Jackson Reports $5.8 Billion in Statutory Capital as QVT Questions Brooke Re
Key Facts
QVT Financial issued a second report on Jackson Financial on October 28, raising questions about Brooke Re’s balance of liabilities, payments and assets as of September 30, 2026, according to the report’s description in the statement announcing it. QVT made a separate allegation that adjusted operating earnings may have been overstated as a result of estimates for the cost of options on RILA products. The questions come ahead of Jackson’s third-quarter results, with QVT focusing on Brooke Re’s ability to meet liabilities and the liquidity tied to the reinsurance arrangement. QVT published its first report on September 17, focusing on Jackson National Life’s exposure to Brooke Re and concerns about liquidity, solvency and the sustainability of its pace of capital returns. In the statement accompanying the second report, QVT repeated its disclosure that its funds hold short positions in JXN debt and shares, including through derivatives, and said it may change those positions without notice. The concerns and allegations remain attributable to QVT, while Jackson’s disclosures on capital and operating results provide the company’s response.
In its second-quarter results disclosure, Jackson said statutory adjusted capital at Jackson National Life was $5.8 billion on June 30, 2026, and that its estimated risk-based capital ratio was 538%. Those figures put the company’s statutory capital level at the center of comparisons with QVT’s questions about the reinsurer and its ability to meet liabilities. Jackson also attributed the improvement in adjusted operating earnings mainly to higher spread income as average assets grew in RILA, FIA and institutional products. It added that growth in average assets in variable annuities increased fee income, while a lower share count after repurchases also supported the result. On sales, RILA products posted a record $2.3 billion in the second quarter, up 69% from the same period in 2025. The company links asset growth to spread and fee income, while QVT’s allegation concerns estimates for the cost of RILA options and their potential effect on adjusted earnings.
The discussion centers on a reinsurance arrangement with Brooke Re that became economically effective on January 1, 2024, after Jackson entered into it in the first quarter of that year. According to the annual report, the arrangement covers 100% of in-force business on a coinsurance-with-funds-withheld basis, in exchange for a $1.2 billion ceding commission. The report describes Brooke Re as a Michigan-domiciled captive insurer established to serve as the counterparty in the reinsurance transaction with Jackson. It also says assets from Brooke Life contributed to Brooke Re’s capitalization and were valued at about $1.9 billion at formation. The disclosure distinguishes Brooke Re from Brooke Life Insurance and says Jackson and Brooke Re are direct subsidiaries of Brooke Life. This structure provides context for QVT’s questions about Brooke Re’s assets, payments and ability to meet liabilities, without turning those questions into an established conclusion about its solvency.
QVT’s first report addressed Jackson National Life’s exposure to Brooke Re and concerns about liquidity, solvency and the sustainability of capital returns. The statement accompanying the second report focuses on the outstanding balance, payments and assets as of September 30, and adds the issue of estimates for the cost of RILA options. Trading data show JXN closed at $130.17 on October 21, then at $133.32 on October 22. It closed at $130.19 on October 23 and $132.64 on October 26, before ending the October 27 session at $135.06. Jackson will report third-quarter results after the market close on November 3, then hold a conference call to discuss them on November 4 at 10 a.m. Eastern time. The announcement and call are the next scheduled opportunity for the company to present its latest figures and address investor questions about Brooke Re and adjusted earnings.