lending, repurchase, reverse
 repurchase, dollar repurchase and dollar reverse repurchase agreements.

*Page* 74

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Investment Risk Interrogatories**

**December 31, 2025**

*(Dollars in thousands)*

&nbsp;&nbsp;&nbsp;&nbsp;21. Amounts and percentages of the reporting entity's total admitted
 assets for warrants attached to other financial instruments, options, caps and floors:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | Owned | Owned | Written | Written |
|  |  | Amount | Percentage<br> of Total<br> Admitted <br> Assets | Amount | Percentage <br> of Total <br> Admitted<br> Assets |
| 21.01 | Hedging | $2597 | 0% | $(21) | 0% |
| 21.02 | Income generation |  | 0% |  | 0% |
| 21.03 | Other |  | 0% |  | 0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;22. Amounts and percentages of the reporting entity's total admitted
 assets of potential exposure for collars, swaps and forwards:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | At End of Each Quarter | At End of Each Quarter | At End of Each Quarter |
|  |  | 1st Quarter | 2nd Quarter | 3rd Quarter |
| 22.01 | Hedging | $8164 | $8385 | $8133 |
| 22.02 | Income generation |  |  |  |
| 22.03 | Replications |  |  |  |
| 22.04 | Other |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;23. Amounts and percentages of the reporting entity's total admitted
 assets of potential exposure for future contracts:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  | At Year End | At Year End | At End of Each Quarter | At End of Each Quarter | At End of Each Quarter |
|  |  | 1 | 2 | 1st Quarter | 2nd Quarter | 3rd Quarter |
| 23.01 | Hedging | $251 | —% | $29 | $241 | $241 |
| 23.02 | Income generation |  | —% |  |  |  |
| 23.03 | Replications |  | —% |  |  |  |
| 23.04 | Other |  | —% |  |  |  |

---

*Page* 75

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Summary Investment Schedule**

**December 31, 2025**

*(Dollars in thousands)*

**Summary Investment Schedule**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Admitted Assets as Reported in** | **Admitted Assets as Reported in** |
| | **Gross Investment Holdings\*** | **Gross Investment Holdings\*** | **the Annual Statement** | **the Annual Statement** |
| <br>**Investment Categories** | **Amount** | **Percentage**<br> **of Total <br> Admitted Assets** | **Amount** | **Percentage**<br> **of Total <br> Admitted Assets** |
| Issuer Credit Obligations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. government obligations | $337255 | 2.46% | $337255 | 2.46% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other U.S. government obligations | 28324 | 0.21% | 28324 | 0.21% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-U.S. sovereign jurisdiction securities | 26757 | 0.20% | 26757 | 0.20% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Municipal Bonds - general obligations (direct & guaranteed) | 43107 | 0.31% | 43107 | 0.31% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Municipal bonds - special revenue | 133553 | 0.97% | 133553 | 0.97% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Project finance bonds issues by operating entities | 424252 | 3.10% | 424252 | 3.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate bonds | 4763495 | 34.76% | 4763495 | 34.76% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mandatory convertible bonds |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Single entity backed obligations | 19287 | 0.14% | 19287 | 0.14% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SVO-identified bond exchange traded funds - fair value | 33241 | 0.24% | 33241 | 0.24% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SVO-identified bond exchange traded funds - systematic value |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds issued by funds representing operating entities |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank loans - issued |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank loans - acquired |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans that qualify as SVO-identified credit tenant loans |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other issuer credit obligations |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total issuer credit obligations | $5809271 | 42.39% | $5809271 | 42.39% |
| Asset Backed Securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial asset-backed securities - self-liquidating | $2580231 | 18.83% | $2580231 | 18.83% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial asset-backed securities - not self-liquidating | 93074 | 0.68% | 93074 | 0.68% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-financial asset-backed securities | 497558 | 3.63% | 497558 | 3.63% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total asset backed securities | $3170863 | 23.14% | $3170863 | 23.14% |
| Preferred Stocks: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total preferred stocks | $— | —% | $— | —% |
| Common Stocks: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial and miscellaneous Other (Unaffiliated) | $5000 | 0.04% | $5000 | 0.04% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total common stocks | $5000 | 0.04% | $5000 | 0.04% |
| Mortgage Loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | $980398 | 7.15% | $980398 | 7.16% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgages | 2093725 | 15.28% | 2093725 | 15.28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine real estate loans | 480379 | 3.51% | 480379 | 3.51% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total mortgage loans | $3554502 | 25.94% | $3554502 | 25.94% |
| Real Estate: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate | $— | —% | $— | —% |
| Cash | 36760 | 0.27% | 36760 | 0.27% |
| Cash equivalents | 308279 | 2.25% | 308279 | 2.25% |
| Short-term investments | 874 | 0.01% | 874 | 0.01% |
| Contract loans | 553983 | 4.04% | 552334 | 4.03% |
| Derivatives | 1348 | 0.01% | 1348 | 0.01% |
| Other invested assets | 255423 | 1.86% | 255423 | 1.86% |
| Receivables for securities | 7613 | 0.06% | 7613 | 0.06% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total invested assets | $13703917 | 100.00% | $13702269 | 100.00% |

---

\* Gross investment holdings as valued in compliance with the NAIC *Accounting Practices and Procedures* Manual

*Page* 76

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Reinsurance Disclosures**

**December 31, 2025**

*(Dollars in thousands)*

The following information regarding reinsurance contracts is presented to satisfy the disclosure requirements in SSAP No. 61R, *Life, Deposit-Type and Accident and Health Reinsurance*, which apply to reinsurance contracts entered into, renewed or amended on or after January 1, 1996.

&nbsp;&nbsp;&nbsp;&nbsp;1. Has the Company reinsured any risk with
 any other entity under a reinsurance contract (or multiple contracts with the same reinsurer
 or its affiliates) that is subject to Appendix A-791, *Life and Health Reinsurance Agreements*,
 and includes a provision that limits the reinsurer's assumption of significant risks
 identified in Appendix A-791?

Examples of risk-limiting features include provisions such as a deductible, a loss ratio corridor, a loss cap, an aggregate limit or similar effect.

Yes ☒ No ☐

If yes, indicate the number of reinsurance contracts to which such provisions apply: _____1_____

If yes, indicate if deposit accounting was applied for all contracts subject to Appendix A-791 that limit significant risks.

Yes ☒ No ☐ N/A ☐

&nbsp;&nbsp;&nbsp;&nbsp;2. Has the Company reinsured any risk with
 any other entity under a reinsurance contract (or multiple contracts with the same reinsurer
 or its affiliates) that is not subject to Appendix A-791, for which reinsurance accounting
 was applied and includes a provision that limits the reinsurer's assumption of risk?

Examples of risk-limiting features include provisions such as a deductible, a loss ratio corridor, a loss cap, an aggregate limit or other provisions that result in similar effects.

Yes ☒ No ☐

If yes, indicate the number of reinsurance contracts to which such provisions apply: _____1_____

If yes, indicate whether the reinsurance credit was reduced for the risk-limiting features.

Yes ☐ No ☐ N/A ☒

*Page* 77

**First Allmerica Financial Life Insurance Company**

**(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)**

**Supplemental Schedule of Reinsurance Disclosures**

**December 31, 2025**

*(Dollars in thousands)*

&nbsp;&nbsp;&nbsp;&nbsp;3. Does the Company have any reinsurance
 contracts (other than reinsurance contracts with a federal or state facility) that contain
 one or more of the following features which result in delays in payment in form or in fact:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Provisions that permit the reporting
 of losses to be made less frequently than quarterly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Provisions that permit settlements to
 be made less frequently than quarterly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Provisions that permit payments due from
 the reinsurer to not be made in cash within ninety (90) days of the settlement date (unless
 there is no activity during the period); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The existence of payment schedules, accumulating
 retentions from multiple years, or any features inherently designed to delay timing of the
 reimbursement to the ceding entity.

e. Yes ☐ No ☒

&nbsp;&nbsp;&nbsp;&nbsp;4. Has the Company reflected reinsurance
 accounting credit for any contracts that are not subject to Appendix A-791 and not yearly
 renewable term reinsurance, which meet the risk transfer requirements of SSAP No. 61R?

---

| | | | |
|:---|:---|:---|:---|
| **Type of contract:** | **Response:** | **Identify reinsurance contract(s):** | **Has the insured<br> event(s) triggering <br> contract coverage<br> been recognized?** |
| Assumption reinsurance – new for the reporting period | Yes ☐ No ☒<br>| | N/A |
| Non-proportional reinsurance, which does not result in significant surplus relief | Yes ☐ No ☒<br>| | Yes ☐ No ☐ N/A ☒ |

---

&nbsp;&nbsp;&nbsp;&nbsp;5. Has the Company ceded any risk in a reinsurance
 agreement that is not subject to Appendix 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 statements, and either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Accounted for that contract as reinsurance
 under statutory accounting principles (SAP) and as a deposit under generally accepted accounting
 principles (GAAP); or

Yes ☐ No ☐ N/A ☒

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Accounted for that contract as reinsurance
 under GAAP and as a deposit under SAP?

Yes ☐ No ☐ N/A ☒

If the answer to item (a) or item (b) is yes, include relevant information regarding GAAP to SAP differences to explain why the contract(s) is treated differently for GAAP and SAP below:

*Page* 78