Caroline Feeney: Sure. John, it’s Caroline. So I’ll take your question. So first of all, just let me say, we’re very pleased with the momentum that we’ve seen in our Group Insurance business. And as you’re aware, the fourth quarter does tend to be a little lighter in terms of sales quarter, with the first quarter being our largest, as the majority of our cases do have January 1 inception dates. So the lower sales that you’re noticing on a year-over-year basis is largely due to just a large case buyout last year that drove up sales volumes. And these do occur periodically and certainly can produce some variability in sales volumes, particularly in those lighter sales quarters. So John, if you were to normalize for last year’s one-time buyout that we saw sales are actually up about 7%.
And obviously, this is on the disability side. On the life side, it was just a matter of timing of premiums driven by changes in when some customers do enrollment in the year. So I would just say, overall, we feel very good as well about our existing pipeline as we continue with our strong sales momentum.
John Barnidge : Thank you for the answers.
Operator: Thank you. Next question today is coming from Elyse Greenspan from Wells Fargo. Your line is now live.
Elyse Greenspan: Hi. Thanks. Good morning. My first question, can you talk about the impact that you’ve seen on your RBC ratio from the IMR getting forward at zero. And do you think that, that issue is solvable via either NAIC changes or by getting a permitted practice from New Jersey?
Ken Tanji : Yes. Hey, Elyse, the impact on our PICA RBC ratio was about 35 basis points, maybe a little bit more. And that occurred with the rise in rates from 2Q through 4Q. And you’ll be able to see that in our Blue Book and Green Book combined. So we’ll be reporting that at the end of the month. We have been with very active discussions with regulators, and I know many others have across the industry have been as well. There seems to be a good understanding of the issue and a lot of careful consideration being given on how to best address it, so more to come. But rest assured, we’re working with our regulators and many others are as well to see what — how best to address this issue.
Elyse Greenspan: Thanks. And then, Rob, I think you had mentioned that the Board was looking at capital deployment in the context of a recession and severe credit cycle potential. Can you talk about what kind of credit outlook factored into the Board’s decision on the 2023 buyback plan? And what is your budget for downgrades and impairments if we enter into a recession?
Rob Axel: Thanks, Elyse. We — as Ken articulated earlier, the decision with regard to the buybacks factored in a number of considerations, including in that the possibility of recession and obviously, a recession that might be accompanied by a credit cycle, which could affect the portfolio. A couple of thoughts on that. First, while we do scenarios, which would anticipate the potential for both negative migration and credit losses, we also take some comfort, as our Board did from the strength that we have in portfolio management. We think we’re incredibly well positioned in the event of any deterioration in the economy that might lead to a credit cycle. We’re not yet seeing any of that, I’ll note Elyse. If you look at our net credit migration in the fourth quarter and for the full year 2022, it was actually positive.
So, we haven’t seen any imminent signs of distress sort of percolating within the portfolio that would lead us to be overly concerned about that. But as we established the buyback amount that was authorized, we did anticipate that such a thing could occur and that we would want to be able to both anticipate that level of buyback and have the strength to be able to absorb anything that might happen from a negative migration or default standpoint.
