Deferred Tax Assets, Valuation Allowance

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| [Table of Contents](#i0cc44b9a01a5457791ad0e0574b4c522_7) |  | Note 12 - Income Taxes |

THE HARTFORD FINANCIAL SERVICES GROUP, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 12. INCOME TAXESINCOME TAX EXPENSE

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| Income Tax Rate Reconciliation |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30, |
|  | 2022 | 2021 |  | 2022 | 2021 |
| Tax provision at U.S. federal statutory rate | $ | 91  |  | $ | 122  |  |  | $ | 321  |  | $ | 419  |  |
| Tax-exempt interest | (9) |  | (10) |  |  | (26) |  | (31) |  |
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| Increase in deferred tax valuation allowance  | 6  |  | (1) |  |  | 14  |  | 6  |  |
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| Tax credits | (7) |  | (8) |  |  | (10) |  | (9) |  |
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| Other  | 11  |  | (2) |  |  | 1  |  | (25) |  |
| Provision for income taxes | $ | 92  |  | $ | 101  |  |  | $ | 300  |  | $ | 360  |  |

UNCERTAIN TAX POSITIONS 

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| Rollforward of Unrecognized Tax Benefits |  |  |
|   | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |  |
|   | 2022 | 2021 |  | 2022 | 2021 |  |  |
| Balance, beginning of period | $ | 18  |  | $ | 15  |  |  | $ | 16  |  | $ | 15  |  |  |  |
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| Gross increases - tax positions in current period | 3  |  | 5  |  |  | 5  |  | 5  |  |  |  |
| Lapse of statute of limitations | —  |  | (5) |  |  | —  |  | (5) |  |  |  |
| Balance, end of period | $ | 21  |  | $ | 15  |  |  | $ | 21  |  | $ | 15  |  |  |  |

The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release. In the three and nine months ended September 30, 2021, the Company recognized $5 of its previously unrecognized tax benefits associated with dividends from segregated asset accounts of the life and annuity business sold in 2018. This liability was subject to a tax indemnification agreement and a corresponding receivable included in other assets was taken down upon lapse of the statute of limitations.OTHER TAX MATTERS As of September 30, 2022, the Company has a deferred tax asset for foreign net operating losses of $36 partially offset by a valuation allowance of $21. While the foreign net operating losses ("NOLs") do not expire, this assessment reflects uncertainty in the Company's ability to generate sufficient taxable income in the near term in those specific jurisdictions.Management has assessed the need for a valuation allowance against its deferred tax assets based on tax character and jurisdiction. In making the assessment, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies which management views as prudent and feasible. The federal income tax audits for the Company have been completed through 2013, and the Company is not currently under federal income tax examination for any open years. The statute of limitations is closed through the 2018 tax year with the exception of NOL carryforwards utilized in open tax years. Management believes that adequate provision has been made in the Company's Condensed Consolidated Financial Statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years.13. COMMITMENTS AND CONTINGENCIES Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes liabilities for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated liability at the low end of the range of losses.LITIGATIONThe Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties related to sexual molestation and sexual abuse claims discussed in Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of this Form 10-Q and in Note 12 - Reserve for Unpaid Losses and Loss Adjustment Expenses, of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, and in the following discussion under the caption “COVID-19 Pandemic Business Income Insurance Litigation” and under the caption “Run-off Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. In addition to the matter described below, these actions include putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper sales or underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, disability, life and inland marine. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims or other allegedly unfair or improper business practices. Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that 45
