So I think what we saw as we went through the process, the normal process this year to bring in that new experience data and take a look – we probably see a little bit of a trend toward pretty modest, but a slight trend towards a little more efficient utilization of the benefit. That’s something we’ve been seeing kind of over the past couple of years, and I think it’s moderated. But maybe just a slight increase there in terms of efficiency. Overall, I think our mortality were pretty immaterial changes. And I think our persistency, we had some slight updates there. We really didn’t see anything in any of those categories that was a step change or anything like that away from what we’ve been seeing in our experience data so far. So really, it was pretty routine updates bringing in another year of experience data.
And then if we think about so far, what we’ve experienced then in 2022 with the market turmoil, I believe as we’ve been – we monitor our experience routinely all through the year separate from the deep dived annual process that we do. And I think what we’ve seen there has generally been lining up with what we would anticipate. Our assumptions have dynamic elements to them, so that when the market is down, we automatically reflect within our assumptions, some related impacts to policyholder behavior. And I think what we’ve typically seen in 2022, and I think it’s also true, what we’ve watched kind of an unusual period in 2020 after the COVID market period that what we saw was the behavior that was relatively in line with what our dynamic assumptions would have assumed.
Tom Gallagher: That’s very helpful. So essentially tracking in line with – so no real deviations relative to what your longer-term assumptions are. Is that fair?
Marcia Wadsten: Yes. That is right. Yes.
Tom Gallagher: Okay. Thank you.
Operator: Thank you. Our next question comes from Alex Scott from Goldman Sachs. Please go ahead. Alex, your line is now open.
Alex Scott: Hi. Thanks for taking the question. So the first one I had is just on the RBC, and I know you provided the 500% pro forma. But I just wanted to see if you could opine on the impact you expect in 1Q from the mean reversion point change as well as what kind of impact you get throughout the year from just sort of normal core statutory net income generation in the normal market?
Marcia Wadsten: Sure, Alex. Thank you for the question. So yes, we did indicate that if we looked at our year-end position pro forma for the $600 million distribution out of the operating company, including the related impact to the DTA, we would be close to the 500% level at the operating company. Looking ahead to the MRP change, as you noted, that is going to go up 25 basis points effective at the beginning of the year. What we’ll note about that is, obviously, that’s a different direction than what we saw in both 2021 and 2022, where we had a 25 basis point decrease in each of those years. So that’s certainly favorable movement for us. But one thing to point out is that the impact of that benefit is not going to be static, and it’s going to depend upon the position of the book at the time, including the tech and CAL levels themselves as well as how those are impacted by the cash surrender value floor.
So we would naturally expect when the cash value floor is more biding that the impact of a change that could be favorable would be a little bit less so because of the fact that you’re floored out and you don’t have the ability to reflect it in full the same way you might if you didn’t have cash value flow intact. So that’s something to keep in mind as we go forward. We’ll intend to talk through the movements and the impact quantification when we go through our Q1 earnings.
